The White House last night approved a Republican tax package that includes a provision to eliminate TIAA-CREF's and Mutual of America Life's tax-favored status. That provision is expected to raise $1.2 billion over 10 years. TIAA-CREF officials did not return calls seeking comment.
All other pension provisions in the tax package passed by a joint conference committee remain intact, sources said. An increase in the amount of contributions employers can make to their pension plans is still subject to a presidential line-item veto because it affects very few taxpayers, but such a veto is unlikely. Lawmakers are expected to vote on the package by the end of the week.
California State Teachers' Retirement System trustees are expected Aug. 7
to approve the key concepts in a planned RFP for a real estate consultant,
approve an implementation time line for 1997-'98 objectives, and consider
a decision on the role of active U.S. equity management for the plan.
Institutional Property Consultants resigned as the $75 billion
Sacramento-based system's real estate consultant earlier this year.
New York City Employees' Retirement System trustees are preparing to make
their first economically targeted investment since approving a new targeted/alternative investments policy earlier this summer.
The $45 billion fund is considering an investment in Duane Reade Holding Corp., a drug store chain with more than 60 stores in Manhattan. An affiliate of investment bank Donaldson, Lufkin & Jenrette recapitalized the retailer with $350 million this past spring.
Trustees met in closed session last week to discuss Duane Reade. The nature of the investment could not be determined. New York City Deputy Comptroller Jon Lukomnik said he doesn't comment on ``potential investments.''
A spokesman for DLJ said the firm had no comment. Telephone calls to Duane Reade Chairman Anthony Cuti were not returned.
Former employees of Conrail Inc., Philadelphia, filed a class-action
lawsuit against the company and trustees of its ESOP to claim their share
of the windfall from appreciated shares the plan sold when the company was
acquired by CSX Corp. and Norfolk Southern Corp. The former employees
asked a federal court in Philadelphia to block the plan to divvy up an
estimated $533 million in unallocated ESOP shares among current employees,
charging the trustees breached their fiduciary duty by disproportionately
rewarding senior and higher-paid employees who kept their jobs, while
depriving long-time employees who were forced into early retirement.
A Conrail spokesman said the company does not comment on pending
California Gov. Pete Wilson said he might decide today to pay a $1.36
billion legal judgment in a lump sum to the $118 billion California Public Employees' Retirement System, Sacramento, unless Democratic state legislators go along with his proposed $1 billion personal income tax cut proposal.
Paying the bill in a lump sum would eliminate the state's extra cash, ending a disagreement between Republicans and Democrats on how the money should be spent.
The judgment resulted from a state court ruling earlier this year that the governor and Legislature violated the law by delaying pension payments to CalPERS in the mid-1990s.
Idaho Power Co., Boise, completed an asset allocation that recommended keeping its current 65% equity allocation of its $250 million pension fund, said Ronald Meyers, pension and investment administrator. No changes are planned. Other allocations will stay 20% bonds, 10$ real estates and 5% cash.
SEARCHES & HIRINGS
Union Electric Co.'s $925 million pension plan, St. Louis, hired Polaris Capital Management to manage $40 million in a TAA portfolio. Polaris will use quantitative modeling, with a target benchmark of 45% equity, 45%
bonds and 10% cash.
National Society of Professional Engineers, Alexandria, Va., hired American Century Investments as bundled service provider for its $3
million 401(k) plan. American Century will provide record keeping, communications and 12 investment selections. The plan also will offer a self-directed brokerage option. A spokeswoman said the fund previously had seven investment options but declined to identify the service provider.
Plan International, Warwick, R.I., hired Argus Consulting as its first consultant to do asset performance analysis and a fiduciary compliance review for the $2.5 million offshore defined contribution plan and $1 million 403(b) plan. Argus also will review alternative providers for the offshore plan, which uses AIG, said Janet Fayle, corporate secretary for PLAN.
Paul Haines will leave his post as investment director of Sedgwick Noble Lowndes in late September to become head of new European investment consulting practice for Price Waterhouse in London. Andrew Kirton, formerly consultancy director-investment strategy, will take over Mr. Haines' duties.