A PBGC audit of the four United Airlines pension plans taken over by the agency in 2005 “did not exercise due professional care in their work,” according to a review by PBGC Inspector General Rebecca Anne Batts.
Also, the PBGC didn't “properly oversee the work and failed to identify or follow up on errors and omissions in the work,” Ms. Batts wrote in a July 20 letter to Rep. George Miller, D-Calif.
In her letter, Ms. Batts also said the “issues surrounding the inadequate plan asset audits were so significant that additional, more detailed evaluation is warranted.”
Mr. Miller, in a letter sent July 23 to PBGC Director Joshua Gotbaum, said the asset audits are “crucial” because they are used to calculate the benefits of the participants in plans the agency takes over.
“I urge you to work with the (Office of Inspector General) to determine the scope and severity of the problem and to properly hold accountable any contractor (including suspension of such contractor) or employee who failed to execute their duties in the manner consistent with the requirements of the law,” Mr. Miller wrote in his letter to Mr. Gotbaum.
Jeffrey Speicher, a PBGC spokesman, said the agency had just received Mr. Miller's letter and had no immediate comment.
When the PBGC took over the UAL plans, they were underfunded by $9.8 billion, and only $6.6 billion of that was guaranteed, according to an April 22, 2005, agency news release.
Ford Motor contributed $400 million to its worldwide pension plans in the second quarter while the New York Times contributed $87.5 million to “certain” defined benefit plans and Continental Airlines, $40 million.
In the first quarter, Ford contributed $500 million worldwide, according to its 10-Q issued May 7. For 2010, Ford expects to contribute $1.5 billion to its worldwide plans, the 10-Q said.
The New York Times might make additional contributions this year, depending on cash flows, pension asset performance, interest rates and other factors,” the company's news release said. It did not elaborate.
Continental contributed an additional $38 million this month, according to its latest earnings report released July 22.
The $8.5 billion Oklahoma Teachers' Retirement System added a new, 5% allocation to core-plus real estate, said James Wilbanks, executive secretary.
Funding will come from domestic equities, which have a target allocation of 53%, Mr. Wilbanks said. It's not yet decided if any managers will be terminated or if the funding will come from rebalancing.
There is no timeline yet on when the fund will search for a real estate manager. The move is part of the system's asset allocation review, which began about 18 months ago, Mr. Wilbanks said.
BT should not be allowed to raise its wholesale prices to help fill its £9 billion ($13.2 billion) pension deficit, U.K. communications regulator Ofcom said.
After an eight-month consultation with BT's competitors, the regulator concluded that it had “not received compelling evidence from stakeholders which would justify a change” in fees, according to an Ofcom news release.
Ofcom will continue to review the question of whether BT should be able to hike rates to cover the deficit in the £32 billion BT Pension Scheme, London, through the end of the year.
Blackstone Group said fee-earning assets under management rose 8% in the second quarter to $101.4 billion, driven by a 17% gain in the credit and marketable alternatives business, which houses Blackstone's hedge funds-of-funds business, according to Bloomberg.
Fee-related earnings in that unit, Blackstone's largest by AUM, rose 37% to $34.6 million as management fees increased, the firm said July 22 in a statement.
Overall net fee-related earnings from Blackstone operations rose 24% to $107.9 million. The firm declared a quarterly dividend of 10 cents a share.
Also, Janus Capital Group said its assets under management fell 11% in the second quarter, to $147.2 billion, but were up 11% from a year earlier.
Net outflows from Janus' INTECH unit, which had totaled $9.2 billion in the previous three quarters, slowed to $1.5 billion in the quarter ended June 30, the company said in a statement.
Some 75% of defined contribution plans for which Vanguard is record keeper offered target-date funds in 2009, and 42% of those plans' participants invested in them, according to a Vanguard survey.
Vanguard's annual survey noted a dramatic increase in target-date fund offerings. In 2004, the first year the Vanguard survey tracked target-date funds, 13% of Vanguard client plans had target-date funds and 11% of eligible participants invested in them.
Charles Conrad, CEO of the $4.5 billion Alameda County Employees' Retirement Association, is retiring, according Marguerite M. Malloy, the system's associate counsel. His official retirement date has not been set.
Efforts to reach Mr. Conrad were unsuccessful.
The commitment represents 5% of the $1.6 billion plan's overall portfolio and is the plan's first hedge fund-of-funds allocation.
The move is part of the plan's revised asset allocation, which reduced its core fixed-income allocation by 4.5 percentage points to 17%. Earlier this year, core fixed-income managers Loomis Sayles and Neuberger Berman, which ran $77 million each, and NCM Capital Management, which ran $31 million, were terminated to fund the hedge fund-of-funds allocation, Mr. Hutt said. Summit Strategies assisted.
The $129.7 billion CalSTRS plans to sell its majority stake in 120 Broadway, a lower Manhattan office tower and national historic landmark co-owned by developer Larry Silverstein, according to Bloomberg.
The property is known as the Equitable Building, according to CB Richard Ellis Investors, the pension fund's real estate adviser.
The combined value of U.S. employer-sponsored retirement plans in eight industries, as measured by percentage of pay employers are contributing, declined 19% to 6.36% from 7.88% of pay for the 10-year period ended Dec. 31, 2008, according to an analysis by Towers Watson.
A 53% drop in the value of defined benefit plans fueled the overall decline, with DB contributions slipping to 1.99% of pay from 4.19% in 1998. That decrease was somewhat offset by a 38% increase in defined contribution plan value, with contributions rising to 3.99% of pay in 2008 from 2.89% in 1998.