WASHINGTON -- Following months of denials by its officials, the Committee on Investment of Employee Benefit Assets finally has broken off from the Financial Executives Institute.
CIEBA, Washington, one of the most visible lobbying organizations representing pension plan sponsors, will become affiliated with the Association for Financial Professionals, Bethesda, Md., on June 1.
CIEBA was founded in 1985 as a technical committee of Morristown, N.J.-based FEI, and has represented employers on numerous pension-related investment issues before lawmakers.
The AFP, which represents corporate treasurers, is headed by James A. Kaitz, for many years CIEBA's lobbyist in Washington, and subsequently a senior executive at FEI's headquarters until mid-1998.
Mr. Kaitz did not return numerous calls seeking comment. His office issued a statement that said the AFP will provide administrative and logistical support for CIEBA's operations, including developing and maintaining a website, and offering educational opportunities to members.
"AFP and CIEBA's members will benefit from the combined wealth of knowledge and influence that both organizations bring to the financial community. CIEBA's expertise in pensions and investments is a perfect fit for AFP," Nolan L. North, AFP's chairman and assistant treasurer at T. Rowe Price Associates Inc., said in the statement.
CIEBA, with 145 members representing corporate pension funds with total assets exceeding $1 trillion, is headed by W. Allen Reed, president of General Motors Investment Management Corp., New York.
Mr. Reed earlier had denied the committee had any plans of moving away from the FEI. He did not return numerous calls seeking comment this week but was quoted in AFP's statement.
Few changes are expected in the way CIEBA is run.
Meanwhile, Philip Livingston, FEI president, said the organization might consider replacing CIEBA with another committee to address concerns of pension plan sponsors. He said Mr. Reed had notified him by phone on May 8 of CIEBA's intended departure.
"CIEBA has been a great group and part of FEI for 15 years, but it's always been a kind of independent group, and these people who run the plans are very independent," Mr. Livingston said.
The FEI will continue to lobby on issues of concern to plan sponsors, he said.
The FEI will keep its Washington office, although Jacque Johnson, CIEBA's executive director, will move to the AFP's office in suburban Washington.
Insiders had been expecting CIEBA's split for several months, alluding to high turnover of several senior-level FEI executives in recent years. Among them was Mr. Kaitz, vice president of government relations, who moved back to the Washington area after he left the FEI.
Moreover, CIEBA had several times in the past considered breaking away from FEI or becoming independent, according to W. Gordon Binns, retired president of GM Investment Management Corp. and the founding chairman of CIEBA.