Administration September 25, 2008

Court OKs Delphi Settlement With EBSA

September 25, 2008 (PLANSPONSOR.com) - The U.S. Department of Labor and Delphi Corp. have obtained approval of a settlement that restores money to a savings plan lost as a result of investment activities.
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The U.S. bankruptcy court in New York has approved the plan that allows the government to recover more than $2.2 million in retirement plan assets owed to the Delphi Personal Savings Plan for Hourly Employees in the United States (see  EBSA Settles $2.2M Bankruptcy Claim for Delphi Pension Plan ).   The bankruptcy settlement resolves a claim brought by the Labor Department on July 31, 2006, seeking to restore assets to the savings plan lost as a result of investment activities.  

“This settlement will ensure that assets are available to pay future retirement benefits for these workers,” said Secretary of Labor Elaine L. Chao in a press release.

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The claim and settlement resulted from an investigation by the department’s Employee Benefits Security Administration (EBSA) into improperly invested dividends the company failed to properly disclose or correct. Between 2000 and 2003, dividends were improperly invested in General Motors Corp. stock, rather than in an income fund as required by Delphi’s savings plan, according to an EBSA press release .

In fiscal year 2007, EBSA achieved monetary results of $1.5 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

Administration September 24, 2008

Putnam Money Market Fund Clients to Become Federated Shareholders

September 24, 2008 (PLANSPONSOR.com) - Federated Investors, Inc. and Putnam Investments announced that, upon liquidation, the institutional Putnam Prime Money Market Fund will invest its assets in the Federated Prime Obligations Fund in an in-kind purchase transaction.
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The companies said the $12.3 billion Putnam Prime Money Market Fund was liquidated after 5 p.m. Wednesday and its institutional shareholders received shares of Federated Prime Obligations Fund on a $1-per-share for $1-per-share basis.  

Federated Prime Obligations Fund, which had $22.1 billion in assets as of September 22, 2008, “is designed for use by fiduciaries and other institutional investors who have rigorous requirements for safety and daily liquidity at par,” a press release noted.

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This action follows Putnam’s September. 18, 2008 announcement that the Board of Trustees of the Putnam Funds, in response to market conditions, had voted to close the Putnam Prime Money Market Fund, effective 5:00 p.m. on Sept. 17, 2008 and to liquidate the fund. (See  Market Turmoil Sparks Putnam Fund Shuttering )

Shareholders of Putnam Prime Money Market Fund will be entitled to dividends through September 24, 2008, the announcement said. The accumulated, but unpaid, dividends will be paid on September 25, 2008 by Putnam.   Such shareholders will be entitled to dividends from Federated Prime Obligations Fund beginning September 25, 2008.

“We believe this transaction with Federated is very beneficial to the shareholders of the Putnam Prime Money Market Fund,” said Robert L. Reynolds, Putnam president and chief executive officer, in the release.   “First, we wanted to be fair and equitable to all shareholders, which is why we closed the fund.   Second, in liquidation, we were looking for the best solution possible.   The transaction with Federated accomplishes this objective.”

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