FedEx Corp., Memphis, filed a lawsuit on behalf of its employees pension plan against the plans trustee, Northern Trust, over its securities lending program.
The lawsuit, filed in U.S. District Court for the Western District of Tennessee in Memphis, claims that contrary to the requirements of the trust agreement, the plan's investment guidelines and specific instructions from plan fiduciaries to avoid securities lending of the plan's assets, Northern Trust performed substantial securities lending of plan assets, according to the court filing.
In a statement, Northern Trust said it will vigorously defend itself in regard to the lawsuit.
Like other securities lenders, Northern Trust has put in place safeguards designed to treat all participants equitably during extraordinary market conditions, the statement said. Northern Trust did so in its role as trustee of the collective funds so that all participants are treated equitably. Until the liquidity crisis eases and unrealized negative effects on portfolios are reduced, Northern Trust will continue to work to protect the interests of all clients.
Steve Barber, a spokesman with FedEx, said the company does not comment on pending litigation.
FedExs defined benefit plan had an estimated $11.5 billion in assets as of Sept. 30, 2007, according to Pensions & Investments.