Compliance July 26, 2016

Bank of America Settles Mortgage-Backed Securities Case with Public Fund

The bank has agreed to pay $335 million to settle a lawsuit brought by the Pennsylvania Public School Employees’ Retirement System.
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The U.S. District Court for the Southern District of New York has preliminarily approved a settlement of a lawsuit brought by Pennsylvania Public School Employees’ Retirement System against Bank of America over the bank’s mortgage-backed securities program.

The lawsuit, originally filed in 2011, claims the defendant violated federal securities law by allegedly misrepresenting and concealing the magnitude of the bank’s potential exposure to demands to repurchase mortgage-backed securities that had been sold by Bank of America and Countrywide Financial Corporation, and about alleged risks to the bank arising from its use of and reliance on a national database that tracks changes in mortgage servicing rights and beneficial ownership interest in loans secured by residential real estate. The lawsuit claims the misrepresentations caused Bank of America stock to trade at artificially inflated prices.

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The bank has agreed to settle all claims for a cash payment of $335 million. It denies any wrongdoing and, according to a court document, it agreed to the settlement to eliminate the burden and expense of further litigation.

The notice of the settlement agreement can be found in this document.

Data and Research July 26, 2016

Retirement Planning Focus Differs by Age

OneAmerica claims its findings show targeted communications are more effective to help participants get retirement ready.
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Age-specific strategies to reach retirement plan participants, rather than a one-size-fits-all approach, is the most effective method for plan sponsors to help participants become retirement ready, OneAmerica found through a five-month analysis of 10,500 visitors to its participant website.

Between September 2015 and January 2016, 29% of people between the ages of 18 and 34 visited the OneAmerica participant website, as did 25% of those between the ages of 35 and 49, and 36% of those 50 and older. Twenty-three percent of those younger than 35 think about retirement every week, compared to 27% of those ages 25 to 49 and 45% of those 50 and older.

Forty-eight percent of those 50 and older monitor their retirement plan at least once a month, followed by 44% of those younger than 35 and 40% of those ages 35 to 49. Fifty-five percent of those 50 and older say it is very important to track their retirement plan status, compared to 49% of those in the 35 to 49 age bracket and 47% of those younger than 35. Participants 50 and older are most interested in retirement plan investment and distribution options, while those younger than 35 concentrate mostly on employer matches.

“To reach employees, plan sponsors and financial professionals should create targeted communication strategies that factor in age demographics,” says Marsha Whitehead, vice president of marketing for retirement services for the companies of OneAmerica. “Segmenting employee populations by age could be an effective way to provide more personalized and effective messaging, because respondents show variations in retirement planning triggers, potential roadblocks and preferred communications by age.”

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