Pension fund fraud can be thought of in two main categories: a fraud against the employee beneficiaries of the pension, or a fraud against the pension fund itself. The employee type is typically issues about a beneficiary being falsely told what the terms and benefits the pension will provide to that employee will be, or an unauthorized third party gaining access to the pension benefits through some form of identity theft.
The pension fund itself can also be defrauded. The trustee of the pension has to make investment decisions about how the pension will maintain and invest the pension’s assets. Pensions can simply keep assets in cash to pay out future beneficiaries. More commonly, pensions invest the assets in an attempt to meet future obligations with less contributions being required from the employer and/or employees. When making those investment decisions, the trustee can be lied to, misled, or otherwise given poor investment advice about the types of investments that should be selected for the pension funds. In extreme cases, advisors have even stolen pension assets by convincing the trustee to invest in what turn out to be fictitious investments.
If you feel you may be a victim of pension fund fraud, contact our securities lawyers for a free consultation.