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Compliance January 10, 2008
Fifth Third Bank Sued over Pension Fund Real Estate Investment
January 10, 2008 (PLANSPONSOR.com) - The U.S.
Department of Labor (DoL) announced it has sued Fifth Third
Bank, adviser to the Operating Engineers Local 324 Pension
Fund in Troy, Michigan, over allegations the bank mismanaged
the sale of property owned by the fund.
Reported by Rebecca Moore
According to the announcement, Ohio-based Fifth Third Bank and Carey Milestone Advisors LLC managed real estate investments on behalf of the pension plan. Based on the advice of Carey Milestone Advisors, the bank furnished the plan with a strategy for development of property in Detroit it owned, but subsequently reversed its development strategy and sold the property to the Cavaliere Group.
The property was sold for only $4.5 million. However, at the time of the sale, the plan had invested more than $28 million in the property, the DoL said.
The suit seeks to recover any losses owed to the plan, including interest, resulting from fiduciary violations under the Employee Retirement Income Security Act.