Friday, January 20, 2006

District suffers in investment collapse 01/20/2006 District suffers in investment collapse

This will be an interesting case as I am pretty sure the employees and their union will end up in a court battle with the district. The issue will be what responsibilities the school district has to the employees regarding their payroll deductions to retirement plans.

What is unclear is what actually transpired. It appears Plan Compliance Group was on the "approved vendor list" (hint: employees need to request a copy of this list to see how it is titled....approved indicates some level of responsibility) of the district and if this is true it means they signed a hold harmless agreement with the district, this agreement holds the district harmless should fraud happen and makes the company responsible. However, the district also has the responsibility to ensure that the money is actually going to an account that is allowed by the IRS. The question is what agreements did the district have with PCG and when was the last time those agreements were updated. The employees need to find their statements and figure out whether their money was ever really invested in a 403(b). The district liability in this is not clear, but the questions will be 1) Is the district responsible for verifying if a plan is actually a 403(b) approved plan, 2) If so, what steps, if any were taken by the district to verify this, 3) was Plan Compliance Group the actual investment provider or were they simply a common remitter, i.e. a firm that forwards money on to another vendor - if so, the district may actually have some liability if it can be proved that PCG was an agent (via the hold harmless agmt) of the district. This will be a very interesting case to watch, though ultimately the new 403(b) regulations require the district to take responsibility and in the future the district will likely be on the hook for occurences such as this. This is why districts are going to have to find a good system for handling their 403(b) plans.

Scott Dauenhauer, CFP, MSFP

Thursday, January 19, 2006

Wednesday, January 18, 2006

Danville investment manager in East Bay hospital 01/17/2006 Danville investment manager in East Bay hospital

Just an update on PCG and the owner Bill Reimers. I was happy to hear that Bill is recovering from his suicide attempt. While I am extremely displeased and upset about what Bill did I also am glad that he survived and hope that he makes a full recovery. The road will be tough for him as he will be forced to account for all that he has done, but this road is better than the alternative.

My heart goes out to him and his family and I keep them in my prayers. However, the people who lost their life savings via this mess are the real victims, let's not forget them in our prayers either.

Scott Dauenhauer, CFP, MSFP

Monday, January 16, 2006

Once at the top, businessman now faces probe

Yet another story about Plan Compliance Group and Bill Reimers. It seems Bill was running a ponzie scheme with individual investors in order to finance his high lifestyle. None of the people involved ever bothered to check into Reimers, whether he was registered or had any licenses. A simple check would have saved their lifes savings. Apparently one woman did do some checking and decided she didn't want Reimers managing her money, it looks like she was the straw the broke the camel's back. It looks like it was just a matter of time before everything crashed in on him. It's sad, but should serve as a lesson to investors....As Ronald Reagan used to say about the Soviets - "Trust, but Verify."

The school districts could have done a better job as well, they could have verified everything that Reimers told them as opposed to just trusting him.

Scott Dauenhauer, CFP, MSFP

Friday, January 13, 2006

High-flier's sudden fall leaves lives in ruin / Good life apparently was propped up by Ponzi scheme

High-flier's sudden fall leaves lives in ruin / Good life apparently was propped up by Ponzi scheme

A story about the damage Reimers and PCG did on the personal investor side. Trust is not enough, you must verify. You must verify your money is where you send it and not in the hands of an advisor directly. You must verify registrations, nobody did this and everybody lost.


Thursday, January 12, 2006

Plan Compliance Group Update

Plan Compliance Group Update: "The president of Plan Compliance Group, the California company responsible for the disappearance last year of more than $2.6 million intended for retirement investments on behalf of island teachers and university professors, attempted suicide last month as the company crumbled under the weight of spreading accusations of fraud."

Turns out money was also stolen from individual investors, not just school districts.

This continues to be a sad story for all involved.


Saturday, January 07, 2006

Company accused of mishandling funds files for bankruptcy - KPUA Hawaii News - Company accused of mishandling funds files for bankruptcy

It's official, Plan Compliance Group is now defunct. It will be interesting to hear the whole story, though I don't believe it will come out for quite awhile. I think it is sad for both school district employees, employers, TPA's, and Plan Compliance Group. I don't actually think PCG was a bad apple, they did a good job; it takes more than good intentions and a good job to run a business.

As always, I'll keep a watch on this an report on it from all sides.