(October 18, 2011) — A former pension executive of the Screen Actors Guild-Producers Pension and Health Plans has been accused of steering business to family members, directing money to his spouse’s marketing firm.
The Los Angeles Times reported that Craig Simmons — the former SAG head — arranged to have the fund hire his spouse’s marketing company, Fortress Communications, in order to aid him in developing a campaign to mark the 50th anniversary of the SAG pension and health plans. Ironically, Simmons was fired in March and accused his boss of directing business to family members.
The payments made by Simmons — which totaled about $25,000 — were made in October 2010 and January 2011 and are likely to attract greater scrutiny from Federal Labor Department officials.
While trustees claim the plans are financially intact, the payments draw further attention to the level of financial oversight at the scheme.
Pension scandals have been prevalent elsewhere in California and around the country – with most scrutiny in the public pension arena. California, along with New Mexico and New York, to name a few, have experienced major problems with regards to investment losses tied to the recommendations of middlemen. In December 2010, two city pension funds – one designated for police and firemen, the other for various municipal employees – lost upwards of $2 billion combined, or 27% of total assets, since 2008. According to the Detroit Free Press, the Securities and Exchange Commission (SEC), the Federal Bureau of Investigations, and a federal grand jury were all looking into many of the failed deals.
More recently, earlier this month, the SEC revealed it was investigating officials at the Kentucky Retirement Systems (KRS), which manages about $14 billion in assets for retirement programs for about 330,000 active and retired employees of state and local governments.
According to Kentucky’s Courier Journal, the federal agency sent subpoenas to one current and two former staff members to attend depositions. The US regulator told attorneys for the retirement systems that it wants to talk to all individuals who have served on the KRS board of trustees since 2007 to investigate their communication with placement agents.
William Thielen, interim executive director of Kentucky Retirement Systems, told the newspaper that the subpoena for the current staff member — whom he declined to identify — ordered a deposition on October 25 in New York City, adding that in total, the SEC aims to speak with about 15 people, including board members.
While the SAG issue is unlikely to reach a similar scope as the state pension scandals, it does further highlight troubling governance issues at pension funds, both public and private, across the United States.
To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:firstname.lastname@example.org'>email@example.com</a>; 646-308-2742