Asset move seen in sale
Texas Instruments may lose about one-third of its pension assets if a deal to sell its defense business to Raytheon is approved, said Joe Anderson, manager of employee benefit fund investments.
The chunk of TI's $2.65 billion in assets would be transferred to Raytheon's plan following Department of Justice approval of the sale, which could happen within the next few months.
Texas Instruments has $1.9 billion in its 401(k) and profit-sharing plans and $750 million in its defined benefit plan. Raytheon has $5.7 billion in pension assets, according to Nelson's directory.
Lillywhite to Bransford
Roger Bransford last week was awarded posthumously the Lillywhite Award. Sponsored by the Employee Benefit Research Institute, the award recognizes lifetime service to the employee benefit industry.
The award is named for Ray Lillywhite, a pioneer in the pension field.
Mr. Bransford, a well-known and respected investment consultant was killed in a plane crash Jan. 9.
Mr. Bransford's widow, Ave, accepted the award at Pensions & Investments' investment management conference in Washington.
Fund changes risk tolerance
The $800 million Arlington County (Va.) Retirement System decided to cut its tolerance for downside risk to -10%a year in a bad market from about -15% even though it could cost the fully funded system about 1.1%in real annual returns. System trustees will decide on an asset allocation to implement the new risk tolerance in subsequent meetings.
Trustees also approved creating a core TAA portfolio with about 20% of fund assets.
Judgment for pension fund
The New York District Council of Carpenters was ordered by a U.S. District Court to shift $50 million from its welfare plan to three pension plans to compensate for improper transfers.
In a lawsuit filed in 1996, the Labor Department charged fund officials failed to repay money transferred to the welfare fund from the pension funds; improperly paid leases with pension fund assets on luxury vehicles and other items; and failed to create leases and collect rent owed to the pension and other funds.
The judgment also requires the trustees to create procedures to assure expenses are properly documented and paid. The pension funds have assets of more than $1 billion.
Aegon hires PanAgora
Aegon Nederlands NV has outsourced global bond and emerging market equities portfolios to PanAgora Asset Management, said Edgar Koning, senior vice president and head of fixed income and equities.
Mr. Koning declined to state the size of the portfolios, but said they are very small in relation to Aegon's total insurance assets of 65 billion guilders ($33.3 billion).
The Dutch insurer internally manages more than 99%of its assets.
PBGC eases reports
The PBGC is simplifying the reporting of missed quarterly pension contributions for small defined benefit pension plans with 100 or fewer participants. Companies need only to file one notice for all missed payments in time to make the PBGC's deadline for premium payments Sept. 15 for calendar year plans. Previously, companies needed to report each missed payment separately within 30 days after the payment's due date.
Funds alter asset mixes
Central Hudson Gas & Electric reduced by 10 percentage points its U.S. large-cap equity allocation for its $280 million pension fund, based on a J.P. Morgan Investment Management asset allocation model, said Steven V. Lent, treasurer and assistant secretary.
It cut the large U.S. stocks to 40% or $112 million, from 50% or $140 million, of total assets. The proceeds were reallocated to bonds, which go to 37% of assets from 27% J.P. Morgan also decided to keep the international equity and U.S. small-cap equity allocations intact at 10% and 5% respectively.
It also kept the 8% real estate allocation.
Meanwhile, the $175 million pension fund of Thomas & Betts Corp. approved a new asset allocation following an asset-liability study.
The new asset mix is 32.5% domestic bonds, 5% real estate, 5% high-yield bonds, 40% domestic equities, 12.5% developing market equities and 5% emerging markets equities.
Previously, the Thomas &*Betts fund had less specific targets. The targets were 5% to 15% international equities; zero to 50% domestic fixed income; 40% to 55% domestic equity; zero to 4% real estate; and zero to 2% cash.
NYC plan taps Price
The $2 billion New York City Deferred Compensation Plan hired T. Rowe Price to manage $153 million in small-cap equities, replacing AIM. The plan also decided to retain FASCorp as record keeper. Mercer assisted.
Duke adds options
Duke University is adding Frank Russell to the list of six mutual fund vendors offering funds to participants in its 403(b) plan. The five new LifePath manager-of-managers lifestyle funds will be added as soon as they become available, said Coleman Trask, executive vice president. With the addition, participants will have a choice of more than 100 funds.
Frank Russell will launch the funds in mid-May, creating an off-the-shelf version of the risk-weighted asset allocation strategies it has been providing to financial advisers.
Median manager tops EAFE
The median manager in the non-U.S. equity universe of InterSec Research posted a 0.5%return in the first quarter, beating the MSCI EAFE index by two percentage points. For the quarter, EAFE returned -1.5% InterSec said. Currency management, market allocation and stock selection all contributed to the good performance.
Alternatives funded
The $18 billion Pennsylvania State Employes' Retirement System, Harrisburg, is putting up to $136 million with three alternative investment managers. Trustees allocated up to $75 million to Blackstone Capital Partners III for large, privately negotiated transactions; up to $36 million to the Schroder Ventures European Fund for European company partnerships and early stage investments; and up to $25 million to Media/Communications Partners Fund III for media and telecommunications investments.
Kwasha founder dies
H. Charles Kwasha, founder of the actuarial benefits consulting firm Kwasha Lipton, died last week at his North Miami, Fla., home. Mr. Kwasha, 90, started the H. Charles Kwasha Co. in 1944 and was joined by Maurice Lipton in 1947. Mr. Kwasha retired from daily involvement with the firm in 1977.
Ruby Tuesday hires
Ruby Tuesday hired Prudential Investments to provide quasi-bundled services for its more than $9 million 401(k) plan. Beginning July 1, Prudential will provide daily-valued record keeping, daily transfer capability, administrative services and employee education and communication. Nine investment options will be offered from Prudential and outside managers.
A spokeswoman declined to identify the previous manager.
TAA model has no stocks
PanAgora Asset Management dropped its equity allocation to zero in its tactical allocation model, the lowest level in its 12-year history, said Edgar E. Peters, direct-asset allocation and chief financial strategist.
PanAgora manages $5 billion in TAA. Before the change, the model had an above-average allocation to equities, depending on client preferences. The change shifts the allocation to mainly bonds and a little cash. PanAgora is concerned over continued optimistic earnings forecast despite the Fed's recent restrictions to slow the economy and lower inflation.
Halt called on new clients
Morgan Stanley Asset Management no longer is accepting new clients for its global emerging markets equities funds. The firm said it would honor all RFPs for emerging markets assignments received by May 30, and current clients will be able to make additional investments.
Emerging markets regional equity and debt offerings remain open. The moratorium is not permanent.
Medical Center shifts bonds
Community Medical Center hired Bank of New York to handle $10 million to $15 million in intermediate bonds for its $94 million operating fund. Assets came from an existing manager, which Steven G. Oleson, corporate director financial systems and cash management, would not identify. Spagnola & Cosack assisted.
N.Y. Common hires
The $78 billion New York Common Retirement System selected Oppenheimer Capital to manage a midcap value equity portfolio. Oppenheimer is expected to get $200 million, pending negotiations. The fund also put an additional $100 million in Capital Guardian's Core EAFE strategy.
Tracor hires 2
The $370 million Tracor Inc. pension fund hired GMG/Seneca Management and RCM Capital to handle $15 million each in small-cap equities and committed another $15 million to Hicks, Muse, Tate & Furst's buy-out fund. GMG/Seneca and RCM will replace Target Investors and Monetta Financial Services.
