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  #721  
Old 06-25-2018, 01:59 PM
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Mary Pat Campbell
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ST. JOSEPH HEALTH SERVICES
RHODE ISLAND

http://ripr.org/post/roman-catholic-...wsuit#stream/0
http://www.golocalprov.com/news/dioc...-fraud-lawsuit

Quote:
Diocese of Providence Issues Statement in Response to Fraud Lawsuit
Spoiler:
Finally, days after the receiver for the failed St. Joseph Pension fund filed massive lawsuits in both State and Federal Court, the Diocese of Providence issued a statement late on Friday.
The lawsuit filed alleges that the Diocese was a key player in a fraud that now leaves the pension fund with a gap of an estimated $118 million.

The Diocese of Providence Statement Reads:

As you know, the ongoing dispute about the status of the pension funds of St. Joseph Health Services of Rhode Island (the former operator of St. Joseph Hospital and Fatima Hospital) has emerged in the news once again with the filing of a class action lawsuit. The suit names corporations related to the Diocese of Providence along with approximately 12 other defendants. Although some litigation about this matter was expected, we are surprised and disappointed that the Diocese is included.

As we have explained before, the Catholic Church ended its administrative role with the hospitals several years before the pension problem developed. In fact, the two legal complaints (each over 100 pages in length) acknowledge and repeat much of what we have said previously. One paragraph references “the diminished or nonexistent roles of Bishop Tobin and the Diocese in SJHSRI’s governance after the 2009 merger” with CharterCare. The next paragraph notes that “Upon the conclusion of the 2014 Asset Sale, the Diocese had no meaningful role in the governance of SJHSRI. To the contrary, the only rights it had concerned the “Catholicity” of SJHSRI’s operation of the hospital and provision of health care.”

The pension fund was in effect “orphaned” when Prospect Medical Holdings, a multi-billion dollar, for-profit corporation, purchased CharterCare which had been previously formed by the combination of St. Joseph Health Services and Roger Williams Medical Center. Prospect assumed responsibility for all aspects of the hospital management – except for the pension fund.

Please keep in mind that these corporate transactions took several years and involved detailed negotiations of boards of directors, hospital administrators, attorneys, actuaries, consultants, and canonists. They were fully vetted and approved by state officials, including the Attorney General and the Department of Health, and were supported and recommended for approval by the nurses’ union.

The litigation is part of the ongoing process which began almost a year ago. The lawsuit is long and very complex and will involve multiple attorneys and corporate entities. It probably will take considerable time to be resolved. The Diocese will be fully engaged in this process and will vigorously respond to the inaccurate claims contained in the lawsuit.

In the meantime, while this unfortunate litigation follows its own discrete path, the work of the Church will continue unabated. We will continue our mission of gathering the faithful for worship, preaching the Gospel, educating children, serving the poor, and advocating for a better and just society. As always, your prayerful and personal support will be important and greatly appreciated. The words of Jesus spoken to his disciples at the Last Supper are as relevant now as ever: “Do not let your hearts be troubled, but have faith in God and faith in me.” (Jn 14:1)
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  #722  
Old 07-15-2018, 07:58 PM
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AVERY DENNISON

https://www.marketwatch.com/story/an...you-2018-07-11

Quote:
Another company just cut its pension plan — what to do if it happens to you
Avery Dennison’s employees will have access to a 401(k) plan


Spoiler:
Avery Dennison AVY, +1.39% is the latest example of a persistent trend: the death of the pension plan.

The labeling and packaging company said on Wednesday it was terminating its pension plan, effective Sept. 28, eight years after first freezing the program. It also said there would be no change in benefits for the 11,200 current participants, although the plan is currently underfunded by about $240 million.


How the ad industry is working to move away from the 'Mad Men' era

See: Government money should help solve this pension crisis

What does that mean for plan participants right now? The elimination of the plan means current participants will have to choose between receiving their benefit now as a lump-sum payment or as a continuing monthly payment, said Edward Snyder, a financial adviser at Oaktree Financial Advisors in Carmel, Ind. “It’s a good time to revisit your financial plan to see how the different pension options will impact your plans and retirement income.”

Of course, that isn’t exactly easy. There are a few stipulations to consider before making a decision, said A.J. Walker, a financial adviser at financial advisory firm Lake Jericho in Chicago. Participants will have to determine if receiving a lump sum today would be equal to the annuitized payments, or if they may be undersold by doing so. In some similar scenarios, clients have risked losing out on a substantial amount of benefits because they opted for a lump sum, sacrificing the benefits they were meant to receive.

Don’t miss: This retired sanitation worker makes $285K a year from pension

If the math works out, and a lump sum and annuitized payments are equal, participants must then consider who would be managing those assets. While Avery Dennison manages the pension plan, it is federally insured by the Pension Benefit Guaranty Corporation, but that changes when those assets are transferred to the private insurance companies to manage. “I would weigh heavily who the provider of the annuity is,” he said. “You want a good, solid reputable company to have that.” If not, a lump sum may be the best option as it can be reinvested into diversified stocks and bonds. The risk of staying with a potentially insecure company is that those assets are exposed to less reliable investments. This would be an expensive mistake for anyone, but especially for those employees with three or four decades until retirement.

