The U.S. Department of Labor (DOL) has settled a lawsuit over provider selection procedures against the International Association of Machinists National Pension Fund (IAM National Pension Fund).
According
to the DOL, an investigation by its Employee Benefits Security
Administration (EBSA) found that the IAM National Pension Fund trustees
breached their fiduciary duties under the Employee Retirement Income
Security Act (ERISA) by:
Failing to loyally and prudently select fund service providers, including consultants and fund investment managers;
Regularly ignoring required procedures included in the fund’s governing plan documents;
Creating conflicts of interest for the fund;
Unlawfully soliciting and accepting gratuities from plan service providers; and
Spending
and permitting others to spend fund assets lavishly on unnecessary
trips, parties and extravagant food, wine, and accommodations.
However, it a statement, the IAM National Pension Fund says it believes the lawsuit was unfounded.
“The
central focus of the Department’s lawsuit questioned the manner in
which the Fund hired certain investment managers and consultants—but
never suggested that those consultants were unqualified, lost money for
the Fund, or performed poorly. Instead, the Department raised questions
as to the process the Trustees employed when selecting these advisers,”
the fund said in its statement. It noted that the fund is nearly 100%
funded.
However, the fund determined that the settlement was in
the best interest of participants. “The Trustees’ decision to accept
the settlement agreement likely has saved the Fund many times the
settlement amount in attorneys’ fees and litigation costs,” says Ryk
Tierney, director of the IAM National Pension Fund.
The
settlement agreement orders the defendants to repay $200,000 to the fund
and pay $40,000 in civil money penalties. The order also requires the
plan trustees to take the following actions to protect fund participants
from future violations of ERISA:
Within 30 days of entry of
the order, adopt the new manager and consultant selection policy, which
mandates that the plan trustees use a three-part search process for
selecting an investment consultant or investment manager.;
Engage
in a new search process for a new general investment consultant for the
fund, and hire an independent search consultant to conduct a
comprehensive and objective request for proposal process for this
search;
Amend the fund’s code of conduct and ethics to prohibit
the same person from acting as both an investment consultant and
investment manager for the fund; and
Amend the fund’s record
retention policy to hold records relating to the hiring or firing of any
investment consultant or manager for six years.
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Prudential Names Head of New Full Service Solutions Business; Willis
Towers Watson Appoints Head of Delegated Investment Solutions; Chief Investment
Strategist for TIAA Investments Appointed, and more.
President Obama has appointed Babette A. Ceccotti to serve as a member of the Advisory Committee of the Pension Benefit Guaranty Corporation (PBGC).
She
will serve as a member representing the interests of employee
organizations. “Babette has extensive experience in employee benefits
and bankruptcy, making her a valuable addition to the Advisory
Committee,” says PBGC Director Tom Reeder. “We look forward to working with her on ways to preserve pensions and enhance retirement security.”
Ceccotti
is a retired partner from Cohen, Weiss and Simon LLP in New York City,
where she focused on employee benefits and bankruptcy. In the firm’s
employee benefits practice, she represented unions and employee benefit
plans in matters under the Employee Retirement Income Security Act
(ERISA) and the Federal Employees Health Benefits Program.
Additionally,
Ceccotti represented labor organizations and employee benefit plans in
numerous business bankruptcy cases in the airline, automotive and other
industries.
Ceccotti was appointed by President Clinton to serve
on the National Bankruptcy Review Commission from 1995 to 1997. She is a
conferee of the National Bankruptcy Conference.
Ceccotti received a Bachelor of Arts from Clark University and a Juris Doctor from New York Law School.
NEXT: Lockton Hires Client Adviser
Jeffrey A. Sumner has joined Lockton's employee benefit team as a senior vice president and client adviser in the company's Philadelphia operation.
Sumner
will work with Lockton clients on employee benefits programs,
compensation strategies, retirement plans, and compliance issues. He
will focus on business development and leading client
teams.
Prior to joining Lockton, Sumner was a
vice president with Tompkins Insurance, a broker in Philadelphia,
advising clients on employee benefits issues. He began his career as a
consultant with Unum, an insurance carrier. He is a graduate of Ursinus
College in Philadelphia.
NEXT: Prudential Names Head of New Full Service Solutions Business
Prudential Retirement, a business of Prudential Financial, Inc, has named Jamie Kalamarides head of its newly created Full Service Solutions business, which delivers retirement plan solutions for public, private and non-profit organizations.
