PBGC'S PAN AM ROLE:
The Aug. 18, page 10 article "Pan Am group calls for probe" provides an incomplete picture of what has happened to the pensions of former Pan American World Airways workers and trustees.
The article contains the allegations of one group of Pan Am employees, but does not include the fact that Pan Am's pension plans were short almost $1 billion, and, even so, 40,000 former Pan Am workers will receive benefits when they retire because of the Pension Benefit Guaranty Corp.
Indeed, PBGC stepped in immediately when Pan Am shut down and made sure that benefits continued to retirees without interruption. Since 1992, we have been paying monthly benefits totaling more than $100 million each year to 14,000 former Pan Am people who have already retired, and we will make timely payments to others when they retire.
By law, PBGC pays benefits according to the specific provisions of each pension plan for which it becomes trustee. One group of Pan Am workers wants PBGC to pay subsidized early retirement benefits for which they are not eligible based on the provisions of their pension plan. We are paying all of the benefits the law allows.
We deeply regret the harm caused when Pan Am ceased operation, but it is not from any lack of duty or care by the PBGC. For its part, PBGC is paying benefits to thousands of Pan An's retirees every month, on time, without delay, and will pay benefits to thousands more when they are eligible to retire according to the provisions of their pension plans.
David M. Strauss
Executive Director
Pension Benefit Guaranty Corp.
Washington
Committee vs. one trustee
Your Aug. 4 editorial, "Sole trustees must go," ignores the many difficulties experienced by investment committees such as internal political turmoil, inability to define policy, and the tendency to hire managers in favor (buy high) and to dismiss them when out of favor (sell low). Supervisory committees, like sole trustees, conduct important business in private, and seldom explain why a manger is hired or dismissed.
On the other hand, our society routinely gives important powers to individuals, such as surgeons, generals, pilots and captains of ships. Books are written about great individual investors, but never about great investment committees.
John Guy
President
Wealth Planning & Management L.L.C.
Indianapolis
$4 billion in tax exempt
While we were very pleased to have been recognized in your Aug. 18, page 14 article, "Montgomery finds hands-off parent," information printed regarding assets for our tax-exempt client base was greatly understated.
Of the $10 billion under management at Montgomery Asset Management, $4 billion is managed for institutional tax-exempt clients.
Our institutional client base includes some of the largest corporate, public, and endowment funds in the U.S., Canada, and Europe. We have recently expanded our institutional scope to included Australia, having established an institutional emerging markets fund for Australian superannuation funds.
Thank you for allowing us to clarify an otherwise accurate article on our firm and our new partner, Commerzbank AG.
Mark B. Geist
President
Montgomery Asset Management
San Francisco
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