California State Teachers' Retirement System, Sacramento, might revamp its corporate governance guidelines to focus more on policies and procedures, said Pat Mitchell, CIO of the $77.4 billion pension fund.
CalSTRS staff will survey other pension systems to develop alternative plans and present its findings to the CalSTRS board next summer. The current guidelines focus on principles and responsibilities, he said.
CalSTRS also is expected to give new contracts to its current line-up of real estate managers, but the contracts hinge on fee negotiations, to be finished in December. The firms are: AMB; ERE/Yarmouth; MIG Realty; O'Connor Group; SSR Realty; and TCW Realty. CalSTRS has about 2.49% of its assets in equity real estate.
Flowserve Corp., Dallas, a new company formed from the merger of Durco International Inc. and BW/IP Inc., is evaluating the retirement program "top to bottom,'' said Kevin Collins, benefits manager.
BW/IP has $100 million in defined benefit assets and $80 million in defined contribution assets, according to Nelson's Directory of Plan Sponsors. Durco International has $99 million in pension assets and $44.5 million in defined contribution assets, according to Money Market Directory. A decision about what will be done with the merged plans is expected by the middle of next year, with a new program in place by early 1999.
The Labor Department should push for legislation to raise to $235,000 the amount of compensation on which employers can base pension calculations for employees, a working group of the ERISA Advisory Council recommended yesterday. The figure would be indexed to keep up with inflation. The limit was cut to $150,000 in the 1993 federal budget legislation, but has risen with inflation to $160,000.
The working group on defined contribution vs. defined benefit plans also recommended repealing limits on employers' ability to contribute to defined benefit plans and allowing private sector employees to make pre-tax contributions to pension plans similar to those allowed by public pension plans.
Hill Samuel Asset Management Ltd. is merging its U.K. and continental European equity teams in the prelude to a single European currency. The move is "more sort of a cultural change than a detail and practical change,'' said Rob Page, marketing director for the London-based manager.
U.K. and continental European equity mandates still will be managed separately, for regulatory and other reasons, he said.
Rep. Jim Saxton, R-N.J., today introduced a bill that would end the forcible withdrawal of retirement savings by Americans 701/2 and older. Under current law, Americans must withdraw their money from individual retirement accounts once they hit that age.
Only 55% of 401(k) plan sponsors have a written investment policy statement covering fund selection criteria and monitoring, according to a soon-to-be-released study by Hewitt Associates. According to the survey, 92% of employers claim investment performance is the most important factor in selecting investment options and only 3% say fees and expenses are the most important factor. However, fees and expenses were cited by 53% as the second most important factor.
Caisse des Depots et Consignations hired Frank Russell to provide performance measurement for its custody clients.
The Paris-based institution has more than 3 trillion francs ($520 billion) in assets under custody. It claims it is the first French-based custodian to provide this level of performance attribution.