Kalamarides’
new role combines retirement plan recordkeeping and administration with
full service investments. In addition, Kalamarides will continue as CEO
of Prudential Bank and Trust. This move comes as Jamie McInnes,
current head of Prudential Retirement’s defined contribution, defined
benefit and nonqualified recordkeeping and administration business, has
accepted a new role with Prudential’s International Insurance Division.
Kalamarides
has more than 20 years of experience managing retirement plan platforms
and investment solutions. He has deep knowledge of the full service
business and is a highly respected advocate in Washington, D.C., for new
approaches to solving financial security challenges.
Phil
Waldeck, currently head of Pensions and Structured Solutions, will take
on an expanded role and become the head of the Investment and Pension
Solutions business, bringing the Pension Risk Transfer, Structured Settlements and Stable Value teams together as one integrated business.
The appointments are effective September 5.
NEXT: Willis Towers Watson Appoints Head of Delegated Investment Solutions
Willis Towers Watson has appointed Kemp Ross as global head of Delegated Investment Solutions in the company’s Investment business, effective immediately.
The
new role follows growing demand for the company’s investment
outsourcing services, which now has approximately $75 billion in assets
under management.
Kemp joins from Aon Hewitt, where he’s held
various roles since 2008; most recently, he was senior partner, head of
Solutions and Operations for Investment. Prior to this, Kemp worked at
Mercer for 15 years, most recently as the Chicago Retirement business
leader.
Kemp is an actuary by background and has a B.S. in
mathematics from Carnegie Mellon University and an M.S. in applied
statistics from North Carolina State University. He will remain based in
Chicago and will report to Chris Ford, global head of Investment at Willis Towers Watson.
NEXT: White Oak Appoints Practice Leader for OCIO Projects
White Oak Advisors, LLC
appointed Kristie Brenner as practice leader for Plan Service Provider
and Outsourced Chief Investment Officer (OCIO) Searches and Benchmarking
projects.
Since its founding, White Oak Advisors has
consistently conducted searches for service providers and OCIO firms.
Recent increases in inquiries and activity have led White Oak to
establish a dedicated professional for the oversight and management of
these services as an extension of their Plan Consulting and Advisory
Practice.
Prior to joining White Oak Advisors,
Brenner served as a retirement plan consultant for more than 20 years
and has been in the employee benefits industry more than 25 years.
Brenner has worked with clients who have complex retirement plan
structures and investment pools including various defined contribution
and defined benefit plans along with foundations and endowments.
White
Oak is a boutique retirement plan consulting and advisory services firm
which specializes in plan design, fiduciary committee leadership
services, plan investment consulting, compliance and regulatory support
services as well as provider search services.
NEXT: Milliman Hires Taft-Hartley Consultants
Milliman, Inc. has hired two Taft-Hartley consultants to its Employee Benefits practice.
John Donohue and Tom Carrabine will focus on bolstering the firm’s expanding Taft-Hartley business across the United States.
Previously, both John and Tom were leading members of the Taft-Hartley team at John Hancock and before that New York Life.
NEXT: Chief Investment Strategist for TIAA Investments Appointed
TIAA Global Asset Management appointed Brian Nick as chief investment strategist for TIAA Investments.
Based
in New York, Nick will work closely with the investment management team
to analyze market data, identify trends and provide insights on events
driving market activity.
He will share his
perspectives on global market trends, equities and fixed income markets
outlook, and other investment analysis, through presentations to
individual and institutional investors, and by contributing thought
leadership content to TGAM.com/insights.
Nick brings extensive
knowledge of global macroeconomic conditions, capital markets,
alternative investments and tactical asset allocation to TIAA
Investments. Formerly with UBS Wealth Management Americas, Nick was head
of tactical asset allocation and led the firm’s efforts in developing
its tactical investment strategies and portfolio concepts. Prior to UBS,
he was responsible for tactical asset allocation modeling and capital
market assumptions as head of alternatives strategy and investment
strategist at Barclays Wealth. He was also a markets analyst at the
Federal Reserve Bank of New York.
NEXT: PAAMCO Hires Managing Director
Pacific Alternative Asset Management Company (PAAMCO), an alternative investment management firm, announced that Carrie McCabe has joined the firm as managing director.
McCabe will work on new business initiatives and special projects.
McCabe
has held leadership roles at several alternative asset management firms
over the course of her 30 years in the industry. She has served as
chief executive officer of Lasair Capital, Financial Risk Management,
and Blackstone Alternative Asset Management. Most recently McCabe was a
senior adviser to McKinsey & Company working with their Asset
Management and Private Equity practices and clients.
McCabe holds an MBA from Harvard University and a B.A. in Economics from Stanford University.