Compliance January 5, 2006

QDRO Amended After Participant Death not Valid

January 5, 2006 (PLANSPONSOR.com) - The US District Court for the District of New Jersey has determined that an amended qualified domestic relations order (QDRO) naming a participant's ex-wife as alternate payee of his monthly pension is not valid.
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The court said the document could not give the ex-wife a right to survivor benefits that did not exist at the time of the participant’s death, and therefore was not a qualified domestic relations order (QDRO) under the Employee Retirement Income Security Act (ERISA).

According to the opinion, the couple’s divorce agreement (which met the requirements of a QDRO) provided for the wife to receive $232.56 per month once the husband began receiving his monthly pension benefits.   Since he died before he began receiving his monthly benefits, the wife’s right to the benefits never existed.  

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The pension fund administrators denied the wife’s claim for benefits on this basis.   After being denied, the wife obtained the amended QDRO from a New Jersey state court.   The amended QDRO stated that the ex-wife was to be deemed the “alternate payee” of husband’s benefits and was to be treated as his surviving spouse.   After still being denied benefits, the ex-wife sued.

The court granted summary judgment in favor of the pension fund.

The case is Sanzo v. NYSA-ILA Pension Trust Fund, D.N.J., No. 04-300 (WGB), unpublished 12/29/05.

Administration January 4, 2006

CII Opens Dialogue With A Fractured Morgan Stanley

April 13, 2005 (PLANSPONSOR.com) - The Council of Institutional Investors has decided to open a dialogue with Morgan Stanley regarding the financial firm's recent management struggles.
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The increasingly activist group of private and public pension plans – with $3 trillion in total assets – has decided to arrange a call with the company’s CEO, directors and dissidents for a briefing on the proposed strategies for managing Morgan Stanley. The call could lead the  Council  to recommending a course of action, according to the Wall Street Journal.

The pension group is increasingly vocal, possibly as a result of its recent shift towards a board that is dominated by organized labor and public-pension officials with close ties to labor, the Journal reported.

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Morgan Stanley indicated that it was open to the interest from the Council, with a spokeswoman stating that the company is “always willing to listen and be responsive to concerns of our shareholders.”

Morgan Stanley has recently been rocked by a serious of high-profile departures and calls for the resignation of CEO Philip Purcell, with dissidents saying a recent management shake up he engineered was not in the best interests of the company. Purcell said on Tuesday that he was replacing President Stephan Newhouse with two co-presidents, Morgan Stanley veterans Stephen Crawford and Zoe Cruz.

A group of major shareholders has also weighed in, saying that Purcell is the reason for lagging stock prices and poor financial performance.

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