News: 2005 4th Quarter

A major US corporation with a market capitalization in the top half of the S&P500 and its labor unions negotiated to establish a retiree medical plan. The board of trustees of that plan hired IFS in September 2005 as its ongoing investment consultant.

The board of trustees of another collectively bargained, retiree medical fund hired IFS as its ongoing investment consultant. The fund is designed as a "voluntary employee beneficiary association" or VEBA. This is the third retiree medical fund which IFS advises.

The Asian Development Bank hired IFS to advise the National Social Security Fund of the People's Republic of China on its legal framework and governance. Based in Beijing, the Social Security Fund is currently valued at approximately $24 billion and is solely an "asset side" investment program; responsibility over processing and payment of benefits lies elsewhere. The Fund is designed to close the gap between pensions promised to employees of state owned enterprises versus the assets available to pay them.

MOSERS hired IFS to conduct a fiduciary performance review of the Board's governance and investment program compared to best practices.

The City of Oakland PFRS hired IFS to complete a comprehensive Operational Review and evaluation of its governance and management structure.

PERS Nevada hired IFS to review its investment programs with a focus on the investment police statement, asset allocation, investment management structure and investment performance.

The board of trustees for these Funds hired IFS to examine the structure, costs and trading practices of its existing consulting and brokerage "wrap" program.

IFS recently completed its comprehensive Operational Review of the governance and investment program of the Montana Board of Investments. IFS is now assisting the Board with implementation of certain enhancements the Board decided to adopt.

IFS recently completed its evaluation of the investment consulting and brokerage services provided to the Children's Hospital.

IFS recently completed its assignment as independent fiduciary to United Pension Plans, responsible for seeking to collect unpaid pension contributions.

IFS recently completed its evaluation and report on the fixed income portfolio of a multi-billion dollar, national Taft Hartley fund.

IFS recently submitted its report proposing policies and procedures related to the Fund's involvement in securities litigation matters regarding securities in its investment portfolio.

IFS recently completed its re-evaluation of the proposed merger of Hibernia with Capitol One Finance and instructed the Plans' trustee how to vote the proxies associated with participant shares.

In the article titled "Indictment of ex-trustee sparks outrage and questions at plan", Samuel W. "Skip" Halpern, executive vice president, Independent Fiduciary Services, Inc., Washington said that many of the issues raised about the Illinois Teacher Retirement System in the Levine scandal were addressed by his firm's 1998 evaluation of the System's processes and investment practices. One key recommendation was to establish an extensive and independent internal audit process, for example. Although the TRS assignment did not ask IFS to examine the role of political contributions in the manager search process, Mr. Halpern noted that IFS recommended-- among many suggested changes-that the System develop model request-for-proposal forms for real estate and private equity managers because manager screening, search and selection in those asset classes was not standardized. The implication was that the board was reviewing managers in those asset classes without a systematic and rigorous process, he said.

Montana Board of Investments, Helena, hired ... the board's first full-time investment consultant ... after issuing an RFP in August following a one-time operational review by Independent Fiduciary Services.

Skip Halpern of IFS conducted a workshop on governance of public pension funds at the November conference in Beijing. Attendees included Trustees, staff and regulators of public pension funds across Asia and the U.S.

Ed Patchett of IFS recently presented two sessions on hedge fund investing at the 2006 International Foundation of Employee Benefits Plans Conference in Hawaii. The first session was geared toward plan attorneys while the second session was for a broader audience of conference attendees. In both sessions, Mr. Patchett defined the terms "hedge funds" and "hedge fund-of-funds," presented the investment characteristics of hedge funds, and reviewed the key risks investors face when investing in the asset class.

Skip Halpern of IFS spoke at the annual meeting of the National Conference on Teacher Retirement in October. The title of his session was the question the conference organizers asked him to address: "Do You Need a Fiduciary Audit?"