2004 1st Quarter

Andrew Irving, SVP & Deputy General Counsel for IFS, has authored an article titled "New DOL Rules Require Independent Approval of Benefit Plan Settlements" that is published in the Spring, 2004 issue of the American Bar Association’s Labor and Employment Law newsletter. Andy’s article describes the Department of Labor’s ruling requiring that plans use independent fiduciaries to decide whether to approve settlements of the plan’s claims against the plan’s sponsor or other ‘party in interest’.

"Not rolling over" is the title of an article in the February 2004 issue of Pensions & Investments. The article refers to the arguments that PIMCO Chief Investment Officer, William H. Gross, and his associates are putting forth in response to the recent New Jersey regulators accusations regarding "fraudulent market-timing arrangement" with a hedge fund, Canary Capital Partners LLC, Secaucus N.J. ... Many consultants have been receptive to the arguments put forward by Mr. Gross and his associates.

"Pension Consultants Need to Come Clean on Conflicts" discusses the need for full disclosure by consultants. The article explains.

"...Having conducted audits of 40 public and private pension funds ranging in size from $15 billion to $20 billion, Independent Fiduciary Services Inc., a Washington-based pension consultant that eschews soft-dollar practices, found that 'we often find (pension) funds using consultants affiliated with broker-dealers,' according to Samuel 'Skip' Halpern, executive vice president of the firm."

"Updating The Garden State" is the title of an article in the February 2004 issue of Plan Sponsor Magazine. The article refers to the recent IFS Operational Review of the NJ Division of Investment, and highlights several of the recommendations IFS made and how the Division of Investment may implement them.

IFS hosted its 2nd Bi-Annual client conference from March 31 to April 2, 2004 at The Westin Diplomat Resort and Spa, Hollywood Beach, FL. The Honorable William Thompson, Comptroller of the City of New York, was the keynote speaker.

Topics covered were:

Lamont (Monte) Tarbox participated on a panel at the Investment Management Network's Asset Allocation Summit in October in California. Monte was joined on the panel by Mike McCauley, Director of Investment Services at the State Board of Administration of Florida and Peter Freilinger from JPMorgan Securities. Monte and his co-panelists discussed how pension funds and other institutional investors have used the concept of "risk budgeting" to change the way they make asset allocation decisions and organize their investment programs.

Steve Harding led a panel discussion on Operational Reviews and Fiduciary Audits at this summit on January 16. The panelists included Ms. Elizabeth (Betty) Martin, Alaska State Comptroller and Mr. Eric Henry, Executive Director of the New Hampshire State Retirement System. The panel focused on the expectations and results of the Operational Reviews performed by IFS for the Alaska and New Hampshire State Pension Plans.

Andrew (Andy) Irving presented a session called "Protecting Your Plans in a Troubled Economy: Perspectives from an Independent Fiduciary" on January 4. The session summarized the challenges facing benefit plan fiduciaries: poor capital market performance, bad macro economic conditions, financial problems at the plan sponsor level, corruption and misconduct in the financial services industry.

• Dayton Power & Light Plans
  IFS has been hired as an independent fiduciary to evaluate the Plans' position regarding a securities class action settlement with DPL.
• National Annuity Fund of International Association of Theatre and Stage Employees
  The National Fund of IATSE hired IFS to assist in a search for a turnkey 401K service provider. This is a joint project working with the Plan's retainer investment consultant. IFS' focus is on all administrative and operational aspects.
• Sale Leaseback Transactions