Susan M. Mangiero

State Street Sets Aside $618M for Pension Related Lawsuits

Dear Opaulo:

I agree with you that these are not just ERISA issues and are in fact broad "suitability" issues. What's interesting is that some of the complaints being filed allege securities fraud and disclosure "problems." I am not an attorney and therefore not in a position to offer legal advice or interpretation of legal issues. That said, I don't believe it is complete (correct) to say that a fiduciary gets a pass if a loss is due to market considerations. ERISA mandates a tough standard in the form of prudential process. State pension laws tend to mimic ERISA so the notion of process applies to them as well. Interestingly, and having just spoken at a conference of global pension regulators, the US is in the minority for its emphasis on process versus outcomes. I appreciate reading your thoughtful comments.