Connecticut Treasurer Christopher Burnham will announce tomorrow the results of a year-long restructuring of the pension fund. Only four of the $12.2 billion Connecticut Trust Fund's 47 stock and bond managers will continue with their current assignments, said Karen Jannetty, deputy chief of staff.
The other 43 managers will have new assignments or will be terminated, according to Ms. Jannetty, deputy chief of staff. She declined to identify the changes. Ms. Jannetty did not say whether the changes will result in increased use of passive management.
President Clinton's proposal to balance the federal budget would lop off $19.4 billion from federal retirement programs over the next seven years. The cuts would come in part by delaying cost-of-living increases in retirement benefits, cutting back employer contributions and scaling back congressional retirement benefits. An outline of the latest balanced budget proposal, issued by the president on Sunday, also retains provisions to expand IRAs and eliminates tax deductions on corporate-owned life insurance policies. The outline did not include pension simplification provisions.
A Republican taskforce on overhauling the nation's income tax system delayed its report because of the East Coast blizzard. The National Commission on Economic Growth and Tax Reform, chaired by former Housing and Urban Development Secretary Jack Kemp, has not rescheduled the release, said Rich Myers, a spokesman.
Trading volume on the MATIF plunged 23% in 1995, returning to 1993 levels of 71 million contracts, said Gerard Pfauwadel, chairman and chief executive officer of the Paris-based derivatives exchange.
Lack of interest by foreign investors in longer-term financial instruments prior to the French presidential election in the spring accounted for part of the fall. Trading in notional futures and options declined 34% and 49% respectively on the Marche a Terme International de France. The three-month Pibor contract experienced rising volume, though trading in the CAC 40 declined slightly.
Mr. Pfauwadel said volume improved in the last four months of 1995 over the similar period in 1994 but he is unsure whether the pickup represents a change in the investment cycle.
1995, while in some ways one of the best years ever from a dividend standpoint, was less than average in terms of dividends paid, according to Standard & Poor's.
The amount of dividends paid on the S&P 500 stock index for 1995 reached $13.79, up 4.6% from the previous year. But dividend growth has averaged more than 6% annually over the last 67 years. With stock prices up 34% last year, the dividend yield has fallen to 2.3%, the lowest in modern history.
The payout ratio - the portion of corporate profits paid out in dividends - shrank in 1995 to one of its lowest levels on record, approximating the all-time low of 38% in 1979. Final earnings figures won't be available for some weeks. In all, the number of companies reporting dividend increases totaled 1,907 in 1995, up 4% from the 1,826 boosts in 1994 and the most since the 2,160 announced in 1981.
But ``unfavorable dividend actions were extraordinarily rare,'' according to an S&P spokesman. Only 49 companies decreased their dividends and 79 omitted them last year. The combined total of 128 unfavorable actions was the lowest since S&P began keeping records in 1956.
The Texas Treasurer's Office, Austin, hired Phoenix Duff & Phelps to advise the treasury in managing $15 billion in state assets. The firm will serve as an adviser only; management of the funds will remain with the treasurer. A spokesman for the Treasurer Martha Whitehead said it is the first time an outside adviser has been used.
Duff & Phelps will assist the staff in analyzing investment options and provide advice regarding the sale and purchase of securities and assist with preparation of quarterly investment performance reports.
The Minnesota Education Association, St. Paul, hired Scudder, Stevens & Clark as the bundled provider for its $4 million 401(k) plan, said Carlos Moreno, controller.
Of the eight investment options offered by the MEA, seven now are managed by Scudder: GICs, balanced, income, growth and income, small cap, indexed equity and international equities. A Midwest equity fund is managed by First Bank. The plan had five options managed by Investment Advisers and Metropolitan Life. The previous record keeper was a local accounting firm.
Jeffrey Slocum & Associates assisted with the hire.