NORWALK, Conn. — The Financial Accounting Standards Board on Oct. 10 approved clarifications on valuing assets in inactive markets under Financial Accounting Statement 157 on fair-value measurements, said Christine L. Klimek, communications manager. The clarifications also offer further guidance on how to value the assets.
The board received more than 100 comment letters on the proposed clarifications, she said.
WASHINGTON — Locally administered pension plans were funded just as well as state-administered plans and had funding strategies that were as good as or better than state plans, according to a new Center for State and Local Government Excellence issue brief.
In a comparison of 2006 data from 84 local plans with data reported in the 2006 Public Fund Survey prepared by the National Association of State Retirement Administrators and the National Council on Teacher Retirement, the aggregate funding ratio for the local plans was 85% and 84% for the state plans.
Local plans had a better track record of making their required contribution, with 69% making the contributions vs. 54% of the state plans.
“The results presented in this brief are surprising. Based on press accounts, our expectation was that locally administered plans would be significantly less well funded than those administered by the state. This expectation did not prove to be correct,” wrote co-authors Alicia H. Munnell, Jean-Pierre Aubry and Kelly Haverstick of the Center for Retirement Research at Boston College. However, with recent economic troubles, “state and local governments are under greater pressure in 2008 than in 2006, so funding levels may have deteriorated,” they wrote in the brief for the Washington-based center.
The brief “The Funding Status of Locally Administered Pension Plans,” is available at http://tinyurl.com/thefundingstatus.
WASHINGTON — The percentage of all workers participating in employment-based retirement plans was 41.5% in 2007, up from 39.7% a year earlier, according to an EBRI study.
Among full-time workers ages 21 to 64, 55.3% were in an employment-based plan in 2007, up from 52.7% the previous year, according to a news release on the study issued by the Employee Benefit Research Institute, Washington.
Other findings in the study were:
• 63.9% of workers ages 55 to 64 were in a retirement plan in 2007, compared to 28% of workers ages 21-24;
• 57% of full-time female workers participated in a plan in 2007, compared to 54% of male workers; and
• Florida had the lowest representation of workers participating in plans in 2007, at 42%. Wisconsin had the highest participation rate, at 68%.
The study is available on EBRI’s website, http://www.ebri.org.
NEW YORK — Quadriserv Inc., a provider of market data, technology and transaction solutions to the securities lending industry, has reached an agreement with Options Clearing Corp. to operate a centralized securities lending platform pending regulatory approvals, according to a spokesman.
Options Clearing will provide clearinghouse services for all securities lending transactions submitted through Quadriserv’s electronic, centralized Automated Equity Finance Markets, or AQS, securities lending platform for domestic equities, according to a Quadriserve news release.
LONDON — At least six U.S. and European pension providers surveyed by Mercer LLC offer pan-European services, including investment, administration, communications and plan management services.
Of 25 pension providers surveyed, five expect to introduce a pan-European pension service within the next year and eight others plan to offer similar services in the next two to three years, according to the survey.
Pan-European pension services “are seen to provide a number of benefits — competitive advantage in attracting staff, support for multinational benefit policies and a vehicle for helping to coordinate the move to defined contribution pensions,” Barry Mack, head of Mercer’s pan-European pensions task force, said in a news release about the survey.
Results of the survey, which also included interviews with 80 officials from multinational companies based in the U.S. and Europe, also revealed that legislation, lack of provision, tax and “overcomplication” kept more companies from setting up PEP platforms.
Mr. Mack could not be reached by press time for further information.
LONDON — Asset management representatives reacted mostly positively to the Oct. 8 announcement that the U.K. government will make up to £500 billion ($866 billion) available to bail out banks, including up to £50 billion to partially nationalize major banks.
Richard Buxton, head of U.K. equities at Schroders, wrote in an e-mailed statement that bailout the package, along with the coordinated effort by the British and other central banks to lower interest rates, were good news “that, together, could potentially mark the turning point in the current crisis.”
He wrote that the package “provides the necessary backstop” while leaving banks “with some role to play in determining how much they borrow, in what form, and to what extent there is appetite from existing shareholders to help with the recapitalization process.”
“It’s definitely a positive for the wider market,” said Simon Pryke, head of global research at Newton Investment Management in London. “I don’t think what’s going on is particularly good news for shareholders.”
“But shareholders are the lowest in the capital structure and probably the ones to bear the responsibility for investments gone bad,” said John Velis, head of capital markets research for Europe at Russell Investments in London.
Mr. Pryke said it’s too early to say whether the bailout will be beneficial to long-term investors years from now.
Mr. Velis also said other countries will follow the U.K.’s lead in nationalizing the banks.
“Even the U.S. is going to have to suspend its free-market ideology to allow the government to buy into banks,” he said.
