Sonesta to freeze DB plan, match 401(k) contributions

BOSTON — Sonesta International Hotels Corp., Boston, will freeze its defined benefit plan to all of its U.S. employees effective Dec. 31, and begin matching contributions up to 4% of employees' earnings to its 401(k) plan, according to an SEC filing. The company currently doesn't make any 401(k) contributions. Defined benefit participants will continue to be eligible to receive a benefit provided they meet the five-year vesting requirement, but the amount of all benefits will be frozen at the Dec. 31, 2006, level.

Sonesta officials expect the decision will cap the retirement plan cost at the level of its outlays for the current year.

Sonesta's defined benefit plan had $19.7 million in assets and its 401(k) plan, $7.7 million, both as of Dec. 31, 2005, according to the Money Market Directory.

ST. PAUL, Minn. — The St. Paul Pioneer Press Guild Pension Plan committee employer members are seeking a court order to appoint an arbitrator to break a deadlock with union committee members over a proposal to freeze the pension plan to current employees, according to a guild news release.

Parent company MediaNews Group, Denver, had total plan pension assets of $85.9 million, according to its most recent 10-K filing. No breakout was available for the St. Paul plan, which covers members of the Minnesota Newspaper Guild Typographical Union.

Employer members proposed the freeze last December and have been unable to reach an agreement with union members, the release said. The plan has a $22 million shortfall, according to a published report. Spokeswoman Pat Effenberger declined to comment further.

Union executive officer Darren Carroll did not return calls for comment. MediaNews Group President Jody Lodovic was not available for comment at press time.

PHILADELPHIA — The Philadelphia Public Employees' Retirement System terminated Ark Asset Management from a $120 million active domestic large-cap growth equities because of performance, said Christopher McDonough, CIO of the $4.5 billion plan. Jay Mermelstein, Ark's COO, was not immediately available for comment. Fund officials plan to select a replacement in February.

DEARBORN, Mich. — Ford Motor Co., Dearborn, Mich., contributed $900 million to its global defined benefit pension plans during the first nine months of the year, according to an SEC filing. Ford plans to contribute an additional $500 million in the fourth quarter. The company had an estimated $41 billion in defined benefit assets at the end of 2005, according to Pensions & Investments data.

LONDON — British Airways PLC, London, plans to make a one-time £800 million ($1.52 billion) contribution to its £6 billion New Airways Pension Schemes by April, following an agreement reached Nov. 15 with plan trustees, confirmed John Birch, secretary to the pension plan. The plan has a £2.1 billion deficit. British Airways contributed £235 million to the plan in 2005, which has been closed to new members since 2003.

FRANKFORT — Kentucky state Treasurer Jonathan Miller last week urged the $14.1 billion Kentucky Teachers' Retirement System and the $14 billion Kentucky Retirement System, to divest eight companies with investments in the Darfur region of Sudan. In Nov. 15 letters to KTRS Executive Director Gary Harbin and KRS Executive Director William Hanes, Mr. Miller, a member of the KTRS board of trustees, identified the companies as: Bharat Heavy Electricals, China Petroleum and Chemical Corp., Nam Fatt Oil & Natural Gas Co., PECD Berhad, PetroChina Co., Sudan Telecom Co., Tatneft OAO and Videocon Industries Ltd.

They "have demonstrated little or no interest in changing their activities or helping to improve the welfare of the Sudanese people. Because of their close ties to the brutal, unpopular Sudanese regime, they also pose serious long-term investment risks to their shareholders," Mr. Miller said in his letter.

Mr. Miller he intends to introduce a resolution at the Kentucky teachers board meeting Dec. 18 to encourage the plan to "monitor its holdings and stay aware of the research being done by our colleagues to determine if there are other bad-actor companies to add to the list above that should require our divestment."

Neither Mr. Harbin nor Mr. Hanes was available for comment at press time.

LOS ANGELES — The Los Angeles City Employees' Retirement System earned a 12% return on investments for the year as of Nov. 13, said Dan Gallagher, CIO of the $10.2 billion system. Funded status improved to 83.1% as of June 30 from 79.3% the year before.

HONOLULU — The Hawaii Employees' Retirement System earned a 10.7% return on its investments for the year ended Sept. 30, said Kimo Blaisdell, CIO at the $10.2 billion system. That compares with 10.8% for the system's composite benchmark. For the three months ended Sept. 30, the system returned 3.63%, compared with 3.81% for the benchmark, he said. The lags were due to underperformance by domestic equity holdings, Mr. Blaisdell said. The fund has 43.1% of assets in domestic equities.

LOS ANGELES — Metropolitan West Asset Management will become totally employee-owned, acquiring the one-third minority stake held by partner Metropolitan West Financial, said Scott Dubchansky, CEO of MetWest Asset. Terms of the transaction, expected to close in the first quarter of 2007, were not disclosed. Bryan Whalen and Mitchell Flack, both portfolio managers, along with Joe Hattesohl, CFO, will become partners of MetWest Asset, bringing the total number of active partners to 10.

The new ownership structure will give the fixed-income firm greater flexibility to increase ownership participation and create new partnerships, including subadvisory relationships, Mr. Dubchansky said. For now, there are no plans to hire staff, nor are there any partnerships in the works, he added.

MWAM had $18.2 billion in assets as of Oct. 3, which included $3 billion in net new accounts won since the start of the year in the firm's structured products and liability-driven investment strategy.