Vermont State Employees' Retirement System trustees, Montpelier, will consider next month whether to adopt recommendations by consultant Wilshire Associates to drastically cut the system's exposure to domestic stocks and more than double the exposure to domestic bonds.
James H. Douglas, state treasurer, said the recommendations to the $701.1 million fund are: 33% domestic stocks, down from the current 50%; 20% international stocks, from up 17%; 32% domestic bonds, up from 15%; dumping entirely international bonds, now at 5%; and boosting alternatives to 5% from 3%. Wilshire recommended the system maintain its 10% exposure to real estate.
The state also retained State Street Bank as custodian for the employees' fund and two other state systems - the $776 million State Teachers Retirement System and the $101 million State Municipal Employees' Retirement System.
Pacific Investment Management Co. resigned as bond manager for the $15 billion State of Connecticut Trust & Retirement Funds, Hartford. PIMCO's resignation follows a request from Connecticut's governor that state Treasurer Christopher Burnham cancel the fund's contract with PIMCO because of a perceived conflict of interests. Mr. Burnham announced last month that he is leaving to become CEO of Columbus Circle Investors, owned by PIMCO Advisors, PIMCO's parent.
Columbus Circle resigned as a money manager for Connecticut two days before Mr. Burnham announced his resignation.
Oklahoma Gas & Electric, Oklahoma City, is searching for a domestic fixed-income manager and its first midcap equity manager with the help of consultant Marquette Associates. A selection will be made by mid-September, said James Hatfield, vice president and treasurer for the $220 million fund. Portfolio sizes have not been determined.
Funding for the fixed-income portfolio will come from either reducing or eliminating the $100 million the fund has in a Ryan Labs Asset Management Index Fund; the midcap equity piece may be carved out of a domestic equity portfolio with Boatmen's Trust.
Stichting Pensioenfonds ABP, Heerlen, The Netherlands, will seek U.S. and European small-cap managers toward year-end, a spokesman for the giant Dutch civil servants pension fund confirmed. The subcategories are new for the 250 billion guilder ($123.5 billion) fund. A formal search process has not yet begun. Details of the sizes of any mandates were not revealed.
401(k) plan participants do not have to sign a loan agreement in order to borrow from their plan account, according to the IRS. In a letter clarifying a 1995 regulation, the agency said a plan participant does not have to sign a loan agreement as long as the loan is legally enforceable and all other loan requirements are satisfied. That means participants can request a loan via telephone or through the increasingly popular Internet services that give participants access to account information and allow them to conduct transactions on-line.
Specialty Equipment Cos. Inc., Aurora, Ill., revised its $21 million 401(k) plan, choosing four new managers, said Douglas Johnson, director of financial services. Added were: First American Equity Index Fund; Putnam New Opportunities Fund, a small stock fund; Fidelity Advisor Overseas Fund; and a stable value fund from PRIMCO Capital.
The four new funds replace group annuities sponsored by Equitable and run by Alliance Capital. Brinson Partners, which runs the fund's $30 million defined benefit plan, remains as the manager of a global multiasset fund. EFR Advisors assisted with the changes.
C.R. Bard Inc., Murray Hill, N.J., hired Vanguard to provide bundled services to its $100 million 401(k) plan. The changes are effective Jan. 1. C.R. Bard now uses quarterly valued record-keeping services from Kwasha Lipton and offers four investment options from different money managers.
Oklahoma City Employees' Retirement System selected BankOne as its new custodian, said Rena Hutton, retirement system administrator for the $226 million fund. BankOne replaces Boatmen's.
Robert Daniels, executive director of the $17 billion Teachers' Retirement System of Illinois, Springfield, said he intends to retire within the next year. He announced his retirement at a state legislative commission meeting in which the fund was criticized for losses taken by Zimmerman Investment Management, the firm run by the fund's former CIO.
Mr. Daniels acknowledged the hedging strategy employed by Zimmerman ``just didn't work,'' but said it was the unusually strong performance of the markets that led to the losses. ``I still stand by what the system did,'' he said.
Mr. Daniels, who is 69, said he would have preferred to retire earlier, but he wanted to stick it out for the Zimmerman situation. He said trustees probably will decide at their August meeting how to replace him