Hewitt Associates announced the launch of Global Risk Services, a new initiative that will help pension plan sponsors manage the risks they face. [...] "A key differentiator of Hewitt's Global Risk Services is that we look at both sides of the equation — risk and return are just the two sides of one coin."
How on Earth is that a differentiator? Like nobody ever thought of risk and return as the two sides of one coin before?
Monday, November 19, 2007
Sunday, November 18, 2007
Loss at Hewitt
Hewitt Associates reported a fourth quarter loss of $266 million, or $2.51 per share, compared with a profit of $23 million, or 21 cents per share, in the previous year. Total operating expenses grew to $1.05 billion from $685 million. Quarterly revenue was $768 million, compared to $728 million a year ago.
For the fiscal year 10/1/2006-9/30/2007, Hewitt posted its second consecutive yearly loss. This year's loss was $175 million, or $1.62 per share, compared with a loss of $116 million, or $1.08 per share last year. Full-year sales were $2.99 billion, versus $2.86 billion in the prior year.
For the fiscal year 10/1/2006-9/30/2007, Hewitt posted its second consecutive yearly loss. This year's loss was $175 million, or $1.62 per share, compared with a loss of $116 million, or $1.08 per share last year. Full-year sales were $2.99 billion, versus $2.86 billion in the prior year.
Monday, November 05, 2007
Pensions Can Be Outsourced
From the LA Times...
Citigroup got the green light from the Federal Reserve for an unusual deal to take over the $400-million retirement plan of a British newspaper company. In exchange for getting its hands on all that cash, Citigroup will run the pension plan - investing the money, paying the benefits and taking on the liability previously borne by Thomson Regional Newspapers. And it's eyeing similar moves stateside. Other banking investment and financial companies, including JPMorgan Chase, also are exploring the idea of taking pension plans - and their billions of dollars of assets - off the hands of employers. At least three federal agencies are considering aspects of the idea, including its basic legality and safeguards for workers.
Advocates say such changes would be a win-win for retirees and employers, retaining all the protections of current law, while putting plans in the hands of sophisticated financial stewards. Plus, large banks are less likely to go out of business or face severe financial strains than smaller employers.
Yet other people worry that such setups could subject retirement benefits to new risks and jeopardize decades-old worker protections. They're concerned that the would-be pension managers are more interested in profit than in the security of retirees. Further, they fear that unwise investments could bring a crisis for which there is no simple solution.
And from the industry magazine Pensions & Investments...
Bradley Belt, the former PBGC chief, wants to take over your frozen pension plans — and he’s betting he can wring enough money out of the hundreds of millions of dollars now sitting in frozen plans in the US to pay off the existing liabilities and turn a tidy profit for his new company and other investors. “We’re very comfortable with our ability to manage the assets against the liabilities in a way that will allow us to earn a consistent return above the liabilities, but without taking inordinate risk in doing so,” said Mr. Belt, now chairman of Palisades Capital Advisors LLC, in an interview in the firm’s Washington office. There’s no precedent for pension plan liability buyouts in the US. So over the past several months, Mr. Belt has been meeting with federal regulators, pension plan sponsors and representatives of investment firms to encourage support for a concept that he argues could serve the best interests of plan sponsors, plan participants and the PBGC alike.
Of course, this isn't really news. The big banks have been making their plays in this space for years now, as seen in this story from January 2006 ...
Recruiters in New York and London say corporate pension deficits are driving demand for actuaries who can help match pension fund assets to ever mounting pension liabilities. As the problem becomes more acute, so demand is likely to rise. “Banks are keen to strengthen their offering in this space,” says Kim Yates, a director at London-based search firm Principal Search. She says, “There are several clear leaders, and others are seeking to challenge them.” The leaders are Goldman Sachs and Morgan Stanley, which formed so-called ‘pension advisory groups’ in the late 1990s and now have large teams devoted to the business. More recent entrants include ABN AMRO, which founded its pension advisory group in 2004.
