Products October 31, 2014

Advanced Capital Group Opens Chicago Office

Advanced Capital Group (ACG) is opening a new office to support retirement plans and other institutional investors.
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ACG, a registered investment advisory firm, is opening an office in Chicago, Illinois.

The Chicago office will extend the geographic scope of ACG’s institutional investment consulting for employer-sponsored retirement plans, endowments and foundations, and Native American tribal trusts, as well as its institutional fixed-income investment management services, which includes customized corporate cash management and bank/insurance company portfolio management.  

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ACG also announced David Schmidt, Ph.D. will oversee its Chicago operations. An industry veteran with firms such as TIAA-CREF, Valic, ING and Morgan Stanley, Schmidt has been a managing consultant serving both public and private institutional clients in Illinois, Wisconsin and Iowa. He has provided retirement plan sponsors of 403(b), 457 and 401(a) plans with plan consulting, compliance, benefit administration, plan design, employee education and communication services.   

In addition to his professional interest in financial services and retirement planning, David’s civic involvement includes elected positions held at the local level in Cook County as Township Committeeman, Township Trustee and Village Trustee. His appointed positions were held at the state level in Springfield as Public Member of the State Board of Financial and Professional Regulation and the Chair of the Investment Advisory Committee to the Illinois Public Pension Division.

“Using the successful development of our diverse offerings of institutional fee-only investment consulting and investment management as our base, we look forward to sharing our solutions with a broader audience,” says Charles Langowski, President and CEO of ACG. “By outsourcing retirement plan governance, oversight and education to ACG, plan sponsors get the experience and resources of a nationally recognized investment advisory firm.”
Administration October 31, 2014

City of Stockton Bankruptcy Plan Approved

A bankruptcy court judge has approved a plan for the city of Stockton, California, to exit bankruptcy while continuing to pay for pensions.
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A federal bankruptcy judge in the U.S. Bankruptcy Court for the Eastern District of California has approved a bankruptcy exit plan from the city of Stockton that allows it to continue paying its obligations to the California Public Employees Retirement System (CalPERS) while giving other creditors pennies on the dollar for debts.  “This plan, I’m persuaded, is the best that could be done in terms of restructuring the city’s debts,” U.S. Bankruptcy Judge Christopher Klein said at a hearing in Sacramento, California, according to Bloomberg.

Earlier in October, Klein ruled that the city of Stockton may eschew paying its pension obligations, and treat them just like other debts in its bankruptcy plan. The city has reached deals with all of its major creditors, except for Franklin Templeton Investments, which took Stockton to trial. An attorney for the investment firm said the firm is being offered one cent on each dollar for a $35 million loan given to Stockton in 2009 to build firehouses and parks, and to move its police dispatch center. In the lawsuit, Stockton argued that it must make its pension contributions for public employees before its creditors are paid the entire amount they are owed.

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According to news reports, during proceedings Stockton often argued its employees have suffered enough in the bankruptcy. In a statement last year, CalPERS said, “The city of Stockton, its employees and its citizens have already endured years of painful cuts, reductions and sacrifices.”

In a statement following Klein’s approval of the exit plan, Anne Stausboll, chief executive officer of CalPERS, said, “The judge recognized that the city’s employees and retirees have already made significant concessions with respect to their pension and health benefits and that further impairing pensions would harm them even more. The City has made a smart decision to protect pensions and find a reasonable path forward to a more fiscally sustainable future. We will continue to champion the integrity and soundness of public pensions—to protect the benefits that were promised to the active and retired public employees who participate in the CalPERS pension plan.”

The National Conference on Public Employee Retirement Plans (NCPERS) also released a statement applauding Klein’s decision, saying, “His ruling means the city will be able to emerge from two years of financial uncertainty with its public pensions and public safety services intact… It has been years since city employees have received a raise, salaries for some employees have been cut by as much as 23%, large numbers of employees have been laid off and employees have already lost their retirement health benefits. To further reduce pension benefits as part of a financial reorganization plan would not only have been unfair to the city’s workers, but destructive to the city’s reputation and its ability to provide public services.”

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