Standards & Poor | Pension360

Pennsylvania Pensions Will Get $15 Million Piece of S&P Settlement

On Tuesday, credit rating agency Standards & Poor’s entered a $1.375 billion settlement with 18 states over the alleged inflated ratings it gave mortgage-backed securities which eventually turned toxic.

Pennsylvania is receiving a $21.5 million chunk of the settlement. Of that money, $15 million will be distributed among state agencies, including pension systems.

Two of Pennsylvania’s pension systems – the Public School Employees Retirement System and the Pennsylvania Municipal Retirement System – will receive a slice of the $15 million.

More from PennLive:

Pennsylvania is to receive $21.5 million from a proposed $1.38 billion nationwide settlement over misconduct allegations against Standard & Poor’s Financial Services LLC, the country’s largest credit ratings agency, [Pennsylvania] Attorney General Kathleen Kane said Tuesday.

[…]

“We contend that Standard & Poor’s set aside its independence and objectivity in order to increase its profits, which led to disastrous results for consumers and the economy,” Kane said in a press release. “This historic settlement ends years of litigation against an industry giant and holds this company accountable for its role in the financial crisis. Attorneys General from across the country and the federal government joined together in a bipartisan fashion to show that no company is above the law.”

[…]

She said $15 million of the settlement is to be distributed to the state treasury, Public School Employees Retirement System, Pennsylvania Municipal Retirement System and the Turnpike Commission, agencies that purchased the S&P rated securities. The rest will pay litigation and investigation costs, Kane said.

The Justice Department statement on the settlement, which includes a list of the states receiving money, can be read here.

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S&P Settlement Nets $20 Million for Iowa Pensions

Iowa will receive $21.5 million, of which $20 million will be distributed among its 5 pension systems.

The distribution is as follows, according to the Des Moines Register:

Iowa’s money will be distributed among public employee retirement systems, specifically, the Iowa Public Employee’s Retirement System will get $10 million; Teachers Insurance and Annuity Association-college Retirement Equities Fund will get $2.5 million; the Peace Officers’ Retirement System will get $2.5 million; the Municipal Fire and Police Retirement System of Iowa gets $2.5 million and the Iowa Judicial Retirement Fund gets $2.5 million.

“We think that’s appropriate because it’s possible that these (systems) had some of these residential mortgage-backed securities … But probably more significantly, because this whole failure by S&P played such a role in the financial downturn, all five funds were affected very significantly,” Miller said. “It’s a good settlement.”

Miller said employees who have these retirement systems may not individually feel the results of this settlement but there will be a greater amount of money in reserves to support retirement checks in the future.

The Justice Department statement on the settlement, which includes a list of the states receiving money, can be read here.

Illinois Pensions Get $50 Million From S&P Settlement

Credit ratings agency Standards & Poor’s announced a $1.375 billion settlement with 18 states today over the alleged inflated ratings it gave mortgage-backed securities which eventually turned toxic.

Illinois will receive a $52.5 million chunk of that settlement – with most of the money going towards its pension systems.

More from the Chicago Sun-Times:

It won’t solve Illinois’ pension crisis — not by a long shot — but it’s “better than nothing,” state Attorney General Lisa Madigan said Tuesday, announcing a $52.5 million settlement connected to the 2008 economic collapse.

[…]

Madigan’s office sued S&P in 2012, alleging the credit ratings agency “compromised its independence as a ratings agency by doling out high ratings to unworthy, risky investments to increase its profits, while its misrepresentations spurred investors, including Illinois’ pension funds, to purchase securities that were far riskier than their ratings indicated.”

“S&P abandoned its critical role in the years leading up to the economic crisis, blinded by its unyielding desire for profits,” Madigan said during a news conference Tuesday morning at the Thompson Center in the Loop.

The majority of the state’s portion will be reinvested in Illinois’ pension systems, Madigan said. To date, the state has recovered approximately $400 million for losses the state pension systems sustained after investing in mortgage-backed securities, Madigan said.

Though Madigan acknowledged the latest settlement will have little impact on the state’s pension mess, she said it nevertheless sends a message.

The Justice Department statement on the settlement, which includes a list of the states receiving money, can be read here.