A massive snowstorm that swept through the Midwest and East Coast Tuesday and Wednesday kicked in contingency plans for pension funds and money managers.
The $10.2 billion Illinois State Board of Investment, $8.3 billion Chicago Public School Teachers' Pension and Retirement Fund, both in Chicago, and the $7.3 billion Missouri State Employees Retirement System, Jefferson City, all operated under off-site contingency plans.
“This is a disaster, so we are operating accordingly,” said William R. Atwood, executive director of the Illinois State Board, who was working from home. “ISBI has adopted a disaster recovery plan, contemplating any number of potential disasters and the necessity of working remotely.”
ISBI closed its office early Tuesday and was closed all day Wednesday, Mr. Atwood said.
“This morning I actuated the disaster recovery plan” Mr. Atwood said. “Among other things, this gives us a chance to work in a disaster recovery environment, work out whatever kinks there are, and determine what works and what doesn't. So far, so good … we had our regularly scheduled staff meeting, via teleconference, at 9 a.m. We are able to remotely access our relevant systems, work with our custodian, communicate with retained investment professionals, and monitor the portfolio.”
The Chicago Teachers plan closed its office Tuesday and remained shuttered Wednesday, but plan employees are working off site.
“We are working from home, which is seamless with being in the office as investment staff have laptops that (are) also their work computer when in the office,” said Kevin R. Huber, executive director, working from home. “We are able to remote into our systems if needed and obviously can access any website of the respective managers.”
The snowstorm has had “no significant impact” on investment operations at the Missouri Employees plan, said Executive Director Gary W. Findlay, noting that “any critical activity can be handled remotely by staff, thanks to technology.”
“I closed the office at noon yesterday because conditions were becoming extremely hazardous,” he said when contacted at his home. “I think a good indication of the severity of the situation is the fact that Interstate 70 was shut down from St. Louis to Kansas City. As I understand it, this is the first time that had ever happened.”
The Missouri plan's office is closed Wednesday “since ground transportation is next to impossible because of snow drifts,” Mr. Findlay said.
“Tomorrow we should be back to business as usual with the office in full operation.”
“I think it would be a mistake to overstate the degree to which this was a problem,” even though the office was closed, Mr. Findlay said. “I'm confident that most major retirement systems have business continuity plans that provide for alternative arrangements for conducting business. This (snowstorm) really did not create any significant obstacles.
“It's obviously much more convenient when we are able to all be together but we also know a lot about being flexible.”
The $641 million St. Louis City Employees' Retirement System was closed all day Tuesday and employees were permitted to come into the office two hours late on Wednesday because of the snowstorm, said Robert Parks, human resources assistant, who made it into the office.
Richard R. Frank, secretary of the system and director of personnel, couldn't be reached for comment.
At Ariel Investments, Mellody R. Hobson, president, said she put the Chicago-based firm's disaster program into effect Wednesday.
“We have told (staff) not to come into the office and work from home,” unless they live within walking distance and choose to do come into the office, Ms. Hobson said.
However, Ariel's operations “are fully up and running,” Ms. Hobson said. “About three-fourths of our people have laptops provided by the firm,” enabling them to work from home, Ms. Hobson said.
“It's business as usual,” Ms. Hobson said, although Ariel canceled meetings today.
Ms. Hobson and Merrillyn J. Kosier, executive vice president and chief marketing officer-mutual funds, live close to work and were in the office Wednesday.
Cheryl Cargie, Ariel's head trader, was also working in the office Wednesday. She stayed in a hotel in the same building as Ariel's offices last night, so trading operations could continue as normal, Ms. Hobson said.
In such an emergency, Ms. Hobson said, “Our system forces us to affirm we are all OK,” through a series of e-mails and phone calls to each employee, requiring a response.
“We were hunting down six or seven people out of 80” who hadn't responded,” Mr. Hobson said, but all were later found to be safe.
In addition, call volume from other investment-related professionals is down considerably, especially from the Midwest and East Coast, including New York and Boston, also affected by bad weather, Ms. Hobson said.
“The only calls coming through are from the West Coast,” Ms. Hobson said.
She said she has gotten only three calls Wednesday morning, when normally she would have had at least 20 calls.
At Fidelity Investments, based in Boston, Vincent Loporchio, spokesman, said, “It's been essentially business as usual.”
“We have a large number of employees in the office today,” Mr. Loporchio said. But the firm also has employees who are working remotely because of difficulty in getting into the office.
“We have business contingency plans in place that enable us to continue to service our customers regardless of weather conditions,” Mr. Loporchio said.