Mississippi PERS Director to Step Down in 2018; Board to Hold Runoff

Pat Robertson, the executive director of the Public Employees’ Retirement System (PERS) of Mississippi, has announced that she is stepping down next year, and a new law could help the system become more competitive at attracting a replacement.

“I am announcing my retirement as executive director of PERS, which will take place in mid-to-late 2018 following the selection of a new executive director by the Board of Trustees,” said Robertson in her resignation letter. “With that objective in mind, the board has created an ad-hoc committee to begin the search for the new executive director, and I have every confidence that they will find the right person to take the reins.”

Robertson joined PERS in 1980, and was named executive director in 2005.

The replacement stands to make more than Robertson, thanks to a new state law that provides a higher salary cap for the next director.

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According to previous Mississippi state law, no public officer, public employee, or administrator shall be paid a salary or compensation, directly or indirectly, greater than 150% of the governor’s salary. The law has since been amended to stipulate that the executive director of the Public Employees’ 1224 Retirement System, and the chief investment officer of the Public 1225 Employees’ Retirement System are exempt from this provision.

“I am confident that PERS will continue to consistently pay promised benefits to a growing population of retirees,” said Robertson, “and that the leadership will continue planning and preparing for the future.”

PERS is also holding a runoff election for one of two retiree representative positions on the PERS board of trustees after none of the candidates in the Feb. 23 election received a majority vote. Candidates for the runoff are George Dale, former Mississippi commissioner of insurance, and Philip Pepper, a former Mississippi state economist. The board will approve the election results at its April 25 meeting.

The 10-member board includes the state treasurer, a gubernatorial appointee who is a member of PERS, two PERS retirees, two state employees, and one representative each from public schools and community/junior colleges, institutions of higher learning, counties, and municipalities. With the exception of the state treasurer and the gubernatorial appointee, board members are elected to staggered six-year term.

By Michael Katz

The University of California has proposed reweighting the asset allocation of its general endowment pool by slashing its holdings in public equity, while boosting its investment in private equity.

“We’ve been spending a fair bit of time looking at how we’ve been invested and how we want to be invested,” said Jagdeep Singh Bachher, the chief investment officer of the University of California Regents, at a March 14 Regents Meeting.

Bachher said the University of California’s investment in private equity is half that of its peers, while its investment in public equities is double that of it its peers.

“With more volatility, or market-to-market changes in the public markets, you’ll see more noise in our results, versus the dampening from private assets,” said Bachher.

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The proposed changes include reducing the investment in public equities to 30% from 42.5%; increasing private equity to 22.5% from 11.5%; and raising absolute return to 25% from 23%. The changes also call for the consolidation of real assets and real estate into one asset group, while increasing the allocation to 12.5% from a combined 10.5%; and the consolidation of fixed income and liquidity into a single allocation to be weighted at 10% of total assets, which would reduce the fixed income current weighting by 2.5%.

“The changes that we are proposing in terms of asset classes and rebalancing are quite substantial,” said Sam Kunz, the University of California Regents’ head of asset allocation and investment strategy. “We made the conscious decision to use very long-term normalized returns, and that just means that we minimized the effect of the current market environment when we make our asset allocation… this asset allocation is very much focused on the long run.”

Asset Class	Current Weight	Proposed Weight	Change
U.S. Equity	21%	15.7%	-5.3%
Non-U.S. Equity	14%	11%	-3%
Emerging Market	7.5%	3.3%	–4.2%
Private Equity	11.5%	22.5%	+11%
Absolute Return	23%	25%	+2%
Real Assets	3%	12.5%	+2%
Real Estate	7.5%	12.5%	+2%
Liquidity	12.5%	10%	-2.5%

Source: University of California Regents.

The University had commissioned a study from Cambridge Associates to help it determine how to adjust its asset allocation. According to Kunz, the results from the study showed that the general endowment’s allocation risk was similar to that of a pension fund, and that it can afford to take a very long-term view of its investments.

“What we observed was really that the endowment is not something the campuses rely heavily on for their operating budgets,” said Kunz. “So the cash flow needed from this endowment is relatively low compared to some of our peers. That’s very important because it allows us to have a very long-term view and focus on the long term for our asset allocation.”

By Michael Katz