BOGUS ARBITRAGE; STYLE-ANALYSIS PIONEER; 401(K) PROVIDER; MERUS'S PHONE; TSA'S TELEPHONE; CIGNA REORGANIZING
Skip to main content
pilogo-NEW
Subscribe
  • Subscribe
  • My Account
  • login
  • NEWS
    • Asset owners and the coronavirus
    • Alternatives
    • Consultants
    • Coronavirus
    • Defined Contribution
    • ESG
    • Frontlines
    • Hedge Funds
    • Investing / Portfolio Strategies
    • Money Management
    • Pension Funds
    • People Moves
    • Private Equity
    • Real Estate
    • Searches & Hires News
    • SECURE Act
    • Special Reports
    • WorldPensionSummit
    • Ron Schmitz
      Pandemic drives faster transition for Virginia to private markets
      Mubadala Investment Co. logo
      Mubadala draws on portfolio in coronavirus fight
      T.J. Carlson
      Texas Muni reduces downside risk during pandemic, finding opportunities now
      Scott Davis
      ‘Triage plan’ at Indiana system helped stem losses
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      Daniel McHugh
      Aviva Investors promotes from within for real assets CIO
      Marc Rowan
      More alts managers seek expansion to retail market
      Mellody Hobson, president of Ariel Investments, speaks during an interview in Hong Kong on Sept. 1, 2017
      Ariel launches effort to boost minority business owners
    • Kieran Mistry
      Hymans Robertson picks head for new non-traditional risk transfer unit
      Troy Saharic
      NEPC brings on director of new business development
      Bill Foley
      Foley-backed SPAC agrees to $7.3 billion deal with Alight
      Jason Schwarz, chief operating officer of Wilshire,
      New owners have big plans for future of Wilshire
    • OMERS CEO Blake Hutcheson
      OMERS records worst loss since 2008 on bad COVID-19 bets
      Mitchells & Butlers turns off tap on pension contributions until April
      Jerome Powell, chairman of the Federal Reserve, adjusts his glasses during a Senate Banking, Housing and Urban Affairs Committee hearing in Washington on Sept 24, 2020.
      Powell says Fed will hold steady during economic recovery
      Institutional investors mobilize for equitable global COVID-19 response
    • Database’s debut focuses on public-sector DC plans
      DC plan sponsors differ on need for annuities – survey
      Biden’s retirement idea getting the cold shoulder
      Few participants tapped savings to weather pandemic – Vanguard
    • Justin Trudeau, Canada's prime minister, smiles during a virtual joint news conference with U.S. President Joe Biden in Ottawa on Feb. 23, 2021
      U.S. joins forces with Canada on climate change
      Signage is displayed at Harvard University Health Services in Cambridge, Mass., on April 20, 2020
      Harvard endowment’s fossil-fuel investments drop to 2% of assets
      After strong 2020, ESG investments forecast to grow more – Moody's
      Emissions rise from the coal fired power plant in South Carolina
      U.K. managers seen pressuring firms on diversity, climate change
    • Donation illustration
      Jefferies will use trading commissions to do good
      Michael Arougheti
      SPACs ride wave as latest investment darling
      Spirit winners
      Prudential honors young people who are helping out
      2 U.K. pension execs take on ESG investing in new podcast
    • Robert 'Rob' Shafir listens during a Senate Permanent Subcommittee on Investigations hearing in Washington on Feb. 26, 2014
      Sculptor hedge fund hits sixth straight year of outflows
      The WallStreetBets forum on the Reddit Inc. website on a laptop computer and the GameStop logo on a smartphone in an arranged photo.
      GameStop frenzy has hedge fund managers rethinking next moves
      Gabe Plotkin, chief investment officer and portfolio manager of Melvin Capital Management, speaks during the Sohn Investment Conference in New York on May 6, 2019
      Citadel, Point72 back Melvin with $2.75 billion after losses
      Shanghai skyline
      Global hedge funds struggle even in a more open China market
    • Signage is displayed at Harvard University Health Services in Cambridge, Mass., on April 20, 2020
      Harvard endowment’s fossil-fuel investments drop to 2% of assets
      Ohio School Employees allocates $100 million to Carlyle fund
      As CEO pay climbs, so does shareholder opposition – report
      Natixis 401(k) participant charges self-dealing in ERISA suit
    • Signage for AMP Ltd. adorns the top of a building in the Docklands area of Melbourne on May 10, 2018
      Ares, AMP eye joint venture
      Thasunda Brown Duckett
      TIAA appoints Thasunda Duckett as president and CEO
      Brightwood Capital adds senior investment professional
      Kimberley Stafford and Alec Kersman
      PIMCO names product strategy group head
    • Doug Heron
      Lothian Pension Fund to lose CEO this year
      Truist Financial puts $387 million in pension plan in Q1
      OMERS CEO Blake Hutcheson
      OMERS records worst loss since 2008 on bad COVID-19 bets
      Exelon to charge up $556 million in pension contributions
    • Doug Heron
      Lothian Pension Fund to lose CEO this year
      Correction: PGIM Real Estate
      Thasunda Brown Duckett
      TIAA appoints Thasunda Duckett as president and CEO
      Brightwood Capital adds senior investment professional
    • Carlyle secures $4.1 billion ESG-related credit facility
      Hamilton Lane raises $3.9 billion for fifth secondary fund
      PSG closes first Europe-focused fund at $1.5 billion
      Kohlberg closes latest private equity fund at $3.4 billion
    • Sebastiano Ferrante and Jocelyn de Verdelon
      PGIM Real Estate turns to staff to fill new roles
      European managers key in on specialist strategies
      Ingrid Jacobs
      Jones Lang LaSalle brings on head of diversity and inclusion
      EQT inks deal to buy real estate manager
    • Neal and Brady
      Retirement security could be only issue both sides accept
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
      Shawn O'Brien
      Annuities coming to target-date funds, but not right away
