CHICAGO -- The Chicago Transit Authority Employees' Retirement System board will add a 401(k) plan to its defined benefit and 457 deferred compensation plans, according to Dennis Anosike, senior vice president and treasurer.
The board opted to include a 401(k) plan because it has a higher deferral limit than the 457 plan and has other back-end advantages, he said.
The investment committee is reviewing available funds through administrator Great-West Life & Annuity Insurance, he said. The 457 plan has 15 investment options.
"The goal is to maintain at least most of the categories for each of the options," and many of the investment choices could be the same, Mr. Anosike said.
While employees have been notified of the addition, the enrollment period will begin immediately upon selection of the fund lineup, he said.
CalSTRS establishes new alternative benchmark
SACRAMENTO, Calif. -- Trustees of the California State Teachers' Retirement System approved a change in the fund's alternative performance benchmark.
The $88 billion fund previously used the increase in the Consumer Price Index plus 12 percentage points as the benchmark for its $4.6 billion alternative portfolio. It will change to the Russell 3000 index return plus five percentage points, when adjusted for the latest three years of contributions figured at the 90-day Treasury bill return.
Pat Mitchell, chief investment officer, said the new benchmark should give trustees a better indication of the value added by alternatives above the equity market return.
Another option for Bell & Howell
SKOKIE, Ill. -- Bell & Howell added the Neuberger Berman Genesis small-cap equity fund, thus increasing its options to 14 in its $340 million 401(k) plan, said William Bergman, director of benefits and risk management.
NYC Police, Fire funds terminate IAI
NEW YORK -- The New York City Police Department and New York City Fire Department pension funds have terminated Investment Advisers Inc., which managed $363 million in an active fixed-income strategy for the $15.4 billion police fund and $125 million for the $5.6 billion fire fund, said Jane Levine, deputy comptroller for pensions.
The money will be shifted to Lincoln Capital, which already manages assets for the New York City system.
The terminations were due to poor performance and staff turnover, she said. IAI officials did not return calls seeking comment by press time.
The Fire Department also terminated Clemente Capital, which was running $37 million in emerging markets, for the same reasons. Those assets will be moved to an existing manager, which could not be named until the contracts are signed.
Tom Prapas, managing director at Clemente, said: "We were disappointed that we couldn't do a better job for the city. Part of the problem was our style of investing was at a disadvantage, and we didn't respond quickly enough. Then the person servicing their account left at that time, and we weren't in a position to match the offer."
L.A. County board shortlists bond managers
LOS ANGELES -- The Los Angeles County Employees' Retirement Association board of trustees approved a short list of candidates for a non-dollar bond manager.
They are: Bridgewater Associates; Fischer, Francis, Trees & Watts; and Western Asset.
Staff for the $25 billion fund plans to review proposals March 10. The allocation is expected to be about $500 million, said Juan Almaguer, investment officer for fixed income.
Frank Russell is assisting.
Better benefits preferred over higher salaries
LOS ANGELES -- About 53% of workers between 25 and 33 would take jobs with lower salaries but excellent retirement benefits over positions with higher salaries and poor retirement benefits, a recent survey shows. That compares with 64% of employees between 34 and 52, according to the survey of 500 employees of small and midsized businesses, conducted by CommSciences for Transamerica Asset Management Retirement Services.
Close to 30% of younger workers said their main motivation for participating in their company's retirement plan was the ability to borrow against it.
The study also revealed a "perception gap" between plan sponsors and participants. Nearly two-thirds of employers considered their retirement plans to be "great," compared with only one-third of employees.
Illinois Municipal terminates large-cap manager
OAK BROOK, Ill. -- The $13.1 billion Illinois Municipal Retirement Fund terminated Harris Associates as an active large-cap value equity manager, placing the $205 million in an existing passive large-cap value equity portfolio run by Dimensional Fund Advisors, said Walter Koziol, director of investments. Prior to the additional allocation, Dimensional ran $79 million for the retirement fund.