Large corporate pension plans could be losing $500 million a year in...

Large corporate pension plans could be losing $500 million a year in trading costs because of the Labor Department’s policy on cross-trading which prevents investment advisers to pension funds from swapping securities among different investment portfolios, Britton Harris, president of GTE Investment Management, testified today at a Labor Department hearing on the subject. Mr. Harris, chairman of the investment committee of the Committee on Investment of Employee Benefit Assets, told DOL officials that the loss could be as much as $1 billion a year if opportunities for cross-trading on asset classes other than domestic stocks are taken into account. CIEBA represents about 140 of the nation’s largest corporate pension funds with more than $1 trillion in pension assets, Mr. Harris said. "The highest cost savings often involve foreign securities, fixed-income securities and other securities that are not traded on the major stock exchanges or otherwise are less marketable and/or more thinly traded,’’ he said.