ALBANY, N.Y. - New York state's public employee pension funds would be allowed to increase their investment in domestic equities to 70% from 60%, according to the budget bill passed during the final hours of the 1997 session Aug. 6.
The measure now awaits the signature of Gov. George Pataki.
The measure also would increase the basket clause to 15% from 7.5%. A basket clause restricts non-qualified, usually private, investments to a certain percentage of a pension fund's total assets.
Ohio panel mulls
pension obligation bonds
COLUMBUS, Ohio - The state treasurer's office has proposed the sale of $4.3 billion in long-term obligation bonds, with the proceeds covering the unfunded liability of some of the state's largest pension funds.
The Ohio Retirement Study Commission is considering the plan; the commission comprises state legislators and government appointees. If the proposal wins favor, it then will be forwarded to the Ohio Legislature.
State treasury officials are not expecting immediate action on their suggestion.
Deputy Treasurer William Guy said the current proposal would target money from the sale to the Ohio Public Employees' Retirement System and the Ohio School Employees' Retirement System.
The employees' plan has $42.2 billion in assets and an unfunded liability of $2.9 billion while the $6.4 billion school employees' fund has $1.4 billion in unfunded liabilities.
Mr. Guy said the Ohio officials got the idea from the state of New Jersey, which raised $2.7 billion with a pension obligation bond sale in May.
Foundation terminates
Harris Investment
COLORADO SPRINGS, Colo. - The $385 million El Pomar Foundation terminated Harris Investment Management as a midcap value equity manager and consolidated the portfolio with existing manager MacKay Shields Financial.
The board had hired both firms with the intention of consolidating the portfolios at a later date, said Thayer Tutt, president and chief investment officer.
MacKay Shields now will run $23 million, including the $7 million Harris had managed.
N.Y. State Teachers
keep Baring on watch list
ALBANY, N.Y. - The $58 billion New York State Teachers' Retirement System's board of directors voted to keep Baring International on watch, despite a closed-door presentation by two Baring staffers to the board.
Baring was put on watch by the system April 29, shortly after the president of Baring North America, Philip Bullen, took a job with Banco Santander.
Baring manages $172 million in active international equity and $665 million in active/passive international equity for the system.
Flinn Foundation studies
alternative investments
PHOENIX, Ariz. - The $153 million Flinn Foundation will be interviewing two hedge fund managers next month, and will be considering Oaktree Capital Management as a distressed securities manager for a new $5 million portfolio.
Cambridge Associates, consultant for the foundation, will bring in two hedge fund managers for the board to interview, said Don Snyder, executive director.
He declined to identify the firms. Funding will come from cash.
The foundation now has $1.4 million in a TCW distressed securities fund, which is being liquidated. Officials are considering Oaktree because the same managers that handled the TCW fund are now at Oaktree, according to Mr. Snyder.
Idaho Power asset mix
will remain the same
BOISE, Idaho - Idaho Power Co. completed an asset allocation that recommended keeping the current 65% equity allocation for its $250 million pension fund, said Ronald Meyers, pension and investment administrator.
"We decided to stay put," he said. The fund has no plans to make changes.
Broken down, its equity allocation will remain 17% core and 12% each in large-cap growth, large-cap value, small-cap and international.
Its other allocations, as recommended, will stay 20% fixed income, 10% real estate and 5% cash.
PBGC takes over
several pension plans
WASHINGTON - The Pension Benefit Guaranty Corp. is taking over two pension plans of Silo Inc., Philadelphia; two plans of Edgewater Steel Co., Oakmont, Pa.; and the United Hospitals Medical Center Pension Plan, Newark, N.J.
The Silo plans have liabilities of $17 million and assets of $13.6 million. Silo, an appliance retailer, shut the plans Feb. 1, 1996, when it went out of business.
The plans cover more than 3,000 former workers.
Edgewater Steel's plans have assets of about $28 million, and liabilities of approximately $50 million. The PBGC is planning to take over the two plans because Edgewater terminated its plans when it filed for bankruptcy court protection March 21.
United Hospitals Medical Center had filed for liquidation Feb. 19 and closed its doors April 20.
The PBGC is taking over the plan even though it has almost enough assets to pay for all promised benefits to about 1,350 participants.
Loretta Berg, a PBGC spokeswoman, said the agency does not have all the records to determine the United Hospital plan's assets and liabilities at present, but believes the plan "may be close to being sufficiently funded."
