Pension Fund

After six years of allowing one firm to manage its pension funds, county officials have decided that the time has come to diversify. On Tuesday, members of the Retirement Board approved a new management policy that will result in three to five fund managers handling the money. The board also will keep those managers on a tight leash by approving an asset mix that keeps half the money in domestic stocks, 10 percent in international stocks and the rest in cash and bonds. As a final step, the board directed the county's consultant, Michael Shone, president of the Peirce Park Group, to develop a bidding proposal for both investment managers and a fund custodian by March 15. It all adds up to big-league tactics for managing a retirement fund that now stands at more than $86 million and is growing, said Shone.

The police officers of Springfield Township, Montgomery County, who saw their pension fund looted by its administrator, filed suit this week against township officials, charging them with negligence. The 29 officers filed their suit Wednesday in Montgomery County Court, charging that township officials failed in their duties as pension trustees by hiring Robert J. Kuss to manage the township funds. Kuss, head of Robert J. Kuss & Associates Inc. of Blue Bell, was pension fund administrator in Springfield and in Upper Providence Township, Delaware County, from 1984 to 1992.

The meltdown on Wall Street has aggravated the Philadelphia pension fund's already precarious situation, threatening to deepen the city's deficit. This pension crisis could consume an enormous share of the city's revenue and jeopardize its ability to provide essential services. The city's pension fund has shrunk from a balance of $4.7 billion in early 2008 to $3.6 billion today. After deducting payouts to current retirees, the pension fund lost 23 percent in 2008, and losses are expected to reach as much as 40 percent.

In an anonymous letter to the Abington Township Board of Commissioners, a group of "concerned township employees" has asked for an independent audit of the township pension fund. In the letter, the employees stated that they do not know how much money is in the fund, where the money is invested or how much is paid out in benefits. The employees also said that township manager Albert L. Herrmann has "complete and absolute control" over the pension fund and that Herrmann has "deliberately and purposefully" withheld information about the fund from employees.

The Morton Borough Council's public safety committee will advise the council to invest its police pension money in federally insured certificates of deposit, according to the committee chairman. The recommendation is contrary to the advice of the borough's pension fund manager. After a meeting of the public safety committee Monday night, councilman Richard Marino, the committee chairman, reported that the four-member committee had voted unanimously to recommend that instead of investing the borough's $281,000 police pension fund in an insurance company's guaranteed- interest contract, the borough council itself should oversee the investment of the money in bank CDs. The main reason for the committee's recommendation is the question of which investment would be insured, according to council member George Dickerson, who is also one of the committee members.

An advocate for customers of the Philadelphia Gas Works is raising questions about a plan to increase the number of money managers who decide how to invest the $280 million in PGW's pension fund. The board that controls the fund is scheduled to vote on the plan today. Attorney Steven Hershey of Community Legal Services said he hasn't been able to get any information about how the new managers were selected, and what their track records were. "My inability to get any response or any information from anybody I've called or written to makes me very concerned," Hershey said yesterday.

A Hostess Brands Inc. union and a pension fund said they were appealing the court order that gave the bankrupt Twinkie maker permission to wind down. U.S. Bankruptcy Judge Robert Drain, at a Nov. 29 hearing in White Plains, N.Y., approved Hostess' requests to shut down and to pay as much as $1.83 million in incentives to 19 senior managers, while overruling objections to the bonuses. The creditors are appealing the wind-down order entered in the case on Nov. 30, according to court papers filed Friday by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the Bakery and Confectionery Union and Industry International Pension Fund.

Preparing for a meeting with Hatboro's police officers to discuss problems with their pension fund, the Hatboro Borough Council this week passed a resolution assuring that although the borough wanted to change the fund administrators, the fund would not be harmed. Council approved the resolution Monday to persuade police officers that their pension fund would remain in good hands if the borough removed the fund from under the auspices of the Pennsylvania Municipal Retirement System.

Former New Jersey State Sen. David Friedland was on trial in Camden yesterday accused of defrauding a pension fund, but you wouldn't know it from being in the courtroom. His name rarely came up, and Friedland himself, who blew a kiss to spectators when he entered the courtroom Monday, yesterday blended quietly into the pin-striped obscurity of the lawyers. Yesterday's testimony focused on the germination of the alleged scam that brought Friedland into court. Witness Alfred Piperata, the pension-fund administrator, described how Friedland's partner, despite two bankruptcies and an "atrocious business reputation," managed to persuade the fund's trustees to entrust him with $20 million.

Former City Treasurer Curtis Townsend, who directs the investment of the city's $1.5 billion employee pension fund, has resigned to take a job with a private investment company. Townsend's resignation as the fund's asset manager comes on the heels of the abrupt departure in June of pension board executive director Anthony Witlin. At that time, Witlin said he quit because it was impossible for him to run a professional organization within the context of city government. His deputy, Peter Crecitelli, was named acting executive director until this fall, when a permanent successor is expected to be named.