Citigroup got the green light from the Federal Reserve for an unusual deal to take over the $400-million retirement plan of a British newspaper company. In exchange for getting its hands on all that cash, Citigroup will run the pension plan - investing the money, paying the benefits and taking on the liability previously borne by Thomson Regional Newspapers. And it's eyeing similar moves stateside. Other banking investment and financial companies, including JPMorgan Chase, also are exploring the idea of taking pension plans - and their billions of dollars of assets - off the hands of employers. At least three federal agencies are considering aspects of the idea, including its basic legality and safeguards for workers.
Advocates say such changes would be a win-win for retirees and employers, retaining all the protections of current law, while putting plans in the hands of sophisticated financial stewards. Plus, large banks are less likely to go out of business or face severe financial strains than smaller employers.
Yet other people worry that such setups could subject retirement benefits to new risks and jeopardize decades-old worker protections. They're concerned that the would-be pension managers are more interested in profit than in the security of retirees. Further, they fear that unwise investments could bring a crisis for which there is no simple solution.
And from the industry magazine Pensions & Investments...
Bradley Belt, the former PBGC chief, wants to take over your frozen pension plans — and he’s betting he can wring enough money out of the hundreds of millions of dollars now sitting in frozen plans in the US to pay off the existing liabilities and turn a tidy profit for his new company and other investors. “We’re very comfortable with our ability to manage the assets against the liabilities in a way that will allow us to earn a consistent return above the liabilities, but without taking inordinate risk in doing so,” said Mr. Belt, now chairman of Palisades Capital Advisors LLC, in an interview in the firm’s Washington office. There’s no precedent for pension plan liability buyouts in the US. So over the past several months, Mr. Belt has been meeting with federal regulators, pension plan sponsors and representatives of investment firms to encourage support for a concept that he argues could serve the best interests of plan sponsors, plan participants and the PBGC alike.
Of course, this isn't really news. The big banks have been making their plays in this space for years now, as seen in this story from January 2006 ...
Recruiters in New York and London say corporate pension deficits are driving demand for actuaries who can help match pension fund assets to ever mounting pension liabilities. As the problem becomes more acute, so demand is likely to rise. “Banks are keen to strengthen their offering in this space,” says Kim Yates, a director at London-based search firm Principal Search. She says, “There are several clear leaders, and others are seeking to challenge them.” The leaders are Goldman Sachs and Morgan Stanley, which formed so-called ‘pension advisory groups’ in the late 1990s and now have large teams devoted to the business. More recent entrants include ABN AMRO, which founded its pension advisory group in 2004.
Sunday, November 04, 2007
What a mess at ACS
Affiliated Computer Services, caught in a bitter battle between members of the company's board and its chairman, said in a statement November 1 that five board members had resigned after initially refusing to do so. [...] Now that the five independent board members have resigned and two potential buyers are gone, it's unclear how ACS will proceed, sources say.
The dispute began several weeks ago when Mr. Deason and private equity firm Cerberus Capital Management withdrew their $6.2 billion bid to buy the company, saying that the board had dragged its feet on the offer while the credit market dried up. Mr. Deason then demanded the resignations of the five independent board members, accusing them of mismanagement. The departing members are Robert Holland III, J. Livingston Kosberg, Dennis McCuistion, Joseph O'Neill and Frank Rossi. In a separate action, board member John Rexford also has resigned from the board but will remain as executive vice president at the company. ACS also said Wednesday that the directors have agreed to withdraw their lawsuit against the company and Mr. Deason.
The dispute began several weeks ago when Mr. Deason and private equity firm Cerberus Capital Management withdrew their $6.2 billion bid to buy the company, saying that the board had dragged its feet on the offer while the credit market dried up. Mr. Deason then demanded the resignations of the five independent board members, accusing them of mismanagement. The departing members are Robert Holland III, J. Livingston Kosberg, Dennis McCuistion, Joseph O'Neill and Frank Rossi. In a separate action, board member John Rexford also has resigned from the board but will remain as executive vice president at the company. ACS also said Wednesday that the directors have agreed to withdraw their lawsuit against the company and Mr. Deason.
Thursday, November 01, 2007
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