Pension Plan Investing

[LOL!]

Not to worry.  Even Harvard is having a hard time with getting someone to manage its endowment.

http://www.nytimes.com/2005/08/05/business/05fund.html

 

[unclemick]

Interesting - also, I recently read an article about them other guys - at Yale.

In both cases - there seemed to be a lack of detail as to how they did it. And a lack of comparison with equivalent benchmarks over the same time period. They did mention the 'curse of success' wherein size becomes an anchor - Bogle and Buffett often comment on that one.

Of the two - the lead guy at Yale - has the more interesting bio - show biz wise.

 

[Brat]

Justin, the recommendtions of Greg and Charlie are worthy of serious consideration. Employees who think they can juce up their returns by agressive investing should do so in their self managed accounts.

The Trust's investment expenses are low and the trustees have been prudent. The cost of administering the individual accounts hasn't changed (although you can ask Vanguard if they provide that service and at what cost).

 

[mikew]

Hi Justin
These are just some questions that I hope may help you. Please remember, I do not know the situation so this could be totally wrong.

I am wondering what the role of the advisory committee exactly is? This did not seem clear from your posts.

It seems the CFP is set up as the expert and he has final (fiduciary) responsibility. Is this correct?

What is your job within the committee? Why were you chosen? What power  do you have (both formal and social)?
Are you exceeding what you were asked to do by coming up with these portfolios and funds? If this is the case, are you alienating yourself from the rest of the group by trying to be the expert and going up against the CFP? The more you push, the less you may accomplish. Also remember, things that happen in the committee could spill over into work. 

Even if you succeed and get everything you want, you could still lose. The funds you are suggesting will probably return lower than the CFP’s targets. This could make you the scape goat, even though their money was safer.

Working on a 25 person committee usually means what is right and what you can accomplish are two different things. The best you may be able to get is a percentage of what you want.

I might try working with the CFP on your concerns such as a balanced portfolio, risk, volatility, fund fees (not the CFP’s), and turnover within the portfolio and the individual funds. I might be inclined to rely on the CFP’s knowledge (whatever that is) and allow him to do his role in the this situation. While at the same time, influencing him closer towards your way of thinking.

If this does not fit, please ignore.
Mike

 

[Bookm]

Justin wrote:

This is the defined benefit plan that individuals invest in?  Not a pension that makes a fixed payment to beneficiaries? 

The reason that I ask is the fixed income percentage is significantly lower than the other pension funds that I've seen.

Those percentages are from a DBP that our employer contributes to on behalf of the employees. Our retirement benefits are determined by a formula, not on accumulated contributions and interest. The formula amount depends on (1)age at retirement, (2)the average compensation of the three consecutive years of highest earnings and (3)years of service.

The plan's returns were double digits for the last two fiscal periods.

Bookm

 

[Olav23]

Why not just pool the ESOP cash and instead form it into an incentive based bonus pool structure for employees? Then they can do whatever they like with the money...

 

[greg]

"I am in control here at the White House." Alexander Haig, Secretary of State to President Ronald Reagan

REW

REW: We were out camping in the woods and accessed the web via DW's phone and computer; I didn't have my password, so I did the hijacking after Martha went to bed.

Martha was horribly amused by your comment and called me Alexander Haig all day Friday and half of Saturday, whenever I appeared to get a little bossy. This took the wind out of one of my favorite camping activities--being a he-man, bossy, primitive type. I blame you. But I also respect a MB troublemaker that muck up a day and half of my fun with one sentence.

--Greg

 

[REWahoo]

Martha was horribly amused by your comment and called me Alexander Haig all day Friday and half of Saturday, whenever I appeared to get a little bossy.

Greg, my sincere apology. I had no idea of the negative consequences of my flippant post.

Martha,

REW

 

[greg]

Greg, my sincere apology. I had no idea of the negative consequences of my flippant post.

Martha,

REW

Hey, I know what's going on here. At least I can take solace in the belief that it now takes three to tease.

--Greg