CHICAGO — The Roman Catholic Archdiocese of Chicago is freezing its pension plan on June 30 and enhancing its defined contribution plan, confirmed Chris Cannova, associate director of human resources. The archdiocese will start making contributions to its $80 million 403(b) plan based on participants’ ages to target-date funds; contributions will range from 1.25% of salary for employees between 21 and 36 and up to 11.55% of salary for employees who are 65. It also will start automatic enrollment on Jan. 1.
It will continue to match participant contributions at 50 cents on the dollar up to 4% of salary.
The pension plan had $454.6 million in assets as of June 30, 2006, the most recent numbers available.
New Mexico to get $16 million from settlement with AOL
SANTA FE, N.M. — New Mexico reached a $16 million settlement on behalf of the state’s two pension systems and its investment council in its lawsuit over America Online’s 2001 acquisition of Time Warner Inc., confirmed Paul Nixon, deputy communications director for New Mexico Attorney General Gary K. King.
The state opted out of a class-action suit against America Online in 2005 and brought an independent legal action the following year on behalf of the $15 billion New Mexico State Investment Council, $13.1 billion New Mexico Public Employees Retirement Association and $9.3 billion New Mexico Educational Retirement Board. The suit claimed that AOL stock had traded at inflated values because of a misstatement of financial information at the time of the Time Warner acquisition.
The investment council will receive $6.8 million of the settlement; its original loss was $39.8 million, said Charles Wollmann, public information officer for the council. The public employees fund will get $4.6 million, 17% of the original loss, said Robert Gish, CIO of the fund. The educational board is receiving $4.5 million; it lost $26.2 million, said Mr. Wollmann.
Oklahoma law hikes teacher plan contributions
OKLAHOMA CITY — Oklahoma Gov. Brad Henry signed a bill on May 7 that will increase state contributions to the $9 billion Oklahoma Teachers’ Retirement System, Oklahoma City. The legislation will increase contributions to 9.5%, from 7.85%, bringing the system’s funding level to about 80% by 2026 from 49% currently.
The law, which goes into effect Jan. 1, will generate roughly $60 million in additional state contributions within four years, said Tom Beavers, executive secretary of the fund. “This is the biggest improvement for the retirement system in 30 years,” he said.
CalPERS to consider manager renewals
SACRAMENTO, Calif. — CalPERS staff recommended renewing the contracts of its three external high-yield managers — Highland Capital Management, PIMCO and Nomura Asset Management — for another 12 months, according to a staff memo to the board.
As of March 31, Highland ran $226.4 million for the fund; PIMCO, $218.2 million; and Nomura, $218.5 million. Further details about the existing contracts could not be learned at press time. The board of the $241.7 billion California Public Employees’ Retirement System was scheduled to vote on the recommendation at its May 14 meeting.
Sudan divestment bill awaits Hawaii governor’s nod …
HONOLULU — Hawaii Employees’ Retirement System will be required to divest investments held in companies that do business in Sudan or with the Sudanese government, or support it, if a bill sent to Gov. Linda Lingle becomes law. The bill would go into effect on July 1.
The bill stipulates the $10.9 billion fund must identify “companies in which it has direct holdings” in Sudan within 180 days of passage. The fund would then be required to send those companies a written notice to cease their Sudan-related business activities and “sell, redeem, divest or withdraw all publicly traded securities of the company within 18 months” if the companies do not comply.
If the fund loses at least 50 basis points as the result of divestment in those companies, it can stop further divesting.
The fund estimates it has $37 million invested directly in those companies, said David Shima-bukuro, fund administrator.
… as Indiana chief gives approval to similar action
INDIANAPOLIS — Indiana Gov. Mitchell E. Daniels Jr. signed Sudan divestment legislation into law May 3.
The law requires the $16.3 billion Indiana Public Employees’ Retirement Fund and $8.8 billion Indiana State Teachers’ Retirement Fund to contact companies with business ties in Sudan and request that they cease those activities; unresponsive companies would have to be divested.
