Deals and People September 20, 2001

President Picks New PBGC Advisory Committee Members

September 20, 2001 (PLANSPONSOR.com) ? President Bush has selected three new members of the Advisory Committee of the Pension Benefit Guaranty Corporation and has designated a chairperson of the panel.
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The new members are:

  • Matthew Fong, who will serve as chairperson and represent the interests of the public,
  • Barry Wynn, and
  • Betsy Atkins, who will both represent the interests of employers.

Messrs Fong and Wynn will serve for terms that expire in 2004, while Ms Atkins’s term will expire in 2003.

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Matthew Fong

Mr Fong is president of Strategic Advisory Group, a director of the Rand Corporation Asia Advisory Board, a regent of Pepperdine University and a former California state treasurer.

He also has served as vice chairman of the California State Board of Equalization and as a trustee of the California Public Employees Retirement System and the California State Teachers Retirement System

Mr Fong holds a Bachelor of Science degree from the US Air Force Academy, a MBA from Pepperdine University, and a JD from Southwestern University.

Betsy Atkins

Ms Atkins is president and chief executive officer of Baja LLC, an independent venture capital firm. She is a cofounder of Ascend Communications Corp, and serves on the boards of directors of Lucent and Polycom.

She is a trustee of Florida International University and a graduate of the University of Massachusetts with a Bachelor of Arts degree.

Barry Wynn

Mr Wynn is president of Colonial Trust Co. His career as an investment banker also includes long service with Robinson-Humphrey Co.

Mr Wynn holds a Bachelor of Science degree from The Citadel and serves on the Board of Directors of the Spartanburg Technical College Foundation.

The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974 to guarantee payment of basic pension benefits.

For more information on the PBGC, visit the agency Web site at www.pbgc.gov

Investing September 19, 2001

Attacks Send Participants in Search of Stability

September 19, 2001 (PLANSPONSOR.com) - Plan participants reentered the market with a vengeance on Monday, transferring some $400 million in plan assets, on a net basis, to fixed income investments, according to the Hewitt 401(k) Index.
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Once again, participants likely “locked” in trading losses, since most such transfers are accomplished at the closing market value ? a day where major US stock indexes dropped anywhere from 5% to 7% – and some employer securities fared even worse.

Stock Shelved

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On Monday, Hewitt noted that money primarily flowed out of large U.S. equity and into GIC/Stable Value – the most conservative asset class generally available to 401(k) participants. Net transfers coupled with the market declines left the overall equity exposure of the Hewitt 401(k) Index at 61.5% from 68.5% at the end of August, which represented the lowest level of equity exposure in the index since its inception (see August Hewitt Index Sees Below Average Transfers ).

Overall participant call volume among 401(k) plans administered by Hewitt was only slightly higher than normal on Monday, suggesting that participant activity was not widespread but might be limited to a small number of participants making larger-than-normal transfers.

Record Volume

While trading had been suspended in US markets for nearly a week, Monday’s activity was more than nine times the “normal” level of trading and more than twice the amount registered on other high activity days, including the August 1998 Russian debt crisis.

It was the highest level of investment transfer activity ever recorded by the Hewitt 401(k) Index since its inception in August 1997.

The Index, which tracks the daily transfer activity of nearly 1.5 million U.S. employees with $71 billion in assets, saw daily net transfer activity reach 0.58% of total balances. That stands in sharp contrast to the average daily net transfer, which has averaged just 0.06% over the past year.

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