US - CalPERS, the largest pension fund in the US, is to change the way it hires and fires asset managers - setting up a "spring-fed pool" of managers that it can switch in and out of quickly.

The 163 billion-dollar fund said the move would streamline its external manager hiring process and improve performance. It would establish a pool of qualified US and international equity and fixed income managers that can be used to manage assets.

It said: "CalPERS spring-fed pool contracting process is a unique feature that allows managers who meet minimum qualifications and scoring standards to be part of the pool for up to five years.

"Managers may not be funded but remain under contract and available for funding. The pool helps CalPERS staff remain flexible to optimally allocate assets.”

The fund would also streamline the hiring process, as well as its own internal approval and contract processes to let it "react quickly to changing conditions market conditions in the market".

And it would eliminate the public watch list process - which will be replaced with a quarterly performance report. The firing of managers will now be delegated to CalPERS staff, who will now just have to notify the board.

"The way in which we have administered our external management program has not changed in 25 years," said CalPERS president Sean Harrigan. "These changes bring us up to date with industry standards and I'm confident that will translate to improved performance, more efficient administration and enhanced perception of CalPERS as an attractive and valuable client by money managers."

The decision follows a poll the Sacramento-based scheme took earlier this year of nine public and corporate pension funds and endowments to compare their practices. The new system brings CalPERS into line with what it found.

"With these improvements, we will be able to improve manager selection, enhance our monitoring and retain the best managers available," said Rob Feckner, chair of the fund's investment committee.

Elsewhere in the US, the Center On Federal Financial Institutions, a policy institute, has said that the Pension Benefit Guaranty Corp. will run out of cash in 2020. The centre said that although the PBGC, which insures defined benefit pensions, has more than 30 billion dollars in assets "it is insolvent on the basis of Generally Accepted Accounting Principles (GAAP) and would be shut down if it were a private insurer".