SEC Blocks Pension Plan Company

The Securities and Exchange Commission issued a cease and desist order Tuesday against an independent pension plan administrator that the agency alleged was operating as an unregistered broker-dealer.

The order against Bankers Pension Services Inc. of Tustin was the second the SEC has issued in as many months against pension plan firms in Orange County.

Bankers Pension, which administers more than $400 million in individual retirement accounts, consented to the SEC order without admitting or denying any wrongdoing, the SEC said.

The action resolved SEC allegations that the company had improperly acted as an unregistered broker-dealer by, among other things, writing checks on behalf of clients to pay for securities transactions and charging clients transaction-based fees.

The decree did not involve any fines and the federal agency did not allege any fraudulent activity.

The company said in a press release that it “does not sell investments, provide investment advice nor underwrite securities.” The agreement with the SEC “addresses some industry changes and has no impact on clients,” the company added.

BPS serves as pension administrator for about 7,000 IRA customers and retirement plan participants nationwide, according to the SEC.

The SEC has been reviewing the administration of self-directed retirement accounts in Southern California to determine which companies should be under SEC scrutiny, said Lisa Gok, the SEC’s regional director in Los Angeles.

In June, for example, the SEC issued a cease and desist order against Irvine-based Transcorp Pension Services, which administers about $700 million in assets in about 30,000 self-directed IRAs. Transcorp complied with a consent order without admitting or denying any wrongdoing, Gok said.

In the prepared statement, BPS Chairman Ronald P. Thon said that his company administers self-directed retirement accounts, but that negotiable securities “are held either by a custodian bank or the client’s designated broker-dealer, and all uninvested cash is deposited and held in FDIC-insured accounts with the sponsoring custodian banks.”

Thon added that independent auditors employed by bank custodians regularly audit his firm’s business practices, and that auditors “reconcile cash deposits to the bank records to ensure compliance with client-directed accounts.”