Benchmark Financial Services today offered to perform forensic audits of pension plans taken over by the PBGC to look for any undisclosed conflicts of interests or other improper activity by consultants and money managers and to help seek potential recovery of any losses or fees stemming from any uncovered misdeeds.
In a letter sent today to Bradley Belt, PBGC executive director, Edward A.H. Siedle, Benchmark president, said: "I would welcome the opportunity to provide an analysis of which of the 3,500 plans should be examined immediately, based upon my knowledge of the business practices of the vendors to these funds and other factors. I believe we could identify approximately 500 plans that merit immediate attention. Given the widespread use of investment consultants by pensions and the pervasiveness of conflicts in the industry, I believe that the majority of the plans the PBGC has taken over may be entitled to recoveries. … Unless the consultant, at a minimum, fully disclosed the nature and amounts of the conflicts related to its advice, a forensic review is mandatory."
In response to the letter, a PBGC spokesman, said: "The PBGC invited Mr. Siedle to share with the agency whether he had any specific evidence that terminated pension plans were the victim of wrongdoing. Mr. Siedle was unable to furnish such evidence but did offer his services to the agency on a contingency-fee basis. The PBGC's principal concern is whether plan participants or the insurance fund have suffered financial losses as a result of illegal activity. The PBGC must have a reasonable basis for believing such activity has occurred before it can consider the expenditure of premium dollars."
The spokesman said PBGC officials would have no further comment on the letter.