Companies are eliminating pensions, known as defined-benefit plans, opting instead for defined contributions plans, such as the 401(k), where participation is voluntary and employees are responsible for their own retirement savings. Only 16% of Fortune 500 companies offered a defined-benefit plan to new hires in 2017, down from 59% among the same employers in 1998, according to London-based insurance company Willis Towers Watson. About half of these companies still employ workers who are actively accruing pension benefits, and 93% of these companies with a defined-benefit plan in 1998 still manage their plans and assets.

Also, like Avery Dennison, some of these plans have been frozen. Freezing benefit plans varies based on the terms of the plans, but basically come down to the benefits no long accruing. Participants will already get the benefits that have grown, but may not earn more moving forward. “Participants generally need to be on the watch that more of this is coming,” Walker said.

Also see: Here’s a way to get a pension-like benefit in retirement

Avery Dennison is transferring its payment obligations and the administration of the plans to one or more insurance companies that manage pension annuities next year, and as part of that transfer the plan will be fully funded, said Rob Six, vice president of communications for the company. Avery Dennison still offers retirement benefits to employees through a 401(k) plan. Beginning this year, the company increased its matching contribution rate for eligible participants to 50% of the first 7% of eligible pay. It also offers an automatic contribution of 3% of eligible pay.


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  #723  
Old 07-15-2018, 09:41 PM
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CHURCH OF ENGLAND
DIVESTMENT

https://www.ai-cio.com/news/church-e...-fossil-fuels/

Quote:
Church of England Votes to Divest from Fossil Fuels | Chief Investment Officer

Spoiler:
Oil, gas companies have until 2023 to comply with Paris Agreement goals before the church will pull all holdings.
The Church of England has voted to dump £12 billion ($15 billion) in holdings of fossil fuel companies if they are not tackling global warming quickly enough.
The church voted 347-4 with three abstentions in favor of the changes in the General Synod, the church’s legislative body, reports Citywire. Oil and gas companies that have not aligned their businesses with the goals of the Paris Agreement by 2023 will see divestment from the £8.33 billion Church Commissioners investment fund, the Church’s £2.3 billion retirement fund, and an additional £2 billion in other Church of England funds.
The vote is based on the suggestion of Canon Giles Goddard of the church’s environmental group that the church track companies’ progress on carbon reduction by 2023. Goddard said companies not focused on the Paris Agreement’s target to reduce global temperatures by 2 degrees Celsius by that time should see divestment from the church.
In his initial proposal, Goddard pushed compliance deadlines to 2020, but the church decided 2023 would better encourage progress without “prematurely divesting” from businesses.
At the Synod discussion, David Walker, Bishop of Manchester, said that full divestment from fossil fuel companies in 2020 would “leave our strategy and influence in tatters.” Walker also said that divestment would also relieve fossil fuel companies from compliance rather than reinforce it. He agreed with the 2023 deadline, saying that it creates enough time for engagement.
As of December, the church itself had £123 million in oil and gas investments. In 2015 and 2017, its funds cut coal miners and companies taking oil from tar sands and filed a motion with oil giant ExxonMobil on improving its climate risk disclosures.

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  #724  
Old 07-22-2018, 05:45 PM
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RHODE ISLAND
CHURCH PLANS

https://www.ai-cio.com/news/ri-treas...-transparency/

Quote:
RI Treasurer Calls for Church Pension Transparency
Seth Magaziner says religious funds should have to abide by ERISA rules.


Spoiler:
In response to the collapse of the St. Joseph Health Services of Rhode Island pension fund, state Treasurer Seth Magaziner is calling for new transparency requirements for pension plans managed by religious organizations.

Magaziner said he will seek legislation in the 2019 state general assembly session that would require pension plans managed by religious organizations in Rhode Island to send regular updates on the financial health of the pensions to their plan participants.

Magaziner made the announcement flanked by retired members of the St. Joseph pension plan, which went into state receivership last year, leaving current and retired workers to face a loss of benefits. Approximately 2,700 current and former workers of St. Joseph’s and Our Lady of Fatima hospitals belonged to the plan.

“What the employees and retirees of these hospitals are going through is unacceptable,” said Magaziner. “All workers and retirees deserve to know the truth about their health of their retirement savings.”

The federal Employer Retirement Income Security Act (ERISA) requires most private pension plans to send members a letter each year outlining the health of their plan. However, church pension plans are exempt from ERISA, which has drawn criticism over a lack of transparency.

“Church plans should be transparent with their members just like other pension plans,” said Magaziner.

Last month, class-action lawsuits were filed against the Roman Catholic bishop of Providence and hospital operator Prospect CharterCare, accusing them of conspiring to mislead state regulators and commit fraud. The suits said that over the last 10 years Bishop Thomas Tobin and the operators of Our Lady of Fatima Hospital vastly underfunded the hospital’s pension plan, and then conspired to conceal that fact to regulators and participants.

“Many people knew that this pension fund was unsustainable without continued financial support,” said Chris Callaci, legal counsel for United Nurses and Allied Professionals (UNAP), “and they said nothing to the 2,700 members of the plan.”

The Roman Catholic Diocese of Providence, which founded the plan, disputed the charges.

“The Diocese of Providence strongly disagrees with the allegations asserted against it in this very long and complex lawsuit,” it said, according to the Providence Journal. “The Diocese will respond appropriately to these claims and we are confident that our position will prevail.”
https://www.sfchronicle.com/news/art...n-13084896.php
Quote:
Treasurer calls for more religious pension plan transparency

Spoiler:
PROVIDENCE, R.I. (AP) — Rhode Island's treasurer says the state badly needs new legislation that would require transparency in pension plans managed by religious organizations.

