San Francisco Investment Management Firm Pays More Than $13 Million In Pension Settlement

Archived News Release — Caution: Information may be out of date.

The San Francisco investment firm of McMorgan and Co. has paid more than $13.7 million, including interest, to 10 pension plans as part of a negotiated settlement, the U.S. Department of Labor announced today.

The settlement stemmed from an investigation conducted by the department's Pension and Welfare Benefits Administration into McMorgan's past construction lending practices. McMorgan agreed to the settlement after voluntary mediation of the department's claims that the company had imprudently underwritten a series of construction loans in the mid- to late- 1980s. As part of the settlement, the parties agreed to new underwriting guidelines, which McMorgan will follow in future construction loan financing involving employee benefit plans governed by the Employee Retirement Income Security Act. McMorgan tendered the full settlement amount for allocation to the affected pension plans.

McMorgan served as the investment manager and had authority to execute investments with regard to some or all of the assets of the affected plans. These plans covered 123,000 participants in California and Nevada and had cumulative assets totaling $4.9 billion as of Dec. 31, 1996.

The settlement resulted from an investigation conducted by the San Francisco Regional Office of the department’s PWBA into alleged violations of ERISA.

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Archived News Release — Caution: Information may be out of date.

Contact Name: GLORIA DELLA
Phone Number: 202.219.8921
Contact Name:DEANNE AMADEN
Phone Number: 415.975.4741