TIAA-CREF executives helped draft a bill, pending in the Wisconsin State Legislature, permitting faculty and academic employees of the University of Wisconsin system to opt out of the public employees' retirement system and into a private pension plan or "optional retirement plan.''
The optional plan would be a self-directed defined contribution plan and would feature fully bundled plan services from an insurance company, said Steve Baas, press secretary for Rep. Scott Jensen (R-Waukesha), the bill's sponsor. AB 331 has passed the Assembly but is stalled in a Senate committee, Mr. Baas said. He predicted it will pass this fall.
Emerging growth, small-cap and midcap equity separate account managers rebounded in the second quarter, taking the top seven slots among all U.S. equity managers in the latest PIPER report.
The top seven managers and their quarterly returns were: Mount Auburn Management, 33.4% in concentrated midcap growth; Apodaca Capital, 29.7%, and TCW, 27.5%, both small-cap growth; and emerging growth managers Constitution Research and Management, 27.3%; Duncan-Hurst Capital, 26.7%; Kopp Investment, 26.6%; and Alex. Brown Capital, 26.2%.
In the same period, the S&P 500 Index returned 17.5% and the Russell 2000, 16.2%.
The median small-cap PIPER manager was up 17.4% in the second quarter, but posted a negative 4.3% return the previous quarter.
Affiliated Managers Group will purchase just more than 50% of GeoCapital. Terms of the deal were not disclosed. GeoCapital, a small-cap equity manager, has about $2 billion under management, of which $1.8 billion is for tax-exempt institutions. It will become AMG's 10th affiliate, bringing the assets under management of AMG's affiliates to $41 billion. Following AMG's investment, all current equity holders of GeoCapital Corp. will become owners of the new GeoCapital L.L.C.
AMG announced Monday it is investing in Tweedy, Browne, with about $5 billion under management.
The American Society of Pension Actuaries, an Arlington, Va.-based trade association, today proposed that the Labor Department establish a program allowing pension plan sponsors to voluntarily fix breaches of fiduciary duty without the threat of legal action or onerous penalties, said Brian H. Graff, executive director.
The proposal - modeled after the IRS' voluntary compliance resolution program - would allow plan sponsors to fix breaches, and present the corrections to the Labor Department for its approval. The program also would let the Labor Department require plan sponsors to file a formal application and pay a fee for pre-emptively fixing problems.
Illinois State Universities Retirement System, Champaign, is searching for providers for a new 401(a) defined contribution plan for employees of public universities and community colleges.
The $8.4 billion system seeks at least three providers of investment management services. Two probably will be insurance and annuity companies and at least one will be a mutual fund supermarket provider, said Jim Hacking, executive director. A third-party administrator to provide record keeping and administrative services also is needed, although one of the investment providers could do that as well. SURS hopes to have the new program in place by Dec. 31.
The health-care industry's use of self-directed defined contribution plans increased to 89% from 75% since 1993, according to a Roper study sponsored by The Copeland Cos. The study said defined benefit plans remain the primary retirement vehicle. But only 11% of plans now offer cost-of-living adjustments, a 21% decrease since 1995 and a 39% decrease since 1993, according to the study. The average participation rate in health care defined contribution plans increased to 67% from 58% in 1995.
HIRINGS
St. Louis (Mo.) Police Retirement System is continuing to hire managers to replace Boatmen's Trust, which was terminated in the spring. Hired were Brinson Partners for U.S. large-cap value stocks and Morgan Grenfell for core bonds. Each will handle about $90 million for the $626 million pension fund. SEI Investments assisted.
Kirby Corp., Houston, hired Northern Trust to run $13.5 million in U.S. bonds for its $35 million master trust and $15 million for Kirby subsidiary Oceanic Insurance Ltd.'s $30 million portfolio. Northern replaces PMG Advisors in the master trust and Charles Taylor Investment Management on the insurance side. In both cases, Kirby wanted a manager that specialized in longer duration bonds.
PaineWebber Consulting assisted.
WHO'S NEWS
Janet M. Brown is the new president and CEO of DAL Investment; she had been vice president and portfolio manager. She succeeds founder Burton Berry, who remains chairman
