2004 4th Quarter

Roughly 100 New Jersey state workers marched on the State House last week to protest an administration plan to permit private financial experts to invest $9 billion from their pension fund, saying the plan was too risky, according to the Trentonian. (The plan is in response to the state-commissioned independent study of the agency by Independent Fiduciary Services, Inc.

IFS was engaged as Independent Fiduciary for the MCI 401(k) Salary Savings Plan (formerly the WorldCom 401k Savings Plan) regarding the partial settlement of a class action lawsuit. The suit alleged that certain Plan fiduciaries violated ERISA in connection with the Plan's holdings of securities issued by WorldCom Inc., the Plan's former sponsor. The settlement provided for combined payments exceeding $47 million by various defendants and their insurers. After deducting various costs, the net proceeds are payable to the Plan. IFS was engaged pursuant to a U.S.

TIFS was engaged as Independent Fiduciary for the Dynegy Inc. 401(k) Savings Plan regarding settlement of a class action lawsuit alleging that certain Plan fiduciaries violated ERISA in connection with the Plan's holdings of securities issued by Dynegy Inc., the Plan's sponsor. The settlement provides for payments totaling $30.75 million by various insurers. After deducting various costs, the net proceeds are payable to the Plan.

Samuel W. Halpern and Andrew Irving authored a chapter on investment best practices which appears as the concluding chapter in the McGraw Hill book called Core-Satellite Portfolio Management - A Modern Approach for Professionally Managed funds. Copies are available from IFS, on request.

Wells Fargo proposes to acquire a family of mutual funds sponsored by The Strong Financial Corporation. However, investors in the Strong funds are entitled to vote in favor or against the proposed merger. One of those investors is Strong's own pension plan. The named fiduciary of Strong's plan hired IFS as an Independent Fiduciary to evaluate, from the Plan's investment perspective whether to approve the merger of the Strong funds in which it invested and to direct the Plan's trustee whether to vote the Plan's proxy in favor of or against each merger.

IFS recently completed an evaluation of the Virginia Housing Development Authority department policies, procedures and workflows. The main focus was on the numerous aspects of the Authority's investment program, compared to best practices.

IFS was hired to impartially evaluate the interrelated functions and cross-ownership of various service providers to Ohio SERS-involving investment consulting, brokerage, investment management, risk management, custody and investment accounting-- and advise the Fund's board whether they create a material perceived or actual conflict of interest. We also provided advice regarding controls, policies and procedures that the board might adopt to prevent and/or mitigate the likelihood of conflicts.