Plan Sponsors Report Quiet Despite Market Turmoil

September 17, 2001 ( - Monday's atmosphere among plan sponsors appeared to be a calm one with no reports of a rush by plan participants to flee equities for the relative safety of fixed-income funds.

Outside of what they labeled routine transactions such as requests for loans or distributions, the plan sponsors surveyed by said employees seemed to have more humanitarian concerns on their minds.

“As far as (portfolio rebalancing) being people’s first concern, that isn’t it at all,” said Cynthia Brewer, assistant human resources director at Bangor Hydro-Electric Co, which runs a $19.6-million 401(k) plan. “For most people, it’s the loss of life and people’s suffering and ‘How can I help?’  They’re not looking at their wallets. As a matter of fact, they’re opening them.”

James Taylor, chairman of ABARTA, a Pittsburgh, Pennsylvania conglomerate, said things were quiet both with his $34-million defined benefit plan and $20-million defined contribution plan.

Market Neutral

Taylor said he wasn’t worried about the effect of a market downturn on his DB plan because the company’s DB investment managers are heavily invested in market neutral hedge funds.

There was also little excitement from his DC participants and Taylor didn’t expect any right away. “My guess is that people may wait for a couple of days and see what happens,” he said.

This was the other picture with several other plan sponsors:

– Sydney Scott, a benefits associate at Black Mountain Group, a New York HR consulting firm, said her office has only gotten routine requests for loans and distributions.

– CalPERS’ officials said they’ve had no trading problems affecting the plan. “We have been able to settle our trades and are conducting our investment business prudently,” CEO James E. Burton said in a statement posted on the agency’s Web site. “Currently, we do not see anything that gives us undue concern.”

– One large public pension plan took advantage of buying opportunities on Monday while another was “watchful and waiting” before making any moves, according to Dow Jones:

  • “Our current strategy is to buy – we’ve been buying already, we’re long-term investors,” John Cardillo, spokesperson for the $81 billion New York State Teachers’ Retirement System, told Dow Jones.
  • The $108 billion Florida Retirement System is “watchful and waiting. We have no plans to sell, but will wait for some stability to be apparent” before we do anything, said Tom Herndon, executive director of the system.

– At the Missouri State Employees’ Retirement System, executive director Gary Findlay said the plan “doesn’t have a lot of cash to commit” – about $25 million of the $5.1 billion fund. Findlay told he does not expect any disruption to plan operations in coming weeks.