Diversity Quotas ‘Absolutely’ Work, Ursula Burns Says

Link: https://www.ai-cio.com/news/diversity-quotas-absolutely-work-ursula-burns-says/

Excerpt:

Change will not come naturally to corporate boards without diversity quotas, according to Ursula M. Burns, the former chairman and CEO of Xerox. She was the first Black female chief executive of a Fortune 500 company. 

“I was dead set against quotas, but now I think quotas are absolutely, positively acceptable,” Burns said in a keynote panel for the California Conference for Women. “They’re the punishment that you get when you don’t do the right thing by yourself.” 

She noted how a change in the Golden State’s laws spurred the naming of female directors, in a conversation with California first partner Jennifer Siebel Newsom, who helped found gender equity nonprofit California Partners Project, directed the documentary film “Miss Representation,” and moderated the panel. Burns pointed out that public companies in California were quick to find women for their directorships when it was mandated by law in 2018, despite previously insisting that there is too little female talent in the pipeline. 

Author(s): Sarah Min

Publication Date: 5 March 2021

Publication Site: ai-CIO

Massachusetts Pension Fund Returns 12.6% in 2020, Hits Record Asset Value

Link: https://www.ai-cio.com/news/massachusetts-pension-fund-returns-12-6-2020-hits-record-asset-value/

Excerpt:

A strong second half rebound helped the Massachusetts Pension Reserves Investment Trust (PRIT) end calendar year 2020 with a 12.6% return, beating its benchmark’s return of 10.8% and raising the fund to a record high of $86.9 billion in assets, according to Pension Reserves Investment Management (PRIM), which oversees the fund.

The fund also surpassed its benchmark over the past three, five, and 10 years, with annualized returns of 8.8%, 10.4%, and 8.9%, respectively, compared with 8.0%, 9.5%, and 7.6%, respectively for its benchmark over the same time periods.

Author(s): Michael Katz

Publication Date: 9 February 2021

Publication Site: ai-CIO

North Carolina Lowers Assumed Rate of Return for State Pensions to 6.5%

Link: https://www.ai-cio.com/news/north-carolina-lowers-assumed-rate-return-state-pensions-6-5/

Excerpt:

The $116 billion North Carolina Retirement Systems has lowered its assumed rate of investment return for the third time in four years, cutting it by 50 basis points (bps) to 6.5% from 7% annually.

The target return had already been reduced to 7.2% from 7.25% in 2017 and again in 2018 to 7%. Prior to then, the rates had been left unchanged for nearly six decades even though the two main state pension funds—the Teachers’ and State Employees’ Retirement System and the Local Government Employees’ Retirement System—have, on average, underperformed their assumed rates of return over the past 20 years. In fact, the new target rate of 6.5% is still higher than the fund’s estimated 20-year return of 6.28%.

Author(s): Michael Katz

Publication Date: 5 February 2021

Publication Site: ai-CIO

Public Pensions Increasingly Rely on Investment Earnings

Link: https://www.ai-cio.com/news/public-pensions-increasingly-rely-investment-earnings/

Graphic:

Excerpt:

Public pension funds derived 71% of their revenue from their investment earnings last year, up from 69% in both 2019 and 2018, according to an annual study from the National Conference on Public Employee Retirement Systems (NCPERS).

Employer and employee contributions made up the rest of the revenue, accounting for 20% and 9%, respectively. The share of revenue from employer contributions declined from 22% in 2019, while the share of revenue from employee contributions remained unchanged.

The study was based on responses from 138 state and local pension systems that have approximately 12.8 million active and retired members, and assets of more than $1.5 trillion in actuarial and market value. Among the responses, 51% were from statewide pension systems, while 49% were from local pension systems.

Author(s): Michael Katz

Publication Date: 5 February 2021

Publication Site: ai-CIO

CalSTRS Aims for New $2 Billion Sustainable Portfolio

Link: https://www.ai-cio.com/news/calstrs-aims-new-2-billion-sustainable-portfolio/

Excerpt:

The California State Teachers’ Retirement System (CalSTRS) plans to build a private markets sustainable investment portfolio to go greener while aiming to maintain its investment returns.

The investment committee of the $282.5 billion pension system, the largest teachers’ retirement fund in the world, is expected to approve the new portfolio at its meetings next week. 

The pension system’s plan calls for investments of $1 billion to $2 billion in the next couple of years—much of it in real estate affordable housing investments, as well as in private equity and infrastructure—according to CalSTRS investment committee material. 

Author(s): Randy Diamond

Publication Date: 24 February 2021

Publication Site: ai-CIO

Wisconsin Treasurer Recommends Creating State-Run Retirement Plan

Link: https://www.ai-cio.com/news/wisconsin-treasurer-recommends-creating-state-run-retirement-plan/

Excerpt:

A task force headed by Wisconsin’s state treasurer has recommended that Wisconsin establish a state-run program that provides a retirement benefit plan for employers that don’t offer one.

The task force, which was created by Wisconsin Gov. Tony Evers in 2019, issued a report outlining the causes of the state’s “retirement security crisis” and provided several recommendations it said would strengthen the financial security of Wisconsin’s retirees.

“Wisconsin is in trouble when it comes to retirement security,” the task force’s report began ominously. “Even before the COVID-19 pandemic, our retirement system was not working for a significant number of Wisconsin workers.”

