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California May Develop First State-Run Retirement Program for Private Sector

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CA Governor Jerry Brown

Jerry Brown, Jr.

On September 28, 2012, California Governor Jerry Brown signed legislation to create a board to begin developing a proposed retirement savings program for California companies that do not offer a retirement plan. The plan called the California Secure Choice Retirement Savings Program will not be implemented until the California state legislature votes to implement the proposed plan solution. If implemented, it would be the first state-run retirement savings program for private-sector workers in the United States. With the anemic financial condition of American public-worker pensions, many believe it will be another mounting liability for state taxpayers. Unfunded pension liabilities continue to haunt California. Republican lawmakers in California felt that Roth IRAs would be a more efficient solution for low-income workers.

The state of California has US$ 617 billion in public debt; furthermore, California has higher per capita debt than the national average.

This new board is tasked to create a plan that would automatically withhold 3% of workers’ pay without any type of employer sponsored retirement plan into a retirement account. The account would be portable. California employees would have to opt out of the plan or the deductions would become automatic. Plan participants would have to sign a liability waiver stating that California would not be liable for losses.

Who will manage the money?
In the legislation it calls for the 3% contributions to be managed by the California Public Employees’ Retirement System (CalPERS) for a fee, the CA State Treasurer, and/or a private manager. This will be determined by the investment board.

California Secure Choice Retirement Savings Investment Board Composition

  • California State Treasurer
  • California State Controller
  • CA State Director of Finance (designee)
  • Expert in Retirement Savings and Investments (Appointed by the CA Senate Committee on Rules)
  • Small Business Representative (Appointed by CA Governor)
  • Public Member (Appointed by CA Governor)
  • Employee Representative (Appointed by CA Speaker of the Assembly)

KIC to Manage a Portion of Korea Post Assets

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In late February, the Korea Investment Corporation (KIC) inked an agreement to manage some of Korea Post’s global assets. KIC also seeks to provide investment training and research to Korea Post.

“As part of effort for Korea Post to allocate part of global investment assets to KIC, both agencies agreed to discuss details during the first half of this year, including the manner in which joint investment and asset allocation will be made,” KIC said in a statement.

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Singaporean Sovereign Wealth Capital Participates in DoorDash Series F Round

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San Francisco-based DoorDash Inc., a food delivery company, raised US$ 400 million in a Series F investment round. The investment round was led by Singapore’s Temasek Holdings and San Francisco-based Dragoneer Investment Group, LLC. Post-raise, DoorDash has raised US$ 1.4 billion in equity capital. This gives DoorDash a post-money valuation of US$ 7.1 billion. DoorDash competes against publicly-traded company Grubhub, Postmates, and UberEats, a service of Uber Technologies.

Other investors in the Series F round include SoftBank Vision Fund (managed by SoftBank Group), DST Global, Coatue Management, Singapore’s GIC Private Limited, Sequoia Capital, and Y Combinator.

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CPPIB and Sterling Partners Exit Livingston International

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Canada Pension Plan Investment Board (CPPIB) and U.S. private equity firm Sterling Partners are exiting their investment in Livingston International Inc., an international trade-services firm based in Toronto, Ontario, which specializes in customs brokerage, freight forwarding, and trade consulting. Livingston International is Canada’s largest customs broker and third-largest entry filer in the United States.

U.S. private equity firm Platinum Equity is buying Livingston International from CPPIB and Sterling Partners. Platinum Equity is a private equity firm founded by Tom Gores in 1995.

Livingston International was founded in 1945 by Gerry Livingston. In 2002, the company went public after backing from CAI Capital Partners. In 2010, CPPIB and Sterling Partners acquired the company for US$ 324 million. On May 8, 2012, Livingston International acquired New Orleans, Louisiana-based M.G. Maher & Company, Inc. and MCLX, Inc. Maher is an international freight forwarder, customs broker and logistics provider. In 2013, the owners of Livingston International refinanced debt raising US$ 555 million in senior secured credit facilities.

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