Administration January 27, 2010

CO Senate Panel OKs PERA Fix

January 27, 2010 (PLANSPONSOR.com) – A Colorado state Senate panel has approved a deal brokered by Senate leaders to rescue the state pension system by increasing employer and employee contributions and cutting benefits.
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The Associated Press reported that the approval by the Senate Finance Committee came after warnings that the Public Employees Retirement Association (PERA) could run out of money in 20 years if no changes are made.

The bill increases contributions from employers by 1.5%, contributions from employees by 2.5%, and reduces cost of living increases from 3.5% to 2%. The bill also provides a one-year cost of living “timeout”, tied to inflation, to give the fund time to recover.

The average retirement age would be raised to 58 with 30 years of service.

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The deal captured in Senate Bill 1 was brokered by Senate President Brandon Shaffer and Senate Minority Leader Josh Penry who both said they had a responsibility to make sure PERA could continue meeting its benefit obligations, according to the news service.

The measure had the backing of school executives, unions and many retirees who told lawmakers they realize the dire consequences of not reaching a compromise. Meredith Williams, PERA’s executive director, said the PERA board supports the compromise because it shares responsibility for fixing the problem, provides long-term stability, preserves a defined benefit plan, and affects each retirement group equally, the AP reported (see Colorado PERA Backs Pension Fix).

About 450,000 teachers, police officers, park rangers, and other state employees are covered by the plan.

Products January 27, 2010

Transamerica to Lower Price for Flexible Income Fund

January 27, 2010 (PLANSPONSOR.com) - Transamerica Asset Management Group announced it is lowering the expense ratio of its Transamerica Flexible Income fund.
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The new pricing structure includes a reduction of the fund’s management fee by a maximum of .25% and a .10%-waiver on the fund’s Class A 12b-1 fee. The changes will go into effect on February 1, 2010, according to the announcement.

Transamerica said Flexible Income (IDITX, IFLBX, IFLLX, TFXIX), an open end mutual fund, generally invests at least 80% of its assets in a broad range of fixed income securities and up to 20% in equities. The fund’s primary objective is to provide a high total return through a combination of current income and capital appreciation.

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“We continue to evaluate our offerings in an ongoing effort to provide financial professionals and their clients with investment solutions at competitively priced levels,” said John Carter, President and CEO of Transamerica Asset Management, Inc., in the announcement.

More information is at http://www.transamericafunds.com.

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