Is there a need for index fund managers to come together? Vanguard founder Jack Bogle thinks there is. He is planning to write letters to the leading index managers and funds specializing in low-turnover investing seeking to form a new group, reports the Wall Street Journal. The goal would be to clean up the accounting and corporate governance mess coming to light in wake of the Enron collapse. Bogle believes these investors are especially harmed by poor practices since they cannot easily dump shares of bad actors. "I'm not saying we should conspire, but we should get together and exchange ideas," the paper quotes Bogle as saying.



Komansky Confirms Early Retirement

Merrill Lynch head honcho David Komansky, 62, acknowledged plans to step down as chief executive prior to his scheduled retirement in April 2004. Rumors of the plan have been circulating in the wake of a management shakeup at the broker that appear to have left President E. Stanley O'Neal in control. He added that he expects to remain on as chairman.



State Street Trims HR Staff

State Street cut 52 members, or 15 percent, of its human resources department this week, reports the Boston Globe and Boston Herald. Altogether, the firm now employs 19,800 workers. The cuts come four months after Louis de Ocejo tooks the reigns of the department. He is quoted as explaining that the firm needs new skills and perspectives in the department.



Voyageur Makes Buy

Dain Rauscher's Voyageur Asset Management unit is purchasing the institutional assets of Daniel S. Kampel Associates of New York City. Terms of the acquisition were not disclosed. Voyeageur does not manage any retail funds. It manages $15 billion for the high-net worth, government, not-for-profit and corporate institutional markets.



SEI Gets Renewal

Banc One Investment Management Group has re-upped with SEI Investments. SEI will continue to provide investment processing and trust accounting system that it has provided o Banc One since 1991. "We found that SEI's offering continues to be the most cost effective and best solution to meet our large-scale processing and STP/T+1 readiness needs," said David Kundert of BOIM.



Boehner Bill Intro

The Boehner-Johnson bill reflecting the Bush administration's proposed 401(k) reforms was submitted today as the Pension Security Act. The bill stresses more notice of blackouts, disclosure and advice, but does not cap company stock holdings.



JPAM Wins $3.7 Billion Plan

International Paper will restructure its $3.7 billion 401(k) plan in April, reports Pensions & Investments. JP Morgan|American Century replaces Towers Perrin as recordkeeper for the plan. Towers Perrin has quietly been pulling out of the 401(k) business for the past four years. The new design will offer three J.P. Morgan Fleming Smart Mix allocation funds, 10 core options consisting of nine unitized defined benefit portfolios, company stock and a self-directed brokerage window. International Paper claims the changes will shave fees in the plan paid by participants by 25 to 30 percent. Only half of future matches will be made in company stock and employees will be able to sell those shares prior to age 55 for the first time.



PSCA Creates Co Stock Bulletin

Defined contribution plan sponsors offering company stock can sign up for a special email update on the topic du jour in Washington. Interested parties can inquire to Betty Nevins at bnevins@psca.org or call 312-441-8550.



Good Matches Make Good Savers

We new it already, but just in case you need a reminder here it is: employer matches are a key component in successful defined contribution plans. Strong Retirement Plan Services polled participants and found that more than half (53 percent) of 401(k) participants contribute up to the company match or more than the company match. Another 23 percent contribute the maximum allowed by their plan. Only 5 percent contributed less than the plan match amount, and just 19 percent contributed only what they could afford, says Elli Dai, vice president at Strong RPS. The numbers are based on a poll of 2,500 participants in Strong administered plans.



Sniff Out Company Stock

BenefitStreet (San Ramon, CA) is proffering software tools to monitor participants' exposure to company stock. The cutely-named 401(k) Sniffer tool can determine each participant's exposure on a daily basis, claims the firm. The Sniffer is part of a suite called 401(k)EarlyWarningSystem that is just out in version 2.0. BenefitStreet CEO Jim Drury argues such tools can eliminate the need for company stock legislation. We doubt Congress will buy the argument, but that doesn't mean such monitoring doesn't make sense. The system can be used by any plan, even those not administered by BenefitStreet and takes less than 30 days to install, says the firm.



DC Industry Conference Called Off

The National Defined Contribution Council has canceled its Fall 2002 conference in response to the current economic condition and reduced travel budgets among members. The Spring conference will be held as scheduled on March 6th and 7th in Washington DC. Among featured speaker is Senator Max Baucus, chairman of the Senate finance committee. Online registration is available at NDCConline.org.  

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