Researchers found a decline in assumed rates of return due to lower assumed inflation combined with a change in asset allocations, resulting in a higher expected real return, has increased costs for public pensions, but the increase is much smaller than if the decline in the assumed return was due to a lower assumed real return.
Tag: public defined benefit plans
A Kentucky appeals court reversed a lower court’s ruling that the beneficiaries of the Kentucky Retirement System (KRS) had standing to sue over risky hedge fund investments; but the beneficiaries have now appealed to the State Supreme Court.
The San Bernardino County Employees’ Retirement Association uses knowledge management and InvestTech to make better-informed portfolio rebalancing decisions.
Wilshire Consulting also reports significant changes to state pensions’ allocations to equity and real assets over the past decade.
Two separate reports suggest that public pension plans’ strict adherence to target allocations and corporate pension plans’ focus on bonds and de-risking their portfolios may be hindering potential performance.
The regulator says a romantic interest led a county manager in Georgia to recommend one investment adviser over others to three public pension fund boards.
Employer contributions to public pensions fell below certain benchmarks for improving plan funded status, and the Society of Actuaries suggests a couple of reasons this may be so.
Between nearly doubled investment returns, stable contributions and cost-effectiveness, the "2018 NCPERS Public Retirement Systems Study” shows an increase in pension funding.
Research from the Center for Retirement Research (CRR) at Boston College also suggests public defined benefit (DB) plan return assumptions are on the optimistic end compared with those of investment professionals.
It developed the new tables to give pension actuaries and plan sponsors current information to assist in setting mortality assumptions once it was determined that public pensions have differing levels of mortality than private pensions.
Reporting proposals from the Actuarial Standards Board and Congress, as well as new proposed mortality tables from the Society of Actuaries could result in a higher valuation of pension obligations and lower funded levels for public pensions, according to Mike Moran with GSAM.
The New York State Common Retirement Fund and the New York State Teachers Retirement System hold Exxon shares with a combined value of approximately $1.5 billion, and a lawsuit asks for damages, a disgorgement of all monies obtained in connection with the alleged fraud, and restitution.
OPERS said the move is expected to lower its funding level, but increase the time in which it can pay off liabilities.
“The increase in global equity values for the 12-month period ending June 30, 2017 was a primary driver of the improved funding levels,” says Ned McGuire, at Wilshire Consulting.
The SOA said it developed the new tables once it was determined that public pensions have differing levels of mortality than private pensions. It is soliciting comments on its proposal.
The California Supreme Court has asked an appellate court to review a proposal approved by voters in 2012 to place new hires in a defined contribution (DC) plan rather than the city’s defined benefit (DB) plan.
Alternative investments charge higher fees than traditional asset classes such as public equities and fixed income, and according to a study, these fees, in particular, may play a meaningful role in public plan underperformance.
“A cap-weighted strategy skews its way toward the largest stocks, but if plan sponsors own equities in a much more balanced way, it will help with stability,” says Bryan Belton, director, multi asset, at PanAgora Asset Management.
However, the Center for Retirement Research (CRR) at Boston College found portfolio allocation did account for about one-quarter of the total 16-year underperformance for bottom quartile plans.