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Retirement Accounts

Juneau, AK: (Jan-08-08) The state Department of Revenue brought charges against State Street Global Advisors, an investment management firm, alleging that the firm mismanaged retirement accounts. The suit claimed that State Street Global Advisors touted the Daily Corporate/Government Bond fund as an ultra-safe investment intended to track a market index and only invest in low-risk securities. It stated that fund managers put money into higher-risk investments, including some backed by subprime mortgages. Those investments could have boosted returns but instead lost much of their value when markets turned down.

The bond fund was one of a limited number of investment options available for employees in the Supplemental Benefits System, as well as those in deferred compensation and new defined contribution plans. The bond fund was billed to employees as a conservative investment for those hoping to avoid risk, such as employees nearing retirement. Sources close to the case stated that as part of a settlement reached, State Street Global agreed to reimburse Alaska state employees almost $6 million, resolving the lawsuit. [ANCHORAGE DAILY NEWS: RETIREMENT ACCOUNTS]

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Published on Jan-9-08


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