District of Columbia Retirement Board has begun an asset-liability study to see how its investment program might need to be restructured in anticipation of the federal government taking over the bulk of its assets. The board, which has about $4.8 billion in assets, will be left with about $1.3 billion, plus investment earnings and employee contributions since July 1. The board also will manage the $57 million received in employer contributions since then.
RogersCasey, the board's consultant, is conducting the study, which is not expected to be completed for several months.
Societe Generale Asset Management and Frank Russell will offer multimanager funds to institutional and individual investors in most continental European countries under a joint venture.
A 50/50 joint venture, called SG/Russell Asset Management, will offer a variety of products, initially in international asset classes, but over time will include all asset classes. Managers have not been named but are expected to include many of the same managers in Russell's existing funds.
Officials at the bank, SGAM and Frank Russell will market the products across continental Europe, except in Holland, where Russell will continue its go-alone arrangements. The joint venture also will seek distribution through other financial institutions.
Public sector organizations could be hit with a $600 million tab in the first year if they are required to provide their employees with Social Security benefits, a new survey by the Public Retirement Institute says.
That is about how much pension plans would lose in contributions diverted to Social Security, said Jennifer Harris, executive director. An estimate prepared by the Congressional Budget office projected the amount would be $300 million. Among the hardest hit would be the large public employee and teacher retirement systems, as well as some police and fire plans, according to PRI.
PRI based its estimate on a survey of more than 500 public pension plans.
Upper Peninsula Energy Corp., Houghton, Mich., could consolidate its $65 million in pension assets with those of Wisconsin Public Service Corp., Green Bay, because of a pending merger of the two companies.
Upper Peninsula has $50 million in defined benefit assets, run by American Express Retirement Services, EBS Asset Management, Employers Insurance, and First of America. It also has $15 million in 401(k) assets, managed by First of America.
Burton C. Arola, UP vice president-finance, secretary and treasurer, and R.G. Baeten, WPS treasurer, said the companies are discussing possible consolidation of the pension and 401(k) assets. No decision has been made about whether any of the UP managers will be retained. A decision likely won't be made until after the merger is approved. WPS has $400 million in defined benefit assets and $150 million in 401(k) assets.
The companies have no money managers in common. Mercer is assisting in the study. The merger requires federal approval, which could take several months.
Pennsylvania Municipal Retirement System, Harrisburg, awarded additional money to two U.S. equity managers, said James B. Allen, chairman of the board.
Chase Investment received $5 million to add to its $100 million large-cap growth portfolio. Another $3 million went to Provident Capital's $30 million small-cap value portfolio. The funding came from the $865 million fund's cash flow.
