Pensions & Investments

Pensions & Investments The international newspaper of money management With unmatched integrity and professionalism, Pensions & Investments consistently delivers news, research and analysis to the executives who manage the flow of funds in the institutional investment market.
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Since its founding in 1973, this continues to be the mission of Pensions & Investments, the international newspaper of money management. Written for pension, portfolio and investment management executives at the hub of this market, Pensions & Investments provides its audience with timely and incisive coverage of events affecting the money management business. Written by a worldwide network of reporters and correspondents, Pensions & Investments' coverage includes business and financial news, legislative reports, global investments, product development, technology, investment performance, executive changes, corporate governance and other topics crucial to the people who drive the world of professional money.

The lawsuit, filed Tuesday in Delaware Chancery Court in Wilmington, demands an "inspection of McDonald's books and reco...
08/14/2020
Teamsters Local 237 funds sue McDonald’s for records in harassment allegations

The lawsuit, filed Tuesday in Delaware Chancery Court in Wilmington, demands an "inspection of McDonald's books and records" related to harassment charges throughout the company since 2006.

Thee Teamsters Local 237 funds sued McDonald's demanding the company provide records related to sexual harassment and other allegations.

The inquiry reinforces a controversial proposal issued in June that many industry observers say will curb ESG investing ...
08/14/2020
DOL investigates use of ESG funds in retirement plan lineups

The inquiry reinforces a controversial proposal issued in June that many industry observers say will curb ESG investing in ERISA plans.

The Department of Labor is cracking down on plan sponsors that use ESG funds in their investment lineups.

The best performer in the fiscal year was LACERA's risk reduction and mitigation asset class at 7.5% vs its 7.7% benchma...
08/13/2020
Los Angeles County sees 1.8% return for fiscal year

The best performer in the fiscal year was LACERA's risk reduction and mitigation asset class at 7.5% vs its 7.7% benchmark.

Los Angeles County Employees Retirement Association returned 1.8% for its fiscal year.

The 7-0 ruling upheld the law and rebuffed a challenge by the New Jersey Republican State Committee over the law that au...
08/13/2020
New Jersey Supreme Court upholds COVID-19 bond law

The 7-0 ruling upheld the law and rebuffed a challenge by the New Jersey Republican State Committee over the law that authorizes the state to borrow up to $9.9 billion.

New Jersey's Supreme Court ruled that the state can borrow to offset revenue lost due to the economic impact of the coronavirus outbreak.

Among all employers citywide, women earned on average 76% of the earnings of their male co-workers. The average hourly w...
08/13/2020
Men earn way more than women at 2 Los Angeles funds – report

Among all employers citywide, women earned on average 76% of the earnings of their male co-workers. The average hourly wage is $46, with men earning $47 and women earning $44.

A large pay disparity exists between female and male employees at the city of Los Angeles' two largest pension plans, according to a report.

McKinsey will retain an independent third party for at least three years "to review the plans' investment options and re...
08/12/2020
McKinsey to pay $39.5 million to settle ERISA case

McKinsey will retain an independent third party for at least three years "to review the plans' investment options and review all expense reimbursements to McKinsey, MIO, or any other affiliated person or entity."

McKinsey agreed to pay $39.5 million to settle an ERISA complaint over the violation of rules against self-dealing in two retirement plans.

"It's becoming a very crowded trade to short the dollar...The risks could manifest at any time, there's room for the dol...
08/12/2020
Hedge funds warn that shorting dollars is now a crowded trade

"It's becoming a very crowded trade to short the dollar...The risks could manifest at any time, there's room for the dollar's retracement."

Betting against the dollar is looking increasingly like a crowded trade that's due for a squeeze, some hedge funds say.

U.K. GDP fell 20.4% in the three months ended June 30, with sectors taking hits from the coronavirus pandemic. The drop ...
08/12/2020
U.K. enters recession with record fall in quarterly GDP

U.K. GDP fell 20.4% in the three months ended June 30, with sectors taking hits from the coronavirus pandemic. The drop followed a 2.2% contraction in the first quarter, the Office for National Statistics said Wednesday.

