Ames liquidating 401(k)
Ames Department Stores Inc. will liquidate its 401(k) plan, Ames' only retirement plan, as a result of the company's closing, said Karen Baker, division vice president of compensation and benefits.
The $170 million in assets will be distributed to participants, Ms. Baker said.
"We were surprised by the company's announcement that it is closing and have yet to talk to our lawyers about how we'll proceed with the plan," Ms. Baker said.
Ill. Teachers alters targets
The $22 billion Illinois Teachers' Retirement System changed its asset allocation targets through 2006. Domestic equities will be 41%, up from 34.6%; fixed income, 23%, down from 35.3%; international equities, 15%, up from 14.7%; real estate, 14%, up from 10.6%; private equity, 6%, up from 2.8%; and short-term investments, 1%, down from 2%.
Separately, the system hired Advisory Research and Great Lakes Advisors to run $45 million each in active domestic large-cap value equities, and MFS to run $300 million in active domestic large-cap growth equities. It also added to several equity portfolios, rebalancing to targets.
Rogge Global Partners, which ran $610 million in international fixed income, was terminated for performance. Richard Gilmartin, Rogge marketing director, declined comment.
Trustees also committed up to $150 million to the Carlyle Private Equity Partners II fund.
Arrowstreet may benefit
CalPERS staff plans to make a recommendation by year-end on whether the system can boost its allocation to Arrowstreet Capital, the poster child for its 2-year-old manager development program. For the 25 months that Arrowstreet has been in the program, the international equity manager has beaten its benchmark by 5.73 percentage points annually, while its assets under management have multiplied 11 times during that period, to $2.5 billion.
In June 2000, the $140 billion CalPERS allocated $100 million to Arrowstreet under the pension fund's incubator MDP program. CalPERS acquired a 15% stake in the firm for nearly $3 million and holds a $1.5 million 12% subordinated note with warrants worth another 5%. The staff, with its MDP partners and its legal office, is examining whether the fund can make a side-by-side allocation to managers in its incubator program.
Indiana official in probe
Walter Kevin Scott, chief benefits officer of the $11 billion Indiana Public Employees' Retirement Fund, resigned after admitting he had served time in federal prison in the 1990s on banking fraud and other charges. Mr. Scott allegedly used someone else's Social Security number to pass a background check when he was hired in November.
Mr. Scott wasn't involved in investing the fund's assets. His resume said he was working at Procter & Gamble Co. during the time he was in prison, said a spokeswoman for Gov. Frank O'Bannon.
Equity losses hammer VRS
Virginia Retirement System reported its assets fell for the second consecutive year, to $34.5 billion for the fiscal year ended June 30. The system's assets have dropped more than $7.5 billion from a peak of $42 billion in August 2000, said Nancy Everett, CIO. The pension fund lost 16.6% on its $15.2 billion domestic equity portfolio in the fiscal year ended June 30, and its $5.4 billion portfolio of international equities lost 7.4%.
Separately, the fund established a task force to review and evaluate its current corporate investment practices. The task force will research and compile best corporate governance practices by peer public pension funds, and study the impact of new laws and new market regulations.
Pension fund up in the air
It's too soon to tell whether US Airways Group will shut down its underfunded pension plans. The PBGC is monitoring the airline, which filed for Chapter 11 Aug. 11, but has not yet been notified of any plans to terminate the pension plans, a PBGC spokeswoman said.
US Airways had pension assets of $3.14 billion at the end of fiscal 2001 and pension liabilities of $5.48 billion, according to the company's 2001 annual financial report.
Janice T. Emery, director of pension investments at the airline, did not return calls seeking comment by press time.
New BGI chairman
Robert E. Diamond Jr. will assume the role of chairman of Barclays Global Investors from Matthew W. Barrett, chairman of the parent company, Barclays PLC. Mr. Diamond, who is based in London, will remain CEO of Barclays Capital, the investment banking division.
Burton strikes gold
James E. Burton, CalPERS CEO, is leaving the $140 billion pension fund to become CEO of the World Gold Council. He had announced earlier he would leave CalPERS by year's end; system officials hope to name a new CEO within the next two months.
Brookline reviews plan
Brookline (Mass.) Retirement System began a review of its $155 million pension plan, said Margaret M. Cossette, acting director. It may be completed by Sept. 24; manager changes are not expected, she said. The plan hasn't been reviewed since Meketa Investment Group replaced Wilshire Associates as consultant in January. The asset allocation is 50% domestic equity, 40% fixed income and 10% international equity.
University adds small cap
Catholic University of America added active domestic small-cap equities as a new asset class, following an asset allocation review of the $140 million endowment, said Ralph H. Beaudoin, vice president of finance and treasurer. The endowment increased its overall equity allocation to 40% from 35%, with the addition going entirely into small-cap stocks, Mr. Beaudoin said. Funding will come from reducing alternatives to 15% from 20% of total assets, with the reduction coming from hedge funds, he said.
2 move to Northern Trust
Daniel Sperrazza joined Northern Trust Global Investments as director of fixed-income research. He replaces Peter J. Floyd, who will become director of risk management and strategy, a new position, said Christine Harmon, a spokeswoman. Also, Timothy Frechette will join NTGI as head of fixed-income trading, a new position.
Messrs. Sperrazza and Frechette came from Columbia Management. Mark Marinella, Columbia's chief investment officer, said he plans to replace both men, perhaps with more senior employees.
"I intend to enhance the research efforts here," said Mr. Marinella, who has been on the job for a month.