Cautious of practices like market timing and late trading, retirement plan providers are performing complete security checks of the mutual funds they entrust their investments to, Pensions and Investments reports .

Leading the way is the $1.9 billion Maryland Supplemental Retirement Agency in Baltimore, which devised a set of questions to ask mutual fund companies on market timing, late trading and other related activities. Michael Halpin, executive director at Maryland Supplemental, which runs the state's defined contribution plans, said the questions helped "open the discussion with our current investment providers."

The list, which Maryland devised in tandem with consultant The Segal Co., was sent to the 11 fund companies in the state's 457, 403(b) and 401(k) plans. Besides questions targeting their companies' internal checks on market timing and late trading, the companies were also asked about current and pending litigation their funds were involved in.

Maryland executives say the list helped them gauge which companies they wanted to be associated with. Some companies "jumped at the chance [to meet with us] and asked for appointments to see us right away," Halpin said.

The Maryland list, which was first sent out in the fall of 2003, has become quite popular. Segal, for instance, used it to look for mutual funds for its other clients, such as the $223 million Nevada Deferred Compensation Fund in Carson City. Fund managers at Texa$avers, the defined contribution program of the Employees' Retirement System of Texas in Austin, also answered questions on the Maryland list.

Earlier, the $6.9 billion New York State Deferred Compensation Plan sent out questionnaires to all its fund managers as soon as the mutual fund scandals erupted in September 2003.

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