State Funds Firing Wall Street Managers

Reuters / CNN Money ^ | January 15, 2003

[Cicero]

Asset managers getting booted for poor public pension fund performance.

NEW YORK (Reuters) - U.S. state pension fund managers have decided to cut their ties with Wall Street asset managers whom they blame for allowing already-bad stock market losses to grow even bigger.

[Cicero]

The rats are starting to turn on one another.

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[razorback-bert]

public pension funds made the mistake of reducing employee contributions. Most public pension funds are now increasing the amount of money employers pay into the pension funds

Employers equals taxpayers meaning higher taxes.

Note, no mention of raising the reduced employee share.

[Ken H]

I never understood why these big pension funds don't just buy an S&P index, a bond index, and a little gold on a regular, cost averaged basis basis. Allocate it, say, 60% stocks, 30% bonds, and 10% gold.

That way you'd avoid a management fee, take advantage of the long term rewards of stocks, and have a nice hedge.

That's what I would do, anyway, with a big pension fund.

[meyer]

60% stocks is too high for a working pension fund, IMHO. I think the pension managers got caught up in the "artificial exuberance" of the late 1990's, and it came back to bite them (and the taxpayers). What's apparent to them now is that it "isn't different" this time.