At Deadline

Rep. Benjamin L. Cardin, D-Md., introduced the Pension Preservation and Savings Expansion Act April 28. The legislation, designed to help employees save more for retirement and have more control over their savings, would repeal the Roth 401(k) plan. Mr. Cardin changed his mind about Roth 401(k) plans, scheduled to take effect next year. Mr. Cardin now feels there is no need for the plans.

His proposal would permanently expand the SAVERS credit for low- and moderate-income workers and make it refundable; it's due to expire next year.

The bill also would protect from non-discrimination rules employers that automatically enroll all their workers in retirement plans; direct the Labor Department to offer guidance on appropriate default investments for employee contributions; and allow workers to automatically direct tax refunds into their IRAs.

Assets under management at Alliance Capital Management, Old Mutual Asset Management and Franklin Resources increased in the first quarter.

Alliance's AUM rose just less than 10% to $534 billion; Old Mutual's were up 5.4% to $194.5 billion; and Franklin's were up only fractionally, to $412.1 billion.

Sears Holdings Corp. will stop making contributions to the old Sears defined benefit plan Dec. 31, and employees will stop accruing benefits at that date, said spokesman Bob Carr. The company, formed by the merger of Sears, Roebuck and Kmart earlier this year, will increase matching contributions to its 401(k) plan; size of the plan was not available.

Mr. Carr said part of the reason for the change is to be competitive with the "best-in-class" competitors, many of which do not offer defined benefit plans. He also cited market volatility related to plan funding and worker interest in plans that are portable.

Major U.S. money managers say CEOs of big U.S. companies are overpaid, and they want directors to be held personally liable for serious financial improprieties, according to a survey on corporate governance conducted by Pearl Meyer & Partners, executive compensation consultants. The respondents favored, by 66%, proposals allowing easier shareholder nomination of directors.

The 88 respondents, from firms with a median $38 billion in assets under management, also "expressed widespread dissatisfaction with both the state of governance in corporate America and the cost to shareholders of compliance with Sarbanes-Oxley and other recent reforms," according to a Pearl Meyer statement.

Among the findings: 75% of respondents said the average CEO pay of $10.5 million at major companies is too high; 59% opposed golden parachute arrangements, which provide executives with financial protection in the event of a corporate takeover; 98% said directors should be accountable for certain financial irregularities; and 60% rated earnings per share among the least useful barometers of company and CEO performance.

U.S. pension plans, foundations and endowments posted negative investment returns in the first quarter, according to data in the Northern Trust universe of more than 300 institutions with combined assets of $390 billion. Private plans posted a median 1% loss in the first quarter; public funds posted a median 0.9% loss; and foundations and endowments posted a median 0.3% loss. About a quarter of foundation and endowment plans managed to eke out modest gains.

"Domestic equities had a rough quarter," Joe Nardulli, product manager, Northern Trust Investment Analytical Services, said in an interview. "That had a lot to do with higher oil prices and rising interest rates. I'm sure inflation fears also hurt the performance."

Higher allocations to private equity helped some foundations and endowments reach positive return territory in the quarter.

For the year ended March 31, ERISA plans returned a median 7.4%, public fund plans returned 7.7%, and foundation and endowment plans returned 7.9%.

Bryan Weeks was named president of Silver Creek Capital Management. It is a new position. Mr. Weeks was managing director of Russell Investment Group's institutional relationship management team. Silver Creek has $3.7 billion in assets under management.

Missouri Gov. Matt Blunt has signed legislation eliminating the Administrative Law Judge and Legal Advisors Retirement System. The pension plan was rolled into the $6 billion Missouri State Employees' Retirement System, said Jessica Robinson, Mr. Blunt's press secretary. The law, which took effect ass soon as it was signed April 26, removed a loophole that allowed some lawmakers and appointees to increase their pensions by serving briefly on commissions. The "outdated" system "was a waste of taxpayers' money," Ms. Robinson said.

Newland named interim head

Robert D. Newland was named interim executive director of the $6.7 billion Indiana State Teachers' Retirement Fund. He will replace William E. Christopher, who retired on April 29. Mr. Newland will remain CIO. "The thought is they (the board) want me to try this (new) position for a month or two, and if it works out, I'll be made executive director," he said. There hasn't been discussion about whether or how he would be replaced as CIO, he said.

Seven of the largest employer groups urged lawmakers not to approve hikes in PBGC premiums; the increases are included in the federal fiscal 2006 budget outline drafted by the House of Representatives.

In an April 26 letter to House and Senate members, the groups said the premium increase — $18 billion over the next five years — is effectively a tax increase of more than 240%. "Premium increases of this magnitude are an unprecedented and unjustified tax on America's defined benefit plans," according to the letter. "Rising and uncertain premiums will cause employers to exit the pension system, eroding the retirement security of American workers and threatening the ongoing vitality of the defined benefit system." The letter was issued by the American Benefits Council, the ERISA Industry Committee, the American Society of Pension Professionals and Actuaries, the Business Roundtable, Committee on Investment of Employee Benefit Assets, Financial Executives International and the National Association of Manufacturers.