Sen. William V. Roth Jr., R-Del., kicked off the new session of Congress Jan. 4 by reintroducing legislation to expand individual retirement accounts. Sen. John Breaux, D-La., who co-sponsored the bill last year, joined Mr. Roth in supporting the new legislation.
Under the Roth-Breaux proposal, all Americans would be eligible for fully deductible IRAs, up to $2,000 a year, indexed for inflation in $500 increments.Spouses who work at home also would be allowed to set up separate IRAs.
The merging of Philip Morris Inc. subsidiaries Kraft and General Foods won't affect management of pension plans for the respective companies, according to a Philip Morris executive.
Mary Lee Calimano, director, benefit investments, said Philip Morris has more than 30 plans for its companies, so changes at the operational level won't lead to changes in pension management. Philip Morris has about $6 billion in defined benefit assets and about $4 billion in defined contribution, she said.
The 2nd U.S. Circuit Court of Appeals has handed the New York City Employees' Retirement System and other shareholders a blow in their dispute with the SEC over the agency's ability to give companies permission to exclude certain shareholder proposals from their proxies.
Such "no-action letters," the court held Jan. 3, are unlike rules; consequently the agency does not have to notify the public or seek comment on them. The court also ruled shareholders may sue companies directly if they disagree over their refusal to consider shareholder proposals, rather than suing the agency.
The dispute stems from the SEC's decision to let the Cracker Barrel Old Country Store Inc. omit from its ballots a shareholder proposal regarding job discrimination against gay and lesbian employees.
Large-cap stocks beat small-caps and growth outperformed value in 1994, according to indexes from Frank Russell Co. Large-cap stocks in the Russell 1000 index returned -2.42%, compared with -3.18% for the Russell 2000 index of small-cap stocks. The Russell 1000 Growth Index returned 0.6%, compared with -5.48% for the Russell 1000 Value Index. It was the first time large-cap had outperformed since 1990. Growth last beat value in 1991.
Scandinavian bourses topped the list of world equity markets in 1994, according to Morgan Stanley Capital International. Finland topped the list with a 51.3% gain, followed by Norway at 22.1%. Japan came next at 20.7%, while Sweden hit 17.3% and Ireland finished fifth at 11.9%.
Overall, world equity markets were mixed last year. The MSCI Europe, Australiasia Far East Index rose 6.2% and the World Index gained 3.4%. The Emerging Markets Free Index declined 8.7%.
Japan's strong return boosted the Far East Index up 12.4%; the Combined Far East (Free) ex Japan Index, including both developed and emerging markets, plummeted 19%.
The Sooner Pipe and Supply Corp., Tulsa, Okla., hired LCG Associates, Atlanta, as consultant for its $25 million profit-sharing and 401(k) plan, a spokeswoman said.
She said LCG is the plan's first consultant and will help evaluate the investment and administration of the internally managed plan.
PRIT taps RhumbLine
The $4 billion Massachusetts Pension Reserves Investment Trust has hired RhumbLine Advisors to run $25 million in an enhanced index fund. With the new allocation, the firm will manage a total of $162 million for PRIT.
The $480 million defined benefit plan of the Carpenters, District Council of St. Louis, hired two new equity managers and expanded the allocation to a third manager, funded from cash.
Hired for a $10 million domestic small-cap separate account was Neumeier Investment Counsel. Lynch & Mayer was hired to manage a $10 million domestic midcap separate account. The Carpenters' fund made an additional $5 million allocation to IAI's midcap equity mutual fund, bringing the total investment in the fund to $10 million.
Fiduciary Consultants assisted.
The California Public Employees' Retirement System selected investment options for the 457 plan program it set up for local government employers.
Hired for three equity options were: Brown Capital Management, for small-cap, active domestic; Oppenheimer Capital Management, large-cap, active domestic; and Morgan Grenfell Capital Management, international, active. Wilshire Associates assisted.
The program also includes a stable value fund managed by the plan's administrator, State Street Bank & Trust. A short term U.S. Treasury fund, an intermediate bond fund, and an S&P equity index fund managed internally by CalPERS will also be offered. State Street Bank also will manage a balanced portfolio.
Separately, CalPERS extended the contracts of currency overlay managers Pareto Partners and BEA Associates until June 30, 1996.
The $120 million Newton (Mass.) Retirement System hired Wellington Management to manage $15 million in global fixed income, confirmed the fund's consultant, Lawrence Marino of Segal Advisors.