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Pension board rescinds remaining real-estate redemptions from Morgan Stanley, keeps income to cash
Summary
Trustees voted to rescind outstanding redemption requests from Morgan Stanley for the plans' real-estate allocation and to continue sending the managers' income distributions to cash, pausing further redemptions.
The Allentown Pension Board voted May 20 to rescind the remaining outstanding redemption requests previously submitted to Morgan Stanley for the plans' real-estate allocation and to continue having income distributed from that manager paid into fund cash accounts.
The motion, made and seconded on the record, passed by roll-call vote. Bina Patel, Jeff Glaser, Evie (Ebi) Balag, Alex Scribe, Rob Bush, Andrew Weiss, John Strobula and Darrell Hendricks recorded votes in favor; no trustees voted against the rescission and Tim Bruce was not present for the vote.
Why it matters: The board had previously submitted a multi-phase partial-redemption request to Morgan Stanley in late 2022; the plans had received roughly 70% of the requested redemptions back to date, the investment presentation said. The rescission will stop future scheduled redemptions, leaving the funds with the option to leave the remaining Morgan Stanley allocation intact while continuing to receive quarterly income as cash.
What trustees said: During debate trustees cited improving transaction activity and liquidity in real estate markets and said rescinding the remainder of the redemptions preserves optionality. "As the money comes back, we can use it for a pack of items, and we're also able to rescind, maybe, cancel it for the remaining redemption requests if the board so chooses," Pat (Marquette) said. Several trustees said they favored rescinding and reviewing the allocation each quarter.
Implementation and timing: Staff said rescission letters must be submitted well before the quarter-end payout (the board was told the next cutoff is roughly June 20) to stop the scheduled redemptions. The board voted that income distributions from the real-estate manager continue to be posted to cash on a quarterly basis.
Vote details: Motion to rescind remaining redemptions and keep manager income to cash passed by roll call: Bina Patel, yes; Jeff Glaser, yes; Evie (Ebi) Balag, yes; Tim Bruce, absent; Alex Scribe, yes; Rob Bush, yes; Andrew Weiss, yes; John Strobula, yes; Darrell Hendricks, yes.
