Administration January 3, 2012

Conflicts Keep NYC Pension Fund from Taking Lead in MF Global Suit

January 3, 2012 (PLANSPONSOR.com) - New York City’s largest pension will not be lead plaintiff in a lawsuit to recover millions of dollars from bankrupt MF Global.
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The New York Post reports the pension board of the NYC Employees Retirement System overwhelmingly rejected a motion to become chief plaintiff in the MF Global securities-fraud class-action suit, citing Comptroller John Liu’s hiring of two top MF Global officers. Larry Schloss, the deputy who oversees the investments of the city’s $120 billion pension fund, served on MF Global’s board of directors before going to work for the comptroller, and Kevin Davis, MF Global’s CEO for a decade before Corzine took over, was a key official in the comptroller’s Bureau of Asset Management before stepping down.  

“We can’t be a lead plaintiff against MF Global when their top employees now work for us and will be grilled as witnesses,” said one insider familiar with the deliberations, according to the Post.  

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The city’s five pension funds, which lost as much as $9.6 million when MF Global went bust, will automatically be a plaintiff in the case.
Benefits January 3, 2012

Minneapolis Pension Plans Go to State, Ending Legal Battle

January 3, 2012 (PLANSPONSOR.com) – Minneapolis’ closed police and firefighters’ pension funds have merged into the statewide public safety pension plan.
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A judge’s signature on a pension lawsuit settlement resolved the last snarl between the city of Minneapolis and the pension funds which have been closed to new members for 31 years. For the first time in more than five years of fighting the city’s legal claim that they were overpaid, pensioners don’t have to worry about refunding part of their past pensions and know they’ll get a major increase in benefits, according to the Minneapolis Star Tribune.  

The settlement, signed by Hennepin County District Judge Janet Poston, means the city won’t pursue the recovery of benefits, and the two pension associations won’t seek pension increases and one-time payments their members would have been entitled to. The news report said the merger brings an end to a Minneapolis Firefighters Relief Association and the Minneapolis Police Relief Association.   

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Pension fund board members could see the high cost of fighting the city’s lawsuit and keeping their septuagenarian and octagenarian pensioners in uncertainty, according to their lawyer-lobbyist Brian Rice, the Star Tribune said. The merger was a high priority for the city because it allowed the city more time to make payments on its unfunded pension liabilities, which would jump by $17 million in 2012.  

The pension merger was approved by lawmakers last summer. 

The plans are the last of four closed city pension plans that have merged into state funds in the past six years. The mergers kept the city’s property levy from increasing in 2012. 

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