CASE STUDY ONE
For a major financial institution who offers portfolio management services to third parties, we assume the responsibility for determining if an affiliated manager should be appointed to manage an investment portfolio for the plan, monitor that manager’s performance, and determine if it is appropriate for the manger to continue in that capacity. In so doing, our activities on behalf of the plan include:
- reviewing the manager’s performance compared to appropriate benchmarks
- analyzing portfolio characteristics to confirm consistency with stated investment strategy
- reviewing organizational items, including resources committed to the investment strategy, changes in personnel, and assets under management
- meeting with the manager on a regular basis to review portfolio and investment process
CASE STUDY TWO
For a plan whose sponsor ceased to exist, we implemented an asset allocation study, generated a revised investment policy to reflect the anticipated termination status of the plan, repositioned the portfolio in line with the new investment policy and continued to manage all of the investments through the date of termination. Our services included management of both public and private investments as well as cash management in support of ongoing benefit payments to participants and fee payments to plan vendors.
CASE STUDY THREE
A major financial institution retained Fiduciary Counselors to serve as independent fiduciary with regard to the spin-off of certain assets and liabilities totaling nearly $250 million from an existing defined benefit plan to a new, separate plan (the “New Plan”). We were to ensure compliance with the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), with respect to the New Plan in connection with the selection, valuation and allocation of commingled assets. Our review and analysis of the materials focused on determining that the method and calculation for the initial allocation and transfer of assets was appropriate, that the in-kind transfer of equity positions to the New Plan was done on a reasonable basis, that the appropriate funds were invested in the designated funds for the New Plan, and that the method and calculation for the final “true-up” transfer was appropriate.
We sampled and confirmed the pricing on a number of the transferred positions and found that the pricing correctly reflected the appropriate closing prices. We also reviewed and confirmed the futures positions and the cash amount transferred for the futures contracts. Based on our review, we determined that the share allocations were handled in a fair and reasonable fashion.
CASE STUDY FOUR
We were retained by a major insurance company (the “Company”) with regard to the redemption of certain investments held by their Separate Accounts. The assets held in the Separate Accounts supported group annuity contracts issued to various employee benefit plans (the “Plans”) and included “plan assets” for purposes of ERISA. The Company directed that shares held directly or indirectly by the Separate Accounts in a number of retail open-end investment companies registered under the Investment Company Act of 1940, as amended (the “Old Funds”) be redeemed and reinvested in similar open-end investment companies registered under the Investment Company Act of 1940, as amended (the “New Funds”), established by the Company and managed, in most cases, by the same asset managers.
The independent boards of directors of the Old Funds informed the Company that the requested redemption of the Separate Accounts’ shares would be conducted by means of an in-kind distribution of certain assets from the Old Funds to the Separate Accounts. The in-kind distributions included domestic and international equities and fixed income securities.
We reviewed the terms of the Redemption and determined that they were consistent with the terms of the Redeeming Funds as specified in each fund’s prospectus and policies. In addition, we reviewed the Redemption In Kind Certifications or Agreements provided by each of the Redeeming Funds. Based on our review of all material aspects of the Redemption, including the level of cash and the list of securities distributed by each fund in connection with the Redemption, we confirmed that the Redemption was consistent with the terms of the Redeeming Funds.
CASE STUDY FIVE
A major manufacturer retained Fiduciary Counselors as an independent fiduciary to determine specific securities within its fixed income asset classes to be transferred from one of its plans (the “Sending Plan”) to another (the “Receiving Plan”). We were appointed as an independent fiduciary with respect to the Sending Plan to negotiate and coordinate with the independent fiduciary for the Receiving Plan regarding the specific securities to be transferred.
In so doing we considered target asset allocation, transaction and other costs, operational complexity and the differing interests of the two plans and determined that the proposed transfer was fair and equitable and in the interests of the Sending Plan’s participants and beneficiaries.
