Japan's Pension Fund Association, Tokyo, with 3.5 trillion yen ($28 billion) in assets, is considering investing in additional asset classes and strategies. Under consideration are: derivatives, which could be fixed-income or equity based, foreign or domestic; tactical asset allocation; and actively managed emerging markets equities.
Decisions about such investments - including the sizes of any allocations - are still a way off, said Noboru Terada, the PFA's executive director, pension investments. The fund still has to do ``extensive research'' into the new areas so any movement into them would be at least a year away, Mr. Terada said.
A New Mexico lawmaker introduced a bill to create a portable retirement plan for state employees.
Under the bill, introduced by Republican State Rep. Kip W. Nicely, the state would set up a new defined contribution plan for state workers. Participants in the plan would have a one-year vesting period and would be allowed to take their assets with them when they change jobs. Participation in the state's defined benefit plan would not be required.
Officials of the $5.75 billion New Mexico Public Employees' Retirement Association, Santa Fe, oppose the legislation. If the bill passes, it will take a large chunk of money from the fund, said Burt Terrazas, executive deputy director for member services. Officials are lobbying for the bill to be part of a voter referendum, he said.
Senate Finance Committee members plan to examine ways the IRS can expand programs that encourage employers to correct, rather than hide, errors they discover in their pension plans. In a Feb. 9 letter to IRS Commissioner Charles Rossotti, a group of senators wrote that they intend to study proposals to improve and expand IRS programs that promote voluntary compliance by pension plan sponsors as part of upcoming hearings on restructuring the IRS.
The letter was signed by Sens. Robert Graham, D-Fla.; John Breaux, D-La.; Charles E. Grassley, R-Iowa; James M. Jeffords, R-Vt.; and Orrin Hatch, R-Utah.
Beloit College, Beloit, Wis., dropped the Acorn Fund, managed by Wanger Asset Management, from its $77 million endowment fund. Trustees didn't like the fund's performance and decided to gradually move the $3 million small-cap equity portfolio to existing international equity manager Morgan Stanley, said John Nicholas, vice president of administration and treasurer. The firm's portfolio will increase to $9 million.
Cambridge assisted. Officials at Wanger did not return calls by press time.
Investment in U.S. office properties has nearly doubled over the past year with pricing increasing an average of 20% nationally, according to a report by Granite Partners, a real estate investment bank. Granite estimates total office investment was about $46 billion in 1997, for transactions greater than $10 million.
REITs were the largest acquirers of office buildings, accounting for about 48% of all individual transactions and 84% of portfolio transactions. Institutions and pension funds accounted for 17% of individual office transactions and 5% of portfolio transactions.