Search the News Archive

BNY Mellon Suit Over Lehman Losses by Pension Funds Narrowed

"Bank of New York Mellon Corp. lost a bid to dismiss a lawsuit alleging it mishandled pension funds' investments in Lehman Brothers Holdings Inc. while persuading a judge to narrow the claims in the case.... The plaintiffs, including the General Retirement System of the City of Detroit and the Police & Fire Retirement System of the City of Detroit, filed class-action, or group, complaints last year. They allege that BNY Mellon ... encouraged them to join its securities lending program, under which the bank would lend securities owned by the funds to creditworthy borrowers. The funds and other members of the class said the bank invested in Lehman notes in 2006 on behalf of the funds and continued to maintain the investments as uncertainty surrounding Lehman grew. The plaintiffs said they lost more than $1 billion in the notes."

BNY Mellon Being Investigated by Law Firm for Possible Violations of ERISA

Specifically, [the firm] says it is investigating whether certain fiduciaries of the Bank of New York Mellon Corporation 401(k) Savings Plan ... may have breached their fiduciary duties under ERISA to the Plan and its participants and beneficiaries by continuing to invest the Plan's assets in BNY common stock when it was no longer prudent to do so.

BNY Mellon Can't Nix Retirement Plans' Suit Over Foreign Exchange Transactions

"Bank of New York Mellon must defend a proposed class action accusing it of charging excessive, unauthorized and undisclosed rates to seven retirement plans through the bank's foreign exchange transactions. Because the participants are suing in their representative capacity on behalf of the plans, they don't need to allege an individualized injury to have standing, federal district Judge J. Paul Oetken held[.]" [Carver v. Bank of N.Y. Mellon, No. 15-10180 (S.D.N.Y. Mar. 31, 2017)]

Another Law Firm Starts BNY Mellon ERISA Investigation

The law office of Brodsky & Smith, LLC announced that it is investigating Bank of New York Mellon's investment of retirement plan participants' and beneficiaries' assets in company stock.

BNY Mellon Must Face Virginia Pension Fund's Fraud Lawsuit

A judge in Fairfax, Virginia, ... rejected the bank's argument that the case couldn't be brought under the Virginia Fraud Against Taxpayers Act because alleged false or fraudulent claims were never submitted to the state for payment.

N.C. Sues BNY for $95 Million Lehman Investment

"North Carolina officials ... accused Bank of New York Mellon Corp. of making an unauthorized $95 million investment in Lehman Brothers Holdings Inc. for the state and joking about the investment bank's precarious footing just days before it collapsed."

Mellon, Lumenos to offer integrated HSA

Excerpt: Mellon's Human Resources & Investor Solutions, a unit of Pittsburgh-based Mellon Financial Corp., has entered into an alliance with Alexandria, Va.-based Lumenos, a major player in the growing consumer-driven health care market, to offer an integrated health savings account product that will combine administration of both the health coverage and financial components of an HSA program.

Third Quarter Plan Sponsor Returns Stay Positive with Non-U.S. Equity Continuing to Lead the Way

"Public Plans reported the highest median return, climbing +3.55% for the BNY Mellon U.S. Master Trust Universe, which has a market value of more than $2.0 trillion and an average plan size of $5.4 billion. The BNY Mellon Master Trust Universe reported a one-year return of +11.82%, which surpassed its 3-year annualized return of +6.69% and 5-year annualized return of +8.26%."

Federal District Court Weighs Dudenhoeffer in $25M Case Targeting Investment in Lehman Bros. Notes

"Although the instant dispute didn't involve the type of employer stock plan at issue in [Fifth Third Bancorp v. Dudenhoeffer], BNY Mellon argued that this decision foreclosed the Teamsters plan from arguing that the bank should have realized from publicly available information that Lehman's debt was overvalued. [U.S. District Court Judge John R. Blakey] disagreed ... explaining that the Teamsters plan argued only that it was imprudent for BNY Mellon to hold Lehman debt given the 'circumstances existing in the market' and the Teamsters plan's 'investment profile.' This claim remained viable following Dudenhoeffer, Blakey concluded." [Teamsters Local 710 Pension Fund v. The Bank of N.Y. Mellon Corp., No. 1:13-cv-01844 (N.D. Ill. Mar. 16, 2015)]

