IFS in the News

Pennsylvania’s two largest state pension funds will be subject to performance audits by state auditor general Jack Wagner. Washington-based consulting firm Independent Fiduciary Services (IFS) will conduct fiduciary reviews of the two funds in conjunction with the audits.

Samuel W. Halpern, executive vice president of Independent Fiduciary Services, Washington, recalled testifying before a working group of the ERISA Advisory council in the mid-1990’s that investment consultants should be regarded as fiduciaries. At that time he indicated, “And to the extent they are, they (consultants), should be subject to the self-dealing provisions of (ERISA) where they should not be paid by someone with an interest that is adverse to the plan.” He still maintains this view. Mr.

The $52 billion Pennsylvania Public School Employees’ Retirement System and the $26.6 billion Pennsylvania State Employees’ Retirement System signed an agreement allowing state audits of the two funds’ investment performance. The agreement settles pending litigation.

The Bureau of Asset Management for the New York City Retirement Systems plans to nearly double its internal investment staff by hiring 40 additional people over the next 18 months to oversee the Systems' allocations to private equity, real estate and possibly hedge funds…. Adam Blumenthal, the city's first deputy comptroller/CFO who also helps oversee the city's $88 billion Systems, said a recent audit conducted by Independent Fiduciary Services suggested that additional personnel were needed.

Montana Board of Investments, Helena, is reviewing Independent Fiduciary Services' preliminary report, which evaluates the investment program and practices of the $6.2 billion system, said Carroll South, executive director. He said the report includes recommendations about the Board's asset allocation as well as proposed additions to its investment policy.

Independent Fiduciary Services, is performing a one-time Operational Review of the $6.2 billion pension system, Montana Board of Investments, and is slated to present its final report at the April meeting of the board.

Pennsylvania Public School Employees' Retirement System and the Pennsylvania State Employees' Retirement System, both of Harrisburg, today signed an agreement with Auditor General Jack Wagner allowing state audits of the two funds' investment performance... The auditor general's office and the two funds also signed a contract with Independent Fiduciary Services... IFS will conduct a fiduciary review of operations at each fund and will assist with the audits. The audits and IFS' fiduciary review are set to begin immediately; there is no timetable on completion.

Edward D. Patchett authored a chapter titled Alternative Investments: An Introduction in the 2004 edition of Employee Benefit Issues - The Multiemployer Perspective published by the International Foundation of Employee Benefit Plans. The chapter provides an overview of the investment characteristics and risks associated with investing in private equity, hedge funds and managed futures (copies of this article are available upon request)

…Independence and transparency was important to the Montana Board of Investments, which earlier this year launched a search for its first-ever outside consultant. The $9.6 billion system in September hired Independent Fiduciary Services to perform a one-time review of the system's operations. Montana expects its relationship with IFS to end after its review is finished; the system manages most of its assets in-house and has never had an ongoing investment consultant. But the chairman says the board still had some demands.

Independent Fiduciary Services received 3 Best in Class Awards from this recent independent survey. All around strength was singled out specifically by several of IFS's clients.