The U.S. Supreme Court today gave multiemployer pension plans more time to collect a proportionate share of a plan's unfunded liability from employers who quit the plan.
In Bay Area Laundry and Dry Cleaning Pension Trust Fund vs. Ferber Corp. of California Inc., the high court ruled that the statute of limitations for multiemployer plans to sue employers for withdrawal liability does not begin to run until the employers miss a scheduled payment.
The plan sued in February 1993 to collect missed withdrawal liability payments of $45,570.80 from Ferber. But two lower courts ruled the plan waited too long to sue and that the six-year statute of limitations had expired.
But the Supreme Court allowed the lawsuit because the plan could not sue until Ferber failed to make its first withdrawal liability payment. The court ruled the fund could collect all but the company's first payment, which was missed just over six years before the suit was filed.
Montgomery County Employees' Retirement System, Rockville, Md., terminated Lazard Freres as manager of a $90 million large-cap U.S. stock portfolio and reallocated the money to existing portfolios, including Lazard's non-U.S. equity allocation, said Julie Dellinger, executive director of the fund.
Lazard will manage an additional $15 million in non-U.S. stocks, boosting that portfolio to $90 million. The system also gave $15 million to J.P. Morgan, a core bond manager, which now has $210 million. The other $60 million went to Systematic Financial, a core value U.S. stock manager, which will now run $145 million for the $1.6 billion system.
Lazard's U.S. portfolio was terminated because its three-year and nine-year performance lagged its benchmarks for the periods ended June 30, Ms. Dellinger said. The firm outperformed its benchmarks over five years.
Bill Butterly, vice president of legal affairs with Lazard Freres, said the firm generally doesn't comment on such matters.
California Public Employees' Retirement System's staff is recommending the investment committee of the $124 billion Sacramento-based system approve $325 million in partnership commitments today.
Some $200 million is recommended for Active Value Fund Managers Ltd., which would make significant investments in a small number of U.K. public companies and become active in corporate governance. Also, $75 million is recommended for Exxel Capital Partners V, a buyout fund concentrating on Argetina and Brazil; $25 million to Technology Partners Fund VI, an information processing, communications and health care fund; and $25 million to Technology Ventures II, an information technology venture cap fund.
RoProperty Services, a subsidiary of Dutch investment company Rodamco, signed a definitive agreement to acquire RREEF Funds, a pension fund real estate manager with $8 billion under management. Terms were not disclosed. RREEF will continue to operate under its current name and will make its own investment decisions.
