Northrop merges 3 plans
Northrop Grumman Corp. is merging three of its defined benefit plans: the Northrop Grumman pension plan, the company's largest plan with more than $11 billion in assets; the Electronic Sensors & Systems Division plan, with about $800 million in assets; and the salaried portion of the pension plan of Vought Aircraft Co., with about $500 million in assets.
Albert Myers, treasurer, said "this change will not in and of itself cause any change in managers with whom the funds are invested."
State Street Bank & Trust Co. is the master trustee for all three plans.
The merger will eliminate $80 million a year in contributions that were being made to the ESS plan.
Richard Waugh, chief operating officer, said merging the pension plans would improve cash flow and reduce operating costs in future years.
ERIC defends cash balance
The ERISA Industry Committee is asking the IRS to ignore letters from several lawmakers urging a moratorium on determination letters for cash balance pension plans and other hybrid plans. In a July 19 letter to IRS Commissioner Charles O. Rossotti, the group noted that the development of cash balance plans and other innovative hybrid plans have revived the faltering defined lawmakers' claims that such plans violate age discrimination laws are false.
CalPERS sets financing
The $155 billion California Public Employees' Retirement System has arranged a $50 million permanent financing for the Capitol Square Office Complex in downtown Sacramento, said Brad Pacheco, fund spokesman. CalPERS owns the 3.88-acre complex, which is fully leased on a triple net basis to the State of California under a 30-year lease-purchase agreement.
Ontario teachers in deal
Ontario Teachers' Pension Plan Board, Toronto, and Ven Growth Investment Fund have completed a private financing for Algorithmics, a provider of enterprise risk management software for financial institutions.
The funding was in the form of a loan with warrants convertible into common shares of the company on a 1: 1 basis. The initial drawdown will be C$35 million (U.S.$23 million) and the actual number of warrants to be issued will depend on Algorithmics' future valuation.
NYC splits indexing
The New York City Deferred Compensation Plan has restructured its $1.8 billion portfolio of passively managed indexed equities in order to diversify, said Lou Porpora, contracts supervisor for the $3.5 billion fund.
Vanguard Group, which previously managed the entire index portfolio in an S&P 500 strategy, has been reduced to $600 million from $1.8 billion. The remaining $1.2 billion was divided between Barclays Global Investors and State Street Global Advisors, with each getting around $600 million to invest in S&P 500 index funds, Mr. Porpora said.
PNC acquiring record keeper
PNC Bank Corp. will acquire the Investor Services Group from First Data Corp. for $1.1 billion in cash. ISG will be rolled into PNC's investment servicing subsidiary, PFPC Worldwide.
The combined organization will provide fund accounting services for $287 billion in mutual fund assets, serve more than 20,000 retirement plans and provide transfer agent services for 33 million shareholder accounts.
First Data officials said they sold the unit to concentrate on electronic commerce and electronic payment solutions.
Reports out
United Asset Management Corp. lost a net $2.7 billion in account business in the second quarter ended June 30, the lowest outflow since the first quarter of 1997, according to Norton Reamer, UAM chairman and chief executive officer.
UAM reported negative net client cash flow of $4.3 billion the same time last year, and $6.7 billion in the first quarter ended March 31.
Due to the loss in business, UAM's net income was down 33%June 30 compared with the same period last year, with revenue also drooping 14%compared with the year-earlier period.
Across the street, the Affiliated Managers Group Inc. reported a 37%increase in net income compared to the same period last year, and a 26%increase from the first quarter.
During the second quarter, AMG closed its acquisition of The Managers Funds LLC, which had $1.7 billion in total assets in 10 mutual funds.
PBGC widens efforts
PBGC is expanding its efforts to find nearly 10,000 "missing participants" with more than $19 million in uncollected pension benefits. The federal pension insurance agency announced it has added more information to its Internet listing of the search program, including the last known addresses of pensioners, and is offering tips for retirees to collect their unclaimed pensions.
The Internet address for the PBGC program is search.pbgc.gov.
Fund launched
EFG Hermes has launched the EFG Hermes Middle East & Developing Africa Fund with initial capital of $30 million.
Hermes Investment Management, which has no affiliation to EFG-Hermes, will be the anchor investor for the fund.
EFG Hermes will be responsible for Middle Eastern and North African investments, while Emerging Markets Investors will act as subadviser on developing African markets.
Singapore alliance set
State Street Bank & Trust and Development Bank of Singapore struck an alliance to provide services to the unit trust marketplace in Singapore. State Street will provide unit trusts registered in Singapore with global custody and fund accounting services. The Development Bank will provide trustee, administration and registrar services.
Castellani promoted
Frederick C. Castellani will assume the helm of MassMutual Retirement Services. He was head of the division's sales.
Robert W. Kumming will become the new head of sales.
Mr. Castellani's promotion to senior vice president of MassMutual Retirement Services came after his predecessor, John V. Murphy, executive vice president, was given increased responsibilities at Massachusetts Mutual Life.
Mullen joins Putnam, Lovell
Francis T. Mullen has joined Putnam, Lovell, de Guardiola & Thornton as the head of equity sales and trading, a new position. He was a managing director for institutional sales at ING Barings. Putnam Lovell is expanding its institutional equity sales and trading business.
