Administration May 6, 2015

Code of Conduct Created for Public Pension Service Providers

“The code of conduct is a valuable tool to ensure that fiduciaries and plan providers are working together in the best interests of participants and beneficiaries,” says Hank Kim, Esq., NCPERS executive director and counsel.
Reported by

Public pension plans will begin asking their service providers to commit to a new set of ethical guidelines designed to protect the interests of plan participants and beneficiaries, the National Conference on Public Employee Retirement Systems (NCPERS) announced.

The NCPERS Code of Conduct for Public Pension Service Providers identifies 10 principles for service providers. The 10-point voluntary plan requires service providers to:

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

  • Act in a professional and ethical manner at all times in dealings with public plan clients;
  • Act for the benefit of public plan clients;
  • Act with independence and objectivity;
  • Fully disclose to public plan clients conflicts of interest that arise that may impair the ability to act independently or objectively;
  • Act with reasonable care, skill, competence, and diligence when engaging in professional activities;
  • Communicate with public plan clients in a timely and accurate manner;
  • Uphold the applicable law, rules, and regulations governing their sector and profession;
  • Fully disclose to public plan clients all fees charged for the products or services provided to said client;
  • Not advocate for the diminishment of public defined benefit plans; and
  • Fully disclose all contributions made to entities enumerated in Schedule A that advocate for the diminishment of public defined benefit plans.

“Pension plan fiduciaries are obligated to make prudent, informed decisions about plan services, with an eye at all times on discouraging conflicts of interest,” says Hank Kim, Esq., NCPERS executive director and counsel. “NCPERS created this code of conduct to help fiduciaries and managers articulate strong, consistent ethical expectations for service providers across the board.”

NCPERS began developing the code of conduct about a year ago, with work originating in the Advisors Committee of the NCPERS Executive Board. As the code of conduct took shape, discussions were held with the CFA Institute, whose mission is to lead the investment profession globally by promoting the highest standards of ethics, education, and professional excellence for the ultimate benefit of society.

Compliance May 6, 2015

PBGC Will Pay U.S. Airways Pilots for Delayed Pension Payments

The agency agreed to a $5.25 million class action settlement.
Reported by

A U.S. District Court has given final approval to a settlement between the Pension Benefit Guaranty Corporation (PBGC) and a class of retired U.S. Airways pilots who claimed their pension benefits were unreasonably delayed.

The case originally filed in 2007, noted that U.S. Airways pilots who chose to receive their retirement benefits as a monthly annuity began to receive retirement payments the first day of the month after they retired (the Benefit Commencement Date). However, pilots who chose the lump-sum payment were typically not paid until 45 days after the Benefit Commencement Date and were not paid interest for that period.

Get more!  Sign up for PLANSPONSOR newsletters.

The PBGC agreed to a $5.25 million class action settlement to remedy the pilots’ claims. The agency assumed responsibility for the plan after U.S. Airways sought bankruptcy protection.

In 2012, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a ruling that a 45-day delay in making a lump-sum payment from the pension plan was unreasonable. The appellate court remanded the case to the U.S. District Court for the District of Columbia “to calculate the appropriate amounts.” The appellate did not decide the duration of a “reasonable” delay because the three members of the panel did not agree.

On remand, the original plaintiffs in the case pressed their rights to a class action, which was denied, but reversed by the appellate court. Upon notice from the parties that they were negotiating a settlement based on anticipated class certification, the district court certified a class. 

The settlement represents a recovery of more than 70% of the damages for the class based on an administrative delay of 45 days at 6% interest. The district court also approved an award of attorneys’ fees to the plaintiffs’ counsel.

The opinion in Stephens v. U.S. Airways Group is here.

«

 

You’re viewing the third of three free articles.

  This is your final free article. 

Subscribe to a free PW newsletter - get free online access!

 Don’t leave before subscribing! 

 SUBSCRIBE & GET FREE ACCESS! 

If you’re a subscriber, please login.

Close