The Dow Jones industrial average closed today at 8038.64, up 62.94 points, an all-time record and the first time it closed above 8000. The S&P 500 closed near 937.48, up 11.72 points, and the Nasdaq Composite closed at 1580.63, up 38.52 points - both records also. All figures are preliminary.
Many pension provisions favored by employers might survive in the tax package now being hammered out in conference committee. Among them: a permanent ban on non-discrimination testing for government retirement plans; an increase in the amount of contributions employers can make to pension plans; and a permanent ban on an excise tax on large distributions exceeding $150,000 a year. Still unresolved: requiring 401(k) plan participants to get spousal consent before tapping into their retirement plans; requiring employers to cap 401(k) plan investments in employer stock; and changing the tax-exempt status of TIAA-CREF.
Roland M. Machold, director of investments for the $56 billion New Jersey Division of Investment, Trenton, today told the Labor Department's ERISA Advisory Council he would like to see the SEC loosen its definition of ``research'' goods and services that can be purchased through soft dollars to include travel expenses incurred for investment conferences. Money managers may use commission rebates from brokerage firms to purchase research goods and services, but travel expenses are not considered legitimate research expenses by the SEC.
As a pension fund, the Division of Investment is not subject to SEC oversight. But Mr. Machold said the pension fund would like to comply with the spirit of SEC rules because it is good public policy. The fund now uses soft dollars to pay for its investment staff's travel expenses, among other things.
Institutional Investor has agreed to be purchased by Euromoney Publications in a deal worth $142 million. Padraic Fallon, chairman of Euromoney, said the deal is expected to close by about Sept. 1, pending an extraordinary shareholder meeting. The 73% shareholder of Euromoney - Associated Newspapers Holdings Ltd. - has already agreed to vote in favor of the deal.
The deal will be financed with a $150 million medium-term bank facility.provided by HSBC Group at an interest rate of LIBOR plus 0.5%, according to a statement.The seller is ABC Inc., which is owned by Walt Disney Co.
Reed Elsevier Inc., New York, started an asset allocation study for its approximately $200 million pension fund, said Vera Lang, treasurer. It will look at adding managers and changing allocation, although a particular target is still under study.
Independence Investment Associates is the fund's sole manager. It runs a balanced portfolio, now allocated 55% equities and 45% fixed income. The fund hired Ennis Knupp as a consultant to assist in the study, which could be completed in a couple of months.
Vermont Municipal Employees' Retirement System's new consultant, Hewitt Associates, will review its asset allocation this fall, said Michael Smith, a spokesman for State Treasurer James H. Douglas, Montpelier. As of March 31, the $101 million system had 47.7% of its assets in U.S. equities vs. a target of 48.3%, and 4.8% in foreign equities, against a 6.3% target. Other allocations and targets are: 27.2% in U.S. bonds vs. 28.3%; 8.8% in non-U.S. bonds vs. 6.3%; 0.9% in in-state investments, vs. 4% target; and 4% in real estate against 7%; and 6.7% in cash.
State of Iowa 457 deferred compensation plan selected Great West Life Assurance as third-party administrator for the $130 million fund. The plan had been administered internally. The plan will begin offering mutual fund investment options; negotiations are under way with Great West to determine which funds will be offered. Currently only insurance fixed and variable annuity products are offered. The Segal Co. assisted.
Northern Indiana Public Service Co., Hammond, Ind., moved $25 million to the Templeton Emerging Markets Fund from an active, separately managed EAFE portfolio run by the Templeton for its $870 million pension fund. The separate portfolio was reduced to $60 million. LCG assisted.
Teacher Retirement System of Texas, Austin, named Northern Trust as domestic and global custodian. Northern had been the $59 billion system's global custodian; Bank of New York had been domestic custodian. Northern Trust will provide securities lending, foreign exchange and cash management services as well as custodial and performance-related services effective Sept. 1.
George A. Long, president since 1996 and CIO of Oppenheimer Capital for the past 10 years, has been named chairman and CEO of the money management firm. Mr. Long, who continues as CIO, succeeds Joseph M. La Motta, CEO for the past 15 years, who has been named chairman emeritus