Staff of the California State Teachers' Retirement System, Sacramento, is recommending the $80 billion fund begin internal management of passive domestic equity for the first time. Approval is expected next week. The first allocation, $1 billion, would be indexed to the S&P 500. CalSTRS would continue its $18 billion external passive domestic equity management program.
The PBGC is dumping its list of 50 worst-funded pension plans. Agency executives said law changes have provided them with other ways to keep up the pressure on companies. But James B. Lockhart III, the former PBGC executive director who began publishing the list in 1990, said its death might be premature.
``It was a useful reminder to participants and (other) people of the underfunding. On the other hand, I can't argue that the PBGC has had a very strong turnaround,'' and reported a surplus of around $1 billion this year, said Mr. Lockhart, now a partner and CFO at Net Risk Inc.
City of Montreal pension fund, with about C$2 billion (U.S. $1.4 billion), is considering searching for a U.S. equity manager, said Bertrand Goudreault, pension fund controller. The allocation probably will be about C$50 million, most likely in small-cap value, where the fund has no specific mandate now, Mr. Goudreault said. Funding is likely to come from small-cap growth, he said.
Testimony in the Harris Trust vs. John Hancock case concluded yesterday, after defendant Hancock's sole expert witness - David Babbel, a finance professor at Wharton - was cross-examined.
Judge Denny Chin, who has presided over the three-week U.S. District Court bench trial, asked both sides to submit post-trial briefs within 30 days. These will summarize the evidence and include legal arguments demonstrating whether Hancock complied with its fiduciary duties under ERISA or acted in its own interests.
Contra Costa County Employees' Retirement Association, Concord, Calif., delayed an impending search for an EAFE manager. The board asked its consultant to review other scenarios for the $2.2 billion pension fund, said Chuck Barron, assistant retirement administrator.
The board was considering a top-down EAFE manager for a $70 million assignment. But it asked Dorn Helliesen & Cottle to evaluate bottom-up and other types of EAFE investments and report to the board.
The amount of the assignment could change as well. Funding likely will come from a reallocation. The board could make a decision by the end of the month.