THE PAST TWO years have been difficult for anyone trying to make money from investments. Even the most prestigious indexes on Wall Street are showing significant losses. The Standard & Poor 500 was down more than 40 percent from its high in October 2007. The Dow Jones Industrial Average was down 37 percent over the same period. And the Boilermaker pension and annuity funds did not escape the devastation, falling well over 20 percent during 2008.
The good news is that they did manage to escape one pitfall that many union pension funds fell into — the Madoff ponzi scheme that bilked investors of a reported $50 billion or more.
Most of Madoff’s clients were hedge funds and pension funds. Many of those pension funds were ones run by labor unions. A Carpenters local in New York reportedly lost the majority of the $100 to $150 million they had in their fund. A Pipefitters local reported losing about $48 million.
But an extensive search through all of the holdings of the money managers used by the Boilermaker-Blacksmith pension showed that none of them were involved with Madoff.
Because of the financial industry collapse and stock market crash, the pension is looking at a long rebuilding period. It remains to be seen what adjustments will need to be made, because stock prices are continuing to fall.
But at least members can be assured that none of their funds went into the hands of the man who has become the most famous fraud artist in recent history — Bernie Madoff.