District Court Narrows $750,000 Retirement Theft Lawsuit Claims

"BNY Mellon served as a plan trustee for the Colgate-Palmolive retirement plan, provided investment management services, served as custodian of the plan's assets and made payments from the plan's trust fund ... BNY Mellon was dismissed as a defendant because it did not act as a fiduciary for the plan[.]" [Disberry v. Employee Relations Committee of the Colgate-Palmolive Company, No. 22-5778 (S.D.N.Y. Dec. 16, 2022)]

Corporate Pension Plan Funding Status Holds Steady in November

"The funded status of S&P 1500 companies' DB plans remained relatively flat at 72% in aggregate, as studied by Mercer, while funding for the typical corporate DB plan increased 0.8 percentage points to 74.4%, according to BNY Mellon. According to BNY Mellon, assets increased 0.7% in November as U.S. equity markets returned 0.8% and international developed markets gained 2.4%, while liabilities decreased 0.3% as the discount rate increased four basis points to 3.76%."

Colorado Employees' Retirement Fund Returns Exceed Benchmark

"Colorado Public Employees' Retirement Association, Denver, returned 1.9% for calendar year 2011, outpacing the policy benchmark return of 1.3%, according to the $38.3 billion pension fund's recently released annual report. In comparison, the BNY Mellon median public fund returned 0.3% for the year; BNY Mellon's universe comprises 74 funds with total assets of $700 billion."

At Chicago Pension Fund, Questions Raised on Conflicts of Interest

"Chicago pension officials wanted to know where to deposit the $11 billion that the city's teachers had saved for their retirement benefits, so they turned in 2014 to the outside consulting firm they'd hired for financial advice.... [W]hen the firm, Callan Associates, told pension trustees at a February meeting to give the cash to a bank called Bank of New York Mellon (BNY), the board's trustees agreed to follow the advice. What they were not told at that meeting, however, is that BNY pays Callan for both general consulting services and financial education programs."

Maine and Colorado to Partner on State-Sponsored Auto IRA

"The Maine Retirement Investment Trust will join the already existing Colorado Secure Savings Program's automatic workplace retirement savings program for the first such partnership in the country ... Small plan provider Vestwell is the administrator, in partnership with BNY Mellon, for the savings program that will now serve both states."

Third-Party Investors Throw Another $70 Million at Vestwell

"Vestwell just raised $70 million in fresh venture capital, after tripling in the past year the number of retirement plans it shepherds for administration, compliance, recordkeeping and trust and custody.... The New York City startup has now raised $112.5 million from outsiders after white labeling its software to giants like Morgan Stanley, BNY Mellon and Voya Financial, formerly ING U.S. It's still counting the days until it turns a profit, but sees light at the end of the tunnel."

Plan Sponsor Returns See First Dip Since 3Q 2016

"In aggregate, U.S. Master Trust Universe plans reported a one-year return of +10.13%, surpassing its 3-year annualized return of +6.37% and 5-year annualized return of +7.64%. In a reversal from 4Q 2017, corporate and health care plans underperformed, with quarterly returns of -478bp, and -432bp respectively."

Should You Switch to an Unbundled Service Provider for Your Defined Contribution Plan?

"For plan sponsors focused intently on fiduciary considerations, ... bundled service providers also mean restricted investment selections and limited insight into the true costs of asset management and asset servicing. Neither of those plan components are without an associated cost, and the issue of costs and expenses has been the lynchpin in many recent lawsuits filed against plan sponsors."

Accelerating Growth: The DOL Conflict of Interest Rule and its Impact on the ETF Industry (PDF)

16 pages. "[T]he DOL Rule will potentially create even greater growth in the ETF industry due to shifts in advisory strategy to move more expensive active investments to less expensive passive investments to meet the new standard of fiduciary responsibility. The DOL Rule also has the potential to change the landscape of ETF products."

Funded Status of U.S. Corporate Pensions Falls to 78.1 Percent

"The slide represents the lowest month-end funded status yet for U.S. corporate DB plans in 2016. Asset growth of 1.5 percent was not enough for plan sponsors to outpace rising liabilities -- which increased by 4.0 percent in June ... [T]he S&P 500 pension deficit is now estimated to have increased by $61 billion in June, to $495 billion."

The DC Plan of the Future: DB Principles for the DC Generation (PDF)

16 pages. "Historical approaches to DC plans have generated decidedly mixed results, including an over-reliance on retail investment solutions, inability to integrate automation and education, and inefficiently priced products and services.... [B]est practices [now] being utilized to increase [plan efficiency include] ... [1] Leveraging institutional investment strategies, or the 'institutionalization' of DC; [2] Ensuring that education and automation work together; [3] Pursuing greater transparency in the pricing model."