September 7, 2012

Bristol mulls extra pension cash to lure business

Bristol's pension plan is so flush with cash it's considering investing a few hundred thousand dollars in companies to boost economic development, The Associated Press reports.

The central Connecticut city's pension liabilities total $210 million, T.J. Barnes, chairman of the city's Retirement Board and the city's treasurer, said Friday. That's less than half the city's pension fund of about $580 million, he said.

The Bristol Press first reported that city officials are considering such a move.

What Barnes called ''one of the best funded pension plans in the state or country'' contrasts with many companies that have halted pension contributions to save money and some states that are seeking greater employee contributions to strengthen pension plans.

Barnes is a former manager at Barnes Group Inc. and a scion of the Bristol manufacturing giant's founding family.

Bristol officials are considering investing about $600,000 in companies that move to Bristol, or 1 percent of $60 million in so-called alternative investments such as private equity and direct real estate investments, he said.

Bristol, with a population of about 60,500, would invest money in companies, buying stock or otherwise obtaining a stake that could eventually pay off.

''We want to make investments as an investor rather than as a government entity giving away money,'' Barnes said.

The first move would be to hire consultants who vet potential companies to receive city investments, he said. The process could start in about two months, he said.

Barnes credits Bristol's success building up its pension fund to two factors. The city started early, in 1978, allowing it to take advantage of stock market run-ups in the 1980s and 1990s, Barnes said.

The pension fund also has made strategic moves, such as selling stock in real estate in 2007 before the sector's collapse and turning to more conservative investments, he said.

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