At Deadline

Delta Air Lines pilots represented by the Air Line Pilots Association International are opposing a May 24 PBGC filing seeking to reject a bankruptcy agreement between the Atlanta-based airline and the ALPA, according to a union news release.

Delta last month tentatively agreed to pay ALPA $650 million to settle the termination of the pilots' pension plan, according to court documents. But the PBGC claimed in its motion that the agreement could violate federal law. According to the PBGC filing with the U.S. Bankruptcy Court in New York, the payment to active pilots would essentially favor current employees over retirees, which is "explicitly prohibited by ERISA" and "usurps PBGC's exclusive claim for the total amount of unfunded benefit liabilities."

The ALPA has recommended that the pilots ratify the agreement, according to the release. ALPA spokeswoman Kelly Collins was not available for comment at press time.

The $35 billion Los Angeles County Employees' Retirement Association terminated Schroder Investment Management from a $295 million active Pacific Basin equity portfolio, said Juan M. Almaguer, principal investment officer. Nik Ekholm, Schroder spokesman, did not return requests for comment by press time.

The money will be transferred to an EAFE index portfolio, now at $3.6 billion, run by Barclays Global Investors. Association officials will review the fund's international equity strategy within the next few months and searches may follow, Mr. Almaguer said.

The $8.2 billion Oklahoma Teachers' Retirement System hired Advisory Research and Epoch Investment Partners to run $250 million each in active domestic all-cap equities, pending contract negotiations, said Tom Beavers, executive secretary. It is a new asset class for the system. The move was made for diversification; funding will come from a general rebalancing, Mr. Beavers said. Consultant gregory.w.group assisted.

Fixed-income net inflows increased to $40 billion for the year ended March 31 from $6 billion for the year ended March 31, 2003, according to a new report from Casey Quirk & Associates. Despite the increase, the median fixed-income manager surveyed returned 4.1% for the past year, compared with 11.9% in 2003.

The increased flows were largely to core-plus strategies, followed by long-duration ones. Core fixed income suffered net outflows, and U.S. equity inflows declined.

The Pennsylvania Public School Employees' Retirement System, Pennsylvania State Employees' Retirement System and two other state funds reached a $23 million cash settlement with Time Warner, its AOL LLC unit, auditor Ernst & Young LLP, and other parties over an allegation that the firms issued misleading financial data that artificially inflated Time Warner and AOL stock prices when the two companies merged in 2001, according to a statement from the state funds.

The $57.1 billion PennPSERS will receive the largest portion of the settlement, $17.4 million. The balance will go to the $29 billion PennSERS, the $1.9 billion State Workers' Insurance Fund and the Tobacco Settlement Investment Board.

Susan Duffy, vice president-corporate communications at Time Warner, said in a statement: "The company has not admitted any wrongdoing in connection with this settlement, but is pleased to have put this securities litigation behind it so it can focus on running its business."

Pension funds of Southern Co., Delta Air Lines, U.S. Bancorp, R.R. Donnelley & Sons and Hewlett-Packard had the best returns among the 100 largest pension funds for the year ended Dec. 31, according to estimates by FutureMetrics.

The $6.1 billion Southern fund returned 16.1%; the $6.5 billion Delta fund, 15.97%; the $2.4 billion U.S. Bancorp fund, 15.46%; the $2.7 billion Donnelley fund, 15.39%; and the $4.7 billion Hewlett-Packard fund, 15.25%, according to a FutureMetrics report.

FutureMetrics, an economics research and forecasting firm, estimated returns for more than 700 corporate pension funds, listing them by name.

The British government on May 25 outlined proposals on how it would tackle long-term pension reform, including plans to establish a portable National Pensions Savings Scheme by 2012. According to a government statement, the NPSS would be a non-departmental public body with administration, servicing and fund management outsourced to private contractors.

Members will be able to choose their investment options or be enrolled into a default fund. The government will decide whether to allow members to open accounts through the NPSS or allow branded pension providers to offer accounts directly to individuals.

Through the NPSS, employees would be automatically enrolled in individual accounts and contribute 3% of salary; employers would contribute 4%, and the government, 1%. Up to 10 million people who don't have access to an occupational pension plan are likely to participate in this new fund.

Pensions Minister John Hutton also announced proposals to change the official retirement age to 68 by 2044.

The Canton of Zurich Pension Fund in July plans to invest 2% of its 19.4 billion Swiss franc ($16 billion) plan in an indexed commodities strategy, said Daniel Gloor, head of asset management. The investment will be increased to 4% by the end of 2007. The strategy, which will probably track the Dow Jones AIG Commodity index, is intended to hedge against inflation and further diversify the fund's overall portfolio, Mr. Gloor said. The fund also will increase its private equity exposure to 4% of assets from about 1% by 2009, he said. Funding for both strategies will likely come from cash.

Kevin SigRist was named deputy executive director of the $153 billion Florida State Board of Administration. The title is new, replacing that of CIO; David Villa resigned as CIO to join the $83.1 billion State of Wisconsin Investment Board as CIO.

Mr. SigRist is chief of enterprise risk management and investment services at the Florida board; that position is expected to be filled internally in a few weeks.

Asset Management Finance will extend financing to Opus Capital Management for an 11-year period in exchange for a specified percentage of the money manager's gross revenue during that time, said Norton Reamer, AMF president and CEO. Terms of the deal were not disclosed.