A group of 49 Lutheran pastors and lay workers, known as the Pension Defense Fund, fired the latest shot in a continuing battle to gain control of defined contribution plan assets from the Board of Pensions of the Evangelical Lutheran Church in America. The Pension Defense Fund has appealed to the Minnesota Supreme Court an appellate court decision dismissing the group's attempt to sue for control of plan assets.
The lower court dismissed the case because it was a matter of church doctrine, rather than civil law. Rev. Thomas Basich, leader of the PDF, said the ELCA violated contract law, rather than upheld church doctrine.
The tussle revolves around alleged underperformance of pension assets because of the ELCA's avoidance of South Africa-related stocks.
GE Investments has closed its second private equity limited partnership, GE Investment Private Placement Partners II, raising $938 million. Among the 23 investors are the pension funds of Chrysler Corp., Crown Cork and Seal, Georgia-Pacific, Montreal Police, Olin Corp., Philip Morris Cos., 3M and GE. Other investors include the endowment funds of Rensselaer Polytechnic Institute and University of Chicago.
The fund will seek later stage growth capital, buy-out and other types of privately structured investments over a 10-year period. It mirrors an earlier fund, GE Investment Private Partners I, which raised $210 million from 12 partners in 1990.
Fidelity Institutional Retirement Services will introduce full transactional capabilities for participant 401(k) accounts over both the Internet and America Online during the first quarter. Plan participants can change the amount of their salary deferrals and alter their asset allocations.
So far, only BZW Global Investors (formerly Wells Fargo Nikko) has offered plan participants full management access of their 401(k) plans over the Internet.
The Governmental Accounting Standards Board has tentatively decided that state and local governments should report many of their investments at fair value in their annual financial reports, rather than on a cost basis. The GASB plans to seek public comment on its fair value proposals within a few months. Among the proposals: the GASB has tentatively agreed to require that unrealized gains or losses on investments be reported in investment income in the year they take place.
HIRINGS
The $13 million Swampscott (Mass.) Retirement Fund hired Freedom Capital to run its assets in a balanced fund. The other finalists were BayBank; Massachusetts Pension Reserves Investment Trust; and the deBurlo Group, the fund's previous manager.
Ceridian Corp., Minneapolis, hired Merrill Lynch to administer a new employee stock purchase plan, said John Grierson, vice president and treasurer. The plan allows employees to buy Ceridian stock, with the company paying for fees and administration costs, at 85% of the market's price, he said.
Moving to outside investment management, the $5 million 401(k) plan of Louis Berger International Inc., Wayne, N.J., hired Scudder Stevens & Clark to provide bundled investment management and record keeping, said Emilio Medina, staff accountant who oversees the plan. Scudder will manage the entire plan, offering five funds. Previously, participants had no investment choice because the 401(k) investments were managed in-house in fixed income, Mr. Medina said. Record keeping also was handled internally.
No consultant was used in the search.
The $40 million Woburn (Mass.) Retirement System invested $1 million with the Massachusetts Pension Reserves Investment Trust. It is the fund's first investment in PRIT. Its primary investment manager is David L. Babson. Funding came from new contributions.
The $35 million ASC Inc. 401(k) and profit-sharing plan, Southgate, Mich., selected existing managers Scudder Stevens & Clark and Fidelity to offer two additional funds each, said Michael K. Richotte, benefits analyst. The plan added a Scudder guaranteed investment fund and growth-and-income equity fund and Fidelity's Equity Income Fund II and Contrafund. The additions bring to 12 the total number of options. Scudder runs nine portfolios, Fidelity three.
