US - Three asset managers that were not selected as finalists for mandates by the $102bn (£72bn) Florida Retirement System (FRS) have won the right to reapply for those mandates, following a decision by the fund's trustees to reopen the selection process.
The Florida State Board of Administration (FSBA), which runs the FRS, had rejected bids to run US fixed income, US equity and international equity mandates from asset managers, Horace Mann, Valic and Sun America. A spokesperson for the FSBA said that the trio were unhappy with the selection process used by the FSBA to decide upon managers, which resulted in a meeting between them and the fund's trustees.
Prior to the meeting with the fund's trustees, two of the rejected managers had threatened legal action against the FSBA, according to an FSBA memo. The spokesperson said that following the meeting with the trustees, Florida Governor Jeb Bush, State Treasurer Tom Gallagher and State Comptroller Bob Miligan, the selection process for the mandates has now been put on hold as the FSBA discusses the matter with consultants William M Mercer and Callan Associates.
Currently, the FSBA is in the process of setting up a new defined contribution (DC) scheme, the Public Employee Optional Retirement Program (PEORP). The mandates are part of the bundled section of the fund's new DC scheme and before the trustees reversal, five managers from a list of the sixteen had been shortlisted. The shortlisted five were Prudential America, Fidelity, TIAA-CREF, ING Aetna and Nationwide.
The PEORP will be available to the state's 650,000 public employees from June 1, 2002. According to consultant's estimates approximately 300,000 public employees and $13bn in assets will be transferred to the PEORP from the defined benefit (DB) scheme.
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