American Express has redesigned its 401(k) plan, combining it with that of IDS Financial, one of its principal divisions, said Phyllis Payne, benefits plan director.
The company also is considering the addition of a cash balance plan within the next few months.
While not disclosing asset figures, Ms. Payne said assets of the combined defined contribution plan are "in the billions."
She said IDS Institutional Retirement will provide investment management through seven mutual funds as well as a company stock fund and a stable value fund. IDS also will be trustee.
She said no changes have been made in the American Express defined benefit plan, which had assets of about $708 million at the end of 1993, according to the company's annual report.
Ending a long-running dispute, the Belgian government has agreed to permit Belgacom, the state telecommunications company, to create a defined benefit plan to cover its 125 billion Belgian francs ($3.9 billion) in pension liabilities.
The agreement clears the way for a partial privatization of the telephone company later this year. The government is seeking to find a strategic partner to take up to a 49% stake in the company.
Creation of the pension plan also will set a precedent as the first public-sector plan in Belgium. The government also is developing a pension plan.
Daiei Hawaii Investments claims Equitable Life violated the terms of a joint venture agreement when the insurer "transferred and sold" its 40% interest in a Hawaiian property portfolio to seven pension funds.
Daiei filed suit against Equitable, the California State Teachers' Retirement System, the Public Employees' Retirement Association of Colorado, the Illinois Municipal Retirement Fund, the School Employees Retirement System of Ohio, the Utah Retirement System and the pension funds for Ameritech and Chevron, seeking to void the transfer and to be given the opportunity to buy the interest.
A spokesman for Equitable, however, said a sale did not occur. Its ownership was "reallocated" from the general account to a separate account, which is owned by the insurer.
According to the suit, the seven pension funds invested a total of $290 million in the Hawaiian Properties Fund. The pension funds are indemnified from the cost of the suit.
Four investment professionals from Stein Roe & Farnham will leave mid-October to form a money management joint venture with Voyageur Cos., said Ralph M. Segall, managing director of Segall, Bryant & Hamill.
Mr. Segall, C. Alfred Bryant and Jonathan C. Hamill - all senior vice presidents with Stein Roe - and Jeff Slepian, intermediate portfolio manager, expect to take with them about $1.2 billion of the $1.6 billion in pension, endowment, foundation and high net worth assets they managed, Mr. Segall said. The four will provide investment management and client servicing to the venture; Voyager primarily will provide back-office, compliance and administrative services.
The $460 million defined benefit plan of McGraw-Hill shifted a $16 million Far Eastern equities portfolio previously managed by now-defunct Pilgrim Baxter Asia to IDS Fund Management, a unit of IDS International. The pension fund chose IDS to continue using the services of Elizabeth Tran and her team, all of whom joined IDS after Ms. Tran was terminated at Pilgrim Baxter Asia.
The $80 billion California Public Employees' Retirement System extended the contracts of its nine small and emerging domestic equity managers, who manage $4.8 billion for the fund.
Contracts were extended for one year beyond the original ending date of Dec. 31, 1994. The nine are: Amerindo; CIC Asset Management Inc.; Brown Capital Management; Oak Associates; Spare, Kaplan, Bischel; Systematic Financial Management; Tiffany Capital Advisors; Valenzuela Capital Management; and ValueQuest.
Making its first move to international, the $82 million City of Gainesville (Fla.) General Employees Pension Plan hired Scudder Stevens & Clark, said Pamela Armagost, investment analyst. Scudder will run $8.2 million in an institutional commingled active MSCI EAFE fund. In addition, the plan hired Mississippi Valley Advisors to take over a $13 million domestic fixed-income assignment run by Weaver C. Barksdale, which was terminated. Merrill Lynch assisted.
Bear Stearns and Jefferies & Co. are the best brokerage firms in execution for exchange-listed and NASDAQ stocks, according to a study on institutional equity trading by Plexus Group. The two executed trades at the lowest overall transaction cost, which includes the market impact of a trade and brokerage commissions, the study said.
The PBGC said it was not satisfied with New Valley Corp.'s plan of reorganization, which would include a one-time $211.6 million contribution to the company's pension plan. The contribution would not be "sufficient protection for participants and the plan," a PBGC spokeswoman said.
Last month, U.S. Bankruptcy Court Judge Novalyn L. Winfield sided with a $1.193 billion bid from First Financial Management for New Valley's Western Union Financial Services. The bid did not include any pension provision.
Although Congress mourned the official death of comprehensive health care reform last week, there's a small provision in a pending trade bill that would provide relief for employers with retiree health plans and excess pension assets.
In a pocket of the General Agreement on Tariffs and Trade bill, there's a provision that would allow pension plans to transfer excess pension assets to 401(h) accounts to pay for retiree health bills. The provision would continue for five years - but with some modifications - a law that was due to expire next year.
Rep. Rosa DeLauro, D-Conn., introduced legislation last week that would create tax-free, infrastructure public benefit bonds for pension funds. The bonds would allow pension funds to pass on tax-free interest to participants while investing in the development of projects including roads, bridges and rail systems.
The legislation would establish the National Infrastructure Corp., which would provide direct loans, bond insurance and risk insurance for the infrastructure projects.
The 12 billion guilder ($6.94 billion) Spoorweg Pensioenfonds, Utrecht, made its first non-Dutch investments, picking Wells Fargo Nikko Investment Advisors to run an undisclosed amount in equity index funds for the U.S., the U.K., France, Germany and Japan. Officials of the Dutch rail pension fund expect one-third of its 3 billion guilders in stocks will be invested outside the Netherlands.
Sarah A.B. Teslik, executive director of The Council of Institutional Investors, said she was extremely displeased with a meeting between some Philip Morris board members and large shareholders, and with "events leading up" to the meeting.
Ms. Teslik and several officials of large pension funds walked out of the Sept. 21 meeting.
In a letter to some outside board members who did not attend the meeting, Ms. Teslik said "it is particularly worrisome to shareholders to be given so many indications that there may also be insufficient board independence, functioning, strategic planning and accountability."
An affiliate of Kenmar Holdings has purchased an undisclosed minority interest in an offshore fund manager of managers, Gems Management, in a bid to increase its hedge fund business.
The new Kenmar Gems Management will to provide hedge fund research, while Kenmar will offer distribution and administrative resources.