September 2015 Pension Plan Funding Update

September was another difficult month for Pension plans as liabilities (BofA Mature 12 year duration index) outperformed assets (60% ACWI/40% Barcap Agg) by 3.2%. For the last 3 months, assets have given up over 7% to liabilities.

After the volatile September, liabilities are now positive 1.3% while assets are down -3.8% for the year. The continued struggle to improve funded status remains an issue for many pension plan CFOs, Treasurers and Boards who are trying to manage and control their funded status volatility.  Once again, a pension plan with a de-risking glide-path would have been able to benefit from this volatility if they added long duration bond investments to their portfolio following the short lived asset outperformance. 

Read more on the current status of pension plan funding here.

Nick Botticelli, Director, Pension Portfolio Management

Nick is a Director at Hirtle Callaghan in the Investment Strategy Group and the Head of Pension Portfolio Management.  Prior to joining, Nick spent over 16 years at Verizon Investment Management Co. serving in various roles. Most recently Nick was the Executive Director of Global Public Assets where he reported directly to the CIO of Verizon Investment Management.  Nick was responsible for manager selection and due diligence of $40 billion globally in Global Equities, Global Bonds, Hedge Funds, Currencies and Commodities. In addition, Nick served as one of the three person asset allocation committee deciding on the strategic and tactical direction of the pension plan. Recent large projects included a $7.5 billion pension risk transfer, 401k target date diversification and the addition of liability driven investments to the pension portfolio. Nick was responsible for the public investments in five different trusts including Defined Benefit, Defined Contribution, VEBA’s, Captive Insurance and Foundation. On-going functions of the Global Public Investment team which Nick managed, included evaluation of asset allocation models, funded status, hedge ratio, monitoring of performance, organization structure, risks, compliance, legal agreements, fee structuring, account structure of both existing and prospective portfolios and asset classes. He is a graduate of Pace University.

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