Author(s): Michael Katz

Publication Date: 24 February 2021

Publication Site: ai-CIO

CPPIB Chief Mark Machin Exits Amid Vaccine Uproar

Link: https://www.ai-cio.com/news/cppib-chief-mark-machin-exits-amid-vaccine-uproar/

Excerpt:

The head the Canada Pension Plan Investment Board (CPPIB) has stepped down in the wake of his journey to the Middle East to receive a vaccination for COVID-19.

CEO Mark Machin, 54, traveled to the United Arab Emirates (UAE) to get the shot earlier this month, as Canada’s rollout of its vaccination program has lagged. Canada’s largest pension fund (US$379 billion) named John Graham, the fund’s head of credit investments, as Machin’s successor.

“After discussions last evening with the board, Mr. Machin tendered his resignation and it has been accepted,” the fund said in a statement. The statement said he had traveled personally to get the vaccine.

Author(s): Larry Light

Publication Date: 26 February 2021

Publication Site: ai-CIO

New York City Comptroller: Ax Rule Forcing Private Equity to Pay Legal Bills

Link: https://www.ai-cio.com/news/new-york-city-comptroller-ax-rule-forcing-private-equity-pay-legal-bills/

Excerpt:

Scott Stringer is worried. New York City pension funds are having a tough time enlisting private equity (PE) firms due to a requirement that PE outfits pay for litigation expenses out of their own pockets instead of shunting the cost onto investors.  

So, as the city official overseeing the funds, City Comptroller Stringer is urging fund trustees to scrap this rule, which would help the buyout firms if they run into trouble with regulators or other litigants, as first reported by the New York Post. The idea is to get more PE players managing city pension money.

The New York City Public Pension Funds, the collective of the city’s five pension funds, implemented the private equity rule, called the “GP Expenses Provision,” roughly five years ago after Carlyle Group was swept up in a collusion case and had to pay a $115 million settlement, the Post reported.

Author(s): Sarah Min

Publication Date: 26 February 2021

Publication Site: ai-CIO

Pension Relief Plan in COVID-19 Stimulus Bill That Passes House

Link: https://www.ai-cio.com/news/pension-relief-plan-covid-19-stimulus-bill-passes-house/

Excerpt:

On Saturday, a measure to give troubled multiemployer pension plans assistance from the Pension Benefit Guaranty Corporation (PBGC) passed the House of Representatives, as part of a larger $1.9 trillion coronavirus relief package from President Joe Biden. 

The federal stimulus package, which includes $1,400 checks for many Americans and increased funding for vaccines, also holds the Emergency Pension Plan Relief Act of 2021 (EPPRA), an update to the Butch Lewis Act. It’s a bill that lawmakers expect will help stabilize the multiemployer pension plans that are in danger of insolvency. 

Of the more than 10 million multiemployer plan participants, about 1.3 million are in plans that will soon run out of money. 

Author(s): Sarah Min

Publication Date: 1 March 2021

Publication Site: ai-CIO

OMERS Reports First Annual Loss Since Financial Crisis

Link: https://www.ai-cio.com/news/omers-reports-first-annual-loss-since-financial-crisis/

Excerpt:

Canada’s Ontario Municipal Employees Retirement System (OMERS) reported a 2.7% loss last year, well off its benchmark’s return of 6.9%. It’s the first time the pension fund has seen a loss since the financial crisis of 2008.

As a result, the fund’s total net assets declined to C$105 billion ($82.4 billion) from C$109 billion. The fund also reported three-, five-, 10-, and 20-year annualized returns of 3.7%, 6.5%, 6.7%, and 6.0%, respectively.

Author(s): Michael Katz

Publication Date: 1 March 2021

Publication Site: ai-CIO

Multiemployer Pensions Reach Highest Funding Levels in 13 Years

Link: https://www.ai-cio.com/news/multiemployer-pensions-reach-highest-funding-levels-13-years/?

Excerpt:

Robust investment returns helped boost the aggregate funded percentage of all US multiemployer pension plans to 88% at the end of 2020, from 85% a year earlier—the highest since before the global financial crisis at the end of 2007—according to consulting and actuarial firm Milliman.  

The strong performance came despite a turbulent year of market volatility due to the impact of the COVID-19 pandemic. The volatility caused those same plans’ funded ratio to plunge to 72% during the first quarter of the year, which was the largest quarterly drop in funded percentage since 2007. That was followed by a rebound to 82% in the second quarter, which was the largest quarterly increase in funded percentage since 2007.

Author(s): Michael Katz

Publication Date: 22 February 2021

Publication Site: ai-CIO

NYC Pension Funds Rebound After Missing Fiscal 2020 Target

Link: https://www.ai-cio.com/news/nyc-pension-funds-rebound-missing-fiscal-2020-target/

Excerpt:

New York City’s five pension systems have bounced back from a 4.4% return for fiscal year 2020 that missed an actuarial target of 7%, to return roughly 18% in the first seven months of fiscal year 2021, according to a report from New York State Comptroller Thomas DiNapoli.

Since fiscal 2012, the pension funds, which had approximately $239.8 billion in assets under management (AUM) as of November, have earned an average of 7.5% annually on their investments.

According to the Comptroller Office’s Review of the Financial Plan of the City of New York, pension contributions have stabilized after growing rapidly for many years, mainly due to higher-than-expected investment returns and savings from lower-cost pension plans enacted for employees hired after March 2012. However, the contributions are still forecast to total $10.1 billion in fiscal 2022.

Author(s): Michael Katz

Publication Date: 25 February 2021

Publication Site: ai-CIO