The Markets December 24, 2008

U.S. Retirement Assets Steady in Q2

American savers held $16.9 trillion in retirement assets at the end of the second quarter of 2008, accounting for nearly 36% of all U.S. household financial assets according to Investment Company Institute (ICI) data.
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An ICI news release said between March 31 and June 30, retirement assets remained largely unchanged from a revised finding of $16.9 trillion in the first quarter of the year. During the second quarter, total return on equities was -2.7%, while bonds lost -1.2% percent, according to the Standard & Poor’s 500 stock index and the Citigroup Broad Investment Grade Bond Index.

At the end of the second quarter, according to ICI IRAs held $4.5 trillion of retirement market assets, and another $4.3 trillion was in employer-sponsored defined contribution plans, of which $2.9 trillion was held in 401(k) plans. Mutual funds represented 47% of IRA assets and 51% of defined contribution plan assets.

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Lifecycle funds continued their growth during the second quarter, ICI said. Assets in those funds reached $205 billion, compared with $190 billion at the end of the first quarter. Almost 90% percent of assets in lifecycle funds were held in retirement accounts, according to the report.

The ICI report (available here) also discussed assets held in private-sector pension plans, both defined benefit and defined contribution plans; government pension plans; annuities; and individual retirement accounts (IRAs).

Compliance December 24, 2008

ERISA Litigator Seeks Plan Fiduciaries

And no, not in the way you may think.
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The ERISA litigators at Seattle-based Keller Rohrback L.L.P – who frequently wind up taking up actions on behalf of plan participants against plan sponsors – have announced that they are “…investigating the legal options of retirement savings and pension plans that have been affected by the long-running Ponzi scheme at Bernard Madoff Investment Securities.’
In a press release, Keller Rohrback said that the ongoing investigation by the U.S. Securities and Exchange Commission has revealed that Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators – and that it has been reported that this scheme has cost investors over $50 billion. The announcement goes on to cite preliminary reports that the firm says indicate that intermediaries who advised investment in Madoff knew or should have known that the firm was engaged in wrongdoing based on suspicious returns and other signals of misconduct.
To date only a few retirement plans have come to light as impacted by the Madoff scandal; Sterling Properties in St. Louis (see 401(k) Plan Invested with Madoff), a profit-sharing plan run by suburban Minneapolis drugmaker Upsher-Smith Laboratories (see Minneapolis Profit-Sharing Plan Also Victim of Ponzi Scheme), and the pension plan of the town of Fairfield, Connecticut (see CT Town Pension Claims $42M Madoff Fund Loss).
The law firm’s announcement suggests that fiduciaries of retirement savings or pension plans that have suffered losses as a result of the Ponzi scheme at Bernard Madoff Investment Securities contact paralegal Jennifer Tuato’o or attorneys Derek Loeser or Lynn Sarko toll free at (800) 776-6044, or via e-mail at investor@kellerrohrback.com.
Keller Rohrback has served as lead and co-lead counsel in numerous ERISA class action cases, including cases against Enron, WorldCom, HealthSouth, Marsh & McLennan, and Merrill-Lynch.

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