      David Ireland
      Sponsors returning to questions about in-plan annuities
    • Charging Bull, sometimes referred to as the Wall Street Bull or the Bowling Green Bull, a bronze sculpture that stands on Broadway just north of Bowling Green in the Financial District of New York City
      Top-performing managers Q4 2020
      P&I 1,000 largest retirement plans: 2021
      Retirement in emerging markets
      Outlook 2021
    • U.S. still a key market for investors
      Collected coverage of P&I's 2020 WorldPensionSummit
      Pedestrians pass a large advertisement on the Arndale Center shopping mall reading 'Act now to avoid a local lockdown' in Manchester, England
      COVID-19 puts new opportunities and risks on the agenda - WPS panelists
      Screens display stock price information over the trading floor of the NYSE Euronext exchange in Paris
      Private assets will continue to grow in portfolios – WPS panelists
  • Data
    • Research Center
    • Searches & Hires Database
    • Searches & Hires News
    • RFPs
    • Charts / Infographics
    • Sponsored Research
    • Trackers
    • Q2 2020 searches and hires overview report
      Q2 2020 money manager M&A activity summary
      Q2 2020 legal overview report
      Q1 2020 searches and hires overview report
    • Ohio School Employees allocates $100 million to Carlyle fund
      Clackamas County sticks with Voya as record keeper
      San Bernardino County seeks record keeper for 3 DC plans
      University of Vermont slates $5 million for health-care fund
    • Ohio School Employees allocates $100 million to Carlyle fund
      Clackamas County sticks with Voya as record keeper
      San Bernardino County seeks record keeper for 3 DC plans
      University of Vermont slates $5 million for health-care fund
    • Emerging Market Equity Manager Services
      Securitized Credit Manager Search
      Private Placements Asset Manager Search
      Actuarial Consultant Search
    • Taiwan Semiconductor’s No. 1 in the emerging markets book
      U.S. fixed-income returns post another positive year
      Nasdaq delivers an impressive year
      U.S. dollar's recent decline continues
    • Institutional Investors: Shared Expectations, Divergent Paths
      Global Investor Study 2016
      Workplace Financial Wellness
    • U.S. Endowment Returns Tracker
      Pension Fund Returns Tracker
      Earnings Tracker
      Corporate Pension Contribution Tracker
  • Insights
    • Opinion
    • White Papers
    • Industry Voices
    • Letters to the Editor
    • Partner Content
    • Publisher's Update
    • Tesla cartoon
      Don’t confuse wealth creation with retirement saving
      Top 1000 cartoon
      Top 1,000 retirement plans weather storm just fine
      Infrastructure cartoon
      You must go big on infrastructure, Mr. President
      Retirement cartoon
      Hopes rising for retirement readiness in 2021
    • Shifting DC Times – Winter 2021
      Bond ETFs show maturity during Covid market mayhem
      Pension Consolidation: Optimizing Scale and Maximizing Efficiency
      China is embarking on a new stage of growth
    • Lawrence Cunningham
      Commentary: Gensler should keep Clayton’s pragmatic proxy adviser rules
      My-Linh Ngo
      Commentary: Pension funds and the role of the debt market in the fight against climate change
      Bill Peressini
      Commentary: Carbon’s elemental role in the future of impact investing
      Teresa Ghilarducci
      Commentary: Lower rates for longer mean a drastic rethink on funding
    • Writer using a typewriter
      OCIO industry needs to adopt GIPS
      Writer or journalist workplace. stock illustration
      Even as it assails China, Trump administration emulates it
      Skeptical of Main Street support for proxy adviser proposal
      Focus on manager diversity pushes asset owners’ to walk the talk
    • P&I Content Solutions
      How will gold react?
      To people shaking hands
      P&I Content Solutions
      Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
      Sponsored Content By MassMutual
      Leveraging Data to Manage Risk
      Sponsored Content By iShares
      ETFs are becoming a cornerstone of insurance equity portfolios
    • Help us help you by supporting quality journalism
      You Must Believe in Spring
      Everything Must Change
      Tomatoes & Investments
  • Multimedia
    • Videos
    • Webinars
    • Polls
    • Slideshows
    • Charts / Infographics
    • watch video
      0:45
      Private funds weathered 2020 turmoil
      watch video
      0:59
      Secure choice and other retirement plans at a state level
      watch video
      3:33
      P&I 1,000 by the numbers 2021
      watch video
      1:33
      A look at hiring activity in 2020
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
    • POLL: Working after the pandemic
      POLL: The year ahead for the 1,000 largest U.S. retirement funds
      POLL: The Biden administration’s economic plans
      POLL: Retirement issues in 2021
    • view gallery
      9 photos
      Coronavirus and the markets
      view gallery
      22 photos
      The 1,000 largest retirement funds: 2020
      view gallery
      10 photos
      Outlook 2020
      view gallery
      10 photos
      2019 as seen through the eyes of Roger
    • By the Numbers for February 2021
      Top performing managers by category: commingled accounts, 4th Quarter 2020
      Top Performing Managers of Domestic Blend Equity, 4th Quarter 2020
      Top Performing Managers of Domestic Intermediate-Duration Fixed Income, 4th Quarter 2020
  • Events
    • Conferences
    • Webinars
    • Defined Contribution Spring Virtual Series
      DC Investment Lineup Virtual Series
      ESG Investing Virtual Series
      Private Markets Virtual Series
    • Emerging Markets: Expanding Investors’ View
      2021: A Fixed Income Odyssey
      Technology is the New Oil: The Changing Nature of Emerging Markets
      Powering the Change: The power of diversity and inclusion
  • Careers
  • Research Center
MENU
Breadcrumb
  1. Home
  2. Print
June 13, 1994 01:00 AM