General Treasurer Seth Magaziner made the announcement Tuesday standing with a group of pensioners facing benefit cuts from the now-in-receivership St. Joseph Hospital pension plan.

The Providence Journal reports that thousands of Rhode Island residents are in benefits plans managed by religious organizations.

These plans are exempt from federal laws that require annual financial information disclosures.

In response to Magaziner, the Rhode Island Catholic Conference released a statement agreeing with the importance of disclosing pension plan information to participants.

Democratic Gov. Gina Raimondo has already signed a law related to the pension collapse at St. Joseph and Our Lady of Fatima hospitals.

___


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  #725  
Old 07-25-2018, 03:13 PM
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RHODE ISLAND
CHURCH PLANS

http://www.630wpro.com/2018/07/17/st...eveal-details/

Quote:
State treasurer proposes private pension plans reveal details | WPRO

Spoiler:
Standing with a handful of St. Joseph Hospital retirees who are suing the Diocese of Providence over their overextended pension plan, Rhode Island General Treasurer Seth Magaziner announced Tuesday he is proposing legislation to require private pension plans reveal basic information to plan participants.
“We just want to close the loophole that says some plans are exempt,” from reporting requirements affecting most public pension plans, said Magaziner.
He said that he would introduce legislation in the 2019 session that would require pension plans managed by Rhode Island religious organizations to send regular updates on the financial health of the pensions to their plan participants.
“The RI Catholic Conference agrees that transparency and disclosure to pension plan participants about non-ERISA plans is a responsible practice.* In fact, such has been the practice of the Diocese of Providence for many years,” said Father Bernard Healey, Conference Director in a statement.
“The Diocese of Providence has demonstrated such transparency by annually providing each pension plan participant (known as the “Lay Employee Pension Plan”) a yearly estimate retirement benefit statement. This report is mailed to each active participant of the pension plan.* Additionally, an annual independent audit of the Central Administration Funds and Diocesan Cemetery Operations discloses the plan’s health, which includes a detailed explanation of the plan’s overall status.* This audit report is published in full on our diocesan website. Lastly, “Town Hall” style meetings with plan participants have been held around the state when significant changes have been proposed to the pension plan.* In addition, diocesan fiscal and human resource personnel are available to consult with every plan participant by phone or in person each and every business day.”
“The hearts of all of us are broken to think that this could ever happen to us,” said Marilyn Horan of Providence, a retired registered nurse who said she was born in St. Joseph Hospital and worked there for 40 years before retiring in 2004.
“That our hospital, that we gave our lives to, could possibly allow such a thing to happen and keep us all in the dark,” Horan said.
St. Joseph retirees have filed class action lawsuits in state and federal courts.

http://www.providencejournal.com/new...n-transparency
Quote:
State treasurer Magaziner calls for private pension transparency - News - providencejournal.com - Providence, RI
Spoiler:
PROVIDENCE, R.I. — The state badly needs a new law that would force pension plans managed by religious organizations to provide the same standard of transparency met by plans that are not exempt from reporting requirements, General Treasurer Seth Magaziner said Tuesday.
As he made his appeal for the legislation, Magaziner stood alongside a group of pensioners who face benefit cuts due to the dire condition of their pension plan, which is in receivership.
Those who worked for St. Joseph Hospital and Our Lady of Fatima Hospital are among thousands of Rhode Islanders enrolled in plans managed by religious organizations, according to Magaziner’s office.
Such plans are exempt from the federal Employer Retirement Security Act, which requires most private pension plans to provide key financial information to plan members each year.
“It is wrong for workers and retirees to not have access to information about how their pension plan is doing,” said Magaziner, who was standing in the rear parking lot of St. Joseph Hospital.
He was flanked by Marilyn Horan, a 75-year-old Providence woman who worked as a registered nurse for 40 years.
Some of those years were tough times for the hospital and employees went without raises, she recalled.
“We were always told ... to remember your hidden paycheck that will take care of you during retirement,” she said.
“We were all kept in the dark about what was happening with the pension, never receiving any notice that it might be in trouble,” Horan added.
In response to Magaziner’s news conference, the Rhode Island Catholic Conference, sent out a statement agreeing with the importance of disclosing pension plan information to participants.
For many years, the Diocese of Providence has mailed a yearly estimate retirement benefit statement to each participant, the statement says.
Gov. Gina Raimondo has already signed one law related to the pension collapse at St. Joseph and Our Lady of Fatima hospitals.
That law gives the attorney general and the state health director the authority to demand a stenographic record of statements made by hospital executives seeking approval to buy or sell a hospital.
The St. Joseph Health Services of Rhode Island pension fund went into state receivership, a type of bankruptcy, in August of 2017.
The $95-million pension fund was declared insolvent three years after California-based Prospect CharterCare bought St. Joseph, which owned several local hospitals.
Members of the plans have joined two large class-action lawsuits in both state and federal courts.
The suits accuse Bishop Thomas J. Tobin of the Roman Catholic Diocese of Providence, the operators of St. Joseph and Our Lady of Fatima hospitals, and others of under-funding the hospitals’ pension plan over the past 10 years and then conspiring to conceal that fact to regulators and to the beneficiaries themselves.
The court-appointed receiver for the troubled pension plan, Stephen F. Del Sesto, told The Providence Journal on Tuesday that the plan needs the necessary finances to have a lifespan of about 40 years.
Right now it only has enough money for a lifespan of about 10 years, he said, adding that it needs another $115 million to $120 million “to achieve fully funded status.”
The lawsuits aim to recoup retirement money for the members of the plan.
The federal suit requests the sale of Fatima and Roger Williams hospitals. In the requested scenario, proceeds from such a sale would fully fund the plan and ensure pensions to all beneficiaries going forward.
One of those beneficiaries is Carol Faufaw, 74, of Warwick, whose career spanned 45 years. She recalled a letter that she received on the date of her retirement in 2007, telling her how much retirement money she would receive.
“As it stands now that doesn’t seem to hold much weight,” she said.
In a recent interview, Bishop Thomas J. Tobin said the St. Joseph’s plan was 93-percent funded years after the church ceased to manage the hospitals when Prospect took over CharterCare.

