Administration September 12, 2006

Americans Have Savings on their Minds

December 21, 2005 (PLANSPONSOR.com) - As Americans pause for a moment this holiday season to ponder their New Year's resolutions, many will be thinking about the health of their savings.
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A Delaware Investments news release said that its recent survey found that the primary savings goal for many people is to set aside enough to live on in retirement. However, oddly enough, only a small subset of that group said they planned to open a tax-deferred retirement savings plan including those offered by their employer.

“We were pleased to learn that so many Americans are focusing on critical issues, such as saving for retirement, in their resolutions for 2006. This shows that Americans are paying attention to the growing worry among experts that individuals are not adequately prepared for the reality of funding their retirements,” said Executive Vice President, Chief of Sales, Client Services and Marketing Kevin Lucey, in the Delaware Investments announcement. “However, we were concerned to find out that many of them are not planning to take advantage of all of the options available to them. Most experts agree that taking full advantage of 401(k)/403(b) programs and IRAs is the best first step toward preparing for retirement.”

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The poll found that: the resolutions (in order) included:

  • saving more money (80%)
  • paying off credit card debt (56%)
  • paying off other debt, including mortgages and home equity loans, college loans and car loans (32%).

Of those who said they planned to save more money, nearly half (49%) said they needed to prepare for retirement, but only 13% listed increasing their contribution to their 401(k)/403(b) as a goal for 2006. Even fewer (less than 10%) chose opening or increasing contributions to an IRA.

Other poll findings included:

  • 29% said they wanted to spend more time assessing their financial position,
  • 27% said that they planned to make a will in 2006, and
  • 18% said they planned to spend time teaching their children to manage money.

The nationwide survey of more than 9,000 adults aged 18 and older was conducted in late November 2005 by Synovate, a global market research company.

Administration September 11, 2006

Ohio Agency Embraces Fixed Income in $15M Transition

November 21, 2005 (PLANSPONSOR.com) - Trying to work its way back from a scandal over its investment choices, the Ohio Bureau of Workers' Compensation has approved a sweeping reform program under which it fired its 69 money managers and opted to invest nearly its entire $15.7 billion portfolio in fixed-income funds.
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As part of the transition program, the agency will move its $7.2-billion equity position over the next four months into fixed income, according to news reports.

The commission used the work of consultants Ennis Knupp and Callan & Associates in reaching its decision.   The agency also chose Wilshire Investments over Ennis Knupp to be its primary investment consultant, a role previously held by Callan. Officials pegged their transition costs to the news investment plan at $15 million.

The agency has been overhauling its financial strategy since revelations last spring that it lost more than $300 million in investments, including $13 million in a rare-coins venture and $215 million in a hedge fund.

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Workers’ comp officials say the fund managers being discharged did nothing wrong but it was easier to dismiss them all so the agency can start fresh. “We have given everyone a passing grade, and terminated them,” said Michael Koetters, chairman of the Oversight Commission’s investment committee, according to the Toledo Blade.

Koetters said the bureau’s long-term financial outlook would be “bleak” if the agency didn’t modify its portfolio.

The manager transition included the firing of six international and 44 domestic equity managers. The committee also voted to ax 19 fixed-income managers, who oversee less risky funds. Assets in those funds will be moved over the next 12 weeks, officials said, saving the agency about $33 million annually in management fees.

At the same time, the agency is keeping 54 managers of 68 private equity funds, explaining that the bureau has multiyear contracts with those managers that can’t be broken. In September, the bureau released a report by Ennis Knupp that said the State Insurance Fund had lost almost $1 billion in potential returns during the last decade by relying on subpar investment managers.


Once the bureau’s equities are moved into fixed-income funds, the only non-fixed-income funds in the agency’s portfolio will be alternative investments, officials said.

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