Few in the pension industry — or the broader investment management industry for that matter — have had as long and varied a career as Kenneth L. Holmes.
In a career spanning more than 50 years, Mr. Holmes has been an officer of major Wall Street firms, a chief investment officer and/or chief executive officer of major investment management firms, a consultant to the Labor and Treasury departments, and, more recently, a pension consultant.
As might be expected, he has accumulated some pretty strong opinions about various sectors of the industry, opinions backed by that experience. He views the demise of defined benefit plans as a tragedy caused by mismanagement at many levels: legislative, corporate, actuarial, consulting and investment management among them.
"When George Buck developed a way to fund defined benefit plans, the idea was to earn a reasonable rate of interest and with that to pay a reasonable benefit with a reasonable contribution," Mr. Holmes said in an interview. "But we have had to deal with the conflicting interests of the government and its taxes, corporations and their earnings, and individuals. Those conflicts haven't been properly resolved."
As a result, he sees the continuing decline of defined benefit plans in the private sector. "Nothing can save them," he said, although they may continue in the public sector.
Mr. Holmes began his career as a trainee at Merrill Lynch in 1955, after obtaining an MA in literature at Duke University, and later was national institutional sales manager.
In 1970 he joined Donaldson, Lufkin & Jenrette, and later became a founder and member of the management committee of the subsidiary that became Alliance Capital Management. At Alliance he was responsible for state and local government pension business and hired the late Ray Lillywhite, the dean of state fund administrators, who had revamped pension management at state pension systems in Utah, Minnesota and Ohio.
Later Mr. Holmes was instrumental in the establishment of the Lillywhite Award, presented each year by the Employee Benefit Research Institute to individuals who have contributed significantly to American workers' retirement income security.
In 1973 he was a founder of Holmes Clark and Morong, one of the first investment management boutiques that were springing up to challenge the trust banks for the management of pension assets. The firm managed midcap growth stocks and fixed income and built assets to more than $1 billion before splitting up.
During the '70s, Mr. Holmes was a consultant to the Labor Department on investment matters relating to ERISA and to the Treasury Department on matters dealing with the Glass-Steagall Act.
Later he was chief investment officer at banks in New England and Delaware, and since 1993 has been a pension consultant with the Peirce Park Group in West Chester, Pa.
But after more than 50 years in the business, much of it constantly on the road consulting with clients, Mr. Holmes has decided to retire. "He will be missed...his wealth of knowledge added greatly to the depth of our organization," said Michael W. Shone, president, Peirce Park Group. "In the late 1990s when the market was going gangbusters, he warned it couldn't continue. He said: ‘I've seen this before, the Nifty-Fifty in the late '60s,' and he was right."
Mr. Holmes plans to continue to watch and comment on developments in the pension and investment management field. His wisdom and experience will be missed not only by his colleagues at Peirce Park, but also by the pension industry.
