The State of Michigan Investment Board approved a recommendation to remove Oakmark Equity and Income Fund from the 401(k)/457 plan investment manager lineup of the $77.7 billion Michigan Retirement Systems, East Lansing, confirmed Ron Leix, spokesman for the state treasurer's office.
The Michigan Department of Treasury, Bureau of Investments, made the recommendation to remove the Oakmark fund, which was approved at the board's March 19 meeting, because more participants now allocate their money to target-date funds, according to board documents.
In its recommendation, the bureau noted that the Oakmark balanced fund, managed by Oakmark Funds, invests in both stocks and bonds. While these types of funds were at one time used to provide a one-choice diversified portfolio option, today much more defined contribution plan assets use TDFs as the one-choice diversified portfolio option, the bureau said.
Moreover, participants would pay lower management fees and could earn higher returns with an alternative allocation, according to the recommendation.
As of Dec. 31, the Oakmark fund held about $117 million in participant assets, board documents show.
The state's 401(k) plan had $6.8 billion in assets and its 457 plan had $1.9 billion in assets as of Dec. 31, according to board documents.
A representative from Oakmark could not immediately be reached for comment.
