UAL Corp., Chicago, is applying $190 million of its credit balance toward its four U.S. pension plans, which have a combined $7.5 billion in assets, confirmed Clifford T. Hew, director of pension investments. The pension plans have $10.4 billion in obligations, he said. United's pension contributions have exceeded the federal minimum funding requirement over the past several years, according to the company's website; pension law allows plan sponsors that contribute more than the required amount to use that surplus as a credit to reduce future payments. UAL, parent of United Airlines, will use the credit to meet the minimum funding level, reserving the company's cash for liquidity purposes.
West Virginia Investment Management Board, Charleston, with $5.1 billion in pension and workers' compensation assets, hired Westfield Capital to run $150 million in active domestic small-cap and midcap equities, said T.J. Carlson, CIO. Funding will come from terminating Loomis Sayles, which ran $110 million in a similar style, he said. The remaining $40 million will come from cash. "We decided it was time for change on that manager," Mr. Carlson said; he would not comment further. Summit Strategies Group assisted.
Separately, the board retained State Street Global Advisors as an enhanced S&P 500 manager, shifting it from a passive S&P 500 fund and reducing its allocation to $700 million, from $850 million, Mr. Carlson said. The remaining $150 million was split evenly between existing active domestic large-cap equity managers Chartwell and Alliance Capital; Chartwell will run a value portfolio and Alliance, growth, he said.
Nevada Deferred Compensation Fund, Carson City, hired ING Retirement Services as bundled provider for $25 million in 457 plan assets, and will retain Hartford as bundled provider for the remaining $190 million, said Robert B. Easton, chairman. State law requires the 457 plan to use two bundled providers, he said.
ING, which replaced ICMA, will offer 17 investment options, down from 30, he said. Hartford will trim its investment options to 17, from 50, he said.
The plan also has added a self-directed brokerage account managed by Charles Schwab and online investment advice from mPower, he said.
Segal advised on the changes.
Catholic University of America, Washington, hired three managers for its $140 million endowment. They are: Kaplan Associates, running $6.7 million in active domestic small-cap value equities; Barlow Partners, $5 million in a hedge fund of funds; and Oaktree Capital Management, $4 million in distressed debt, said Ralph H. Beaudoin, vice president of finance and treasurer.
Partial funding came from trimming the endowment's $7 million investment with hedge fund manager Knob Hill to $3 million, and terminating manager Bennett Lawrence Offshore, Mr. Beaudoin said. The balance will come from trimming the fund's exposure to its other hedge fund managers, he said.
People's Bank, Bridgeport, Conn., hired Mercer Human Resources Consulting as actuary for its $92 million pension plan, said William J. Pieper, vice president and senior trust officer. Previous actuary Towers Perrin was terminated due to personnel changes, he said. The plan's asset allocation is 65% equity and 35% fixed income.
Jarden Corp., Rye, N.Y., hired Bank of New York as trustee and record keeper and investment provider for the company's $32 million 401(k) fund, effective Oct. 1, said David Tolbert, vice president-human resources and administration. BNY replaces Vanguard.
The plan will offer 10 investment options, up from eight. They are: BNY money market and value; MFS value equity, core growth, international equity, emerging growth equity and government securities fixed income; Fidelity midcap equity; Alliance balanced; and Dreyfus S&P 500 index funds. Jarden made the change "because we have a number of banking relationships with the Bank of New York, and this is really just a bundling of services," Mr. Tolbert said. The plan didn't use a consultant, he said.
Seventy percent of assets in defined contribution plans were invested in equities in the first six months of 2002, according to statistics released by the Vanguard Group at the Profit Sharing/401(k) Council of America's annual meeting in Chicago last week. Also, 91% of plan participants did nothing to their asset allocations during that period.
Chicago Board Options Exchange announced it will begin trading options based on the Barclays Global Investors iShares MSCI EAFE exchange-traded fund, effective Sept. 25.
Separately, BGI filed a prospectus with the SEC to offer an exchange-traded fund based on the MSCI Emerging Markets Free index.
Trammell Crow Co., Dallas, added the Artisan Midcap Growth Fund as an investment option in its $130 million 401(k) plan, said Marty Joyce, human resources specialist. The plan now offers 13 investment options. CIGNA is bundled provider; HR Investment Consultants advised.
Sharp Electronics Corp., Mahwah, N.J., added eight investment options to its $110 million 401(k) plan, said Michael Martakis, senior benefits manager. The plan added the American Express Trust Small-Cap Value Fund 2, State Street Research Aurora, T. Rowe Price Capital Appreciation, Vanguard 500 Index and Midcap Index, Artisan International, Oppenheimer Global and Royce Low Priced Stock funds. The plan now has 15 investment options, up from seven, he said. American Express Retirement Services is bundled provider and assisted. Cambridge Financial Services also advised, he said.
Sundt Cos. Inc., Tucson, Ariz., hired Fidelity as investment provider, record keeper and trustee of its $6 million 401(k) plan, replacing American Express Retirement Services, said Carol W. Peabody, vice president and treasurer. The plan will have 15 investment options, up from eight, she said. Administration is handled internally. Schultz Collins Lawson Chambers advised.
Illinois State Universities Retirement System, Champaign, is completing an asset allocation study, said John R. Krimmel, CIO. Consultant Ennis Knupp will present the results to the $9.8 billion system's investment committee on Sept. 26. Any recommended changes probably would be minor, Mr. Krimmel said.
The system's current asset allocation is 43% domestic equities, 29% fixed income, 19% international equities, 3% private equity, 2% REITs, 2.5% TIPS and 1.5% global equities.
Nebraska State Investment Council, Lincoln, plans to issue shortlist RFPs for an active international developed markets equity manager and an active international emerging markets equity manager, said Carol Kontor, state investment officer. Portfolio sizes have not been determined. Portfolio size has not been determined, she said.
Officials at the $4.3 billion pension plan want to switch a portion of international equity investments from passive to active management. Ms. Kontor declined to give details about the passive managers, but she said funding likely will come from reducing portfolios, rather than terminations.
The plan will start looking for the developed markets manager within the next few months, and plan officials expect to make a decision by the end of the year, she said. They have not decided when the emerging markets search will begin, she said.
Wilshire Associates will advise.
District of Columbia Retirement Board next month will begin an asset-liability study that could result in the hiring of new managers, said Sheila Morgan-Johnson, CIO. The board of the $1.9 billion system also will review its existing money managers to see if they offer multiple strategies in different asset classes.
Additionally, the board will look at new asset classes that could help meet the plan's 7.25% long-term actuarial rate of return. The board also will review whether the return assumption needs to be changed.
The review, being conducted by recently hired consultant Watson Wyatt Worldwide, should be finished before the end of the year, she said.
The system's current asset allocation is 43.7% domestic equities, 20% international stocks, 30.3% fixed income, 5% private equity and 1% short-term securities.
American Federation of State, County & Municipal Employees, Washington, by the end of this month will begin a review of the investment options in its $80 million 401(k) plan, said Charles Jurgonis, plan secretary.
Bundled provider CIGNA suggested that the plan reduce its number of options to 16 to 22, from the current 34, Mr. Jurgonis said. "Two things will drive us: The amount of money in the existing styles, and the performance of funds within those styles," he said. No timetable has been set for completing the review.
Healthcare Foundation of New Jersey, Livingston, N.J., is conducting an asset-liability review of the $140 million foundation, said Gary Aidekman, chairman of the investment committee. It should be completed this fall. Disabato & Associates is assisting.
