Administration December 8, 2002

Bay State's PRIM Fires Three Managers

August 12, 2002 (PLANSPONSOR.com) - The Massachusetts state pension fund has joined a growing list of state funds to take aggressive action to stem and/or recover fund losses.

Reported by

Nevin E. Adams

In the most recent case, Massachusetts’ Pension Reserves Investment Management (PRIM) has terminated the services of Schroder Capital Management, MFS, and Turner Investment Partners, according to Dow Jones.

PRIM, which invests the pension funds of state employees and teachers, has reportedly lost more than $1 billion in the first six months of 2002, according to state Treasurer Sean O’Brien.

The 3.75% drop in 2002 is part of a 6.5% fall in value over the past year – still better than most major US stock indexes during that period. In all, the fund has lost $4 billion since it peaked at over $31 billion during the high-tech bubble of the late 1990s.

PRIM has been one of a number of pension funds with financial exposure to Enron and WorldCom, having lost some $50 million in investments in those firms, according to the report.

The Dow Jones report notes that O’Brien and Attorney General Tom Reilly have disagreed over how aggressively Massachusetts should pursue a lawsuit against Enron to recoup some of the losses, but the two have reportedly agreed on a plan to pursue the next such case, should it arise.