Mass. settlement to boost pension funds

BOSTON – A settlement in a class-action suit could yield a windfall for affected state pensions several years after the housing market collapse impacted pensions and retirement funds, thanks to a settlement reached between Massachusetts pension groups and Fannie Mae, according to a report by Boston.com.
The $170 million settlement with Fannie Mae could benefit tens of thousands of class members, the website reported.
The Massachusetts Pension Reserves Investment Management was created in 1983 to help Bay State retirement systems meet pension obligations. The group, along with the State-Boston Retirement Board, sued Fannie Mae in 2008, saying it defrauded pensioners by violating the Securities Exchange Act of 1934 when it made “false and misleading statements about the internal controls of the company.”
PRIM and the State-Boston Retirement Board also argued Fannie Mae’s exposure in the subprime mortgage market was revealed in partial disclosures before the Federal Housing and Finance Agency, or FHFA, took Fannie under conservatorship.
According to the website, the next step will be for PRIM’s experts to develop a plan to gather the extent to which its overall losses were directly linked to the alleged misdeeds. Once a court approves that plan, an administrator will oversee the claims in order to award PRIM and other shareholders portions of the settlement. •

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