Products September 12, 2007

Putnam Releases Retirement Savings Analysis Booklet

A booklet from Putnam Investments is expected to help individuals analyze their current retirement savings, figure out whether they are on track and, if they are not on track, how to close any shortfall.
Reported by

According to a press release, the booklet helps individuals gain a better understanding of how their retirement savings will convert into income in retirement, and includes an estimate of Social Security benefits.

If individuals find a gap between their expected retirement savings and retirement needs, the booklet will suggest steps to get on track by saving more, adjusting retirement dates, or changing investment strategies. To make immediate changes to improve a retirement plan, individuals can secure help by phone, online, or using a pre-filled, pre-paid business reply card.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

“The concept of a retirement check-up clearly resonates with people as evidenced by the strong response rate,” said David Tyrie, managing director of retirement services for Putnam Investments, in the press release. “By taking the time to review their retirement savings, including how it will convert into income in retirement, individuals have the opportunity right now, to adjust their strategies so they will be on track to reach their retirement goals.”

For more information visit www.putnaminvestments.com.

Compliance September 12, 2007

Countrywide Financial Participants Sue Over Plan Losses

Employees enrolled in Countrywide Financial Corp.’s 401(k) plan claim that illegal actions by those overseeing the plan led to millions of dollars in losses during a recent stock plummet.
Reported by

The employees of the mortgage company filed a suit in a federal court in Santa Ana, California saying the 401(k) plan suffered steep losses after news of the company’s tumultuous financial status prompted a drop in stock prices.

According to a news release, the suit makes several claims of wrongdoing by Countrywide and retirement plan administrators, including:

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

  • failure to prudently and loyally manage the plan’s assets,
  • failure to provide complete and accurate information to participants and beneficiaries,
  • failure to monitor the compensation and benefit plan committees and provide them with accurate information,
  • breach of duty to avoid conflicts of interest, and
  • co-fiduciary liability.

From October 27, 2005 until August 9, 2007, Countrywide matched 401(k) employee contributions with company stock.

The company announced charges of $417 million and a loan-loss provision of $292.2 million at the end of June, causing company shares to fall more than 10% to $30 per share, losing $1.87 billion in total market capitalization. On August 16, 2007, the company’s stock dropped an additional 30% to $15 per share following news that Countrywide was using all of an $11.5 billion credit line due.

Between February 2007 and August 16, 2007, Countrywide’s shares lost nearly three-quarters of their value.

The suit claims that CEO Angelo Mozilo and benefits committee members had a fiduciary responsibility to warn employees about the company’s financial turmoil. In particular, the suit alleges that Mozilo repeatedly certified financial statements he knew were misleading in an attempt to cover the high-risk loans his company was selling. He ignored analyst recommendations to compile a reserve.

«