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  #726  
Old 07-27-2018, 05:15 PM
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UNITED KINGDOM
BRITISH TELECOM
ACTUARIAL ERROR

https://www.theguardian.com/business...counting-gaffe

Quote:
BT blames human error as it reveals £500m pension deficit gaffe
Mistake by actuary comes after accounting scandal last year that wiped £8bn off its value
Spoiler:
BT has revealed another accounting error after its pension deficit was underestimated by £500m.

The telecommunications company, which had £8bn wiped off its stock market value in 2017 after admitting to an accounting scandal at its Italian unit, blamed the latest gaffe on an “isolated human error”.


BT loses almost £8bn in value as Italy accounting scandal deepens
Read more
The error was made by BT’s independent actuary, Willis Towers Watson, in its calculation of the company’s pension deficit at 31 March. The restated pension deficit stands at £3.9bn as at the end of June.

Simon Lowth, BT’s chief financial officer, said: “We have received assurances from Willis Towers Watson that there are no other errors. As you would expect, we are undertaking further review procedures around that calculation.

“We spent a lot of time with WTW making sure we understand what created the error. It was an isolated human error that they identified. We are also working on what they need to do to strengthen their controls.”

Following the £530m Italian accounting scandal, which cost the outgoing BT chief executive, Gavin Patterson, £4m in bonus payouts, the company’s accountant, PWC, was eventually fired. BT would not comment on its future relationship with WTW.

Lowth pointed out the error had no impact on the company’s profits, cashflow, the triennial valuation of its pension deficit conducted last year, or any members of the BT pension scheme. Nevertheless, another financial error was the last thing BT needed.

BT's credibility is still very much on the line
Nils Pratley
Nils Pratley
Read more
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: “Clearly this slip doesn’t inspire confidence.”

BT said the correction amounted to less than 1% of its total pension liabilities of just over £57bn.

WTW said the error was due to “an actuarial assumption not being accurately reflected in our actuarial calculations”.

“Willis Towers Watson has stringent controls in place to confirm the accuracy of the calculations that we provide to clients, and the error has now been corrected,” a spokesman said. “We are working closely with BT to support their review of the matter.”

Patterson, who said he would still be in place in November to deliver the company’s half-year results, said BT had made a good start to the year. “We are making positive progress against our strategy,” he said.

In the first quarter, Patterson said, it had made the first 900 of a planned 13,000 job cuts over the next three years to save £1.5bn.

BT’s financial performance for the second quarter was slightly ahead of forecasts, and the company reaffirmed its guidance for full-year revenue and profit.

This prompted a 4% share price rise as investors responded positively after a string of negative news that had left its share price down more than one-quarter in the past year.

Total revenue for the quarter was down 2% to £5.7bn. Reported profit before tax was up 68% to £704m, due to the hit the company took relating to the Italian accounting scandal. Adjusted profit was up 3% at £816m. Net debt increased to £11.2bn from £8.8bn.

The company has stopped reporting broadband and TV subscriber numbers, which fell in the past two quarters, as it focuses on increasing average revenue per customer rather than the number of sign-ups.

Paolo Pescatore, an independent telecoms analyst, said: “All providers will be seeking to lure households with attractive offers ahead of the new Premier League season. BT must do a better job of signing up TV subscribers and maximise BT Sport across its base.”


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  #727  
Old 08-07-2018, 11:14 AM
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AT&T
CLAWBACK

