ATLANTA -- The Coca-Cola Co. is considering an asset-liability study for its $1.1 billion defined benefit plan, which could lead to investment changes, said Linda Mincey, manager of pensions and investments. The current mix is 49% domestic equity, 25% domestic fixed income, 12% international equity, 4% international fixed income, 4% real estate, 3% private equity and 3% cash.
PBGC gets stock, board seats in Allis-Chalmers settlement
WASHINGTON -- The PBGC received 35% of Milwaukee-based Allis-Chalmers Corp.'s stock and three of seven board seats as part of a $63 million settlement for the termination of the company's pension plan in 1997.
Allis-Chalmers didn't make any pension contributions after January 1996 and asked the Pension Benefit Guaranty Corp. to take over the underfunded plan, which covered 9,000 former workers and retirees.
The plan had assets of $209 million and liabilities of $272 million when it was terminated.
Pacholder Associates, a special situations manager, will represent the PBGC on the Allis-Chalmers board, according to the agency.
State universities opt for enhanced indexes
CHAMPAIGN, Ill. -- The Illinois State Universities Retirement System decided to move $100 million to an enhanced index portfolio from PIMCO's stocks-plus portfolio. The enhanced portfolio will be with BlackRock, which already manages a $360 million mortgage-backed securities portfolio for the fund. PIMCO will continue to manage $600 million for the $10.4 billion fund.
Separately, large-cap equity manager Fayez Sarofim will lose $400 million to existing domestic equity index managers BGI and Northern Trust Quantitative. The exact split will be at the investment staff's discretion, said James Hacking, executive director. Fayez Sarofim still will manage between $300 million and $350 million.
School employees expand fixed-income allocation
BATON ROUGE, La. -- The Louisiana School Employees' Retirement System allocated an additional $40 million to domestic fixed-income manager Schroder Capital Management June 1. Schroder's portfolio now totals $287 million. Funding came from existing large-cap equity managers, the result of a rebalancing in which the equity portfolio was pared four percentage points, said Julia LeBlanc, chief investment officer for the $1.5 billion fund.
County considers adding 401(a) plan
SAN DIEGO -- The San Diego County Employees' Retirement System is investigating adding a 401(a) plan to augment its $300 million 457 deferred compensation plan, said Neil Rossi, chief deputy treasurer.
Plan documents are being drafted and the concept is being reviewed by counsel in preparation for IRS approval, he said. Staff is looking into alternative plan structures with current 457 service provider Hartford Life. Whether there will be an employer matching contribution and whether the investment options in the 401(a) plan will mirror those in the 457 plan are still undetermined.
County system rejiggers asset allocation
ROCKVILLE, Md. -- The Montgomery County Employees' Retirement System shifted its asset allocation, following a study completed earlier this year. The $1.85 billion fund is increasing its international equity allocation to 13%from 10%and its fixed-income exposure to 39%from 36% It also is eliminating a 6%target real estate allocation.
"(Real estate) did not provide the return expectation we had anticipated," said Patrick Bell, recently named director of pension investments at the Montgomery County Board of Investment Trustees, which includes the employees' retirement system, a 401(a) retirement savings plan and a 457 deferred compensation plan. Mr. Bell was named acting executive director following Julie Dellinger's departure several months ago.
Study shows coverage could cost $25 billion
WASHINGTON -- The American Federation of State, County and Municipal Employees, AFL-CIO, released a report concluding mandatory Social Security coverage of newly hired public employees would increase payroll cost by $25 billion in the first five years.
Based on statistics from the Social Security Administration and information gathered from individual state retirement plans, Segal Co., which was hired to do the study, estimated the cost impact of adding Social Security benefits to the current retirement program; the cost of maintaining current benefit levels for all employees, along with Social Security; and the cost of maintaining current benefit costs by absorbing Social Security and cutting benefits to employees.
The actuarial firm concluded that mandatory Social Security will likely result in a reduction of benefits and higher contribution rates for employees and employers.
Dwight Asset introduces stable value mutual fund
BURLINGTON, Vt. -- Dwight Asset Management introduced the Dwight Capital Preservation Portfolio, a stable value mutual fund for IRA participants. A separate class of shares may be introduced for defined contribution plans, said Laura Dagan, managing director. The mutual fund will invest in securities rated AAA and use wrappers that are at least rated AA, she said.