Skandia Unveils Annuity Rider

September 10, 2001 (PLANSPONSOR.com) - American Skandia Life Assurance Corporation on Monday introduced Plus40, a guaranteed issue term life insurance rider.

The product, funded with after-tax dollars, may help offset income taxes due at the death of the annuitant on rollovers from 401(k)s, 403(b) Tax-Sheltered Annuities, or IRAs according to Skandia.

Rider Range

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Available as an option on newly-issued variable annuities beginning September 17, the Plus40 rider:

  • can pay beneficiaries a federal income tax-free amount equal to 40% of the annuity’s account value at the owner’s death, in addition to the annuity contract death benefit
  • is available to new purchasers of the company’s variable annuities between the ages of 40 and 75, and coverage may continue through age 95
  • does not require purchasers to answer any medical questions or undergo examinations.

Purchasers of Plus40, ages 40-75, cannot be turned down.

Manager Accused of Cheating Pension Funds

August 10, 2001 (PLANSPONSOR.com)- Two pension plans and an investment advisory firm have allegedly fallen victim to a fraudulent trading scheme by pension fund manager Alan Bond, to the tune of $56 million.

The complaint filed in the US District Court in Manhattan identified the injured funds as the Birmingham Amalgamated Transit Authority Local 725, the Old Dominion Disability and Retirement Allowance Plan and Baltimore-based Chapman Capital Management. Chapman has allegedly suffered losses of more than $40 million from the scheme.

Scheme-atic

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Bond, 40, president and CEO of Albriond Capital Management, has been charged with conducting a scheme that directed virtually all of his profitable stock trades to his own accounts and most of his unprofitable ones to the accounts of those three clients. Incredibly, Bond allegedly undertook the scheme while out of jail on a $1 million personal recognizance bond from trading charges levied against him in 1999.

In December 1999 Bond 8, was charged by the US Attorney’s Office and the SEC with taking nearly $7 million in kickbacks over five years from brokerage firms in connection with his management of some $600 million in customer funds. Bond allegedly directed trades to the brokers through his former money management business, Bond, Procope Capital Management. Bond, who has denied the charges, was scheduled to stand trial in November.

In a separate action yesterday the SEC filed a complaint against Bond and was successful in getting the courts to freeze his assets, including his personal accounts, now valued at about $5.2 million.

Some of Bond’s other clients have included the National Basketball Association, the City University of New York and the Washington Metropolitan Area Transit Authority. Albriond still manages $235 million for as many 50 clients, according to prosecutors.

Trading Places

The new allegations came to light in late July after Neuberger Berman Inc., Bond’s broker-dealer in New York, reported his activities to prosecutors.

From March 2000 until the end of last month, prosecutors claim that Bond’s account grew to $6.5 million from $263, 360, a gain of more than 5,000%.

Technically, Bond directed 93% of his profitable trades to his account and 83% of his unprofitable trades to his client’s accounts. Prosecutors and court documents allege that Bond’s strategy was to perform day trading and then wait until later in the day or until the close of markets to instruct Neuberger Berman on the direction of trades to his accounts. According to the complaint, this tactic allowed Bond to determine whether trades were profitable or not.

Formally, the complaint charges Bond with six counts of securities fraud and three counts of investment advisory fraud. If convicted, he faces a possible maximum sentence of 75 years in prison. Each securities fraud charge carries a maximum sentence of 10 years while each advisory fraud charge carries a maximum of 5 years. This is in addition to millions of dollars in fines.

Bond’s lawyer, Ted Wells, told a number of news sources that the new charges came as a complete surprise and until he has had a chance to study them, cannot comment.

«