Lehman Brothers Retirement Funds Suffer Loss
admin on January 6th, 2009
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Lehman Brothers employees and retirees have suffered a loss in a stable-value fund within their retirement plan because of a lack of fund insurance. Lehman Brothers filed for the largest bankruptcy in US history in September of last year. As a consequence of the bankruptcy filing, Lehman had to drop insurance it held against losses within its retirement plans.
Lehman holds approximately $2 billion in retirement funds and $239 million of that fund was invested in stable-value funds offered by Invesco Ltd. Although the loss was relatively low at 1.7%, it was the first time in 14 years a stable-value fund had loss money. Additionally, the lack of fund insurance will not protect investors against the fund’s loss. Stable-value funds are viewed as conservative security holdings and over $400 billion dollars are currently held in US retirement funds. Lehman Brother employees and retirees are the only investors affected by the fund loss.
