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Pension Governance, LLC Sponsors Research Sites on the Social Science Research Network

Excerpt: Pension Governance, LLC (our sister company) is pleased to announce the sponsorship of two sections of the Social Science Research Network. Check them out [http://www.ssrn.com/update/lsn/lsnann/annA026.html] and see for yourself. You'll find interesting research papers and announcements about forthcoming events in the areas of employee benefits law and corporate governance, respectively.

New Study Addresses Pension Risk Management Gaps

Excerpt: Pension Governance, LLC is pleased to make available a new research report that explores current pension risk management practices. In what is believed to be a unique large-scale assessment of pension risk practices since the publication of a 1998 study by Levich et al., this survey of 162 U.S. and Canadian plan sponsors seeks to: (1) understand why and how pension plans employ derivative instruments, if they are used at all (2) identify what plan sponsors are doing to address investment risk in the context of fiduciary responsibilities and (3) assess if and how plan sponsors vet the way in which their external money managers handle investment risk, including the valuation of instruments which do not trade in a ready market. The report was written by Dr. Susan Mangiero, AIFA, AVA, CFA, FRM, with funding from the Society of Actuaries.

Pension Risk Management: Derivatives, Fiduciary Duty and Process (PDF)

64 pages. Excerpt: Recognizing that meaningful change, as needed, cannot occur without knowledge of the status quo, the objectives of this research are threefold – (a) understand why and how plan sponsors employ derivative instruments, if at all (b) identify what plan sponsors are doing to address investment risk in the context of fiduciary responsibilities and (c) assess if and how plan sponsors vet the way in which their external money managers handle investment risk, including the valuation of instruments which do not trade in a ready market.

Database and Analysis of Pension Litigation Decisions

Excerpt: With over 1,500 cases and more than 100 classification codes, this research tool provides invaluable information about a variety of ERISA and public pension litigation cases. Plan sponsors, general counsel, transaction attorneys, litigators, regulators, compliance officers and advisors enjoy numerous benefits, including unlimited access to the Subscribers-Only website.

ARPA: Federal Government Contributions to Union Pension Plans, and Other Pension Provisions

"Congress took a very rare step in ARPA requiring the federal government make contributions to some of the worst-funded MPPs using the PBGC as the conduit, as further described [in this article].... The Congressional Budget Office (CBO) estimates that the estimated outlays under ARPA for such contributions will be approximately $83 billion, most of which are expected to be contributed to the affected MPPs in 2022."

New Website: PensionLitigationData.com

"[PensionLitigationData.com (PLD) is a subscriber searchable database of pension litigation events.] Inspired by a need to provide information to the plan sponsor and legal communities about the growing number of financial fiduciary cases, PLD is a premier searchable database of pension cases from January 1, 2005 and on."

Supreme Court Clears Bankruptcy Restructuring of Puerto Rico Government Pension Plans

"While the restructuring process has not yet ended, barring unexpected developments within the next couple of years the plans are likely to be modified as follows: the accumulation of additional defined accruals will be permanently frozen; government employees in Puerto Rico will be covered solely under a defined contributions/savings plan; and previously accrued pension benefits will be reduced by up to 8.5 percent." [Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC, No. 18-1334 (S. Ct. Jun. 1, 2020)]

Testimony Presented by Dr. Susan Mangiero to ERISA Advisory Council Working Group on Hard to Value Assets (PDF)

14 pages. Excerpt: I concur with others who assert that additional regulation would be redundant and arguably counterproductive. For one thing, empirical evidence suggests that a 'one size fits all' mandate could induce perverse outcomes. Plan sponsors may get overly scared about investing in 'hard to value assets' and ignore them altogether rather than conducting a thorough analysis as to their suitability. I don't believe it is the current intent of any regulator to have plan fiduciaries automatically shrink the universe of possible product and/or strategies.

House Oversight Committee Hearing Addresses SIGTARP's Report on Treasury's Role in the Delphi Pension Bailout

At the link are video of the September 11, 2013, hearing, along with links to testimony by witnesses: The Honorable Christy L. Romero, Special Inspector General for the Troubled Asset Relief Program; Barbara D. Bovbjerg, Managing Director, Education, Workforce and Income Security, U.S. Government Accountability Office; A. Nicole Clowers, Director, Financial Markets and Community Investment, U.S. Government Accountability Office; Matthew A. Feldman, Partner, Willkie Farr & Gallagher, LLP; Steven Rattner, Chairman, Willett Advisors, LLC; Harry J. Wilson, Chairman & CEO, MAEVA Group, LLC; and Harvey R. Miller, of Weil, Gotshal & Manges LLP.

Beware of Possible Union Pension Plan Withdrawal Liability

"Tips on avoiding withdrawal liability.... [1] Don't sign a collective bargaining agreement ... without reviewing the current plan financial information, the plan document and the plan participation or joinder agreement.... [2] [S]ome multiemployer pension plans purporting to be well funded for government reporting purposes use a lower interest rate for calculating withdrawal liability than they use for funding purposes, which will result in withdrawal liability when you might not otherwise expect it.... [3] [P]ersonal assets such as rental real estate in an unincorporated business could be exposed to withdrawal liability if that business is in 'common control' with the business that participates in the multiemployer pension plan."