The U.K. economy is in a technical recession following a second quarter of negative growth and the biggest fall in quarterly GDP on record.

Milliman estimates that the pension plans' investment return for the first half of 2020 was about -1.3%, up from an esti...
08/12/2020
Milliman: U.S. multiemployer pension plan funding drops to 82%

Milliman estimates that the pension plans' investment return for the first half of 2020 was about -1.3%, up from an estimated year-to-date return of -13.4% at the end of the first quarter.

The aggregate funding ratio of U.S. multiemployer pension plans dropped to 82% as of June 30, down from 85% at the end of 2019.

According to the letter, the application is being rejected because the Treasury Department has determined "that the inve...
08/11/2020
Teamsters Local 807 MPRA application expected to be denied

According to the letter, the application is being rejected because the Treasury Department has determined "that the investment return assumption used to demonstrate that the plan will remain solvent is unreasonable."

An application by Teamsters Local 807 Labor-Management Pension Fund to suspend benefits to prevent insolvency is expected to be denied.

The $10.1 billion San Bernardino County (Calif.) Employees' Retirement Association was one of the first to take action. ...
08/11/2020
Pension funds explore ramifications of court decision on ‘California rule’

The $10.1 billion San Bernardino County (Calif.) Employees' Retirement Association was one of the first to take action. On Aug 6, its board voted to exclude certain kinds of pay including standby pay, on-call pay, and callback pay as required by the court decision.

Some California pension plans are starting to decide how to implement a recent state Supreme Court decision involving the “California rule.”

"One of the strongest rebounds in modern history lifted the fund's value well above what it was at the close of the stat...
08/11/2020
New York State Common posts 10.4% return in fiscal Q1

"One of the strongest rebounds in modern history lifted the fund's value well above what it was at the close of the state fiscal year and restored most of the losses caused by the COVID-19 pandemic."

New York State Common Retirement Fund posted a 10.4% return on investments for the first fiscal quarter ended June 30.

Geeta Aiyer, founder of the $2.7 billion firm, said she will renew pressure on nine global companies (which she declined...
08/10/2020
Boston Common to focus on looming eviction crisis

Geeta Aiyer, founder of the $2.7 billion firm, said she will renew pressure on nine global companies (which she declined to name) to better combat racial inequity within their ranks, products and services — and to boost transparency when it comes to lobbying.

Boston Common Asset Management is planning to confront banks and real estate investors as an eviction crisis looms across the U.S.

In the report, Funston said many respondents expect to continue virtual board and committee meetings, most likely via a ...
08/10/2020
Virus contingency plans worked well for public plans – survey

In the report, Funston said many respondents expect to continue virtual board and committee meetings, most likely via a combination of phone and video conferencing, though 44% said it was "too soon to tell" how future meetings would be conducted.

A survey of 34 public pension funds found few had significant problems with contingency plans put in place during the coronavirus pandemic.

Attached to the complaint are two statement of economic interest forms filed by Mr. Meng with CalPERS, the first when he...
08/10/2020
Complaint alleges financial irregularities with ex-CalPERS CIO

Attached to the complaint are two statement of economic interest forms filed by Mr. Meng with CalPERS, the first when he joined CalPERS as CIO on Jan. 2, 2019, and the second filed April 1, 2020, for calendar year 2019.

Former CalPERS CIO Yu "Ben" Meng failed to disclose sales of stocks and other holdings, according to an anonymous complaint.

A letter sent Thursday to Mr. Scalia by 29 congressional Democrats warned that the proposal "would move the nation backw...
08/07/2020
Democrats continue fight over DOL fiduciary rule

A letter sent Thursday to Mr. Scalia by 29 congressional Democrats warned that the proposal "would move the nation backwards by reinstating a broken status quo that allows financial advisers to evade their fiduciary duties and denying retirement savers meaningful remedies when they have been harmed."

