Treasurers consider merit-based fees for pension managers

Article Abstract:

In an attempt to improve the rates of return of pension fund investments, some pension plan sponsors are investigating the possibility of compensating investment managers according to performance, rather than by the amount of assets managed. However, corporations have been uncertain as to the legality of this kind of compensation; the U.S. Department of Labor has not yet established whether performance-based fees are in violation of the Employee Retirement Income Security Act (ERISA). In September 1986, the Department of Labor approved a request by a Boston pension management firm to use a 'fulcrum fee' schedule, which combines a base fee for matching the Standard and Poor's 500 stock index and bonus fees for exceeding the index by a given number of basis points. The Labor Department's approval is limited to plans with $50 million or more in assets. Pension consultants are urging plan sponsors to wait until the Labor Department issues a general class exemption or to investigate state laws thoroughly before adopting a performance-based fee structure for pension and investment trust managers.

Management, Compensation and benefits, Pension funds, Investment advisers

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Part-Time Financial Pros Help Harried Treasurers

Article Abstract:

There is a growing market for part-time financial professionals. They are used in areas of risk management, credit management, and accounts receivable. Benefits of using part-time people are: better analysis from an outsider, specialization producing results, and areas typically neglected being supported. Guidelines for choosing a part-time consultant are given. Examples of firms that have hired part-time consultants are outlined.

Standards, Finance, Business consultants, Management consultants, Part time employment, Part-Time Employment

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