News Briefs

SPRINGFIELD, Ill. — The $34.9 billion Teachers' Retirement System of the State of Illinois approved a new domestic equity structure. Active domestic equity managers J&W Seligman, which handled $286 million in small-cap to midcap growth, and Advisory Research, which ran $88 million in large-cap value, were terminated for performance. Neither Rebecca Shroyer, a J.&W. Seligman spokeswoman, nor Brien O'Brien, chief investment officer of Advisory Research, returned calls by press time seeking comment.

Also, the following target allocations for active domestic equity managers were increased at the system's Dec. 8 meeting, said Jon Bauman, executive director:

Turner Investment Partners and Voyageur Asset Management each will manage $775 million in large-cap growth, up from $433 million and $473 million, respectively. Funding will come from reductions in large-cap value equities, including Bear Stearns which was terminated in November from a $747 million account.

Great Lakes Advisors will manage $181 million in large-cap value, up from $88 million. Funding will come from terminating Advisory Research.

Thompson, Siegel & Walmsley will manage $233 million in small-cap value, up from $216 million. Funding will come from terminating other managers or reducing their portfolios.

Small-cap growth managers Emerald Advisors and Batterymarch each will manage $233 million, up from $202 million and $204 million, respectively. Mazama Capital will manage $109 million in small-cap growth, up from $57 million. Funding will come from terminating other managers or reducing their portfolios.

Also, Ariel Capital Management's active domestic small-cap to midcap value portfolio will be reduced to $194 million from $451 million. Ariel was on the plan's automatic watchlist for performance reasons.

Callan assisted in restructuring the domestic equity portfolio.

DETROIT — General Motors Corp. is temporarily freezing contributions to its $20.3 billion 401(k) plan beginning Jan. 1, said Robert Herta, spokesman.

GM will suspend its 401(k) match, currently 20 cents for each $1 up to 6% of pay, Mr. Herta said. The company had already cut its contribution to 20 cents from 50 cents in April. "This is a temporary situation, and we will monitor the business outlook to determine when to reinstate the match," he said.

GM is also no longer requiring 401(k) participants to invest in its common stock fund. "We're always looking at how we can improve flexibility for employees," he said.

The plan is administered by Fidelity Investments and offers 68 investment options. Mr. Herta declined to say if GM has plans to alter the investment lineup.

HONOLULU — Aloha Airlines' plan to terminate its four defined benefit plans as part of the airline's Chapter 11 bankruptcy reorganization was approved Dec. 15 by a federal court judge, said Stu Glauberman, Aloha Airlines spokesman. Judge Michael Seabright's ruling in U.S. District Court in Honolulu rejected an appeal filed by the Pension Benefit Guaranty Corp.

The PBGC will assume responsibility for Aloha's pension obligations after the airline terminates them. PBGC spokesman Jeffrey Speicher could not be reached for comment.

Aloha Airlines CEO David Banmiller said the company intends to emerge from bankruptcy protection as soon as possible, according to Mr. Glauberman. Mr. Banmiller has not yet specified a date.

Aloha Airlines has $281 million in pension assets, according to the Money Market Directory. Aloha and parent company Aloha Airgroup Inc. filed for bankruptcy protection on Dec. 30, 2004. Mr. Glauberman did not have updated asset information.

LONDON — U.K. corporate pension plan sponsors will pay about £575 million ($1.02 billion) into the government's Pension Protection Fund next year, nearly twice the amount originally estimated, according to proposals announced Dec. 16 by PPF officials.

Plan sponsors are expected to pay a total of about £150 million into the PPF for the year ended March 31, 2006, based on a flat-rate levy. Contributions for the 2006-2007 fiscal year had been expected to total £300 million. The increase was due to changes in factors such as life expectancy. The result is higher levies based on liabilities and deficit risks for about 8,500 U.K. defined benefit pension plans, said Rob Jones, communications officer for the PPF.

The levy, which is set to kick in on April 1, 2006, will be capped at 0.5% of a pension plan's liabilities.

"The initial proposal was said to be ‘cost-neutral,' but with today's announcement, the PPF is effectively acknowledging that it will be adding to the cost of (running) pension schemes," Stephen Yeo, senior consultant at Watson Wyatt Worldwide, said in a telephone interview. "As we know, pension schemes are not awash with money ... so this will have some adverse effect."

NEW YORK — A group of retired Delta Air Lines Inc. pilots have filed a class-action lawsuit against the Atlanta-based carrier in an attempt to force the airline to make contributions to its pension plan for pilots, according to court papers. The Delta Pilots' Pension Preservation Organization, with about 2,600 members, filed the suit Dec. 14 in U.S. Bankruptcy Court in New York, where Delta's Chapter 11 bankruptcy protection case is pending. The group is seeking to "compel Delta to comply with its obligations to make contributions to its tax-qualified pilot pension plan," according to the filing.

The airline "will respond though the court process at the appropriate time," Delta spokesman Anthony Black said in an e-mail.

The group of retired pilots filed a motion in Delta's bankruptcy case in September seeking to force the company to make required pension plan contributions. U.S. Bankruptcy Court Judge Prudence Carter Beatty denied that motion in October. The ruling, which the retired pilot group is appealing, allowed Delta to forgo a $160 million required pension contribution in October. Delta had just more than $7 billion in defined benefit pension assets as of Sept. 30, according to data the airline supplied to Pensions & Investments.