CalSTRS considers creating 457 plan
SACRAMENTO, Calif. - CalSTRS is looking into forming a 457 plan, said Sherry Reser, public information officer. Officials at the $100 billion California State Teachers' Retirement System are considering alternative ways of administering the plan, including creating a joint 457 plan with the $149 billion California Public Employees' Retirement System.
So far, the matter has not been scheduled on the CalSTRS board's agenda.
Separately, CalSTRS adopted a sweeping set of corporate governance reforms stemming from the Enron Corp. and Global Crossing collapses. Top priorities include the independence and qualifications of audit committee members; auditor disclosure; accounting standards; disclosure of executive compensation; and reforms of deferred compensation and defined contribution plans. Gary Lynes, CalSTRS' chairman, said the system will team with other pension funds, regulatory agencies and legislative bodies to push for improving corporate governance practices.
CalPERS recently adopted a similar set of proposed reforms.
Alaska Air, subsidiary to review 401(k) options
SEATTLE - Alaska Airlines and subsidiary Horizon Air Industries will review the 29 options in Alaska's Pilots Investment & Savings 401(k) plan. Also under review are the 10 options shared by Alaska's Flight Attendant 401(k) , Alaskasaver 401(k) and COPS & MRP 401(k) plans, and Horizon's 401(k) plan, said a Horizon spokeswoman. The four Alaska plans have a combined $250 million in assets, and the Horizon plan has $105 million in assets. The Horizon 401(k) plan may add a large-cap growth equity fund because the Putnam Investors Fund, which it currently offers, has become a large-cap blend fund, she said. Any changes would be made by early September. Tom Richards, director of employee benefits for Alaska Airlines, confirmed the airlines' 401(k) plans were reviewing their options.
Putnam is bundled provider for all five plans. Watson Wyatt is conducting the reviews.
Tucker Anthony team heads to Park Street Capital
BOSTON - Tucker Anthony's 14-member private equity management team left the firm to launch Park Street Capital, where it will continue to manage four funds of funds with a combined $800 million in commitments.
The limited partners are joining them at Park Street, said Bob Segal, Park Street managing director. Also, Park Street hired Harry Turner as director. He was a co-founder of the Stanford Management Co., where he managed a $1.6 billion private equity portfolio for the $8 billion Stanford University endowment, Palo Alto, Calif. Mr. Turner was succeeded at Stanford Management by Georganne Perkins.
Mr. Segal said the Tucker Anthony private equity team, formed in 1997, was structured to become independent if there was a change of ownership; the company was acquired by RBC Dain Rauscher for $625 million in August. Park Street bought back Tucker Anthony's 50% interest in its current funds for an undisclosed price.
Investors in the funds include the $47.3 billion Ohio State Teachers Retirement System, Columbus; $704 million Boston Foundation, Boston; and the $493 million Washington & Lee University endowment, Lexington, Va.
PennSERS to interview alternative fund managers
HARRISBURG, Pa. - Pennsylvania State Employees' Retirement System will interview officials of Berwind Property Group Investment Partnership VI and the Campbell Timber Fund at its April 24 board meeting and decide whether it will hire either firm. The amount of the potential commitment or commitments has not been decided.
Also, the $24 billion system renewed the investment contracts of four real estate managers, whose contracts were set to expire Sept. 30. They are: Lowe Enterprises Investment Management, which handles a $413.3 million portfolio for the system; Heitman Capital Management, $267.3 million; Legg Mason Real Estate Services, $226 million; and LaSalle Investment Management, $192 million.
Nashville OKs settlement with UBS PaineWebber
NASHVILLE, Tenn. - Nashville & Davidson County Metropolitan Council on April 2 approved by voice vote a $10.3 million settlement with UBS PaineWebber and its consultant, William Keith Phillips, who advised on investments for the Metro Benefit Board's $1.3 billion pension fund. The settlement stems from a KPMG audit that found inherent conflicts of interests in PaineWebber's consulting, including its soft dollar and directed brokerage arrangements.
The council was required to approve the settlement, which requires UBS PaineWebber to pay $10 million to the pension fund and $300,000 to the Metro law department.
UBS PaineWebber officials couldn't be reached for comment.
Mr. Phillips now works as a consultant at Morgan Stanley.
PBGC takes over bankrupt CSC's 2 pension plans
WASHINGTON - The PBGC took over the underfunded pension plans of CSC Ltd., a bankrupt steel maker in Warren, Ohio, which were shut down Oct. 31. The CSC Production and Maintenance Pension Plan and the CSC Clerical Pension Plan had combined assets of $15 million and combined liabilities of $71 million, creating a shortfall of $56 million, according to PBGC estimates.
Les Schwab Tire gauges performance of 4 managers
PRINEVILLE, Ore. - Les Schwab Tire Centers Inc., Prineville, Ore., is reviewing the performance of four managers, said Steven Bjorvik, manager of the $322 million profit-sharing retirement trust. He would not name the managers. An active domestic large-cap growth equity manager that runs $17 million is being reviewed because of performance, and the plan's three active international equity managers, which handle a total of $30 million, are being looked at to determine if they are too growth oriented, he said. The reviews should be finished by early May.
The plan's asset allocation is 53% domestic equity, 10% international equity, 10% domestic fixed income, 12% real estate, 8% cash and 7% private equity. Brockhouse & Cooper and R.V. Kuhns are assisting.
UBS combines Phillips & Drew, Brinson under one name
NEW YORK - UBS on April 8 adopted its new unified brand name, UBS Global Asset Management, replacing Brinson Partners, Brinson Advisors and Brinson Canada in North America; Phillips & Drew in the United Kingdom; and UBS Asset Management in Europe, the Middle East, Africa and Asia.
Separately, Brian M. Storms will become UBS Global Asset Management's CEO for the United States and Canada July 1. He replaces Benjamin F. Lenhardt Jr., who will remain chairman until his retirement in December 2003. Mr. Lenhardt will focus on client and consultant relationships. Mr. Storms was president and COO of the UBS Global Asset unit.
IRRC to screen companies for links to terrorism
WASHINGTON - Investor Responsibility Research Center will offer a terrorism screen, identifying companies with global securities risk even though they are not knowingly assisting any terrorist group. IRRC identified some 300 U.S., European and Asian companies whose reputations or finances are at risk because their products are used in terrorist-related activities, or are used in weapons of mass destruction or nuclear proliferation. Companies with manufacturing plants in countries identified as harboring terrorists also are screened. Those countries, as identified by the U.S. government, are: Iran, Iraq, Libya, North Korea, Sudan and Syria.
IRRC plans to market the new service to pension funds, money managers and other institutional investors. Bradley Webb, director-sales and client services, is leading its development.