Tobacco halt sought
Some TIAA-CREF participants have asked the fund, one of the largest investors in Philip Morris stock, to make no additional investments in tobacco and begin an orderly divestment of all tobacco holdings.
Of CREF's $1.5 billion in tobacco-related holdings, Philip Morris stock and commercial paper represents $1.25 billion, according to a June 1996 CREF report. CREF also holds stock in 18 other tobacco corporations. Its stock investments overall total $50 billion.
"Educators for Tobacco-Free Investments by TIAA-CREF," a group of five university faculty and administrators, will mail proxy solicitations to TIAA-CREF's 1.43 million shareholders in October, before the Nov. 11 annual meeting. The shareholder resolution asks the fund to "stop investing our retirement savings in tobacco."
Fund officials have said they oppose the measure. They note they offer the Social Choice Account, which excludes tobacco companies, and divesting would cost the fund some diversification.
AIM, INVESCO in discussion
INVESCO PLC and AIM Management Group confirmed reports the two firms are in talks "about a possible business combination." AIM, which manages $54 billion in 33 mutual funds, had been reported to be on the block; INVESCO, which has $90 billion in assets, was mentioned as a possible suitor. Both sides said no agreement had been reached.
PBGC takes 2 plans
The PBGC will take over two separate pension plans, one underfunded by $2.2 million and the other underfunded by $1.5 million.
Grocery retailer Peter J. Schmitt's pension plan has $17.8 million in assets and $20 million in liabilities and covers 1,600 workers and retirees.
The second plan covers 1,300 workers and retirees from Detroit Plastic Molding and the Michigan Molded Plastics. The plan has $5.1 million in assets and $6.6 million in liabilities.
All three companies are being liquidated because of bankruptcy.
Ingersoll-Rand hires Putnam
Ingersoll-Rand hired Putnam Investments to manage a synthetic GIC, worth $75 million to $100 million, for a $900 million profit-sharing plan. Nancy Casablanca, assistant treasurer, said funding comes from eliminating another asset class, which she declined to identify. Ms. Casablanca said other major changes are planned, but she would not say what they will be.
San Diego OKs REIT
The San Diego City Employees' Retirement System will invest $30 million in a publicly traded REIT with RREEF, said Doug McCalla, investment officer.
The move is part of the $1.64 billion fund's efforts to increase realty investments to the fund's 10% of total assets target. So far, the fund is about halfway toward reaching its real estate target.
EBRI eyes Social Security
The Employee Benefit Research Institute is creating a Social Security reform project to study, through simulation models, various plans to restructure the system. EBRI will evaluate the models and create a scorecard on the various prototypes. EBRI will not be declaring a winner; the models will be tools that will help policy makers, media and the public objectively compare the alternate proposals.
Initial results are expected to be announced Dec. 4.
BZW Barclays Global Investors provided a grant to initiate the project.
NYC plan signs consultants
The New York City Deferred Compensation Plan retained Mercer Investment Consulting as its consultant and hired Segal Advisors as a second consultant, said Georgette Gestely, director of pretax benefits. Both got three-year contracts effective Nov. 1.
Trustees of the $2 billion plan decided "it is better to have more than fewer" consultants, Ms. Gestely said.
Segal Co. will advise the plan on communications and federal compliance. Mercer and Segal's affiliate, Segal Advisors, will give investment advice.
Pru Real Estate names CEO
Bernard Winograd was named president and CEO of Prudential Real Estate Investors. He replaces Claude Zinngrabe, who resigned earlier this year to pursue private interests. Mr. Winograd was CFO of Taubman Centers, a public real estate investment trust.
Interim CIO named
Ransey "Jack" Cooper, director of fixed-income investments, has been named interim CIO of the $50 billion Teacher Retirement System of Texas. He fills the position vacated by John E. Young, who resigned after five years. Charles Dunlap, TRS executive director, said the search for a new CIO will be conducted internally; if unsuccessful, then the fund will hire an executive search firm. Mr. Dunlap said he hopes to fill the position "as soon as possible."
457 change due
State Street Bank & Trust received a no-action letter from the SEC that, in effect, requires vendors offering unregistered investment pools to rewrite the trust agreements they have with 457 plan investment clients.
Managers are now exempt from registering as investment advisers with the SEC for the management of 457 plan assets, provided the agreements for unregistered commingled funds contain rabbi trust provisions. The rabbi trust essentially ensures plan assets are held for the exclusive benefit of participants and can be tapped only by the employer's general creditors in the event of bankruptcy.
The SEC letter gave vendors with previous exemption letters until August to rewrite the trust agreements with clients. The SEC said previous no-action letters on unregistered fund investment by 457 plans are nullified by the latest letter.
The ruling has a fairly limited shelf life, however, because provisions of the new Small Business Jobs Protection Act require that all existing 457 plans move by Jan. 1, 1999, into a full trust arrangement.
Women's bill introduced
Sen. Carol Moseley-Braun, D-Ill., and Rep. Barbara B. Kennelly, D-Conn., late last week formally put women's pension issues on the table for the next session of Congress by introducing the "Comprehensive Women's Pension Protection Act of 1996."
Because no action is expected on the bill before Congress adjourns, the bill is intended only as a marker for action in the 105th Congress, confirmed Ross Brown, an aide to Ms. Kennelly.
Interim exec tapped
Raymond Wells has been named interim administrator of the $2.6 billion Orange County Employees' Retirement System. He replaces Terry Slattery, who earlier announced he will become administrator of the San Bernardino Employees' Retirement Association. Mr. Wells, a retired Orange County treasurer, has been hired by for a maximum of three months. The board is scheduled to interview finalists for a permanent administrator on Oct. 22.
Terra 401(k) hires
Terra Industries hired Putnam Investments to provide fully bundled services for its $80 million 401(k) plan. Nine diversified investment options, all managed by Putnam, will be offered. Putnam also will administer a company stock option, said Steve Crary, manager-benefits and administration.
Mr. Crary declined to identify the plan's current record keeper and money managers. He said the fund has seven investment options.
Hewitt is the plan's consultant.
Koll names executive
J. Grayson Sanders has been named to the new position of vice chairman of Koll Investment Management, a real estate money manager. Mr. Sanders formerly was the director of real estate the Ameritech pension fund. He resigned last year.