TRENTON, N.J. - A New Jersey state judge threw out a request by trustees of the New Jersey Teachers' Pension and Annuity Fund to hire outside lawyers to help determine the impact of 1994 changes in pension law enacted by Gov. Christine Todd Whitman.
Trustees had argued state Attorney General Peter Verniero, who normally would provide advice to the fund, had a conflict of interests because he also is the top lawyer for the governor's administration.
In his opinion, Judge Philip S. Carchman noted the pension board is in effect part of Ms. Whitman's administration, and the state government cannot sue itself. What's more, Mr. Carchman pointed out trustees' contention that they wanted to analyze the changes was "disingenuous" - what they actually wanted, he said, was to hire lawyers to help challenge the changes.
MICHIGAN BUYS PIECE OF NEW YORK REIT
LANSING, Mich. - The $35 billion State of Michigan Retirement Systems made its first direct investment in a public real estate investment trust through its purchase of a $35 million limited partnership interest in Home Properties of New York.
Home Properties is a $350 million company that specializes in apartments for older people.
The $35 billion system's investment is in convertible debt, which if converted, would give the fund an 18% stake in Home Properties, said Philip Van Syckle, administrator for mortgage and real estate. The security pays 9.25% for two years and 9% for three years. Michigan's previous REIT investments were made by purchasing shares in the open market, he said.
SELF DIRECTED BROKERAGE ADOPTED BY U S WEST
ENGLEWOOD, Colo. - U S WEST Inc. added a self-directed brokerage option to its $3.7 billion 401(k) plan.
The plan will provide access to the Schwab Personal Choice Retirement Account to its 57,000 participants. The Personal Choice account - under which participants can buy and sell individual securities in addition to about 1,800 mutual funds, most of which carry a small transaction fee - is being added to eight core funds at U S WEST.
It will be administered by Bankers Trust Co., the plan's record keeper.
270 PUT IN BIDS FOR CALPERS BUSINESS
SACRAMENTO, Calif. - About 270 managers are seeking active domestic equity assignments with the California Public Employees' Retirement System.
Fund officials said the response rate was three times more than any previous RFP. Because of the huge response, preliminary evaluations will be completed in August rather than in June, as earlier announced.
About $6 billion in active domestic equity assignments are available.
The RFP for a passive domestic equity assignments of $1.2 billion was scheduled to be released June 18.
HEDGE FUND MANAGERS GAIN 3.6% IN MAY
NEW YORK - Managers in the Hennessee Hedge Fund Index returned an average of 3.6% in May, raising their average total return to 8.5% for the five months.
Hedge fund managers focused in Latin America, emerging markets and international markets performed best for the five months, returning 23.3%, 16.1%, and 11.7%, respectively. Laggards were managers focused on levered bonds, technology and growth stocks, reporting average respective returns of 2.8%, 3.7% and 3.8% for the five months.
The Hennessee index is produced by the Hennessee Hedge Fund Advisory Group, New York, which will be splitting from Weiss Peck & Greer L.L.C., New York, in coming months.
PBGC EXPANDS AUDIT PROGRAM
WASHINGTON - The Pension Benefit Guaranty Corp. will expand its premium audit pilot program nationwide.
The agency reported the pilot program generated more than $4 million in additional income, collecting $8 for every $1 spent on the effort.
The PBGC reviews premium filings, actuarial assumptions and other information to determine whether a plan calculated and paid the correct premium for the six most recent plan years. Plans that underpaid are billed for the unpaid amounts plus late payment penalty and interest charges.
The PBGC recently started a voluntary compliance program under which plans can reduce their penalty charges if they identify and correct premium underpayments before they are contacted by the agency.
AIMR CREATING SOFT-DOLLAR RULES
CHARLOTTESVILLE, Va. - The Association for Investment Management and Research will be producing specific guidelines for its members on soft dollar usage, said Jonathan J. Stokes, director of professional conduct for AIMR.
The issue is already addressed in AIMR's code of ethics and standards of professional conduct, but the forthcoming report will be more specific. It should become available in 60 to 90 days.
