NASHUA, N.H. -- The Nashua Corp. pension plans, a $128 million composite pension trust and a $64 million employee savings plan, have entered into an agreement to purchase, for $74.6 million, a non-participating group annuity contract from Principal Life Insurance. The purchase will settle Nashua's pension obligation to retirees who were receiving pension benefits as of Dec. 1. Principal will assume the obligation to fund retiree payments beginning Jan. 1.
Upon completion of the transaction, expected in the first quarter, Nashua will record a one-time, pre-tax gain of roughly $8 million.
Gerald G. Garbacz, Nashua's chairman, president and chief executive officer, said, "The move to an annuity-based system allows Nashua to significantly reduce its exposure relative to changes in equity and bond markets which impact the assets held by the company's pension plans. The change will allow the company to focus its near-term investment strategy on increasing portfolio value for future retirees, as opposed to its previous split focus on income generation for current retirees and appreciation for future retirees."
Vanguard plans socially responsible fund
MALVERN, Pa. -- The Vanguard Group soon will file a registration statement with the SEC for a new passively managed, socially responsible mutual fund, the Vanguard Calvert Social Index fund.
John Brennan, Vanguard chairman, said customers have been asking for a socially responsible mutual fund for more than 10 years, but that a suitable index hadn't been available.
Vanguard's partner in the offering is Calvert Group, which is developing the Calvert social index. The index will screen the 1,000 largest U.S. companies on five criteria: environment; workplace issues; product safety and impact; international operations; and human rights. It will exclude companies involved with production and sale of tobacco, alcohol, gambling or nuclear power and companies that violate fair labor practices and equal opportunity standards. The fund will be managed internally by the Vanguard core management group and will be offered at cost. It will offer an institutional share class with a $10 million minimum.
Rhode Island Employees boost non-U.S. equity allocation
PROVIDENCE, R.I. -- The Employees' Retirement System of Rhode Island will boost its allocation to non-U.S. equities by 5% of total assets. The increase will be funded from its U.S. bonds allocation.
A spokeswoman for Treasurer Paul J. Tavares said the $6.6 billion fund's overall equities allocation will total 72.5% and the U.S. bonds allocation will decrease to 27.5% following an asset allocation study done by Wilshire Associates.
Wilshire is expected to make recommendations this month at the trustees' meeting on implementation of the new asset mix. It is not yet known whether manager changes will be made, the spokeswoman said.
CalPERS sells private equity stake
SACRAMENTO -- CalPERS earned $500 million by selling its private equity stake in a joint venture with Comcast Corp.
Comcast, which acquires and operates cable TV systems in the United States, agreed to purchase CalPERS' 45% equity ownership stake in Comcast MHCP Holdings for $750 million in cash, which gives the $170 billion CalPERs a 25% annualized return over the past five years. The California Public Employees' Retirement System in 1994 purchased a $250 million stake in Comcast MHCP Holdings, a joint venture between CalPERS and Comcast.
New York governor approves pension benefit plan
ALBANY, N.Y.-- New York State Comptroller H. Carl McCall criticized Gov. George Pataki for recently signing a bill approving a new pension benefit plan only for New York City corrections officers. Mr. McCall said he is still pushing for an across-the-board benefit increase to public employees across the state.
The law creates two supplemental funds to boost the pensions of close to 11,000 jail guards.
Mr. McCall, the sole trustee of the $115 billion New York State Common Retirement Fund, Albany, in a statement said, "We need to give all public employees -- not just a portion of them -- a permanent cost-of-living adjustment, a benefit public employees receive in most other states."
Deutsche Bank combines mutual fund families
NEW YORK -- Deutsche Bank will combine the no-load mutual fund families of it Bankers Trust and Morgan Grenfell units under a single "Deutsche" label in its Deutsche Asset Management division in the first quarter. The assets invested in the more than 45 mutual funds in the two families totaled $35 billion at the end of November.
Rich Marin, co-head of Deutsche Asset Management, said some funds with duplicative investment styles were merged prior to combining the fund families. Twenty of the funds in the new Deutsche no-load fund family are money market funds.
EBRI study shows increase in retirement saving
WASHINGTON -- More Americans than in previous years are saving for retirement, but many workers still are not, according to a new survey by the Employee Benefit Research Institute.
According to EBRI, 70% of those surveyed are saving for their retirement, up slightly from 68% of those surveyed last year. Of those surveyed, 49% have tried to figure out how much money they will need in retirement.
PaineWebber fund hits $2.1 billion in six weeks
NEW YORK -- PaineWebber Strategy Fund hit $2.1 billion in its first six weeks, making it one of the fastest growing new mutual funds in history, according to a mutual fund research consultant.
The fund is managed by Mitchell Hutchins and invests in PaineWebber's highlighted stocks list. The list includes an average of 25 companies rated "buy" or "attractive" by PaineWebber's equity research group; the companies were picked by Edward M. Kerscher, chairman of PaineWebber's investment policy committee and head of the investment strategy group. The fund equally weights assets among the stocks on the highlighted list.
The portfolio manager is T. Kirkham Barneby, chief investment officer of quantitative investment for Mitchell Hutchins.
International exchange joins electronic trading platform
CHICAGO -- Trading Technologies announced the International Securities Exchange will be added to the list of markets accessible through TT's electronic trading platform. Pending approval from the Securities and Exchange Commission, the ISE is scheduled to launch in the first quarter and will be the first fully electronic options market in the United States