Compliance May 30, 2014

Realtor to Repay Plan for Bad Real Estate Investment

A federal district court has ordered an Oregon realtor to repay more than $400,000 to the participants of its profit-sharing plan.
Reported by

Pursuant to a consent judgment entered into by the Department of Labor (DOL), the Portland-based Georgetown Realty Inc., the company’s owner, John Mahaffy, and the Georgetown Realty Inc. Profit Sharing Plan and Trust, will pay $420,127 to the plan for losses due to imprudent real estate investments directed by Mahaffy. In addition, Mahaffy is barred from serving any employee benefit plan covered under the Employee Retirement Income Security Act.

An investigation by the DOL’s Employee Benefits Security Administration found that, from 2005 to 2007, Mahaffy used the plan’s assets to purchase property to develop it into a resort, known as the RiverGate project. The project involved purchasing parcels of land overlooking the Crooked River and the Meadow Lakes golf course in Prineville, Oregon.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

By the end of 2008, Mahaffy had spent most of the plan’s cash and sold off most of its securities to fund RiverGate. Mahaffy’s actions left the plan with more than 80% of its assets in the RiverGate project, an illiquid investment. The project failed, the lenders foreclosed on the plan’s properties throughout 2009 and 2010, and the plan participants lost substantial retirement assets.

The DOL filed a lawsuit, Perez v. Georgetown Realty Inc. (civil action number 3:12-cv-01164), in the U.S. District Court for the District of Oregon.

Deals & People May 30, 2014

Ingham Retirement Adds LPL Worksite Solutions

Ingham Retirement Group added LPL Financial LLC’s employee advice and education solutions to its retirement planning platform.
Reported by

Clients of Ingham Retirement Group can now access LPL’s Worksite Financial Solutions, which allow plan participants to receive customized advice through online tools that factor in key data on each participant’s financial picture and life stage.

As LPL explains, after completing a detailed on-boarding process, participants using the Worksite Financial Solutions can elect to receive personalized advice through the system or manage their accounts on their own. Participants can elect to receive advice all the way through retirement, LPL says, and sponsors benefit from better-informed employees and plan administration support. 

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

By adopting the Worksite Financial Solutions platform, Ingham Retirement Group hopes to help its retirement plan advisers better address the needs of plan sponsor and participant clients throughout their financial lives, the firm says. The new partnership will also create significant opportunities for LPL Financial advisers to provide advice services to the more than 190 plans representing approximately $1.1 billion in retirement assets currently served by Ingham Retirement Group.

Ken Ingham, president and CEO of Ingham Retirement Group, says his firm looks forward to implementing custom-tailored, participant-level advice programs through the Worksite Financial Solutions. “By working together to offer this next generation of personalized financial guidance to plan participants, we are putting the financial future of the American worker ahead of proprietary but fragmented solutions,” he adds.  

The Ingham Retirement Group is a national, independent, full-service retirement plan consulting and investment advisory firm. Ingham also provides recordkeeping and actuarial services. More information on the firm is available here.

LPL Financial LLC is an independent broker/dealer, a registered investment adviser (RIA) custodian and a wholly owned subsidiary of LPL Financial Holdings Inc. More information is available here.

«