No Harvey-related disruptions reported; disaster plans work
Hurricane Harvey and the subsequent tropical storm that dumped more than 50 inches of rain in areas of Houston left both plan sponsors and money managers scrambling to implement closures and disaster recovery plans.
Fixed-income manager Garcia Hamilton & Associates LP, located in downtown Houston, opened its offices Aug. 30 for the first time since the hurricane made landfall Aug. 25, with about 10 of its 32 employees present.
"We've been in our building for about 13 years, and so we have had our disaster recovery tested about two or three times," said Gilbert A. Garcia, managing partner, in a telephone interview. "We were prepared from that standpoint, but the devastation is just unimaginable."
"I live in the middle of town in a house that's relatively new and my house is very tall, but the other houses on my street, most of them had at least 3 to 5 feet of water in them," Mr. Garcia said. "I have a neighbor and it's a 4,000-square-foot beautiful red-brick home with 3 feet of water, and we saw him get rescued by a police boat. My street was a river, I mean a RIVER, for three days."
Mr. Garcia said his home was completely isolated for several days after the storm began. "It took a while to get up to speed. There was no internet, no radio, no TV. You couldn't leave your house." The business "never missed a beat" and never lost contact with any of its information systems such as servers, all located well off-site, Mr. Garcia said.
"We've had an outpouring of support from clients, consultants, brokers, and that's been beautiful," he said. "People trying to send donations, channeling it to different charitable organizations, people offering for us to work out of their offices."
Quantitative manager Bridgeway Capital Management Inc. experienced no interruptions from the storm, said Tammira Philippe, president and director of the Houston firm, in a telephone interview.
"The short version is we have a lot of plans in place for this type of thing," Ms. Philippe said. "Obviously, hurricanes are our most predictable source of potential business impact."
Certain employees were placed outside of the area for a "just-in-case scenario," while others worked from the office or their homes. Ms. Philippe said the "extraordinary good fortune" is that there was no loss of power, which is usually the primary result of a hurricane's winds. That part of the storm had relatively little impact, she said.
"The reaction from our clients and business partners base has been remarkable," she added. "The outreach to us, offering to help, asking where to give, how to give. Some of our close business partners have already given large donations to national and local organizations."
Money manager Fayez Sarofim & Co. on Aug. 30 was operating from a small office in Austin as part of its disaster recovery preparedness. A spokeswoman said the company plans to reopen its main Houston office, which has been closed since the beginning of last week, on Sept. 5.
The offices of the $2.3 billion Houston Municipal Employees Pension System and $4 billion Houston Firefighters' Relief and Retirement Fund were closed through Aug. 30. Ajit Singh, chief investment officer of the firefighters fund said in an email that the pension fund won't reopen until Sept. 5 because the "city has advised to keep all non-essential people off the road" until then.
"We have a robust business continuity and disaster recovery plan, and we can work remotely and perform all essential investment function remotely indefinitely," Mr. Singh said.
The Austin-based Texas Teacher Retirement System moved its Aug. 25 board meeting to Sept. 1 because of the hurricane, said Juliana Fernandez Helton, spokeswoman for the $139.7 billion pension fund, in an email.
Peter Koops, spokesman for the Houston municipal plan, and officials at the $3.9 billion Houston Police Officers' Pension System could not be reached for comment by press time.
Federal agencies offer relief
The Internal Revenue Service also announced Aug. 30 that it would allow loans and hardship distributions to 401(k) plan participants and members of their families who have been affected by Hurricane Harvey, and the Pension Benefit Guaranty Corp. said it would waive late premium payment penalties and extend other deadlines for plans affected by the storm. The disaster relief announcement is available on the PBGC's website.
The Labor Department also released employee benefit plan compliance guidance for companies affected by the hurricane. "Our deepest and most immediate concern is for those who are in harm's way, and for the first responders who will work tirelessly to help those affected," said Labor Secretary Alexander Acosta in a news release. "We also realize that employers and employees impacted by Hurricane Harvey will need assistance in dealing with employee benefits issues arising from disruptions in banking and payroll processing."
The compliance information is available on the DOL's website.
Meaghan Kilroy contributed to this story.