The Connecticut State Employees Retirement Commission will delay legal action against TIAA-CREF, former bundled provider of the state's $1 billion 403(b) plan, $1.5 billion 457 plan and $300 million 401(a) plan, said Thomas Woodruff, director of retirement and benefit services. Mr. Woodruff said the state is trying to resolve the dispute with TIAA-CREF without going to court. The commission said TIAA-CREF did not map assets to options offered by ING, the plan's new provider. TIAA-CREF officials contend its contract prevented the firm from mapping without participant approval.
The PBGC took over four defined benefit plans sponsored by Kaiser Aluminum & Chemical, a subsidiary of Kaiser Aluminum, and two from Venture Holdings, confirmed PBGC spokesman Gary Pastorius.
The four Kaiser plans have combined assets of $20.1 million and liabilities of about $29.6 million, according to PBGC estimates. The agency expects to be liable for $2.7 million of the shortfall.
The Venture plans had $12.5 million in assets and $24.9 million of liabilities, and the agency will cover "substantially all" of the shortfall, said Mr. Pastorius. The company, which filed for Chapter 7 bankruptcy, liquidated its assets and no purchaser was willing to assume the two plans, Mr. Pastorius said. The plans were terminated in 2004.
Stichting Pensioenfonds ABP plans to add new allocations of €4 billion ($5.17 billion) each to global infrastructure and "innovative" strategies, as well as increasing its existing private equity and hedge fund allocations, as part of the fund's new three-year investment strategy, said Roderick Munsters, CIO of the €209 billion pension fund.
Global infrastructure will be a separate asset class. The innovative-strategies money will be used to incubate "promising new investment ideas," said Tom Steenkamp, director of allocation and research.
ABP's private equity allocation will increase by one percentage point to 5% of assets, and hedge funds will be increased to 5% of assets, from 3.5%. Funding will come from reducing real estate exposure by one percentage point to 9% of assets, and cutting international equity by two percentage points to 32% of assets. The plan also increased indexed fixed income to 7% of assets from 4% of assets. It decreased its overall bond portfolio to 40% of assets from 44%. Convertibles remain at 2%.
As part of the new strategy, the plan will categorize its asset classes into two portfolios according to their risk-return profiles. The change was made to more closely link the management of assets and liabilities and optimize the investment management of both portfolios, Mr. Steenkamp said.
R. Dean Kenderdine was named executive director of the $35.4 billion Maryland State Retirement & Pension System, according to Anne Budowski, spokeswoman for the system. Mr. Kenderdine has been interim executive director of the system since Thomas K. Lee left Sept. 5 to become deputy executive director of the $90 billion New York State Teachers' Retirement System.
Stichting Pensioenfonds PGGM will commit €250 million ($323 million) to Albright Capital Management, a long-term global emerging markets specialist manager formed by former U.S. Secretary of State Madeleine Albright. The move is not only part of the €81 billion pension fund's strategy to increase its emerging markets exposure, but also further integrates investment decisions with the United Nations Principles of Responsible Investments.
The $9 billion Oklahoma Teachers' Retirement System is making several changes to its equity portfolio, said Tom Beavers, executive director. It will add $92 million to an active domestic large-cap growth equity portfolio managed by Chase Investment Counsel, bringing it to $192 million, and $87 million to an active domestic large-cap growth portfolio run by Sawgrass Asset Management, bringing it to $187 million. It will also add $48 million each to active domestic all-cap equity portfolios run by Advisory Research and EPOCH Investment Partners, bringing them to $298 million each.
Funding comes from reducing active international equity portfolios run by Brandes Investment Partners by $150 million, leaving it with $520 million, and Capital Guardian Trust and Causeway Capital Management by $62.5 million each, leaving them with $400 million and $300 million, respectively. The plan will also reduce active domestic midcap equity portfolios run Wellington Management, Frontier Capital Management, Aronson+Johnson+Ortiz and Hotchkis & Wiley Capital Management by $25 million each, leaving them with roughly $325 million each.
The changes are being made to keep in line with the fund's target allocations, Mr. Beavers said. Consultant gregory.w.group is assisting.
Fund officials also placed Goldman Sachs Asset Management on "notice," a more closely scrutinized status than its previous "alert" status, because of personnel changes, Mr. Beavers confirmed. GSAM manages a $450 million active domestic large-cap growth equity portfolio for the fund. Fund officials also put Smith Group Asset Management on alert because of the "disappointing" performance of a $200 million active domestic small-cap growth equity portfolio. John Brim, portfolio manager for Smith Group, was not available for comment.
New American Century CEO
Jonathan S. Thomas will become president and CEO of American Century Investments on March 1, said spokesman Chris Doyle. Mr. Thomas replaces William M. Lyons, who is retiring. Mr. Thomas is an executive vice president and CFO.
Callan Associates lost a motion to dismiss a lawsuit accusing it of conflicts of interest, according to documents filed Jan. 11 in U.S. District Court in Chicago. The lawsuit was filed on behalf of Patrick Patt, a participant in the $39 billion Illinois Teachers' Retirement System. The suit claims Callan collected fees from investment managers attending seminars hosted by the firm at the same time it was seeking, evaluating and recommending those managers for the Illinois fund. A trial date has not been set. Nancy Malinowski, Callan spokeswoman, declined to comment.
Outflows from 401(k) plans will reach nearly $300 billion in 2007, according to predictions in a Cerulli Associates report. Outflows will widen by upward of 15% each year, signaling that defined contribution plan providers need to focus on capturing asset rollovers.