The three firms – Prudential Investment Management, Wellington Management Co., and Western Asset Management Co. – will actively manage fixed income strategies for the agency, according to a press release . Their goal is to match the liabilities of the PBGC, with their secondary goal being to earn excess returns over PBGC’s liability discount rate.
The PBGC now employs 10 asset management firms. The agency manages short-term cash holdings in a revolving fund for premium revenue, while outside managers take care of all other discretionary investments. They are selected on past performance, expertise and expense, according to the release. The PBGC currently has around $40 billion in assets.
The agency insures private sector pensions.