California Public Employees' Retirement System's staff is recommending the $128 billion fund invest in European, Asian and Latin American real estate investments for the first time. The investments would be made through Security Capital Global Realty, which created a private real estate company. SCGC will invest in public and private real estate operating companies.
Staff also is recommending the Sacramento-based system invest $150 million in the Lexington Capital Partners II fund, which will invest up to $1 billion in secondary interests in buyout partnerships in the U.S. and abroad.
CalPERS' investment committee could act on the recommendations Monday.
As expected, John R. Kasich, R-Ohio, House Budget Committee chairman, yesterday introduced a bill that would earmark 80% of any federal budget surplus for IRAs.
Under the legislation, all working Americans paying into Social Security would share in surpluses equally and be allowed to invest the money in the same investment options as the federal thrift retirement system: a stock index fund, a bond index fund, and a short-term U.S. Treasuries fund. The individual accounts would co-exist with the Social Security system.
MTS Systems Corp., Eden Prairie, Minn., is evaluating its defined contribution plan in anticipation of a move to daily valuation Jan. 1, 1999.
The $160 million plan has six options managed by Piper Capital, Dwight Asset Management, Alliance Capital, Vanguard, Wellington and American Fund Advisers. Watson Wyatt is the plan's administrator. In the next three months, officials should have a plan for what investment and administration changes, if any, will be needed, said Kristina Barclay, compensation and benefits analyst.
Los Angeles County Employees Retirement Association, Pasadena, Calif., selected Watson Wyatt as its actuarial firm to replace Towers Perrin. Finalists not selected were Buck and William M. Mercer.
Marsha Richter, CEO of the $22 billion pension fund, said she intends to recommend actuarial audits every five years. A recent audit turned up a $1.2 billion error in the size of LACERA's liability.
Pending final negotiations, Watson Wyatt is expected to sign a three-year contract with LACERA. Towers Perrin sought renewal of the contract it has had since the 1970s but was given a low evaluation score by LACERA.
Fairfax County (Va.) Police Officers Retirement System and the Fairfax County Uniformed Retirement System are conducting asset allocation studies, said Laurnz A. Swartz, executive director.
The more than $500 million Police Officers system, had 59% of its assets in stocks and the remainder in fixed income at the end of the year. William M. Mercer is assisting.
The Uniformed Retirement System, with $513 million in assets, had 54% in equities and the rest in bonds. RogersCasey is assisting.
The studies probably will be completed around midyear, Mr. Swartz said.
Santa Clara (Calif.) County Transit District has a recommended asset allocation from consultant William M. Mercer, said Manny Bagnas, investment program manager. The new mix is 30% large-cap value stocks; 10% small-cap value stocks; 10% international large-cap stocks; and 50% domestic fixed-income. The suggested asset allocation has yet to be approved by the $150 million pension fund's board. The fund now has 4% U.S. equity, 93% U.S. bonds and 3% cash. Final approval is expected in April.