https://www.wsj.com/articles/at-t-ov...ack-1533306044

Quote:
AT&T Overpaid Some Pensioners. Now It Wants the Money Back.
The telecom giant has enlisted a collection agency, a step other companies in similar situations have declined to take
Spoiler:
When James Mizelle retired in 2001, he started drawing a pension from his 27-year career with AT&T and other phone companies.
Fifteen years later, he got a letter saying his benefits were miscalculated and demanding he repay $32,116.05. Mr. Mizelle, living in Round Hill, Va., replied that he couldn’t repay. Within weeks, he heard from a collection agency.
“That money had been spent,” says Mr. Mizelle, 70, who had incurred medical bills in a battle with prostate cancer. “I could not pay it back.”
The former programmer and human-resources worker is among potentially hundreds of ex-employees whom AT&T Inc. has dunned in recent years for what it calls pension “overpayments.” AT&T sometimes has enlisted a collection agency to recover the money, a move retiree advocates, pension lawyers and some former Treasury Department officials call unusual.
Among them are 17 retirees from whom AT&T and Fidelity Investments, the pension plan’s record-keeper, have demanded a combined $1 million and who have contacted lawyers working with the Pension Rights Center, a retiree-advocacy nonprofit in Washington, D.C., or related groups around the country, the center says.
An AT&T spokesman says the pension overpayments affect “significantly less than 1/10th of 1%” of its about 517,000 participants, with “a very small percentage” referred to collections. He declines to say how the company identified the errors or how much money is at stake.
A Fidelity spokesman says the firm helped zero in on errors at AT&T’s direction, including some predating Fidelity’s role. AT&T and Fidelity decline to address the individual cases in this article.
Companies for years have been taking measures to recoup pension overpayments, an issue federal tax officials have tried to address going back to the 1990s with a series of refinements to rules governing when and how companies must rectify such errors.
AT&T appears to have gone a step beyond many other large companies by sticking to its demands of full repayment and hiring a collection agency in some cases, even where retirees make the case that they lack the wherewithal to repay.
Sydney Smith, a former AT&T information-technology analyst living in the St. Louis area, received a letter in July 2016 saying she owed AT&T’s pension plan $19,306.95—money she had received, the company later told her, because she provided a date in the pension-benefit calculation that the plan’s website shouldn’t have let her use.
Ms. Smith says she told Fidelity she didn’t have the money. A single mother, she had cashed out her pension to pay debts and living expenses. “I used it,” says Ms. Smith, 42. “It’s gone.”
She asked about a repayment plan and was told she could make two payments of nearly $10,000 each, she says. She didn’t have that. Days after the plan denied her appeals, Ms. Smith says, she began getting calls from Lyon Collection Services Inc., the same agency that demanded repayment of Mr. Mizelle. “They started to call pretty constantly.”
Ms. Smith enlisted Roger Curme, a lawyer with the South Central Pension Rights Project, a legal-assistance service funded in part by the U.S. Department of Health and Human Services. “We haven’t seen that before,” Mr. Curme says of a big company’s using a collection agency. “These tactics that AT&T is using … they’re kind of harsh.”
Ms. Smith filed a claim with the plan asking it to waive repayment but was denied. The plan also denied her subsequent appeal. She hasn’t heard from the company since February, she says, and is hopeful she won’t. Yet, she adds, “it’s not resolved—it’s still up in the air.”
Lyon Collection President Rick Mantin says his firm follows laws governing consumer collections and his employees are persistent without harassing customers. He declines to comment on individual cases or clients and says the company doesn’t focus on retirees. “Debtors have the right to request that Lyon cease any further communication with them,” he says, “which we immediately honor.”
In general, pension lawyers say, it is legal for a company to demand back pension overpayments. Pension-plan sponsors and administrators have an obligation to safeguard a plan’s assets. Companies for years have interpreted that obligation to include not just stopping overpayments but also requiring repayment. Often, plans recoup what they can by reducing retirees’ remaining benefits.
“Not recouping the monies would mean that there would be fewer funds available for distribution to other participants,” the Fidelity spokesman says.
Pension lawyers say that in recent years some employers and plan administrators have grown skittish about giving retirees a pass for even small overpayments. They point to Internal Revenue Service guidance that suggested plans had to pursue repayments vigorously or risk losing key tax benefits, such as deductions for employer contributions and tax-free investment returns.
Among companies recently requesting paybacks is Fiat Chrysler Automobiles NV’s U.S. unit, which says that in 2016 it notified several hundred retirees that their pension checks were incorrect. About 300 people, or 0.3% of its pension recipients, received more than they were supposed to, it says.
The company says it followed federal regulations when asking retirees to return overpayments and doesn’t use a collections service. On average, it says, those getting extra payments were receiving benefits of $24,000 a year. Three-quarters of them were asked to repay $3,000 or less. Of the rest, the average recovery the company sought was 3.7% of the retiree’s monthly benefit, and none was more than 8%.
Had they known the correct payment amount, some retirees might have made different life decisions, such as when to retire or where to move, says Jay Kuhnie, president of the National Chrysler Retirement Organization, a retiree-advocacy group. “They might have said, that’s not as much as I thought, I’m going to work another 4 to 5 years,” he says. “The retiree has no way of going back.”
AT&T’s collection agency
AT&T’s pension plans have $45 billion in assets, enough to pay about 77 cents on every dollar of pension benefits earned so far by all current and former employees and retirees for their full life expectancy, as well as other beneficiaries.
Lawyers who work with retirees say they rarely see referrals to collections agencies by a large company. Some former Treasury Department officials who worked on recoupment issues say it wasn’t something they had seen before.
“An awful lot of plan sponsors, just as a matter of culture, are not very enthusiastic about chasing down their retirees to recover overpayments,” says Brian Dougherty, co-leader of the plan-sponsor task force at the law firm Morgan, Lewis & Bockius LLP.
The AT&T spokesman says “our approach is common and similar to how most other employers handle this issue” and follows federal pension rules, treating retirees ethically. The Fidelity spokesman says that “having a third party to assist with contacting plan participants in seeking reimbursement is a common practice among many employers in the industry.”
Faced with complaints from retirees whose pension benefits had been reduced, officials at the Treasury Department and the IRS in 2015 issued new guidance, clarifying that plans could recover funds in other ways instead, including from contractors responsible for errors. Companies could also replace the missing funds themselves, or modify plan rules retroactively to accommodate the overpayments, according to the guidance.
“It clarified that plan sponsors were not always required to recoup inadvertent overpayments and pursue all available legal remedies to do so,” says Mark Iwry, a Treasury Department official from 2009 to 2017 who worked on retirement policy. The guidance “took a step toward making the system more practical, workable, and humane.”
Some pension experts have concluded that overpayments essentially never harm plan finances, says Richard Shea, who advises employers as head of the employee-benefits law practice at Covington & Burling LLP. That’s because employers must set aside enough money to cover a lifetime of benefits based on what retirees actually receive, not some earlier estimate.
“The way the funding rules work, you’ve already got it,” he says. “You don’t have to get it back.”
Telephone-company pensions may be more prone to mistakes than others, thanks to the federal breakup of the Bell System monopoly in the mid-1980s. Often, workers’ pensions accompanied them as they moved among the company’s successors.
An operator’s case
Some errors AT&T identified amount to double-counting, in which retirees received benefits reflecting their full careers plus additional payments reflecting part of the same history.
Eileen Ralston of Daytona Beach, Fla., joined what was AT&T’s Pacific Telephone in 1970 as an operator. She left telephone work in the mid-1980s, then rejoined the new AT&T in 1986 as an operator.
She began collecting her AT&T pension of $921.83 a month soon after leaving in 1999. Shortly before turning 65, she says, she called AT&T’s pension administrators and was surprised to hear she was entitled to another $546.73. “I said, are you sure about this? Because I get an AT&T pension,” says Ms. Ralston, 75. “They said, no, this is your pension for your previous service.”
Just before Ms. Ralston’s September 2017 birthday, Fidelity told her in a letter that the additional benefit was a mistake and that she owed $58,500.11. It was about two years after she suffered a heart attack. “I thought I was going to have another one,” she says. “Every time I get something in the mail from AT&T that says ‘benefits department,’ I get a cold chill up my back.”
AT&T offered to halve her remaining pension to $444.89 a month. After Ms. Ralston consulted a lawyer, she received a letter from AT&T in February reaffirming the debt but adding that “your overpayment information will not be sent to an outside collections agency at this time.”
She hasn’t repaid and worries AT&T might come after her again.
Claudia Jones worked for Bell South and then AT&T for about 16 years, she says, before being laid off in 2015. She took her pension in a lump sum and invested it in an annuity that pays about $600 a month.
In March, she got a letter from AT&T and Fidelity saying her benefit had been miscalculated and that she would have to repay $45,300.17. “Say they did miscalculate,” says Ms. Jones, 66. “We shouldn’t be punished for that.”
In late June, she says, she started receiving calls from Lyon Collection. She can’t afford to pay, she says, and isn’t sure what she’ll do.
AT&T left Mr. Mizelle, too, in limbo. Fidelity in a letter wrote that “the Plan will recover the excess benefit amount by any means that are available.”
He enlisted a lawyer to file a claim with the plan, arguing that he no longer had the additional money and that requiring repayment would cause him financial hardship. The plan rejected his claim.
The committee that denied his subsequent appeal wrote him reiterating the debt but saying it “decided not to pursue further collection attempts of the overpayment amount at this time, without waiving any rights to resume the collection process in the future.”


