New York State Gov. George E. Pataki said he would look at Comptroller H. Carl McCall's proposal to provide a permanent 3% cost-of-living adjustment for retirees when the retirement fund yields 10%. Mr. McCall, the sole trustee of the $78 billion New York Common Retirement Fund, Albany, discussed his proposal last week during a legislative conference.
``One of the things that I want to be careful about,'' said Mr. Pataki, ``is that we don't assume that because in the 1996-'97 fiscal year we had more than 8% increase in revenue that will continue in the future.''
Mr. McCall successfully sued Mr. Pataki in 1995 when the governor raided a pension account to balance the state budget.
United Asset Management increased assets under management by $28.9 billion in 1996 despite a $3.3 billion drop in client cash flow. UAM assets grew to $171 billion from $142.1 billion. The asset losses did not hurt revenue thanks to higher-fee assignments replacing lower-fee ones, a company statement said.
Annual revenue grew 20% to $883.3 million from $734.4 million at year-end 1995. Of the new assets, $11.8 billion was gained through acquisitions - including international managers OSV Partners, Clay Finlay and Rogge Global Partners - and another $17.1 billion through internal asset growth among the 45 UAM affiliates.
Aided by smart currency market allocation and stock selection, the median manager in the non-U.S. equity universe of InterSec Research nearly doubled the performance of the MSCI EAFE index for the year. InterSec's median manager returned 12.4%, compared with EAFE's 6.3% rise, the consulting firm's data show.
InterSec said most managers' underweighting to the Japan market added value, as did stock selection generally. Managers achieved returns well above index levels in Japan and Germany.
Overall returns in Europe were ``generally very good,'' InterSec reported. In Europe, InterSec's median manager posted 25.4% for the year, compared with -11.4% in Japan, 18.9% in the Pacific Basin excluding Japan and 5.1% in emerging markets excluding Malaysia.
The House Subcommittee on Employer-Employee Relations will hold a hearing tomorrow that will examine ways federal pension law can be improved.
The hearing will address four areas: improving worker education; increasing portability of defined contribution and defined benefit plans; expanding coverage of defined contribution and defined benefit plans; and analyzing pension reforms of the 104th Congress.
Separately, House Subcommittee Chairman Harris Fawell, R-Ill., and ranking member Donald Payne, R-N.J., expect to write President Clinton requesting a national summit on pension reform.
The London Borough of Sutton Superannuation Fund hired M&G Investment Management to manage a £64 million ($105 million) global balanced portfolio, said George Walmsley, head of corporate finance.M&G replaces CCLA Investment Management.
Mr. Walmsley said trustees of the £126 million ($207 million) fund were not dissatisfied with CCLA but had decided to switch to a more aggressive benchmark.
Watson Wyatt Partners, Reigate, assisted.
The University of Massachusetts endowment fund, Boston, committed $1.5 million to a western Massachusetts-focused venture fund managed by Kestrel Venture Management, said Robert Lyons, executive director of the fund.
The hiring is part of a newly created 5% allocation to alternative investments for its $55 million endowment fund.
Fund executives will consider using commodities under the alternatives commitment, but no decisions have been made, he said.Prime Buchholz & Associates is assisting.
The Attleboro (Mass.) Municipal Contributory Retirement System, with more than $28 million in assets, received regulatory approval to invest $1 million in international stocks with Smith Barney, its first international stock manager, said Alison Ellsworth, the Segal Advisors consultant who assisted with the hiring.
Earl White was named director of pension administration for Consolidated Edison, New York. He will oversee investment management of the $7 billion in the company's pension, 401(k) plans, retiree health funds and the nuclear decommissioning trust.
He replaces John Bell, assistant treasurer, who retired.
Mr. White had been a manager-trust investments with the Public Service Electric and Gas Co., Newark, N.J., for 23 years. The company is seeking his replacement