Free Special Resources
Get Your FREE Special Report. Download Any One Of These FREE Special Resources, Instantly!
Featured Special Report
Claim Your Free Copy of Overtime Primer: Highlights from the New Regulations

The federal DOL overtime regulations go into effect this year. Are you ready?

Download Now!

This report includes a summary of key changes, including the salary level test and salary basis test.

As a bonus, we've included a handy flowchart to help you determine exemption status under the FLSA.

Download Now!
June 28, 2002
WorldCom Spells 'Trouble' for Pension Funds
For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!
rseers of retirement funds for public employees around the country said Thursday that the accounting scandal at telecom giant WorldCom already has cost them well over $1 billion in lost stock and bond investments.

WorldCom, the country's second-largest long distance telephone company, stunned the world Tuesday by disclosing that it had nearly $4 billion in improperly treated expenses.

The news disintegrated the value of WorldCom's already battered shares, and three bond-rating agencies slashed WorldCom's debt ratings deeper into "junk" territory, citing the increased likelihood of default.

As a result of all this, the California Public Employees' Retirement System, the biggest pension fund in the U.S., faces an unrealized loss of $565 million in its $150 billion portfolio, according to the Reuters news agency.

The country's No. 2 pension fund, the New York state retirement system, estimates it lost $300 million. It has $112 billion in total assets.

New York Comptroller Carl McCall said through a spokesman that he "is outraged that another irresponsible corporate action has defrauded members of the pension system and all investors."

But other state officials told Reuters that benefit recipients can relax for now.

Sherry Reser, a spokeswoman for the California State Teachers Retirement System, said the losses will have "no impact on the pension that our members will receive and it will not affect contributions."

Reuters notes that Cal Teachers, the third-largest U.S. public pension fund, with $100 billion in assets, suffered a $109 million unrealized loss due to WorldCom.

Reuters also reported these other state pension fund losses related to WorldCom:

- The State of Wisconsin Investment Board says realized losses on its $58.5 billion in assets reached $29 million on WorldCom bonds and $7.3 million on stock.

- Michigan lost $116 million in its four pension funds.

- The Florida State Board of Administration public pension fund lost $92 million on WorldCom stock and estimates a $54 million loss on its bonds holdings.

- Virginia's retirement system has an unrealized stock loss of $44 million in indexed funds.

- Oregon pensions have $63 million in unrealized losses, of which $38 million is in stocks and $25 million is in bonds.

- North Carolina has $100 million in losses.

Click here to view the Reuters story, via Yahoo!

Participate in this week's poll and discussion!
Featured Special Report:
Top 100 FLSA Overtime Q&As
Twitter  Facebook  Linked In
Follow Us
Copyright © 2016 Business & Legal Resources. All rights reserved. 800-727-5257
This document was published on
Document URL: