At Deadline

CalPERS' staff proposed selecting Barclays Global Investors, Baring Asset Management and JPMorgan for a new enhanced index international equity pool. Staff of the $183.6 billion pension fund also proposed that Alliance Capital, PanAgora Asset Management, New Star Institutional Managers and The Boston Co. Asset Management be chosen for an active non-U.S. equity pool.

Funding would come primarily from passively managed international equities, according to a staff memo to the board of the $183.6 billion pension fund. Additional assets might come from CalPERS' existing active international managers or from cash flow.

CalPERS' investment committee will consider the proposal April 18.

Also at that meeting, the committee will interview two finalists in its search for a general consultant: incumbent Wilshire Associates and R.V. Kuhns & Associates. A third finalist, Ennis Knupp, withdrew from consideration, according to a staff memo to the board. David Russell, principal at Ennis Knupp, did not return a call by press time for comment.

The $70 billion State of Wisconsin Investment Board dropped Baillie Gifford and Capital Guardian as managers of $105 million and $101 million, respectively, in active developed market international equities, said Vicki Hearing, public information officer. She said both firms had been underperforming, but declined to comment on the specific reason for the terminations. The assets were reallocated to Fidelity, which now manages $1.042 billion in active international equities for the fund.

The $52 billion Pennsylvania Public School Employees' Retirement System and the $26.6 billion Pennsylvania State Employees' Retirement System signed an agreement allowing state audits of the two funds' investment performance. The agreement settles pending litigation.

The auditor general's office and the two funds also signed a contract with Independent Fiduciary Services to conduct a fiduciary review of operations at each fund and to assist with the audits. The audits and IFS' fiduciary review are set to begin immediately; there is no timetable on completion.

IBM contributed $1.7 billion to its U.S. pension fund in the first quarter of 2005, according to the company's 8-K filing. Without the impact of the pension funding, the company's earnings per share for the quarter would have been up 20% over the prior year, according to the filing.

The University of California reached a $468 million settlement with Dynegy and some of its former executives and directors. The university, which has $62 billion in pension and endowment assets, will also obtain an additional $5 million from Citigroup, which served as banker to the energy firm. In March, the university reached a $1.05 million settlement with Arthur Andersen, Dynegy's former auditor. In addition, Dynegy agreed to name two plaintiff-nominated directors to the board to monitor the firm's corporate governance activities.

The settlements stem from a class-action lawsuit alleging that Dynegy mischaracterized the proceeds of a loan as operational revenues and manipulated its reported tax liability. When the financial maneuvers were exposed in April 2002, the price of the company's stock plunged. The University of California, lead plaintiff in the suit, had held 4.16 million shares of Dynegy stock. Several former Dynegy employees previously pleaded guilty or have been convicted of criminal fraud.

Telia Pensionsstiftelse switched $140 million run by State Street Global Advisors to a new socially responsible global equity index fund from a pooled global index fund, said Peter Antonsson, president of the €1.5 billion ($1.94 billion) pension plan. The new fund was launched in March, and the pension plan puts social investment screens on all its portfolios, Mr. Antonsson said.

The PBGC is asking the court overseeing United Airlines' Chapter 11 bankruptcy reorganization to postpone a potential trial on the carrier's motion for authority to terminate its pension plans, according to court documents. Parent UAL Corp. is asking the U.S. Bankruptcy Court in Chicago to approve a voluntary distress termination of the plans. A trial is slated to begin May 11 if United cannot reach agreements with its labor groups. The agency is asking the court to consider its motion at a hearing April 22.

Attorneys for the PBGC argued in the motion, filed April 14, that UAL's termination motion "is premature" and that the court must determine that terminating the plan would be integral to the company's paying all its debts and continuing business outside of bankruptcy. The agency's filing said the court "cannot make that determination until United is much closer to emerging from bankruptcy."

The SEC is again being challenged on the legality of its 2004 regulation requiring hedge fund investment advisers to register under federal securities laws. Hedge fund Opportunity Partners and Kimball & Winthrop, its investment adviser and general partner, sued the SEC in the U.S. Court of Appeals for the District of Columbia after filing a similar lawsuit in the federal district court in Washington on Dec. 21.

CalPERS' 457 Deferred Compensation Program plans to add an automatic rebalancing feature, probably within the next six months, according to Martin Walters, program manager for the $420 million plan. Fund officials are considering expanding the plan's investment options to offer active domestic small-cap, midcap and large-cap value equity options. If the program does add the value options, Mr. Walters said it will use managers that already have a relationship with the $183.6 billion CalPERS defined benefit plan.

Frank Pfeffer will join M.D. Sass Investors Services May 1 as a senior vice president and director of institutional marketing, said Martin D. Sass, chairman and CEO. It is a new position. Mr. Pfeffer will focus on marketing the firm's alternatives strategies, including distressed securities, private equity and hedge funds. Mr. Pfeffer left UBS Asset Management in November; he was the head of institutional business for the U.S. UBS spokesman Peter Casey said the position is being filled by Kai Sotorp, head of UBS Global Asset Management in the Americas, on an interim basis.

The $700 million AFSCME Pension Plan urged the SEC to deny American International Group use of the self-registration procedure to register new securities because of the company's disclosure deficiencies. The pension fund wants AIG to use the longer, more complete disclosure.

In a letter to Alan Beller, director of the SEC's division of corporation finance, Gerald W. McEntee, chairman of the AFSCME fund and president of AFSCME, wrote: "The company has lost more than 28% of its value in the past two months and has already missed its required annual filing deadline twice. Shareholders deserve as complete a disclosure as possible in the forthcoming period. AIG needs to be as transparent as possible." Joe Norton, AIG spokesman, couldn't be reached for comment.