The $1.2 billion pension fund of Consolidated Rail Corp., Philadelphia, hopes to bump up its exposure to foreign equities to 16% of total assets by midyear while reducing domestic equities to 42% of total assets. Both moves would be in keeping with the targets set by an asset allocation study in late 1994, said Thomas J. Conroy, director of pension assets. The pension fund has about 14% of its assets in international equities now and 44% in domestic equities. The fund does not plan to hire any new managers; it will simply readjust portfolios of existing managers. Incumbents Capital Guardian and Baring International, which have equal amounts in international equities, will split the new allocation, and pro-rata cuts will be made in domestic equity allocations to Delaware Investment Advisers, Fayez Sarofim, Arnhold & S. Bleichroeder Capital, Concert Capital, Newbold's Asset Management and MacKay-Shields, Mr. Conroy said. Although USAir Group Inc., Arlington, Va., earned its first annual profit in seven years, the airline didn't make a contribution to its profit-sharing plan. Richard S. Lustig, director of pensions, said the airline needed to earn a profit of 1.5% of revenue to make the contribution. Instead, the company earned 1.42% last year and ``just missed the margin by a hair,'' Mr. Lustig said. The profit-sharing plan was established in January 1993 but hasn't had a company contribution yet. The Department of Labor filed suit yesterday against the trustees of the St. Johnsville Nursing Home 401(k), St. Johnsville, N.Y., and an insurance agent, seeking to restore losses suffered by the plan because of improper investments. The pension plan covers 186 participants and had $63,000 in assets at the end of 1990, said a spokeswoman for the DOL. The suit was filed in U.S. District Court in New York. Defendants in the case are Michael Ray and Charles Glessing, plan administrators and partners in M&G Ventures, a partnership that operates the nursing home, and Ferrand Russell, an insurance agent. The DOL alleges the defendants invested the plan's assets in whole life insurance policies and failed to investigate if the investment was appropriate.
U S WEST, Englewood, Colo., is evaluating interactive asset allocation and retirement planning educational software for use by participants in its $3 billion-plus defined contribution plans. Donald J. Butt, manager of trust investment management, said the company is reviewing software from several providers and has not made a decision. Median global and international bond managers outperformed their bogeys in the fourth quarter, according to preliminary results from InterSec Research Corp. The median manager in InterSec's global fixed universe returned 4.8% in U.S. dollar terms vs. 3% for the Salomon World Government Bond Index. The median manager in the firm's international fixed universe returned 3.6% vs. 2.1% for the Salomon World Government ex-U.S. Bond Index. For the year, the median global bond manager's return was 19.4% vs. an index return of 19%. But the median international bond manager returned 18.8%, down from the index's 19.6%. 19.619.6%.19/6%return of 19.6%. Castrol Inc., Wayne, N.J., a division of Burmah Castrol PLC, hired SEI as consultant to its $75 million in defined benefit funds, said James Pierson, director of compensation and benefits. SEI is assisting fund executives with an asset/liability study, and will make a recommendation on whether Castrol should merge its three U.S. pension funds, Mr. Pierson said. Although the three funds are run separately, each has similar asset allocations - about 60% in U.S. equities and 40% U.S. fixed income, including short-term securities, he said. He said SEI should be ready to make recommendations by the end of the second quarter.
