Some UAL Inc. employees will be offered limited investment diversification within the two new ESOPs, if shareholders approve the proposed $5 billion employee buy-out of the airline.
A UAL spokesman said employees older than 55 will be able to diversify up to 25% of their ESOP accounts out of company stock into other asset classes, such as stocks and bonds.
The other options likely won't be offered until the ESOPs have been up and running for some time, the spokesman said. UAL officials still are working out the details on asset classes, investment vehicles and vendors.
The PBGC reported a $2.9 billion deficit in its single-employer program in 1993, a 5.8% increase from the previous year. In its annual report released last week, the agency reported the multiemployer program jumped 63% in equity from 1992, to a surplus of $276 million. The agency's deficit increased 2.1% to $2.6 billion.
The $17 billion Oregon Public Employes' Retirement Fund has put its shares in Cadillac Fairview up for sale, confirmed Rollie Wuisbrock, a spokesman.
The book value of the retirement system's shares is a little more than $10 million, according to Mr. Wuisbrock. He declined to say what the shares are now worth.
He said the fund has been approached by a number of different potential buyers.
McGraw-Hill Inc. will outsource all record keeping and administration for its five defined contribution plans to Kwasha Lipton. Those functions had been handled by internal staff.Northern Trust was retained as trustee.
McGraw-Hill also will move to daily funds valuation, from monthly, for its $379 million in plan assets.
Plan enhancements include expanded loan provisions and better participant account accessibility through a 24-hour automated voice-response system. Sources say McGraw-Hill will hire an outside firm for employee communications and investment education.
The Electricity Supply Pension Scheme is the first non-U.S. pension fund to receive investment ratings from Standard & Poor's and Moody's Investors Service.
The ratings stem from the pension fund's guarantee of a $105 million commercial paper program being issued by its U.S. real estate subsidiary, Eastern Realty Investment. The commercial paper replaces existing debt.
The 13 billion ($19 billion) internally managed fund received an implied triple-A rating to the fund's senior debt obligations, while the commercial paper has been rated A-1+ by S&P and Prime-1 by Moody's.
The PBGC reached a settlement worth about $50 million with Lone Star Industries to keep the pension plans ongoing as the company emerges from Chapter 11 bankruptcy proceedings.
Under the settlement, the company will have to contribute about $12 million to its nine underfunded pension plans, in addition to its regular contributions.
The plans are underfunded by about $73 million on a termination basis.
In addition, the agreement gives the agency an estimated $35 million lien against Lone Star's Oglesby, Ill., cement plant and a 25% lien against the Kosmos Cement Co. Partnership in Kentucky.
Fewer than 2% of the 3.3 million 401(k) and 403(b) participants serviced by Fidelity changed their asset allocations between March 28 and April 8, reports Fidelity Institutional Retirement Services.
The $14.2 billion Colorado Public Employees' Retirement Association hired two emerging markets managers. Bankers Trust Australia will run a $100 million portfolio of Southeast Asian equities, and BEA Associates, $100 million in global emerging markets equities.
Funding came from cash flow.
In a sweeping move to multimanagers, Archbold Expeditions, which has a $22.6 million foundation, hired eight managers and a custodian, said Frances Leidy, treasurer.
In domestic equities, it assigned Burridge Group 9% for mixed-cap growth; Eagle Capital, 17%, large-cap growth; Sloate Weisman Murray, 20%, large-cap value; Kennedy Capital, 9%, small-cap growth; and David Vaughn, 14%, income.
In international equities, it assigned 12.5% each to Templeton International and Fiduciary Trust. PIMCO was allocated 6% for high-yield fixed income.
In addition, the fund hired Mellon Bank as custodian, replacing Brown Brothers Harriman.
Carnegie Wealth Management and Portfolio Consulting Services assisted. The fund had been managed in-house by Page Hufty, who retired as treasurer and money manager.
The National Society Daughters of the American Revolution, Washington, hired Systematic Financial Management to manage a $4 million endowment in a balanced strategy.
Rosalie Clary, manager of the finance committee and recording secretary general, said funding came from reducing the allocation to an existing manager she declined to identify.
Emerging Growth Management will acquire Henwood Capital Management. Both run hedge funds. Henwood Capital Partners, which has $20 million, uses a market neutral strategy that goes long and short on equities. Emerging Growth runs $180 million, including $50 million split into two hedge funds.
The $16 million profit-sharing plan of Smart & Final Inc., Vernon, Calif., hired NWQ Investment Management to manage a balanced option. Martin Lynch, chairman of the investment committee, would not disclose the amount of the hire. He said funding came from the reduction in the allocation of an existing manager he wouldn't name. Merrill Lynch assisted.
The Ohio School Employees' Retirement System, the Texas Permanent School Fund, the Dallas Employees' Retirement Fund and Dallas Police and Fire Pension System are planning to join the Council of Institutional Investors, according to the minutes of a meeting of the executive committee of the council. The Los Angeles City Employees' Retirement System and the Sheet Metal Workers' National Pension Fund have dropped out, the minutes show.
The Callan Broad Market Index of the 2,000 largest U.S. equities posted its first quarterly loss in eight quarters, falling 3.95% through March 31.
The largest companies fell the most (4.5%), as represented by the Callan Large Cap Index. Indexes of medium-, small-, and micro-cap stocks fell 3.45%, 3.2%, and 1.34%, respectively.
W. Gordon Binns, who is retiring as president of General Motors Investment Management and vice president and CIO of General Motors Corp., has been appointed chairman of the Virginia Retirement System's investment advisory committee.
Assets of the 100 largest emerging markets funds vaulted $27.8 billion to $54.1 billion in the last six months of 1993, according to Micropal. The closed-end Emerging Markets Growth Fund of Capital International remained the largest, with almost $4.1 billion in assets. Second was T. Rowe Price's New Asia Fund, with about $2.5 billion, moving up from fifth place.
New allocations to global stock markets by foreign investors reached a record $159.2 billion in 1993, triple the level in 1992, said Michael Howell, global strategist for Baring Securities in London. Emerging markets were the fastest growing sectors, attracting a total of $52 million last year.
U.S. investors were the world's single largest group of foreign investors.
The market value of AT&T and the seven Baby Bell companies could increase by more than $18.2 billion if the Clinton health care reform proposal is enacted, according to research done by the Communication Workers of America.
A study of 1992 data done by the union estimates the savings would come from reducing current health care costs of the communications companies, now at 13% of all payroll costs, to the 7.9% mandated by the Clinton health plan. The reform proposal would save the companies $1.7 billion in annual health care costs, translating into a $1.1 billion increase in net income per year and higher share prices for the companies, according to the study. The market value of AT&T alone would increase $8.2 billion, the study said.
The union, through an employee shareholder, plans to submit a shareholder proposal April 20 at AT&T's annual meeting asking the company to study the impact of the Clinton health care reform proposal and other competing proposals on the company finances. Management has opposed the resolution.
