2003 12 December

In October, IFS completed a comprehensive management study and operations review of the New York City Office of the Comptroller's asset management function. The study provided an independent evaluation of the asset management polices processes and procedures related to the investment advisory services the Comptroller provides to the five New York City Retirement Systems. The Systems in the aggregate total more than $75 billion in assets and are considered one of the 10 largest pension funds in the country.

In September 2003, IFS completed a wide-ranging Operational Review of the New Jersey Department of the Treasury Division of Investment. The Report was commissioned by the State Treasurer. The Division internally manages all $73 billion of the assets under its purview using active management. The Report was presented to the State Investment Council on October 1, 2003 and addressed a range of subjects, including governance, asset allocation, risk controls, and staffing.

In June, PNC hired Independent Fiduciary Services Inc. of Washington, D.C., to represent employees of the company's 401(k) savings plan to ensure that they get their fair share of the restitution fund [established to compensate shareholders-including its 401K Plan-for claimed losses allegedly caused by securities law violations]. About 17,000 active employees participate in the savings plan....

...Independent actuaries and fiduciaries can also monitor the work of plan investment consultants and investment managers, and make recommendations on funding and benefit issues.

Independent Fiduciary Services (IFS) in Washington, D.C., for example, provides independent fiduciary services on both an ongoing and transactional basis, serves as an investment consultant for retirement plans and conducts fiduciary audits.

... "We have seen it from a number of boards. It is not widespread, but it is hardly unheard of and is increasingly common as a stand-alone service," finds Samuel "Skip" Halpern when asked if pension boards are looking for outside advice on board governance or fiduciary education. Halpern is Executive V.P. and General Counsel at Independent Fiduciary Services in Washington, D.C. IFS provides pension funds with investment consulting and fiduciary audit services. ...

In this era of corporate reform, it's important that some pension funds scrutinize their own operations. The problems at the New York City Retirement Systems and the New Jersey Division of Investment are examples of what can be uncovered. Both were subjects of recent, separate critical reports by Independent Fiduciary Services Inc., which made valuable suggestions to improve the two systems...

New Jersey Division of Investment, Trenton, .....Last month, a report by Independent Fiduciary Services recommended the state turn over some investment management to external firms for diversification. Tom Vincz, spokesman for state Treasurer John McCormac, said, "We have said all along in reviewing all recommendations from the IFS report that if there is need for legislation to implement any of the recommendations, we will seek it." .....

• Monte Tarbox also spoke in October at a Taft-Hartley Roundtable organized by the Investment Management Institute on how to develop an effective governance structure.

Investment Management Network's Asset Allocation Summit:

• 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.

IFEBP Annual Conference in San Diego:

• Edward (Ed) Patchett co-presented a session called "Valuation Forecasts and Asset Liability Modeling" on 11/10 and 11/11.