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Old 08-07-2018, 05:13 PM
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MISSING PARTICIPANTS

https://www.wgbh.org/news/local-news...-for-solutions

Quote:
Retirees Struggle To Locate Billions In Lost Pensions As Government Looks For Solutions

Spoiler:
Deborah Imondi knows pensions. The 66-year-old retiree from Johnston, Rhode Island, managed a large corporate pension fund for 25 years. But when it came time for her to claim her own pension benefits from a bank she worked for five decades ago, Imondi found herself helpless.

The bank, Rhode Island Hospital Trust, went through a series of complicated buyouts and mergers after Imondi left in 1984. The local business was eventually taken over by Bank of America Corporation, which initially told Imondi she did not have a pension with them. Many phone calls later, she said the company admitted the pension may have been turned over to Fidelity Investments — but Fidelity initially denied any record of it.

“I had just about figured this is a lost cause,” said Imondi. “If Fidelity can’t find me, nobody can.”

Imondi was one of many retirees attempting to follow the elusive paper trail to find their “lost” pensions, routinely meeting rejection and leaving behind billions of dollars in unrecovered benefits.

An estimated $156 billion in private “defined benefit” pensions — employer-funded plans popular when today’s seniors made up the workforce — are unclaimed, according to the Pension Action Center, a nonprofit based out of the University of Massachusetts Boston that helps seniors recover lost benefits.

A private-sector pension can become “lost” for a slew of reasons. Pension plans are transferred during corporate buyouts and restructuring. Employees change addresses and last names, becoming unreachable. In some cases, workers are never notified of their pension to begin with or forget they are entitled to benefits.

Part of the problem is that it is not clear what employers are obligated to do to find “missing participants,” pensioners like Imondi who are owed benefits but whose contact information is outdated or missing in plan records.

The U.S. Department of Labor, recognizing the depth of the problem, recently announced it will draft new guidelines for employers to locate people who are owed pension payouts.

Preston Rutledge, newly appointed head of the Department of Labor’s Employee Benefits Security Administration, said at a July conference that the issue “has the potential to undermine the very basis of the whole [pension] system.”

In the same address, Rutledge announced that his agency will issue clear search guidelines for employers administering pension plans. The move came after a June report by the Internal Revenue Service that found that there are “no standard practices in the industry for the frequency or method of conducting searches.” Industry groups have also publicly requested guidance from the government.

