The American Federation of State, County and Municipal Employees is seeking information about the Florida state board’s dealings with Alliance Capital Management Holding LP, while at the same time raised separate questions about a new retirement investment plan set to be launched this summer, according to Dow Jones.
Alliance, one of the state’s many money managers until it was fired in December, lost $283 million on Enron investments on the state fund’s behalf.
The union’s Florida affiliate Wednesday filed a public records request with the state ‘to turn over any documents related to potential mismanagement on the part of the state board in its relationship with Alliance Capital Management in the Enron investment scandal,’ the union said in a press release.
Richard Ferlauto, director of pension and benefit investment policy in the union’s field-services office, said that it was the Florida State Board of Administration’s (SBA) responsibility to oversee investments and questioned why Alliance was allowed to continue buying up shares even after the SEC launched an investigation into Enron’s accounting.
Wait – and See
The union is also calling for a delay of the implementation of the state’s new investment plan – currently scheduled for a June 1 launch – until the SBA ‘is cleared from any potential concerns about mismanagement, conflicts of interest, or breach of duty in the Enron case.’
The new investment plan will give public employees a choice between the current defined benefit plan and a new defined contribution offering. The union says it is worried that retirees who opt to stay in the old plan may end up losing benefits as actuarial assumptions change amid transfers to the new plan, according to the Dow Jones report.
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