SANTA ANA, Calif. Employees of Countrywide Financial Corp., Calabasas, Calif., have lost millions of dollars in 401(k) assets as the value of the companys stock dwindled because of its alleged illegal actions, according to the law firm of Hagens Berman Sobol Shapiro. The firm filed a class-action suit against Countrywide Sept. 12 in U.S. District Court in Santa Ana.
From Oct. 27, 2005, through Aug. 16, 2007, the company provided its matching contribution as company stock, which has lost three-fourths of its value since January amid the subprime lending fallout.
The suit claims employees participating in the 401(k) plan relied on information supplied by the company, its CEO and other plan fiduciaries in making the decision to contribute to the plan, according to the law firms statement.
The suit seeks the return of money lost, the creation of a constructive trust on any amount by which the defendants were unjustly enriched and the appointment of an independent fiduciary to help manage the companys stock.
A statement from the company said: Countrywide has not yet seen this lawsuit, and does not generally comment on specific points of pending litigation. From what we can discern from the news release put out by the public relations firm for plaintiffs counsel, we do not believe the case has merit, and we will defend it vigorously. Countrywide believe(s) our 401(k) program is properly structured and provides competitive benefits to employee participants.
Steve Berman, the attorney representing the plaintiffs, could not be reached by press time.
Countrywides 401(k) plan had $1.1 billion in assets as of Dec. 31, according to an SEC filing.
Nevada 457 plan creates executive officer post
CARSON CITY, Nev. The Nevada Deferred Compensation Fund, Carson City, will search for its first-ever executive officer, said Brian Davie, chairman of the board that oversees the $375 million 457 plan. Previously, board members handled the administrative duties.
The executive officer will provide another level of oversight, Mr. Davie said. He expects to have a job posting in the next few weeks; the executive officer will start Jan. 1.
Mercer HR, Financial Engines to offer more
BOSTON Mercer expanded its relationship with Financial Engines to include managed account services in addition to investment advice for participants in 401(k) plans of Mercer client companies, confirmed Stephanie Poe, Mercer spokeswoman. Financial Engines also will offer individual retirement assessments.
Delaware, AST Capital create collective trust funds
PHILADELPHIA Delaware Investments, in partnership with AST Capital Trust, will launch four collective trust funds, according to a news release. Delaware Investments will manage the money, and AST Capital Trust will be trustee for the investment pools, which will be available as investment options on the platforms of third-party retirement plan providers, including AST. The AST Collective Trusts offerings are the Delaware High-Yield Fund, Large Cap Value Fund, International Equity Fund and REIT Trust.
Kmak resigns from JPMorgan Retirement Services
NEW YORK Thomas Kmak resigned as president and CEO of JPMorgan Retirement Services, said Mary Sedarat, spokeswoman. Eve Guernsey, CEO of JPMorgan Asset Management, Americas, will be interim CEO of the retirement services subsidiary while the firm searches for Mr. Kmaks replacement. Mr. Kmaks plans were not known.
After 18 years of helping to build Retirement Plan Services into a major national retirement business, Tom Kmak is leaving JPMorgan to apply his entrepreneurial skills in other ways, said an internal memo from Ms. Guernsey.