PITTSBURGH — U.S. pension plans’ funding level declined by 3.4 percentage points in February, according to Mellon Financial’s pension liability indexes. The funded status of pension plans had been improving in recent months, the decline in the stock markets last week helped drive down the value of assets, said David Chittim, senior vice president at Mellon Asset Management. The value of assets declined by 0.1% last month, while liabilities increased 3.3%. The increase in liabilities was driven by a 30- to 35-basis-point drop in interest rates.
For the first two months of the year, the typical funded status of a pension plan has declined by one percentage point.
Oklahoma Tobacco trust shifts to fixed income from equities
OKLAHOMA CITY — Oklahoma Tobacco Settlement Endowment Trust, Oklahoma City, decreased its equity allocation to 45% of assets from 55% and increased its fixed-income allocation to 45% from 35%, confirmed James Wilbanks, director of revenue and fiscal policy for state Treasurer Scott Meacham.
The changes are designed to boost returns, he said. The assets will be reallocated to the fund’s existing managers.
The $323 million trust fund, which invests Oklahoma’s share of the National Tobacco Settlement, has the remaining 10% of its assets invested in a market-neutral hedge fund managed by Franklin Portfolio Associates.
New England Pension Consultants assisted.
Goldman Sachs quarterly assets under management up 6.4%
NEW YORK — Goldman Sachs reported $719 billion in assets under management for its fiscal first quarter, ended Feb. 28, up 6.4% from the previous quarter and up 26% from a year before, according to a company filing. For the quarter, the largest increases in assets were in the fixed-income and money market businesses. Fixed-income assets rose 7.6% to $213 billion, while money market assets were up 9.3% to $129 billion. For the year, fixed-income assets were up 29%, while equity assets jumped 27% to $230 billion and alternative assets grew 24% to $147 billion.
Ohio plans reach $144 million settlement with Time Warner
COLUMBUS, Ohio — Five Ohio pension funds and the Ohio Bureau of Workers Compensation fund, all in Columbus, will share a net $144 million settlement with Time Warner Inc. over a 2003 lawsuit that claimed the value of AOL stock was inflated before the 2001 AOL-Time Warner merger, Ohio Attorney General Marc Dann said. Mr. Dann said Ohio funds would have received only $9 million if it taken part in the class-action lawsuit against the company. A separate lawsuit against Ernst & Young, Time Warner’s accounting firm, is pending.
The $67.9 billion State Teachers Retirement System of Ohio will receive $66.6 million; the $73.6 billion Ohio Public Employees Retirement System, $62.3 million; the $18.9 billion workers compensation fund, $8.9 million; the $11.2 billion Ohio Police & Fire Pension Fund, $4.2 million; the $10.3 billion School Employees Retirement System of Ohio, $2.5 million; and the $753 million Ohio Highway Patrol Retirement System, $290,778.
A call to Time Warner was not returned by press time.
The $149 billion California State Teachers’ Retirement System, Sacramento, reached a $105 million settlement with Time Warner in February.
Rhode Island sets Shenkman adrift for performance
PROVIDENCE, R.I. — Employees’ Retirement System of Rhode Island terminated Shenkman Capital Management, which ran $135 million in high-yield bonds, for underperformance, said Peter Kerwin, spokesman for state Treasurer Frank Caprio, who oversees the $7.9 billion system.
Shenkman consistently failed to meet Rhode Island’s performance requirements since the firm was hired in mid-2002, according to a news release from Mr. Caprio’s office.
In the release, Mr. Caprio said the termination was in line with a campaign promise he made to conduct a “top-to-bottom analysis of the management of the state pension fund” and — with the fund’s high-yield allocation falling to 7.5% from 15% of its fixed-income portfolio — gives Rhode Island the opportunity to proactively limit its exposure to “this particular high-risk asset class.” A decision on where to allocate the $135 million will be made after the review of the pension fund is completed, according to the news release.
An official at Shenkman who declined to be identified said no one at the firm would comment.
St. Louis City Schools ups global TAA to 10%
ST. LOUIS — St. Louis Public School Retirement System increased its target allocation to global tactical asset allocation to 10% from 8% and trimmed core global bonds to 10% from 12%, confirmed Andrew Clark, executive director for the $1.1 billion pension fund. He was not able to provide further comment at press time.
