Statutes of limitations might be running out for pension sponsors to seek legal reparation for losses related to the market bubble, according to Edward A.H. "Ted" Siedle, the John Shaft of money management investigation.
"Funds cannot afford to ponder leisurely about what to do next," Mr. Siedle, president of Benchmark Financial Services Inc., Lighthouse Point, Fla., wrote in a recent report. "In many states, the applicable statute of limitations is a mere three years. And this year, 2003, may mark the end of the period pensions have to mull over their alternatives for dealing with abuses related to the period of ‘irrational exuberance.'"
He also calls on pension sponsors to examine and address weaknesses in the investment management of their funds, recommending what he calls "six-step pension fund cleanup" to assist sponsors in reducing costs. At the top of the list is reducing investment advisory fees and reducing trading costs. He also advises sponsors to examine the conduct of their pension consultants, actuaries, money managers and portfolio companies. Among the reasons, he said, are potential conflicts of interest, liability limits for work or poor investment performance, or corporate malfeasance.
An "unacceptable alternative is to simply walk away, leaving money on the table," he wrote. "Funds that wait too long to take action may wake up to discover it's too late."