On March 12, fraudulent financier Bernard Madoff pleaded guilty to 11 felony counts - including mail fraud, wire fraud, investment adviser fraud, money laundering, false statements, perjury, false filings with the Securities and Exchange Commission, and theft from an employee benefit plan - for conducting the largest Ponzi scheme ever, stealing $65 billion from 4,800 investors by using new investor dollars to pay off old investors over the course of some 20 years. According to reports, Madoff, 70, faces a sentence of up to 150 years in prison.

As Madoff's legal fate is sealed, still unclear is the future for the multiple pension plans that fell victim to Madoff's scheme. Court filings show a 162-page list of Madoff's clients that were affected, including several labor unions and defined benefit plans. The Department of Labor in February released guidance reminding plan sponsors of their fiduciary duties in light of Madoff's theft, and steps to assess and protect the interests of their plans.

It reads: "Where plan fiduciaries determine that plan assets were invested with Madoff entities and material losses are likely, appropriate steps should be taken to assess and protect the interests of the plan and its participants and beneficiaries. Such steps may include:

1. Requesting disclosures from investment managers, fund managers and other investment intermediaries regarding potential exposure to Madoff-related losses.

2. Seeking advice regarding the likelihood of losses due to investments that may be at risk.

3. Making appropriate disclosures to other plan fiduciaries and plan participants and beneficiaries.

4. Considering whether the plan has claims that are likely to lead to recovery of Madoff-related losses that should be asserted against responsible fiduciaries or other intermediaries who placed plan assets with Madoff entities, as well as claims against the Madoff bankruptcy estate.

"Fiduciaries must ensure that claims are filed in accordance with applicable filing deadlines such as those applicable to bankruptcy claims and for coverage by the Securities Investor Protection Corporation."The Web site of the court-appointed trustee for the liquidation of Bernard L. Madoff Investment Securities LLC is www.madofftrustee.com, which features the liquidation notice, claim forms and related claims information.

Philadelphia law firm Spector Roseman Kodroff & Willis, P.C. announced in February the filing of a class-action against Austin Capital Management Ltd. for millions of dollars of losses due to improper investments in securities controlled by Madoff and his company. Although multiple Madoff-related suits have been filed, the one against Austin is believed to be the first filing that seeks relief under the Employee Retirement Income Security Act.

The suit, brought on behalf of the Pension Fund for Hospital and Health Care Employees, alleges that Austin violated ERISA by failing to prudently invest the benefit funds' assets, in violation of the Employee Retirement Income Security Act. The complaint alleges that Austin was a fiduciary to the class of benefit funds and owed them the duty to manage investments with the highest care. Instead, the complaint alleges, Austin failed to conduct an adequate due diligence prior to recommending and investing monies in Madoff-related funds on behalf of its clients. Specifically, Austin failed to notice, or completely disregarded, the numerous "red flags" about the Madoff-related securities, including:

• Lack of transparency in the operations of Madoff and Madoff Securities, including Madoff's refusal to disclose his investment strategy.
• Investment returns of Madoff Securities were abnormally smooth, with very little volatility, including only five months of negative returns in the past 12 years.
• The inability of other funds, using Madoff's stated method, to generate comparable returns.
• Monthly account statements sent to Madoff investors did not support the returns supposedly being earned.
• Madoff's auditors consisted of one office in Rockland County, N.Y., with three employees. One was 78 years old and lived in Florida, and one was a secretary.

Even absent Madoff's fraud, defined benefit plans have experienced a turbulent several months, with funding status tumbling since the fourth quarter of 2008. According to consulting firm Milliman, the slide has continued into this year. In the latest update to the Milliman 100 Pension Funding Index, which consists of 100 of the nation's largest defined benefit pension plans, pensions lost another $54 billion in assets in February. These losses were offset by liability decreases of roughly $21 billion, resulting in a net loss of $33 billion in funding status for the month. In the last year alone, the funding ratio for these pensions has fallen from 99.6% to 71.7%.

"January was a terrible month for asset values, and February was worse," says John Ehrhardt, co-author of index. In the first two months of 2009 alone, "already funding status had declined from 77.2% to 71.7%, and that's with asset values being offset by changes in discount rates."

Funding status has fallen by $337 billion in the last 12 months, thanks in large part to a -26% asset return. As of the end of February, the total asset value for these pensions stood at $869 billion.

List of several plans affected by Madoff's scheme: East River Management Corp.;Laborers International Union of North America Local 210; Louisiana State Police Retirement System; Massachusetts Pension Reserves Investment Management; Missouri State Employees' Retirement System; New Orleans City Employees Retirement System; North Shore-Long Island Jewish Health System; Royal Dutch Shell and the Town of Fairfield, Conn. - From various news reports