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Illinois Lawmakers Introduce Bill Barring Pensions From Investing In Trump’s Wall

Illinois Democrats this week introduced a bill that would bar the state’s pension funds from investing in any company that gets a contract to work on president-elect Donald Trump’s still-hypothetical “Wall”. The Wall, one of the cornerstones of Trump’s campaign, seems less likely to happen lately. But if construction does ...
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401(k) Nepotism: Menu-Setters Show Favoritism Towards Own Funds, Says Study

Do 401(k) service providers show favoritism towards their own mutual funds when setting investment menus? This is the question that three researchers – Clemens Sialm, Irina Stefanescu and Veronika Pool – sought to answer in a new paper published in the Journal of Finance. The short answer, according to the paper, is that setting a 401(k) menu is ...
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California Lawmakers Pass Divisive Private Equity Transparency Bill

The California state legislature has passed a controversial bill, formally called AB 2833, which aims to improve reporting and disclosure of fees paid by public pension funds to private equity firms and hedge funds. The bill awaits Gov. Jerry Brown’s signature. The bill has been championed for months by State Treasurer John Chiang; but observers ...
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Columbia, Four Other Schools Latest To Be Hit With ERISA Suits; Could Signal “Race to Courthouse”

The wave of ERISA lawsuits against top schools’ 401(k) and 403(b) plans continued rolling this week. The University of Pennsylvania, Johns Hopkins University, Vanderbilt University and Emory University were slapped with lawsuits early this week; more recently, Columbia University joined the fray on Wednesday. The Columbia suit was, notably, brought ...
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Top Universities Sued Over 401(k) Fees; Duke Latest to Be Hit With Suit

Lawsuits have been filed against New York University, MIT and Yale for alleged high-fee options in the schools’ 401(k) plans. The three class-action suits, each filed by employees of the schools, allege breach of fiduciary duty for imprudent, high-priced investment options. As of Thursday morning, Duke University was hit with a similar suit. [Read ...
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CalPERS Returns 0.6% in Tumultuous FY 15-16

The portfolio of the U.S.’ largest pension fund returned 0.6% in fiscal year 15-16, marking CalPERS’ worst return since 2009 and the second consecutive year of underperformance relative to its 7.5 percent discount rate. From Reuters: Speaking at a CalPERS meeting, Chief Investment Officer Ted Eliopoulos said performance for the year was driven ...
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NJ Supreme Court: No Contractual Right to COLAs

The New Jersey Supreme Court on Thursday sided with Chris Christie and ruled that state employees had no contractual right to cost-of-living adjustments. Christie in 2011 signed a law that froze pension COLAs for state workers, prompting a lawsuit that ended today. From Bloomberg: New Jersey Governor Chris Christie and the Legislature acted legally ...
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U.S. Treasury Rejects Central States’ Benefit Cuts

The U.S. Treasury Department on Friday rejected the Central States Pension Fund’s proposal to cut member benefits by as much as 50 percent. Renowned mediator Kenneth Feinberg made the decision. Here’s why Fienberg rejected the plan, according to the Kansas City Star: In a 10-page letter to the pension fund, Feinberg said it failed on three tests. The ...
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CalSTRS CIO Ailman: 2 and 20 Model Is “Dead”

CalSTRS CIO Chris Ailman spoke to CNBC during a lull at the Milken Institute Global Conference on Monday. The interview featured an interesting tidbit: Ailman indicated that the two and 20 model – the traditional fee structure for alternative investments – is “dead”. Watch the interview above. From CNBC: To find yield in the current low-interest-rate ...
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New York City’s Largest Pension To Exit Hedge Funds

The New York City Employees Retirement System (NYCERS) voted on Thursday to liquidate its hedge fund portfolio, according to a trustee. The pension fund currently has 3 percent of its total assets allocated toward hedge funds. More from Reuters: The board of New York City’s largest public pension fund voted on Thursday to stop future investments ...
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