People Moves Roundup | Chief Investment Officer

Liberty Mutual Names Kelly Proctor Branch Executive for Mid-Atlantic Region

Liberty Mutual has named Kelly B. Proctor as branch executive in the Mid-Atlantic region. Proctor will partner with key brokers in her territory to provide a broad range of commercial and specialty insurance coverage from Liberty Mutual and Ironshore. She will report to David Russo, senior vice president, Mid-Atlantic regional executive.

Most recently, Proctor was regional sales manager with AmTrust North America, where she was responsible for the development and expansion of its regional distribution channel of retail agencies within Virginia and eastern North Carolina.

Previously, Proctor served with Westfield Insurance for more than seven years as an agency specialist, and a senior middle market underwriter.

BRG Appoints Two Senior Economic and Financial Experts to Expand Presence in Singapore

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Global consulting firm Berkeley Research Group announced the appointment of Dr. Peter Bird as a managing director. He will focus on providing expert evidence on economic and financial issues in international arbitration and will be based in Singapore as the firm expands its presence in Southeast Asia.

BRG also announces the relocation of Tigran Ter-Martirosyan, a director, to the Singapore office from London.

A Ph.D. economist and economic consultant by training, Bird pursued a distinguished 25-year investment banking career with an international financial advisory group, rising to executive vice chairman and specializing in M&A advisory, with a particular focus on infrastructure, utilities, and energy. Based in Singapore for over a decade, he joins BRG from a global economic consulting firm, where he acted as an expert in international arbitrations involving M&A and private equity disputes, joint venture disputes, and disputes relating to large infrastructure projects and their financing.

Ter-Martirosyan is a business valuation and forensic accounting expert. His experience spans valuations and damages assessments in international arbitration and litigation across a broad range of industries; and valuations for the purposes of mediation, expert determination, M&A, financial reporting, restructuring, fairness opinions, management incentive schemes, and tax.

HGGC Promotes 10, Hires Five Following Strategic Investment

HGGC announced several promotions and new hires in the wake of receiving a strategic investment from Dyal Capital Partners.

The HGGC team members promoted to partner include Les Brown, John Block, Steven Leistner, Harv Barenz, and Lance Taylor.

Other promotions include Kurt Krieger, who has been promoted from general counsel to chief legal officer; Jay Tabu, from vice president to principal; Chris Schulze from senior associate to vice president, Peter Cozzi from associate to senior associate; and Neha Vaidya from associate to senior associate.

New additions to HGGC include Greg Caltabiano and Lindsay Sparks as executive directors; Mo Gulamhusein, vice president; Holland Reynolds, investment associate; and Chandni Shah, fund accountant in the operations team.

Senthil Kumar Joins BNY Mellon as Chief Risk Officer

BNY Mellon has appointed Senthil Kumar as senior executive vice president and chief risk officer.

Kumar, who will join the company in July, will report to Charlie Scharf, chairman and chief executive officer. He will join the executive committee.

In this position, Kumar will oversee the firm’s credit risk, operational risk, market risk, and compliance functions.

Kumar joins BNY Mellon from Citigroup, where he has held a number of risk leadership positions since 2004. He succeeds Jim Wiener, who moves into a new role as head of balance sheet and capital strategy.

Investcorp Announces Leadership Change in its US Credit Management Unit

Investcorp announced that John Fraser, head of Investcorp’s US credit management unit (ICM US), is retiring and Jim Feeley will be stepping in as co-head of ICM US.

Fraser joined Investcorp as part of the firm’s acquisition of 3i’s debt management business in 2017 and has since led the integration and build out of Investcorp credit management in the US. As part of the transition, Fraser will continue to serve as an adviser to ICM US over the next year.

Based in New York, Feeley will co-head the ICM US business and will report to Jeremy Ghose, who will assume the duties of interim co-head of ICM US as part of the transition, in addition to his role as head of Investcorp credit management.

Feeley joins Investcorp with more than 25 years of experience in credit investing, asset management and investment banking. Most recently, he was a senior managing director and head of credit and structured credit at Medley Management Inc.

Tags: Berkeley Research Group, BNY Mellon, HGGC, Investorcorp, Liberty Mutual, People Moves

The average US state pension plan is funded at a paltry 35%, as unfunded liabilities of state-administered pension plans total nearly $6 trillion—equal to $18,300 of unfunded pension liabilities for every US resident—according to a report from the American Legislative Exchange Council (ALEC).

The report surveyed more than 290 state-administered public pension plans, detailing assets and liabilities over a five-year period. Based on ALEC’s calculations, all but two state’s pension funds—Wisconsin and South Dakota—have a funded ratio below 50%, which it said is “especially troubling” because plans below an 80% funding ratio threshold are considered “at risk.”

In its calculations, ALEC used what it deems “a proper, risk-free discount rate,” and found that unfunded liabilities of state-administered pension plans now total over $5.96 trillion. It attributed much of the problem to state governments failing to make their annually required contributions (ARCs), which represent the appropriation needed to cover the cost of future pension obligations accrued in the present, along with amortization of prior unfunded liabilities.

“Unfunded liabilities in public pension plans continue to loom over state governments nationwide,” said the report. “If net pension assets are determined using more realistic investment return assumptions, pension funding gaps are significantly wider than even the large sums reported in state financial documents.”

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ALEC said its figures differ from the states’ numbers because its calculations use a risk-free rate to reflect the constitutional and legal protections extended to state employee retirement benefits.

“The accumulation of unfunded pension liabilities per capita is the most alarming facet of the pension crisis,” said the report. “This metric reveals the personal share of liability for every resident in each state, an indicator of potential future tax burdens to be borne by residents for pension promises made but not funded.”

Alaska had the highest pension liabilities per capita by far at $46,774, followed by Connecticut and California, with $32,805 and $29,137 respectively, based on ALEC’s calculations. Meanwhile Connecticut, had the lowest funded ratio among all 50 states at 20.28%, followed by Kentucky and Illinois, which had funded ratios of 24.81% and 25.19%, respectively.

Tennessee had the lowest unfunded liabilities per capita at $8,466, followed by Indiana and Nebraska, with $8,690 and $9,043, respectively. And Wisconsin had the highest funding ratio at 60.54%, followed by South Dakota and Idaho with 50.73% and 47.20%, respectively.

ALEC suggested that one reform most pension plans could immediately adopt to improve their standing is to lower their discount rate to the private sector average, or to a risk-free rate. It said this would shift the estimated liability from the average amount states would be liable for in the future, to an estimate which covers all potential futures.

“This change would ensure the constitutional and legal protections afforded to state pension benefits are being met,” said the report. “This will increase the ARCs, as the target asset will increase to match the risk-free liability.

The report said that if contributions are made in accordance to the ARC, the health of the funds would rapidly improve.

“Even a global financial crisis would not threaten the fund’s solvency,” said the report. “It would truly be a guaranteed, ‘defined benefit.’”

A second reform ALEC suggested is variable benefit or contribution rates based on the funding on the plan. For example, it said Wisconsin was the best-funded pension system because it has a variable benefit rate, which means the disbursement varies over time. It said that lowering the payments from the fund during economic shocks allows Wisconsin’s pension fund to recover, which has let it provide retirement security with few significant changes to the plan since 1975.

“Current state workers and retirees are not the only people affected by the pension liability crisis,” said the report. “Taxpayers ultimately provide the wages for public sector employees and the financial resources to cover promised benefits of traditional, defined-benefit pension plans.”

Milliman Study: Public Pension Plans See 4Q Funded Ratio Decline

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