Federal regulations require employers to perform a “diligent search” before declaring a participant “missing,” but the rules do not outline specific steps for completing this search.

Employers typically use some combination of mailers sent to addresses on file, electronic search tools, and commercial locator services to find participants. Imondi says she received no such communication about her pension.

While many plans follow comprehensive search procedures, others do the bare minimum. The Employee Benefits Security Administration recently uncovered several large pension plans with serious record-keeping issues and others that were not following their own established procedures to find missing pensioners. In fiscal year 2017, the agency recovered $682.3 million in benefits by locating plans’ missing participants for them.

Mark Machiz, former regional director for the Employee Benefits Security Administration in Philadelphia, said his office was able to find a large number of participants without extraordinary effort — prompting officials to conclude companies weren’t trying very hard.

“No matter what anyone said, real efforts were not being made,” Machiz said.

While regulators move to clarify and enforce employer responsibility, legislators are working to make it easier for retirees to find their lost benefits. Sen. Elizabeth Warren, a Democrat from Massachusetts, and Sen. Steve Daines, a Republican from Montana, reintroduced a bill this year that would create an online registry of all retirement plans. This central pension registry would act as a one-stop-shop for retirees trying to find plan data now scattered across several federal agencies.

But pension rights advocates have raised concerns about language added to the bill earlier this year thanks to lobbying by employer advocacy groups like the Washington, D.C.-based American Benefits Council, whose members are mainly Fortune 500 companies. The so-called “Safe Harbor” provision would bypass any guidance issued by regulatory agencies, mandating just two or three required steps employers must take to find missing participants.

Critics see the amendment as an attempt by the industry to reduce its responsibilities to locate missing participants. Machiz said the duties outlined in the amendment are much less stringent than anything the Department of Labor might issue.

“They want to know what's the least they can do” to find missing participants, he said.

Industry advocates disagree, saying employers only want to make the search process more efficient.

“There are some people that want to make this very adversarial and it’s not,” said Lynn Dudley, senior vice president with the American Benefits Council. “It’s an opportunity for government to partner with those that are regulated to do the right thing.”

But pension rights advocates claim employers have an incentive not to find missing participants like Imondi.

When employers decide they have exhausted their search options for a participant in a defined benefit plan, the money that would have been distributed often remains in the plan, boosting its financial stability.

“The more money that hasn’t been paid out, the less money the plan sponsor has to pay into the pension fund,” said Jeanne Medeiros, former director of the Pension Action Center. “They don’t have any incentive to seek out those who are entitled to those benefits.”

Dudley insists that there is no incentive for employers to neglect their search duties.

Employers are not the only ones grappling with how to manage pension plans. Some insurance companies that have taken over pension funds have neglected missing participants as well. For example, MetLife Inc. admitted in February that over the past 25 years it had made “ineffective” efforts to contact about 13,500 pensioners, whose unclaimed benefits amount to over $500 million.

In June, the office of the Massachusetts Secretary of the Commonwealth charged MetLife with fraud for failing to make these payments.

In addition, a lawsuit filed by one of those pensioners, Edward Roycroft, claims that MetLife not only failed to pay retirees but took ownership of the $500 million from the plan when participants did not come forward, converting it to money on its own bankroll.

Greg Porter, a veteran employee benefits lawyer at Bailey & Glasser in Washington, D.C. and the chief litigator for the lawsuit, explained that after MetLife sent two letters to missing participants and received no response, “as a matter of policy it would say, well those people don’t really want their money, so we’re going to take it.”

A representative for MetLife said the company was taking “aggressive steps” to locate and pay out missing participants after voluntarily conducting its internal audit earlier this year, but did not comment on the Roycroft lawsuit’s allegations.

A lost pension may only be worth a few hundred dollars a month to a retiree, but that can be a crucial financial lifeline for someone on a fixed income. A 2016 Study by the Gerontology Lab at the University of Massachusetts Boston found that 61 percent of seniors living alone in the state are struggling to meet basic living expenses. The threat of unexpected healthcare emergencies and the rising cost of housing hits seniors especially hard.

Barbara Burns, 76, of Hampton Falls, New Hampshire, says her recently recovered pension has made an unexpected difference in her life. Burns had no idea she even had a pension until speaking to a counselor at the New England Pension Assistance Project, one of six federally funded centers around the country housing the handful of lawyers that assist pensioners free of charge.

After mentioning that she had worked for 19 years at John Hancock Financial in Boston, the counselor said Burns should have been entitled to benefits and offered to take up her case.

At first, Hancock said it would not retroactively payout the benefits Burns should have begun receiving at age 70. But in June, the pension project’s lawyers were able to secure a $24,000 lump sum payment, in addition to future monthly benefits of a little under $150. Since setting up shop in 1994, the Pension Assistance Project has recovered about $60 million in pension benefits for more than 9,000 local clients.

A representative for John Hancock declined to comment on Burns’ case, saying they can’t address individual cases.

Burns said the money was instrumental. “It will help us stay in our home as long as we can before we have to downsize.”

In the end, Imondi also received help from the project. At her counselor’s insistence, Bank of America located Imondi’s benefits, and the former pension fund manager began to receive monthly checks of $291 in September of last year. Although they initially denied any knowledge of Imondi's pension, a representative of Fidelity, contacted for this story, said, "Once Fidelity was supplied with additional information, we worked with the plan sponsor to identify the benefit for the participant."

