Products December 7, 2009

SSgA Introduces Community Investing Index Strategy

December 7, 2009 (PLANSPONSOR.com) - State Street Global Advisors (SSgA) has launched its US Community Investing Index strategy.

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The company says the strategy is the only offering that seeks to match the returns and characteristics of the U.S. Community Investing Index (USCII).

According to a press release, the underlying investment approach for SSgA’s U.S. Community Investing Index strategy is to buy and hold securities with the aim to minimize turnover and transaction costs, trading only when the composition of the Index changes or when cash flow activity occurs in the strategy.

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Launched in 2005 by the F.B. Heron Foundation in collaboration with Innovest Strategic Value Advisors, the U.S. Community Investing Index is comprised of more than 300 large- and mid-cap companies spanning all sectors that have demonstrated successful and proactive engagement with economically underserved populations in rural and urban communities in the United States.

The USCII employs a methodology that positively evaluates the community investment and engagement performance of a broad universe of companies, using three main factors: strategic alignment, workforce development and wealth creation, and community engagement and corporate philanthropy, the announcement said.

“By positively screening for companies with strong track records in community investing, the U.S. Community Investing Index can be considered part of the second generation of the evolution of environmental, social and governance (ESG) investing,” said Luther M. Ragin, Jr., chief investment officer, the F.B. Heron Foundation, in the announcement.

More information is at www.ssga.com.
Administration December 7, 2009

U.K. Pension Costs Slowing M&A Activity

December 7, 2009 (PLANSPONSOR.com) – A new Watson Wyatt U.K. survey found that 33% of responding companies consider the level of their pension liabilities as an obstacle to going after potential mergers or acquisitions.

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A Reuters news story about the survey said latest figure represented nearly a doubling of companies in that predicament over the last 24 months  

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The study indicated that the role of pension funding in the U.K. is affected by the fact that employers pursuing a restructuring or merger are required to fully cover liabilities – a rule to prevent employers from walking away from their pension obligations.  Longer life expectancies are also making pension obligations a prevalent factor as companies recalculate their pension liabilities.

“These figures suggest that defined benefit liabilities are an economic problem for UK competitiveness,” the study said.

In other areas, the study found that more than a third of responding employers plan to shutter or at least modify their defined benefit plans.

Watson Wyatt noted that personal accounts — a state plan designed to encourage pension savings among those with little or no savings — will be introduced into the U.K. retirement plan landscape in 2012, and companies will have the option to use the new system or automatically enroll employees in their existing pension funds. Critics of personal accounts have said they would encourage employers to either roll back more generous arrangements or stop them altogether to enroll their staff in the national plan, which only requires employer contributions at 3%, but the survey found only 8% of respondents admitted they would reduce contributions for new or existing members following the introduction of personal accounts.

Six percent said they would increase contributions to differentiate their plan from the new minimum standard, but 71% said they are likely to maintain their contributions.

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