HARTFORD, Conn. - Connecticut State Treasurer Christopher Burnham plans to seek legislation to establish a defined contribution plan for state employees that eventually would replace the state's defined benefit plan.
Mr. Burnham, sole trustee of the $12 billion Connecticut Trust Funds, said new employees probably will be offered only the defined contribution plan. How existing employees would be affected has not been decided.
The legislation will be drafted in November or December, to be introduced in the 1997 legislative session. Mr. Burnham is certain he can find a sponsor to introduce the bill.
Mr. Burnham said he also expects to see legislation reintroduced in January to form a six-member board of trustees for the pension fund that would replace the single-trustee system. A previous bill was never voted on during the last legislative session.
Pennsylvania fund crafts
5-year investment plan
HARRISBURG, Pa. - The $16.6 billion Commonwealth of Pennsylvania State Employes' Retirement System is assembling a five-year investment plan it expects to present to its board of trustees in December.
Staffers are meeting with consultants to study the fund's liabilities, Diane Sterthous, director of fixed income, said at the conference of the National Association of Securities Professionals.
Ms. Sterthous said some possible changes already have been identified, including increasing private equity allocations, adding an international real estate allocation with special interest in the Pacific Rim, reducing the bond allocation and expanding passive equity holdings.
Ms. Sterthous said the fund also recently instituted a policy governing currency hedging and reporting of derivatives positions and is constructing a manager retention policy that will put on record the fund's guidelines regarding performance, communications and other criteria for evaluating managers.
Montana may boost
international exposure
HELENA, Mont. - The $3.5 billion Montana Public Employees' Retirement System is considering an increase to its international allocation and could hire an external manager to run the assets.
James Penner, CIO of the Montana Board of Investments, which manages the retirement system assets, didn't know how much new money would be involved.
The system has $190 million in internally managed international stocks.
System officials could discuss the proposal at their meeting in mid-July, although Mr. Penner stressed that no specific time horizon has been established.
Agreement keeps PBGC
from terminating plans
WASHINGTON - The Pension Benefit Guaranty Corp. reached a preliminary agreement with Hayes Wheels International Inc. and MWC Holdings Inc. that will require the newly merged companies to add at least $54 million in cash to underfunded pension plans.
In exchange, the PBGC agreed not to terminate the plans.
Hayes, of Romulus, Mich., and MWC Holdings, parent of Motor Wheel Corp. of Okemos, Mich., will add $14 million in pension contributions immediately.
An additional $28 million will go into the Hayes plans and $12 million into the Motor Wheel plans over three years.
After that, $6 million annually will be contributed to the Motor Wheel plans until they are well-funded.
As a result of the agreement, Hayes' plans will be almost fully funded by the end of three years and Motor Wheel's plans will be almost 70% funded.
Currently, Hayes has an unfunded liability of about $37 million; Motor Wheel, about $42 million.
Michigan Muni to offer
defined contribution plan
LANSING, Mich. - The $2.3 billion Michigan Municipal Employees' Retirement System, Lansing, will begin Sept. 1 to offer an alternative defined contribution plan to the 501 municipalities that make up the system.
Under the new system, municipalities will have control over whether and how they offer the new daily valued defined contribution plan to their employees, a spokeswoman for the system said.
ICMA Retirement is the plan's record keeper and will provide trust and administration, employee education and an automated voice response system. The number of investment options is still being determined; the options will be a mix of ICMA's manager-of-manager mutual funds and funds from other managers.
Pension fund drops
2 hedge funds
NEW YORK - The $20 million pension fund of American Jewish Joint Distribution Committee Inc. dropped two hedge funds, said Amy O'Rourke, investment manager.
It dropped Glenwood Trust and Bridge Partners. Each managed $2 million.
The fund placed the proceeds in an in-house fixed-income portfolio.
Neither manager could be reached for comment.
