News: 2006 2nd Quarter

New Clients

  • New Clients for Operational Reviews

    IFS recently added several Clients for Operational Reviews:

    • Oregon Department of Treasury
    • Sheet Metal Workers National Pension Fund
    • Utah Carpenters
  • New Fiduciary Transactional Assignments

    IFS recently began several fiduciary transactional assignments:

    • Wilmington Trust
    • Utah Carpenters

Recently Completed Projects

  • City of Oakland

    The Board of Trustees (the "Board") of the City of Oakland Police and Fire Retirement System ("PFRS") retained IFS, through a competitive bidding process, to conduct a management audit. A review of this nature had never been conducted by PFRS. The scope of the project covered over a dozen task areas, including governance and accountability, expert advice and the role of legal counsel, disclosure requirements, investment analysis and performance, investment benchmarks, investment reporting and monitoring, custody and securities lending and internal controls.

  • Fortunoff

    IFS was engaged act as the independent fiduciary on behalf of three pension plans with respect to a warehouse property which the plans had purchased from and leased back to one of the companies pursuant to a prohibited transaction exemption issued by the U.S. Department of Labor. As independent fiduciary, we reviewed the status of the tenant company's compliance with the terms of the lease and the exemption. We engaged the services of an independent appraisal firm to appraise the property both currently and retrospectively as of the end of each year since the plans acquired it. After critically evaluating the appraisals, as well as the circumstances surrounding the plans' funding of renovation work done to the property, we determined that the tenant owed the plans underpaid rent, a return on the cost of the renovation and interest, which we collected on behalf of the plans. IFS also organized a Delaware limited liability company to hold the plans' title to the property in order to protect the plans' other assets from potential liabilities arising out of the property. We also determined that it was in the plans' interest to sell the property, and we recently completed its sale at a price well above the property's most recent appraised value.

  • Nevada PERS

    The Public Employees' Retirement Board of Nevada is responsible for the administration, investment and management of the Public Employees' Retirement System of Nevada ("PERS"), the Nevada Legislators' Retirement System ("LRS") and the Nevada Judicial Retirement System ("JRS"). These systems provide retirement, disability and survivor benefits for public, legislative and judicial workers employed by the State of Nevada. Pursuant to Board policy, PERS must perform an "independent investment program review" at least every ten years "regarding the soundness of the PERS, JRS and LRS funds, including the assumptions, asset allocation, management structure, and performance results." The scope of work for this engagement included the following key task areas: (a) Review of Investment Policy; (b) Asset Allocation; (c) Investment Management Structure; and (d) Investment Performance.

  • MOSERS

    The Board of Trustees of the Missouri State Employees' Retirement System ("MOSERS") retained IFS, pursuant to a competitive bid, in December 2005, to assist them in evaluating their role as fiduciaries and further to review various aspects of MOSERS' internal operations and investment programs. The operational review focused on 1) identifying and controlling risks, 2) enhancing long-term investment performance, and 3) adopting and implementing industry best practices. The specific scope of work for this engagement included the following key task areas: (a) Statutory Framework; (b) Governance policies; (c) Organizational Structure and Resources; (d) Investment Management Structure and Costs; (e) Investment Policy; (f) Asset Allocation and Investment Risk; (g) Risk Management and Internal Controls; (h) Due Diligence Procedures; (i) Trust and Custody; (j) Legal Issues; (k) Fiduciary Liability Insurance. IFS presented its final report to the MOSERS Board in July 2006.

  • Chinese National Council for Social Security Fund

    IFS recently completed an evaluation of the legal framework and governance of the investment program of the Chinese National Council for Social Security Fund, in Beijing-- work financed by the Asian Development Bank. Established to help close the gap between promised pension benefits and assets available to pay them, the Fund--now valued at approximately $25 billion (U.S.)-- is financed both by legislative appropriations and by proceeds from initial public offerings of formerly state-owned enterprises. IFS compared numerous aspects of the Fund's current operations to global "best practices" regarding, e.g., fiduciary standards, investment criteria, internal governance, ethics provisions, brokerage procedures and autonomy over procurement, budget and personnel.

Conferences

  • Upcoming Speaking Engagements

    Samuel Halpern, President October 2006---Skip will speak at the Annual Employee Benefits Conference sponsored by the International Foundation of Employee Benefit Plans in Las Vegas on the subject of "Current Fiduciary Issues in Investments".

    Edward Patchett, Managing Director October 2006---Ed will speak at the Annual Employee Benefits Conference sponsored by the International Foundation of Employee Benefit Plans in Las Vegas on the subject of "How Investment Policies Can Impact Return."

  • Andy Irving Speaks at Conferences

    Andy Irving, Managing Director and General Counsel spoke at the following:

    • Proskauer Rose program entitled "ERISA Fest: Current High Stakes Employee Benefit Plan and Executive Compensation Issues for Directors and Officers" on the subject of "Best Practices Reviews: Enhance your Investment Program's Effectiveness and Efficiency"
    • Andy was a panelist at a conference sponsored by Financial Research Associates LLC in New York. His panel discussed ERISA litigation, and his main focus was strategies to mitigate the litigation risks associated with plan investments.
    • Andy was a panelist at the Glasser LegalWorks 6th Annual ERISA Fiduciary Conference. His panel discussed "Prudent Investments in 401k and Other Plans". His remarks focused on "Best Practices Reviews".
  • Association of Investment Management Sales Executives Annual Conference

    Frank Lilly, CEO, spoke at the Association of Investment Management Sales Executives Annual Conference in Orlando. He participated in a panel discussion relating to "The Impact of Government Regulation (and Legislation) on Employee Benefit Plan Investing."