An ERISA Advisory Council working group is recommending the Labor Department require all employers to list on their annual pension plan returns all fees of more than $5,000 paid with directed brokerage.
The soft dollar and commission recapture committee also is suggesting: the DOL require all plan sponsors to certify on their Form 5,500s that they comply with federal pension law in using directed brokerage programs; the SEC tighten the definition of ``research'' in the law ``to better determine what can justifiably be purchased with soft dollars;'' that sponsors avoid soft-dollar conflicts of interests by hiring only consultants with no financial arrangements with brokerage firms; and that sponsors require money managers and investment consultants to specify in their contracts any potential conflicts of interest.
The working group also is recommending investment managers reveal to each client all trades done involving soft dollars, and the benefits they received for those soft dollars.
The recommendations will be presented to Congress after Labor Secretary Alexis Herman signs off on the report.
Los Angeles County Employees' Retirement Association, Pasadena, has decided to drop AMB Institutional Realty Advisors. AMB had invested $53 million in three properties for a LACERA special account. Under a new investment arrangement at AMB, 25% of the ownership of any new separate account investment must be placed into AMB's new REIT.
Finding the new arrangement unacceptable, the $22 billion fund's investment board is using a 30-day notice of termination clause to drop AMB. The properties AMB has been managing for LACERA will be turned over to existing manager ERE Yarmouth.
A spokeswoman for AMB said she had no immediate comment.
Michael J. Donoghue, chairman of the $240 million Worcester County Retirement Board, Worcester, Mass., called on pension systems around the state to explore the feasibility of setting up REITs to invest in so-called ``brownfield'' sites - polluted, abandoned industrial property.
Mr. Donoghue, who is also the county treasurer, said proposed state legislation might make some of the sites potentially attractive to real estate and venture capital investments.
The legislation would alleviate for new investors clean-up responsibility and liability for hazards caused by former industrial activity. The proposal will be considered when the legislative session opens in January.
Connecticut State Treasurer Paul Silvester said he will spearhead a bill in next year's legislative session to create a six-member board for the state's $16.8 billion pension fund.
Mr. Silvester is the sole trustee of the Hartford-based State of Connecticut Trust Funds. Christopher Burnham, Mr. Silvester's predecessor, twice introduced bills that passed through committee but were never put on the General Assembly calendar for a vote.
Mr. Silvester also said he will submit a bill that would value the pension fund's equities by market value instead of book value, for purpose of the statutory equity cap, and exempt REITs from being part of the equity allocation.
