Deals and People September 14, 2004

Tar Heel Fund Gets New CIO

September 14, 2004 (PLANSPONSOR.com) - North Carolina State Treasurer Richard Moore has tapped Patricia Gerrick as chief investment officer for the Tar Heel state's $60 billion pension fund.
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Gerrick, who was also named as a deputy state treasurer, fills a position that had been vacant since former investment manager Andy Silton resigned in December, the Raleigh News & Observer reported. Gerrick, 51, is the first female and first black person to hold the position for North Carolina.

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As the state’s newest money manager, Gerrick will earn $150,000 a year plus a 30% performance bonus, closely mirroring the compensation package paid to Silton.

Gerrick, who holds an MBA from Columbia University, has 25 years of experience in public and private pension-fund management, including leading Sprint’s $1.7 billion plan and, most recently, Indiana’s public pension fund.

Silton complained in his resignation letter of low salaries and understaffing in the state’s investment division. Since then, lawmakers approved the hiring of seven new workers at the pension fund and higher salaries for investment employees. Gerrick will oversee a staff of 19 (See NC Pension Advisor Quits Over ‘Sheer Lack of Resources’ ).

Benefits September 13, 2004

Multinats Moving Toward Central Plan Admin

September 13, 2004 (PLANSPONSOR.com) - Multinational firms with retirement plans in several countries are moving toward the centralized plan control offered by global management platforms.
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Mercer Investment Consulting said in a news release about its 2004 Financial Management of Multinational Retirement Plans Survey that most respondents already have shifted or are moving decisively toward a more global perspective.

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Cutting both costs and risk along with increased focus on plan governance at a global level are the forces driving this trend, despite country differences in local legislation, culture, reporting, operating environments, valuation methodologies, and product availability.

The underpinning of most cross-border plan-governance programs is a series of committees divided according to function – for example, benefits, funding, accounting, investments, and governance. Very few multinationals create such committees at a global or pan-regional level.

“Multinationals are rising to the challenge of managing retirement plans on a cross-border basis,” says Stacy Scapino, head of Mercer IC’s multinational investment consulting services. “The primary drivers toward implementing a cross-border management framework are governance and risk and cost control.”

The shift toward global influence is clearest with regard to funding decisions. The movement toward global funding policies over the past two years has been swift and decisive. In 2004, 61% of respondents indicated that they have some form of global funding policy and 11% of respondents have no funding policies.

There is a strong trend toward more global corporate oversight and implementation of global plan-governance principles. This development shouldn’t come as a surprise in light of changes in regulatory tenor, particularly in the US, where regulatory scrutiny has dramatically increased.Fifty-five percent of respondents have global governance policies in place, with 77% expecting to implement them by 2006.

Despite a general global shift toward defined contribution plans, few multinationals have an explicitly stated preference for establishing only DC plans. Most prefer an approach that ensures benefits are locally competitive to attract and retain the right employees while controlling costs.

Among the 130 multinational respondents in the survey, 52% are headquartered in the US, 17% in Ireland/Continental Europe, 13% in the UK, and 9% in Canada. The remaining 9% of respondents are headquartered in South Africa, Australia, and Asia.

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