The California government's withholding of $910 million in employer contributions to the California Public Employees' Retirement System was declared unconstitutional last week by Judge John Lewis in Sacramento Superior Court.
In a written decision, the judge said Gov. Pete Wilson and other state officials must transfer overdue contributions to the fund and pay 8.75% in interest for the period the money was withheld.
Prudential Asset Management Group consolidated three of its investment management units into a money management firm, Prudential Global Advisors.
The firm will manage the investments of Prudential Fixed Income Advisors, Global Advisors and Prudential Investment Advisors. John Werring and Len Santoro, CEO and CIO, respectively, of Prudential Fixed Income, will have the same positions in the new firm.
Tom Piskula, head of Investment Advisors, will continue heading institutional money market investments. Ruth Putney, CEO of Global Advisors, will become a consultant to the firm, and Nick Sargen, Global Advisors' CIO, will leave to join a private banking firm.
The 11 billion Belgian franc ($340 million) Voorzorgskas voor Geneesheren, Tandartsen en
Apothekers vzw, Brussels, is overhauling its portfolio to boost international equities to 44% of assets from nothing by the end of 1995. Domestic bonds will shrink to 30% from 75%, while domestic equities will decline to 16% from 20% and Belgian real estate will double to 10%.
In the first stage of the diversification, the Belgian pension fund for doctors, dentists and pharmacists picked five managers to run a total of 1.8 billion francs in European and North American equities.
Hired for European stocks were Gartmore Capital Management for a large- and midcap portfolio, and Framlington Investment Management for mid- and small-cap equities. Hired for stocks in North America were Sanford C. Bernstein, value; Jennison Associates, growth; and Denver Investment Advisors, mid- and small-cap with a growth bias.
Assets were taken from a 7.5 billion franc Belgian bond portfolio managed by Dewaay, Servais & Cie.
Pragma Consulting assisted.
A constitutional amendment was to go into effect last week in Oregon that will radically change the funding mechanism for the state's $17.3 billion public employees' retirement system.
Results of a recount on the vote over the amendment, still uncertified Dec. 8, showed the controversial initiative was leading by a margin of 705 votes out of more than 1.2 million cast. The final vote was to be certified Dec. 9.
The amendment requires the state's nearly 140,000 employees to pay a 6% pension contribution, which previously was picked up by the state. The measure also prohibits public agencies from raising salaries to compensate for the loss in wages, prevents the public employees' system from guaranteeing an assumed rate of return on investments in contracts and eliminates the application of unused sick leave to enrich benefits at retirement.
The 950 million ($1.48 billion) Lothian Regional Council Superannuation Fund, Edinburgh, hired Royal London Asset Management to run the pension fund's 47 million real estate portfolio, said Alan George, head of administration.
The portfolio previously was managed by Donaldsons & Sons. Hymans Robertson assisted.
Trustees of the $16 billion Virginia Retirement System voted Dec. 1 to convert its wholly owned real estate development company, RF&P Corp., to a private real estate investment trust.
The conversion allows the retirement system to sell undeveloped land owned by the company without incurring a hefty federal tax bill. By converting to a trust, the tax liability is shifted to outside investors.
The Pension Benefit Guaranty Corp. signed an agreement with Ampex Corp. and its corporate parent N.H. Holding Inc. in anticipation of a proposed corporate restructuring.
In the agreement, N.H. Holding Inc. and its affiliates will be responsible for Ampex's pension plans if Ampex cannot support them in the future.
Ampex's two pension plans are underfunded by $84 million, a PBGC statement said.
The Wayne County Employees Retirement System, Detroit, hired Abacus Financial Group to manage a $30 million domestic core bond account and Strong/Corneliuson Capital Management for a $100 million domestic fixed-income account. The assets are part of the $870 million defined benefit plan for county employees.
In its first dedicated commitment to high-yield bonds, the $720 million Houston Municipal Employees Pension System hired Loomis Sayles to run $50 million, according to David L. Long, executive director.
Kamal Duggirala has been named president of BARRA, the investment technology company. He succeeds Richard Grinold, who left BARRA to work for Wells Fargo Nikko. Mr. Duggirala, director of BARRA's equity trading unit, will continue in that capacity until a replacement is found.
David Hargrave, head of pensions and employee benefits at Bacon & Woodrow, London, will leave the actuarial firm in the spring to set up a specialized actuarial consulting firm. A successor has not been named.
The new firm will focus on projects for corporate, political and union organizations.