Neuberger & Berman was terminated by The Common Fund for a $1 billion-plus assignment, and lost another of its senior fixed-income portfolio managers, William Cunningham. It's not clear if the two events are connected. Officials at The Common Fund, one of Neuberger's biggest fixed-income clients, declined comment. Neuberger managed a portion of The Common Fund's short-term fund.
Martin McKerrow, co-director of Neuberger & Berman's fixed-income department, said: ``We were told it was a consolidation'' of the managers in the short-term fund. ``I can assure you our performance has been highly competitive.''
Vanguard won't accept any new bundled 401(k) plan business for the remainder of 1997. The reason: an unusually heavy volume of 401(k) plans hiring the firm during the first half of the year.
Vanguard still is accepting new investment-only business from 401(k) plans.
A new tax rule could make it virtually impossible for some foreign pension funds to avoid paying taxes on earnings from U.S. stocks by claiming to be tax-exempt labor organizations. The rule would affect only pension funds based in countries that don't have reciprocal tax treaties with the United States.
K. Peter Schmidt, a partner at Arnold & Porter, said because the rule is effective only after Dec. 21, 1995, it will have no impact on an ongoing dispute between Stichting Pensioenfonds voor de Gezondheid Geestelijke en Maatschappelijke Belangen, a Zeist, Holland, health care industry pension plan, and the IRS over the fund's claim to be a tax-exempt labor organization. That's because PGGM is asking for a refund of taxes paid in 1993 on income from U.S. stocks.
The PBGC today announced it will take over the pension plan of Kerr Group Inc., Lancaster, Pa. The PBGC is taking over the pension plan, which has assets of nearly $90 million and liabilities of $130 million, because Fremont Partners is acquiring Kerr and financing a large portion of the purchase price with debt secured by Kerr's assets. This would place the PBGC behind other creditors if it had to make pension plan-related claims.
MetLife's defined contribution group formed an alliance with Scarborough Group and 401(k) Forum to offer portfolio management and on-line investment advice to MetLife's bundled clients. Scarborough, an investment advisory firm that manages $1.2 billion in individual participant portfolios, will provide investment management to plan participants for a fee of $299 to $325 per year. 401(k) Forum will provide personalized investment advice via the Internet for $10 to $30 per participant. Plan sponsors will have the option of whether to offer the services to participants.
New England Electric System, Westborough, Mass., hired Crabbe-Huson and Boston Partners to each run $21 million in small-cap equity for its $850 million defined benefit plan. Funding will come from State Street Bank's midcap equity index fund, which will continue to invest 10% of the fund's total assets, said Don Goodwin, vice president of benefits finance. Hewitt Associates assisted.
Memorial Sloan Kettering Cancer Center, New York, committed $10 million to a hedge fund managed by Maverick Capital.
The hire, to be funded from cash, is part of the fund's new $190 million allocation to alternatives. The fund has committed $140 million so far. Cambridge is assisting.
DeKalb Genetics Corp., DeKalb, Ill., hired T. Rowe Price as bundled provider for its $140 million 401(k) plan. The firm will provide eight options and replaces investment managers Harris Investment Management and Cooke & Bieler. Record-keeping had been done in-house. Towers Perrin assisted.
The State of North Carolina renewed its contract with BB&T Corp. as third-party administrator for the its $1.3 billion 401(k) plan. The other finalist was State Street Bank. The plan also added three investment options: the Putnam New Opportunities fund, a U.S. stock fund; the BB&T Small Company Growth Fund; and the T. Rowe Price International Stock Fund.
American Fidelity Group, Oklahoma City, hired Fox Asset Management to run an $11 million balanced portfolio and Bank of Oklahoma as custodian for its $25 million defined benefit plan. Fox replaces American Fidelity Assurance, an American Fidelity Group subsidiary. Officials thought it was better to hire an outside firm, said Marvin Ewy, CFO.
Bank of Oklahoma replaces Boatmen's Bank, which exited the custodial business. Asset Services Corp. assisted.
Martin ``Marty'' Walker has been named CIO of the $59 billion Teachers' Retirement System of Texas, Austin. He replaces John Young. Mr. Walker was group executive vice president-asset management at KeyCorp until he retired in 1996