The $25 billion Los Angeles County Employees' Retirement Association, Pasadena, Calif., is planning two RFPs, one for a $500 million nondollar bond portfolio and another for $330 million in high-yield bonds.
The nondollar RFP is expected to go out in September. Two current nondollar bond managers are expected to be in the running: Capital Guardian, which now runs a $520 million portfolio for LACERA, and Brinson Partners, which runs $400 million. A decision is expected by January.
Following the nondollar RFP, LACERA will begin its high-yield bond manager search. LACERA already has two high-yield bond managers, Oaktree Capital Management and Loomis Sayles, but it wants a third. Frank Russell is assisting in both searches.
Also, Oaktree and Loomis will be getting an additional $60 million each in assets, brining each portfolio to a little over $300 million. The money will come from the $1.3 billion LACERA has in a Lehman Brothers aggregate bond index fund with Bankers Trust. The high-yield search is expected to be completed in late spring.
The City of Los Angeles Board of Deferred Compensation Administration has voted to cancel its RFP for a plan administrator and reissue two more narrowly drafted RFPs, one for an administrator and one for investment products. The new RFPs will be drafted to conform with criteria developed at the board's May meeting, said Steven Montagna, management analyst for the $1.1 billion 457 plan. The board decided the new plan should: include a broad-universe brokerage window option; administer current funds without triggering surrender charges; have one fund in which costs would not exceed those of the Vanguard Institutional Index Fund, the lowest-cost fund offered by the plan; identify record-keeping fees independent of investment management fees; and offer one actively managed and one indexed fund in each of four categories. The plan has two administrators: Hartford Life and Washington Mutual. Both provide record keeping, investment and communications services. The board decided to hire a single administrator to make it easier for plan participants to access information from one source, Mr. Montagna said. William M. Mercer is assisting.
The County of Westchester, N.Y., will issue an RFP in March or April for a consultant to assist with a plan administrator search. The county's $200 million defined contribution plan's contract with Diversified Investment Advisors expires in 1999. Under state law, the county must do a search, said Phil Speziale, manager of payroll and benefits. The administrator search should begin next summer, he said.
The $3.5 billion San Diego County Employees' Retirement Association has started an asset allocation study expected to be completed by August or September, said a high-ranking system official who declined to be identified. The study is being conducted in-house with the assistance of the Bank of New York, the official said. "It has been years since we've done a full-blown asset allocation," he said. The official added that the retirement system changed its actuarial assumption rate last fall for reasons he declined to give and that this change led to the asset allocation review.
The City of Aurora, Colo., hired Callan Associates as consultant for its $175 million pension fund. Callan will perform an asset allocation study to determine, among other things, if a manager search is necessary. Callan replaces DeMarche, which was included in the search.