BOGUS ARBITRAGE; STYLE-ANALYSIS PIONEER; 401(K) PROVIDER; MERUS'S PHONE; TSA'S TELEPHONE; CIGNA REORGANIZING

  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    In response to Jack Stoufer's May 30 letter to the editor regarding my April 4 Commentary Page article on issuing public pension obligation bonds, I acknowledge a basic misunderstanding. I incorrectly believed that pension obligation bonds were issued by the pension system, rather than the sponsoring state or municipality.

    Correcting this error unveils a significant beneficiary profit at the expense of taxpayers, but changes little else. My commentary focuses on the pension fund balance sheet, which is also part of the sponsor's balance sheet. Taking this broader view, the sponsor is leveraging its investment in pension assets by issuing POBs, or pension obligation bonds. This leveraging will benefit taxpayers by lowering future appropriation only if pension returns exceed the borrowing rate.

    The change I missed originally is a significant elevation in the status of the pension claim. Beneficiaries significantly profit at the expense of taxpayers, because the unfunded pension promise is replaced by secure cash when the state transfers its pension obligation from beneficiaries to bondholders. The problem is that no one is explaining it this way to taxpayers, who have much more control over pension contributions than debt repayments.

    The analogy to refinancing a mortgage is inappropriate. The pension liability differs from a mortgage in several major ways. Most importantly, the pension obligation is not a fixed-rate obligation, but rather a promise to pay a specified benefit at a future date. To fund this benefit, the actuary establishes a budget that involves a variety of assumptions that include the actuarial interest rate. This budget is only loosely connected to the investment environment. If actuaries select a 7% interest assumption that conforms to today's interest environment, POBs will not be a consideration.

    I'm grateful to Mr. Stoufer for pointing out my error on the issuer of POBs. The corrected reality is that beneficiaries clearly profit from POBs at the expense of taxpayers, whose future tax appropriations become more unpredictable and uncontrollable. My basic premise still stands. POBs are advocated by those who benefit from them - underwriters, investment managers, consultants and beneficiaries. From whence does this benefit derive? It's paid by taxpayers, who clearly lose as they are bilked into buying off on bogus arbitrage arguments.

    Ronald J. Surz

    Performance Presentation

    Consulting Alliance

    Wheaton, Ill.

    In your April 4 technology section, page 30, you ran an article titled, "BARRA product has global outlook."

