Products April 6, 2009

Transamerica Launches Special Needs Trusts Strategy Center

Transamerica Insurance&Investment Group (TIIG) launched a resource for financial planners and life insurance professionals to help clients who have children or relatives with special needs.
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TransAbility Special Needs Trusts Strategy Center is dedicated to supporting special needs trusts (SNTs), according to a press release. TIIG has also established a strategic alliance with Knights Administration, a national online third-party trust administration company that provides automated secure administrative support systems.

TIIG said its service connects financial professionals to specific legal, trust, and investment resources for all stages of an individual or pooled SNT set-up and maintenance.

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Additionally, the center gives producers and advisers access to resources and support, including TransACT, a Web site that provides brochures, guides, presentations, continuing education, and other marketing materials and tools. SNT-specific resources are also available via a special SNT division of TIIG’s open-access Legacy Planning Resource Center. Individual personalized support can be obtained from dedicated specialists in TIIG’s Advanced Marketing Department, according to the release.

SNTs (also known as supplemental care trusts) are individual or pooled trusts created for disabled individuals to supplement, but not replace, any public benefits to which the disabled individual may be entitled. TIIG said the goal of funding an SNT is to provide a pool of funds from which the disabled individual can maintain the quality of his or her life, while still remaining eligible for public assistance.

 

More information is available by contacting the TransAbility Special Needs Trusts Strategy Center at 877.238.6758 from 8 a.m. to 5 p.m. Pacific Time or via e-mail at specialneeds@transamerica.com.

 

Compliance April 6, 2009

Merrill Lynch Settles Company Stock Lawsuit

A federal judge has given preliminary approval to a proposed $75 million deal to settle claims Merrill Lynch violated its fiduciary responsibilities by keeping company stock in its retirement plans when its mortgage-related losses made it no longer prudent to do so.
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Lawyers for the participants in the Merrill Lynch plans announced the deal that is scheduled for a final court consideration at a July 27, 2009 court hearing.

The settlement comes after a number of individual suits against Merrill Lynch were consolidated into one case, which focused on an 80% decline in the value of Merrill stock in the retirement plans between September 30, 2006 and December 31, 2008.

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The plans involved in the court action are:

  • the Merrill Lynch & Co., Inc. 401(k) Savings and Investment Plan,
  • the Merrill Lynch & Co., Inc. Retirement Accumulation Plan, and
  • the Merrill Lynch & Co., Inc. Employee Stock Ownership Plan

According to Monday’s announcement, the $75 million (minus attorney’s fees, administrative expenses, and other charges) will be allocated to plan account(s) of members of the class whose plan account(s) suffered losses as the result of investing in Merrill Lynch stock during the class period.

The plaintiffs charged that having company stock in the plans was no longer prudent because, by June 29, 2007, the company had accumulated at least $43 billion of net exposure to “risky and illiquid’ collateralized debt obligation (CDO) securities and subprime mortgages, which was greater than the company’s total equity value of $42 billion at that time.

According to plaintiffs’ court documents, “Merrill Lynch’s Company stock was not a suitable investment for the retirement accounts of its employees due to Merrill Lynch’s reckless business practices, including wagering the entire book value of the franchise on securities that were risky, illiquid and highly correlated. Merrill Lynch’s rush into the uncharted waters of purchasing and holding CDO and subprime related securities exposed the Company to unacceptable levels of risk…’

Court documents in the case related to the settlement are available here and the settlement agreement is available here.

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