Still, Imondi worries about other retirees who don’t have her experience dealing with pension plans.

“I can just imagine how much of a horror show it is for regular people who aren’t in the business,” said Imondi, reflecting on the difficulty of her years-long search process. “It’s got to be daunting.”
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Old 08-13-2018, 12:26 PM
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ESG INVESTING

https://www.plansponsor.com/gao-expl...s-embrace-esg/

Quote:
GAO Explores Why Few Retirement Plans Embrace ESG Investing
GAO says in other cases where plans may face complexity, such as selecting a target-date fund or monitoring pension consultants, the DOL has provided general information, including items to consider and questions to ask. It suggests that the DOL do the same with ESG investing.
Spoiler:
In a report, the Government Accountability Office (GAO) points out that whether or not retirement plans consider the projected impacts from climate change and other environmental, social and governance (ESG) risk factors could affect investment returns and, in turn, the financial health of retirees. GAO notes that some investors believe that companies with good corporate governance practices are better managed and will perform better financially over time.

GAO says that examples of environmental factors are climate change impacts, energy efficiency and waste management. Social issues include labor standards, human rights, and gender and diversity. Governance includes board composition, executive compensation, whistleblower programs, and accident and safety management.

Citing a report from US SIF: The Forum for Sustainable and Responsible Investment, investors in the United States are increasingly incorporating ESG factors into their investment management. According to US SIF, assets in the U.S. that considered ESG factors in 2016 were $4.7 trillion, a 14% increase from 2014, when they were $4.1 trillion. Globally, the amount of assets using ESG factors was $22.9 trillion in 2016, up 26% from $18.3 trillion in 2014.

However, few retirement plans in the United States incorporate ESG factors into how they manage investments, GAO says. Asset managers told GAO that retirement plans face several challenges, including a lack of consistent and comparable data on ESG factors and regulatory uncertainly. According to the Plan Sponsor Council of America’s (PSCA) 2016 survey of 600 defined contribution (DC) plans, only 2% offered an ESG investment option to participants. The asset managers told GAO that if companies were required to standardize reporting of ESG factors, that would help retirement plan sponsors to be able to assess funds that use ESG factors.

GAO also notes that while finding incorporating ESG factors has a positive or neutral impact on financial performance, the perception that it could negatively impact performance persists, and this is another impediment to retirement plans incorporating ESG investing. Yet another problem the asset managers told GAO about is that incorporating ESG factors in investment management may increase costs to retirement plans because of the additional resources needed to assess the ESG factors.

Several asset managers told GAO that incorporating ESG in retirement plans could increase the complexity of plans for participants, and plans have been, instead, looking to reduce the number of funds in their lineup.

And perhaps most notably, asset managers also said that the Department of Labor’s (DOL’s) guidance on ESG investing has changed with different administrations, making retirement plans very wary of relying on that guidance. In April, the DOL issued a Field Assistance Bulletin on ESG investing that—given some of the strong language used to warn retirement plan fiduciaries against placing other interests ahead of the financial benefit of their participants—has created some confusion.

The few asset managers with retirement plan clients using ESG said the plans are not using them as the qualified default investment option (QDIA) but as an option in the fund lineup. Asked what benefits incorporating ESG factors into investment management brings to retirement plans, the asset managers said it enhances risk management, improves long-term performance and increases participation.

GAO notes that while the DOL has said that retirement plans may incorporate ESG factors in investment analysis, the DOL has not addressed whether plans can incorporate ESG in the plan’s default option or qualify for legal protections. GAO says that in other cases where plans may face complexity, such as selecting a target-date fund or monitoring pension consultants, the DOL has provided general information, including items to consider and questions to ask. GAO suggests that the DOL do the same with ESG investing.

GAO’s full report can be downloaded here.
https://www.gao.gov/products/GAO-18-398
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Old 08-13-2018, 01:48 PM
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BRITISH HOME STORES
UNITED KINGDOM

https://www.reuters.com/article/us-b...-idUSKBN1KX0ES

Quote:
Collapsed UK retailer BHS pension scheme secured by $1 billion insurance buyout

Spoiler:
LONDON (Reuters) - The pensions of 9,000 employees of collapsed British department store chain BHS were secured on Sunday after a specialist insurer announced an insurance buyout of the firm’s ‘BHS2’ scheme covering 800 million pounds ($1 billion) of liabilities.

FILE PHOTO: A woman walks past the Wood Green branch of department store chain BHS, in London, August 28, 2016. REUTERS/Peter Nicholls/File Photo
Pension Insurance Corporation said the buyout left members of the scheme, which was set up in 2017 following BHS’s collapse and a cash injection by former owner Philip Green, fully insured and certain to receive benefits under the scheme.

A pension insurance buyout involves a transfer of the promise to pay pension fund members, shifting that responsibility from the fund to the insurer, and giving policyholders a guaranteed income stream.

BHS fell into administration in 2016 with a pension deficit of 571 million pounds ($729 million), with 11,000 jobs lost as result. An outcry over the collapse prompted the government to try to clamp down on bosses who do not do enough to protect workers’ pensions.

In February last year Green, who was blamed by British lawmakers for the demise of the BHS, paid 363 million pounds to plug a hole in the pension scheme. Green had sold the chain in 2015 for one pound.


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