Democratic lawmakers still seek to put the brakes on the Labor Department's fiduciary rule and a proposed exemption for investment advice.

The working group also called for the SEC to require more prominent investor disclosure of the risks of investing in Chi...
08/07/2020
Task force seeks tougher listing rules for Chinese companies

The working group also called for the SEC to require more prominent investor disclosure of the risks of investing in China and other uncooperative countries, and enhanced registered fund disclosures for funds exposed to such issuers.

Chinese companies listed on U.S. exchanges should have to follow tougher auditing rules and other listing standards, a report says.

On July 31, the board of trustees unanimously voted to place Mr. Ingram on administrative leave “due to performance issu...
08/06/2020
Illinois Teachers executive director out after ‘performance issues’

On July 31, the board of trustees unanimously voted to place Mr. Ingram on administrative leave “due to performance issues covered by his employment contract.”

Richard Ingram resigned as executive director of Illinois Teachers' system, after being placed on administrative leave on July 31.

"Not only is this another example of deep-pocketed interests profiteering off Puerto Ricans' suffering, but these hedge ...
08/06/2020
Lawmakers seek probe of Puerto Rico hedge fund bondholders

"Not only is this another example of deep-pocketed interests profiteering off Puerto Ricans' suffering, but these hedge funds may have also violated securities law...There needs to be an immediate, thorough investigation and any wrongdoing must be swiftly prosecuted."

Members of New York's congressional delegation want the state to investigate whether hedge funds manipulated prices of Puerto Rico bonds.

"I'm proud of the work we did to change the portfolio, build a skilled investment office, and set CalPERS on a strong pa...
08/06/2020
CalPERS chief investment officer resigns

"I'm proud of the work we did to change the portfolio, build a skilled investment office, and set CalPERS on a strong path to achieve our return target. But at this time, it's important for me to focus on my health and on my family and move on to the next chapter in my life."

Yu “Ben” Meng has resigned as CIO of the California Public Employees' Retirement System after 18 months in the role.

"Setting a long-term net-zero target is the easy part; the challenge is to have a credible and transparent framework tha...
08/05/2020
Investor guidelines seek to put a lid on global temperature rise

"Setting a long-term net-zero target is the easy part; the challenge is to have a credible and transparent framework that enables your fund to convert intent into practical decisions and action."

Some 70 investors with $16 trillion in assets have developed recommendations for investing sustainably in an effort to limit global warming.

Under environmental themes, BlackRock discussed climate risk management 272 times and operational sustainability 245 tim...
08/05/2020
BlackRock tallies 974 engagements with 812 companies in Q2

Under environmental themes, BlackRock discussed climate risk management 272 times and operational sustainability 245 times, and within the social theme, BlackRock discussed human capital management 236 times.

BlackRock made 974 engagements with 812 of the companies in its global investment portfolio in the second quarter.

The request is related to the recent lawsuit filed by the $15.3 billion Arkansas Teacher Retirement System, Little Rock,...
08/05/2020
SEC wants data on certain AllianzGI funds

The request is related to the recent lawsuit filed by the $15.3 billion Arkansas Teacher Retirement System, Little Rock, charging the money manager improperly invested the pension fund's assets in three enhanced-return strategies.

Allianz Global Investors has received a request for information from the SEC regarding its structured alpha funds.

The company said the transaction during the second quarter "mitigates future mortality, inflation and yield curve risk" ...
08/05/2020
Arconic buys group annuity for $250 million in U.K. pension liabilities

The company said the transaction during the second quarter "mitigates future mortality, inflation and yield curve risk" in an 8-K filing Tuesday with the SEC.

Arconic Corp. purchased a group annuity contract from an insurer to transfer about $250 million in U.K. pension plan liabilities.

"While most asset classes delivered positive returns during the second quarter, sizable allocations to U.S. equities was...
08/04/2020
Plans see healthy rebound in Q2

"While most asset classes delivered positive returns during the second quarter, sizable allocations to U.S. equities was the primary driver of returns."

