American Council of Life Insurers, Washington, may search for external managers to handle assets in its new cash balance plan. Any changes would be the result of recommendations by newly hired investment consultant Ernst & Young, pending approval of the new consultant at the plans Oct. 13 fiduciary committee meeting, said Joanne Daly, vice president of benefits. ACLI is terminating its $60 million defined benefit plan and starting the cash balance plan, pending IRS approval, she said. The group also will increase the employer contribution to its $35 million 401(k) plan.
Officials for the trade association hope to finance the new cash balance plan using part of a $9 million pension surplus the group will receive after terminating its defined benefit plan, Ms. Daly said.
Prudential Investments managed the plans defined benefit assets, which were split evenly between stocks and bonds. ACLI officials have not yet made any decisions on how to invest the assets, she said.