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Newsmakers

United Nations Appoints New CIO

Sudhir Rajkumar from World Bank Treasury to replace Carolyn Boykin.

By Michael Katz

The United Nations has completed its search for the CIO position of its $62 billion staff pension fund, and announced it will hire Sudhir Rajkumar of India. The position is currently held by Carolyn Boykin, who reapplied for the job, according to Farhan Aziz Haq, deputy spokesman of UN secretary-general António Guterres.

Haq was asked if the decision was made because of performance and he responded, “It is the Secretary-General’s prerogative to fill senior posts, and many senior posts have been advertised while there is still an incumbent in the post.”

During Boykin’s three-year tenure as CIO, the total asset value of the UN’s staff pension fund has grown by more than $9 billion. So far this year, the fund has returned 13.49%, edging out its benchmark, which has returned 13.23% year to date, according to the UN website. Boykin has led the UNJSPF pioneering efforts in ESG investing across all asset classes, which is consistent with the United Nations’ Sustainable Development Goals, according to the website. The Fund received an AAA rating for climate change from Asset Owners Disclosure Project (AODP) in 2017.

“I am very pleased that the fund has achieved record highs, fully funded status and the benefit is secure, and I wish the next CIO every success in his new endeavor,” said Boykin.

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The job posting said it was seeking applicants with “over 20 years of proven progressively responsible experience in the management of economic, social security and/or financial policies and activities.” 

The job description included leading the fund’s investment operations in terms of strategy and policy analysis, asset allocation, as well as exercising discretionary authority over the investment of the assets of the fund, and being responsible for the overall investment policy and oversight and management of the investments of the fund.

Boykin, whose official title is Representative of the Secretary-General, was named CIO of the UNJSPF in October of 2014 by then-Secretary General Ban Ki-moon.  Prior to joining the UN, Boykin was president of the Bolton Partners Investment Consulting Group for 10 years, and before that, she was CIO of the Maryland State Retirement System.

Rajkumar currently heads the global pension advisory program at the World Bank Treasury, a role in which he has provided advisory services to the National Pension Fund of the Republic of Korea, Ministry of Finance of Brunei Darussalam, South Africa’s Government Employees Pension Fund, KWAP — Malaysia’s second largest pension fund and the Nazarbayev University Endowment in Kazakhstan — in addition to other public investment institutions globally, according to a UN press release.  

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Home > News > Newsmakers > OPERS Board to Cut COLAs in 2019
Newsmakers

OPERS Board to Cut COLAs in 2019

New plan must still be approved by the General Assembly.

By Chris Butera

The $90 billion-plus Ohio Public Employee Retirement System (OPERS) board approved a plan Wednesday to reduce cost-of-living adjustments (COLA) for its more than 1 million members, current retirees, and future pensioners.

The plan was voted in favor with a 7-2 vote. Of the 11-member board, one member was absent and one seat is currently unfilled. The move will reduce COLAs from their current 3% rate to a 2.25% cap to match the Consumer Price Index beginning in 2019. While the proposal must still be approved by the General Assembly, the plan is projected to save OPERS—which is 80% funded for the future and meets the 30-year state law requirement for pension liability payments—about $4 billion.

The affected plan members are those who retired after January 2013. Beginning in 2019, the index-matched COLAs are not to exceed 3%.

However, implementation to the new proposal would be delayed two years for members who retired between 2010 and 2012.

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The Columbus Dispatch reports that state officials have said the cost-of-living benefit is intended to “lessen and not completely offset the effects of inflation on pension benefits.” They also say that retirees have financially benefitted from this because there have only been five instances where the Consumer Price Index capped at 3%, meaning their cost-of-living increases were larger than inflation.

Due to its financial position, the board’s decision did not go without some controversy.

“We don’t have to do any of this. Everything I see, everything I read … says we are financially strong …. in fact, I would say this is a solution in search of a problem,” retiree-representing board member Steve Toth told the Dispatch, adding that the plan is a “pay cut” for members. “Our retirees have been hit by a one-two punch. They have had to deal with rising cost of premiums, rising cost of prescription drugs and out-of-pocket expenses, and in 2012, we went through the health care reform.”

While no one on OPERS’ board wants benefits reduced, the goal is to protect the fund’s members for the future and the uncertainty it brings.

“We’re not here to make people unhappy. We’re here to protect people’s lives and their futures, and sometimes you just have to suck it up and do something even though you know, and I know, it’s [going to] hurt me. I’m [going to] have to go home and explain this to my wife,” investment expert James Tilling, who was appointed to the board by the General Assembly, told the Dispatch. “I’m not minimizing any of the sacrifices. I wish it didn’t have to happen.”

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