Pension Funds

Stock prices are rising in Germany as middle-class Germans, anxious about saving for retirement, get the stockholding habit and foreign pension funds from the United States and other countries pour money into shares of German companies. Stocks of such major companies as Siemens, SAP and Deutsche Telekom have risen more than 100% in the last year.

The nation's pension funds have lost money in the last two years, and that spells big changes ahead for corporate earnings growth, the stock market and the personal retirement plans of millions of Americans. Corporate pension plans have lost $630 billion since 1999, a 14% decline, according to a new study by Cerulli Associates Inc., a Boston-based research firm.

New Jersey will sue companies whose misleading financial reports or mismanagement led to losses in the state's $73-billion pension funds, Atty. Gen. David Samson said. The state has identified at least $1 billion in losses that may be due to improper actions by corporations whose stock was held by the funds, the attorney general's office said. The funds have declined 22% over the last two years because of a falling stock market and increased pension payments.

First Union's Capital Management Group has won a contract to manage $30 million in pension funds for the city of Lake Worth, Fla.'s employee, police and firefighters. The agreement includes all money for the employee and police portfolios, and half the firefighters' fund. First Union operates more than $6 billion in equity, balanced and fixed-income portfolios, including 21 public funds, officials said. First Union National Bank of Florida is a unit of First Union Corp. of Charlotte, N.C.

Four of the largest U.S. public pension funds said Tuesday that they would ask Walt Disney Co. to change company policy to let investors nominate two independent directors to the board.

Dissident Hewlett-Packard Co. director Walter Hewlett gained ground in his bid to scuttle the Compaq Computer Corp. acquisition, as four state pension funds said they would vote against the Palo Alto computer company's proposed deal. Officials for the New York State Teachers' Retirement Fund, the New York State Common Retirement Fund, the State of Michigan Retirement Systems and the Public Employees' Retirement Assn. of Colorado said they planned to vote their 15.

California's giant retirement funds for public employees and teachers would be urged to avoid investing in global companies doing business with Sudan under a resolution that cleared a key state Assembly committee Wednesday. A 4-1 vote by the Public Employees, Retirement and Social Security Committee sent the resolution to the full Assembly for a vote. The New Jersey Assembly has already approved such a resolution, while similar legislation has been introduced in Arizona, Texas and Illinois.

European Union governments will allow private pension funds to operate across the 15-nation bloc, a first step in expanding the EU's $2.3-trillion company pension market. Finance ministers Tuesday will permit funds to branch out across national borders as long as they invest no more than 30% of their assets in hedge funds or derivatives and no more than 5% in a single security, EU officials said.

If Jesse M. Unruh has learned one thing after four decades in California politics, it is that "the public sector does not have a corner on incompetence." Unruh, for years one of the best-known and most influential state legislators in America, and now California's state treasurer, is of the opinion that corporate America shares in the wealth of that commodity too.

Congress should start off the new year right by outlawing "reversions"--the polite word for corporate raids on workers' pension funds. One form of reversion occurs when an employer terminates a pension plan and siphons off what is euphemistically called "surplus" money--the amount left after the company buys annuities that will give retired workers only minimal benefits.