NEW YORK - The Manhattan & Bronx Surface Transit Operating Authority Pension Plan is studying indexing, said Anthony Patten, deputy director-payroll and pension services and secretary of the $315 million fund.
"It's a topic of some interest," he said. "There is a concern about active managers not being able to beat the market. We will visit the issue (of indexing) to see if it adds anything to the process. I'm not saying we will change."
Callan Associates is assisting with the study.
The plan has seven managers, all active, and is invested 50% in U.S. equities, 15% in international equities and the rest in fixed income.
Montana faces huge
hike in contribution
HELENA, Mont. - The state of Montana might be required to increase its funding of the Montana Judges' Retirement System to 36% of salary as opposed to the 6% it now contributes to the fund, if proposed legislation is passed, said Linda King, administrator of the Montana Retirement Board.
The board oversees the judges' system and proposed the legislation.
The legislation would make the state responsible for paying the system's unfunded liabilities instead of requiring additional funding from district court fees, which now contribute 38% of salary. Employee contributions would remain at 7% of salary. If passed, the legislation would become effective July 1, 1997.
The judges' system has $26.5 million in assets. The unfunded liability was $1.89 million as of June 30, 1994 (the most recent data available).
The state has always been responsible for the liability, but so far has not met its obligation, Ms. King said.
The proposal has been approved by an interim committee and will come before the Legislature during the next session in January.
drops bond manager
SEATTLE - The $550 million University of Washington endowment dropped Wedgewood Capital Management, said Susan Ball, senior associate treasurer.
It was running $6 million in domestic fixed income.
The proceeds are being placed with an interim fixed-income manager she declined to name. Fund officials haven't decided whether to do a search for another manager; they could make a decision by early fall.
Cambridge Associates is assisting with the change.
Fayez Sarofim re-hired
by Louisiana fund
Sarofim manages $165 million for the fund.
Other finalists in the search were IDS, Chancellor and MacKay-Shields.
James Wood, executive director, said the system will select finalists in a private market fund-of-funds search this month for a placement of up to $150 million. Hiring is expected to follow in October, he said.
Houston seeks manager
for Asia ex-Japan
HOUSTON - The Houston Municipal Employees Pension System will soon issue RFPs to about 10 to 12 managers to invest in Asia outside Japan and Australia.
The $915 million fund expects to hire one manager to run approximately $30 million, said Executive Director David Long. The hiring should take place in November.
Assets will come from a rebalancing within the fund's international equities area, but the fund does not expect any terminations to occur.
Wilshire Associates is assisting in the search.
2 firms' assignments
changed by Kmart
TROY, Mich. - Kmart Corp.'s $1 billion defined contribution plan, changed the mandates of Federated Investors and Putnam Investments, its two stable value fund managers, said Thomas O'Rourke, portfolio manager.
The firms, which each run about $50 million, will run synthetic GIC portfolios instead of short-term bond portfolios. Mr. O'Rourke wanted to lengthen the maturity of the portfolios to intermediate.
J.P. Morgan was selected as the wrap provider.
Bricklayers to add
1 manager, drop 1
WASHINGTON - The Bricklayer & Trowel Trades International Pension Fund plans to add a fifth equity manager and drop one of four bond managers for the $850 million fund, according to David Stupar, executive director.
The planned changes follow an asset allocation study and manager review.
The fund uses Ark Asset Management and Lazard Freres for both stocks and bonds. Other stock managers are RCM Capital and Columbia Partners. Nicholas-Applegate and Miller, Anderson & Sherrerd manage bonds only.
Mr. Stupar declined to say which bond manager might be dropped.