    Style Advisor was the first returns-based style analyzer on the market, signing up its first client in the fall of 1992. Recently, the product was purchased from Balch Hardy Scheinman & Winston Inc. by Zephyr Associates Inc., of which I am president.

    We currently have 30 plan sponsor and money manager subscribers. Aside from being able to do style and attribution analysis for international equity and fixed-income managers, the program contains a database of 215 international managers that can be used for various search purposes.

    Style Advisor subscribers receive every month: 32 foreign equity indexes; 18 emerging market indexes; 36 foreign fixed-income indexes; 19 currency indexes; and eight country consumer price indexes. Plus, they have 33 domestic equity indexes and 78 domestic fixed-income indexes.

    Steve Hardy

    President

    Zephyr Associates Inc.

    Zephyr Cove, Nev.

    We're writing on behalf of Alexander & Alexander Consulting Group to register our dismay at being omitted from your directory of defined contribution plan service providers (March 21 and April 4). It's extremely important to ACG that its defined contribution services be published.

    The firm is located at One Piedmont Center, 3565 Piedmont Road N.E., Atlanta, Ga. The phone number is (404) 264-3141; and the fax number is (404) 240-6099.

    Among its services, it provides periodic account valuation, including daily; a toll-free, telephone voice-response system; record-keeping/administration; and retirement planning education software.

    On its 800 number, it offers: account balances; account transfers; 24-hour access; live operators; loan request/processing; performance data; fund information; retirement planning aid; changes to contribution allocations; withdrawal disbursement; enrollment and plan provision information.

    It has 135 defined contribution clients, servicing more than 290,000 participants. Record-keeping and administrative services are supplied through an in-house department.

    Claire Crawford

    Associate director

    corporate information

    Melanie Langsett

    National practice director

    defined contribution services

    Alexander & Alexander

    Consulting Group

    Lyndhurst, N.J.

    The phone number for Merus Capital Management was stated incorrectly in its profile on page 68 of the May 16 directory of money managers. Please correct this number to (415) 296-6400.

    Carolyn Carlson

    Client relations manager

    Merus Capital Management

    San Francisco

    TSA Capital Management's phone number was reported incorrectly in its profile on page 90 of the May 16 directory of money managers. Our correct phone number is (213) 688-3015.

    Hadas Perchik

    Marketing coordinator

    TSA Capital Management

    Los Angeles

    CIGNA has recently reorganized and I want to note two divisions that weren't named but whose assets were included in CIGNA Investments Inc.'s profile on page 40 in the May 16 directory of money managers.

    CIGNA Retirement & Investment Services: It provides products and professional services for defined benefit and defined contribution plans. Client contact is Fred Castellani at (800) 997-6633.

    CIGNA Investment Management: It provides investment advisory services. Client contact is Daniel McDonough at (203) 726-4364.

    In addition, there was an error in our response on how much we manage in 401(k)/457 assets. It is $16 billion, which raises CIGNA's ranking to fourth in your table on page 30 of the largest managers of 401(k)/457 assets.

    James A. Mitchell Jr.

    Assistant director-marketing

    CIGNA Retirement

    and Investment Services

    Hartford, Conn.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    Sponsored Content: Lessons From 2020: Today’s OCIO Model Passes a Major Test of Governance
    sponsored
    Events
     
     
    Sponsored
    White Papers
    Shifting DC Times - Winter 2021
    Bond ETFs show maturity during Covid market mayhem
    Pension Consolidation: Optimizing Scale and Maximizing Efficiency
    China is embarking on a new stage of growth
    GP-LED OPPORTUNITIES AT THE SMALLER END OF THE MARKET
    Gold Outlook 2021
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    pilogo-NEW
    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    150 N. Michigan Ave.
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • NEWS
      • Asset owners and the coronavirus
      • Alternatives
      • Consultants
      • Coronavirus
      • Defined Contribution
      • ESG
      • Frontlines
      • Hedge Funds
      • Investing / Portfolio Strategies
      • Money Management
      • Pension Funds
      • People Moves
      • Private Equity
      • Real Estate
      • Searches & Hires News
      • SECURE Act
      • Special Reports
      • WorldPensionSummit
    • Data
      • Research Center
      • Searches & Hires Database
      • Searches & Hires News
      • RFPs
      • Charts / Infographics
      • Sponsored Research
      • Trackers
    • Insights
      • Opinion
      • White Papers
      • Industry Voices
      • Letters to the Editor
      • Partner Content
      • Publisher's Update
    • Multimedia
      • Videos
      • Webinars
      • Polls
      • Slideshows
      • Charts / Infographics
    • Events
      • Conferences
      • Webinars
    • Careers
    • Research Center