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Articles and Presentations
JANUARY 26, 2015
Laura Rosenberg and Ivan Strasfeld quoted in Pension & Investments article: “DOL feeling heat on QPAM exemptions“.
JULY 15, 2014
Laura Rosenberg served as a panelist on the July 15, 2014 In-House Benefits Counsel Network webinar discussing the Fifth Third Bancorp v. Dudenhoeffer Supreme Court decision. This decision pertains to fiduciaries managing employer stock funds.
“PTE 84-24 and Pension Plan Transactions Involving Insurance Agents or Brokers, Pension Consultants or Mutual Fund Principal Underwriters” by Laura Rosenberg and Ivan Strasfeld.
If an insurance agent or broker, pension consultant or mutual fund principal underwriter provides fiduciary investment advice to a plan fiduciary regarding the use of plan assets to purchase insurance or annuity contracts or investment company securities, and receives commissions in connection with the sales, the insurance agent, pension consultant, or mutual fund underwriter and the plan need to ensure that such transactions comply with the requirements of Prohibited Transaction Exemption 84-24 (“PTE 84-24”).
JUNE 6, 2014
Presentation at the 2014 Association of Insolvency and Restructuring Advisors’ (AIRA) 30th Annual Conference
Laura Rosenberg presented “Understanding Underfunded Pension Liabilities” and discussed how debtors may deal with pension liabilities in a chapter 11 filings during the “Un- and Under-Funded Pension Liabilities” Session.
OCTOBER 21, 2013
Presentation at the 2013 Conference of Consulting Actuaries
Laura Rosenberg presented “Section 04 – Dealing with Underfunded Plans: PBGC Issues” at the 2013 Conference of Consulting Actuaries in San Antonio, Texas. She discussed… negotiating Early Warning Program cases, dealing with PBGC downsizing liabilities and 4062(e) , missed contributions and liens, distress and involuntary terminations, pension bankruptcy claims, and “trade or business” controlled group issues.
“The Role of the Independent Fiduciary in Litigation Settlements” by Stephen Caflisch
The Department of Labor has held that a transaction prohibited by ERISA section 406(a) will occur when a plan fiduciary causes a plan to release a claim against a person who is a party in interest at the time of the settlement. In the Department’s view, such a settlement involves an exchange of property (a chose in action) between such [plan] and parties in interest as described in section 406(a)(1)(A).
“An INHAM Audit Will Keep You Out Of Sticky Compliance Issues” by Laura Rosenberg and Ivan Strasfeld.
A corporation’s own pension plan managed by the corporation’s in-house managers needs an independent audit in order to take advantage of the prohibited transaction relief provided by the INHAM class exemption.
“A QPAM Audit Will Keep You Out Of Sticky Compliance Issues” by Laura Rosenberg and Ivan Strasfeld.
A financial institution’s own pension plan managed by the institution’s internal managers needs an independent audit in order to take advantage of the prohibited transaction relief provided by the QPAM class exemption.
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Fiduciary Counselors primarily acts as an independent fiduciary for employee benefit plans. With our extensive knowledge of the Employee Retirement Income Security Act (ERISA) and the associated fiduciary responsibilities established by the Department of Labor (DoL) along with our expertise and experience in financial and investment matters, Fiduciary Counselors is well qualified to provide employers and those charged with the administration of benefit plans with solutions for a broad range of fiduciary and investment issues. For more information about Fiduciary Counselors, please click here.
Fiduciary Counselors has acted or is currently acting as independent fiduciary for more than 60 class action litigation settlements related to violations of U.S. Securities law or ERISA. We have filed claims on behalf of the plans in almost all the securities settlements we have reviewed. For information about our Litigation Settlement services, please click here.
We are currently independent fiduciary with respect to approximately $17 billion in company stock in defined contribution plans. Engagements for which Fiduciary Counselors acts as independent fiduciary with respect to employer securities in defined contribution plans include plans of Altria, BNY Mellon, Granite Construction, and DTE Energy. Please click here to access our Company Stock Brochure.