Institutional investors saw very healthy median returns in the second quarter, data from Wilshire Associates show.

"We are working diligently to ensure a seamless transition and superior exam experience for our candidates. It goes with...
08/04/2020
CFA Institute to move to computer-based exams

"We are working diligently to ensure a seamless transition and superior exam experience for our candidates. It goes without saying that we will uphold the rigor of the passing standard to earn the CFA charter."

All CFA Institute examinations will move to computer-based testing starting in 2021, with the COVID-19 pandemic accelerating a planned move.

"With rates continuing to drop, additional pension funding relief is looking even more attractive to plan sponsors faced...
08/04/2020
Corporate pension funding drops in July – 2 reports

"With rates continuing to drop, additional pension funding relief is looking even more attractive to plan sponsors faced with large increases in contributions over the next few years."

Funding ratios for corporate pension plans fell slightly in July as market returns could not keep pace with an increase in liabilities.

"A failure by the federal government to provide adequate fiscal relief to state and local governments could upend the st...
08/04/2020
NYC sees 4.4% pension system return for fiscal year

"A failure by the federal government to provide adequate fiscal relief to state and local governments could upend the state budget – and by extension, the city's," the report said.

The New York City Retirement Systems posted a preliminary return of 4.4% for the fiscal year.

The $64.7 billion sovereign wealth fund's preliminary return was 4 basis points below its primary benchmark return of 2....
08/03/2020
Alaska Permanent just misses benchmark with 2.01% annual return

The $64.7 billion sovereign wealth fund's preliminary return was 4 basis points below its primary benchmark return of 2.05%.

Alaska Permanent Fund Corp. recorded a preliminary return of 2.01% for the fiscal year ended June 30, 4 basis points below its benchmark.

There's a lot at stake should the scrutiny lead to tougher oversight. The alternative financiers are major providers of ...
08/03/2020
Fed headed for a clash with hedge funds, other shadow banks

There's a lot at stake should the scrutiny lead to tougher oversight. The alternative financiers are major providers of credit to households and companies, making their smooth functioning critical to the health of financial markets and the economy.

The Fed and central banks worldwide are heading for a collision with shadow lenders, firms that increasingly are dominating global finance.

The endowment's new 4% long-term target to private credit was recommended "to take advantage of private credit's strong ...
08/03/2020
University of California creates private credit target allocation

The endowment's new 4% long-term target to private credit was recommended "to take advantage of private credit's strong illiquidity premium and preferred return characteristics over marketable hedge funds."

University of California approved a new long-term target of 4% to private credit for its endowment pool and cut absolute return.

About 30% of Grosvenor shares will be publicly traded and the firm's management will own the remainder of the equity sha...
08/03/2020
Grosvenor Capital Management to go public

About 30% of Grosvenor shares will be publicly traded and the firm's management will own the remainder of the equity shares of the combined company "consistent with their historic ownership level of the firm," according to a Grosvenor news release.

Grosvenor Capital Management is set to become a publicly traded company through a merger with a Cantor Fitzgerald SPAC.

"There's definitely going to be pressure in some places to not pay annual required contributions because of revenue shor...
07/31/2020
States pull back on pension fund payments as virus ravages revenue

"There's definitely going to be pressure in some places to not pay annual required contributions because of revenue shortfalls...States are going to have to make up the shortfall somehow, some way."

Colorado and South Carolina have pulled back from making additional payments to their underfunded pension plans — and others may follow.

The court said the so-called "California rule" for calculating public pension benefits, developed by a string of court c...
07/31/2020
California high court rules against pension ‘spiking’

The court said the so-called "California rule" for calculating public pension benefits, developed by a string of court cases stating that pension benefits cannot be cut without providing a similar benefit, did not prevent the state legislature from excluding or limiting the inclusion "of additional types of compensation in an effort to prevent perceived abuses of the pension system."

The California Supreme Court ruled pension systems are not barred from reducing or eliminating practices that resulted in benefit increases.

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