US - The Circle Trust Company (CTC), Trust Advisors, and certain other corporations and individuals have been ordered to repay more than US$8.8m to 1500 pension plans.
The DoL said settlements related to pension plan investments in Trust Advisors' Stable Value Plus Fund (SVF), a collective trust administered by CTC.
The settlements resolved a Labor Department lawsuit that alleged CTC violated its duties as a fund trustee under the Employee Retirement Income Security Act (ERISA). According to Elaine Chao, US Secretary of Labor, the corporation allegedly caused SVF to invest in a number of speculative and imprudent investments that resulted in millions of dollars in losses to the trust fund.
Those investments were based on the recommendations of Trust Advisors. On Sept. 30, 2005, an independent fiduciary appointed on behalf of SVF filed a petition seeking bankruptcy protection for the SVF. On the same day, the Connecticut Banking Commissioner was appointed as the receiver of CTC.
Under the settlement agreements, Trust Advisors of Westport, Conn., and certain corporations and individuals affiliated with the firm, have also paid a separate civil monetary penalty of nearly $1m to the federal government.
Chao accused the defendants of "jeopardising millions of dollars in workers’ retirement benefits,” and added:
“The department aggressively pursued justice for these workers and their families, recovering $8.8m in retirement assets for their pension plans as well as levying a nearly one million dollar civil fine.”
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