US - A former Chicago money manager has been ordered to repay five Michigan pension funds US$50m after it was alleged he misappropriated pension fund assets to invest in a strip club and horse farm.
The US Department of Labor (DOL) said it had charged John Orecchio, a former president of AA Capital Partners, with improperly using $25.9m in pension fund assets "to pay for, among other things, the operating expenses of the firm, renovations to a horse farm, and a strip club owned by Orecchio".
His actions took place between 2002 and 2006.
He was also charged with allegedly charging the pension plans excessive fees on their investments.
The five pension funds are: Carpenters Pension Trust Fund of Detroit and Vicinity, Operating Engineers Local No. 324 Pension Fund, Michigan Regional Council of Carpenters Annuity Fund, Millwrights' Local No. 1102 Supplemental Pension Fund, and Michigan Teamsters Joint Council #43 Pension Fund.
Secretary of Labor Hilda Solis said: "Fiduciaries have a legal obligation to ensure plan assets are used only to pay benefits and reasonable expenses of a plan.
"Those who violate that trust will be held accountable for their actions."
The Pensions and Lifetime Savings Association (PLSA) has announced it will shrink its board by more than one-third as part of a governance overhaul to make it "agile and more appropriate".
Smaller FTSE 350 defined benefit (DB) schemes were nearly 15 percentage points less well-funded than larger schemes in 2017, according to a Goldman Sachs Asset Management (GSAM) analysis.
The advent of collective pension systems could help the UK avoid demographic challenges which will make it "impossible" for society to help savers in retirement, experts say.