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PBGC Provides $29.3M to Teamsters Local 11 Pension Plan

The New Jersey-based transportation workers pension fund is in critical status, according to the Pension Benefit Guaranty Corporation.
By Matt Toledo




The Pension Benefit Guaranty Corporation announced Friday that it will provide $29.3 million in assistance under the Special Financial Assistance Program to the Teamsters Local 11 Pension Plan, approving the plan’s application.

The SFA Program provides financial assistance to pension plans that are distressed and on the verge of insolvency.

The New Jersey-based Teamsters Local 11 plan covers 2,112 participants in the transportation industry. According to the plan’s Form 5500 for plan year 2023, the plan had assets of $75.18 million and has a funded status of 61.7%. The plan is in critical status and, prior to receiving the assistance, was not expected to emerge from critical status until 2043.

The Department of Labor informed the plan that it had entered critical status—meaning the plan had significant funding and/or liquidity problems—on June 29, 2021. The plan applied for special financial assistance on August 29, 2024.

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“By providing Special Financial Assistance, the Biden-Harris administration will ensure that these … workers in the North Jersey area get the benefits they have earned after a lifetime of hard work and can retire with dignity,” said Acting Secretary of Labor Julie Su in a statement.

According to a statement by the PBGC, the organization has provided a total $69.8 billion in special financial assistance to pension plans covering more than 1.2 million workers. Nearly 70% of this financial assistance has gone to plans administered by the Teamsters union. Approximately 33 Teamsters unions covering 538,000 participants have received a total of $48.7 billion in special financial assistance since March 11, 2021.

The SFA Program was enacted as part of the American Rescue Plan Act of 2021. Plans that receive special financial assistance from the PBGC must allocate at least two-thirds of the assistance provided to fixed-income investments. According to the Final Rule on Special Financial Assistance, issued in July 2022, the other third can be invested in “return-seeking investments,” such as stocks and stock funds.

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Home > News > Asset Allocation > Texas Teachers Returns 12.7% in Fiscal 2024
Asset Allocation

Texas Teachers Returns 12.7% in Fiscal 2024

The $209.5 billion pension is expected to be fully funded by 2052.

By Michael Katz




The Teacher Retirement System of Texas reported during a recent board of trustees meeting that the pension fund’s investment portfolio returned 12.7% for the fiscal year ended August 31, well ahead of its long-term annualized return of 7%.

According to a November release, the pension fund’s asset value was $209.5 billion as of the end of the fiscal year, up from $186.6 billion at the end of fiscal 2023.

The quarterly meeting also included the retirement system’s annual “health checkup,” which involved discussion of the TRS’ actuarial valuation, conducted and presented by actuarial firm Gabriel, Roeder, Smith & Co. The valuation is intended to help determine whether the current statutory contributions are enough, as well as explain changes in the fund’s actuarial condition and the impact on the fund’s unfunded actuarial accrued liability and its funded status.

“Annual market returns have been volatile from year-to-year but have met the TRS assumption over the past decade,” according to a TRS statement.

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According to the actuarial assumptions, the TRS’ funded ratio was 77.8% for fiscal 2024, up from 77.5% in fiscal 2023, and the fund currently is expected to be fully funded by 2052. The 28-year funding period is three years short of qualifying for possible benefit enhancements, as determined by the Texas Legislature.

The retirement system did not disclose asset allocation or asset performance for the fiscal year, but the board approved changes to the pension fund’s asset allocation in July for the first time in five years. The TRS revises its strategic asset allocation at least every five years as required by state law, and the previous adjustments were made in July 2019.

The new allocation moved regional weights in its public equity portfolio and increased the portfolio’s exposure to U.S. equities and non-U.S. developed asset classes, while paring back its exposure to emerging markets and related foreign currencies. Among the changes, the TRS lowered its allocation to non-U.S. developed assets to 5% from 13% and slashed its emerging markets investments to 1% from 9%, while lowering its private equity holdings to 12% from 14%.

Meanwhile, the allocation for nominal government bonds was reduced to 10% from 16%, while real, or inflation-linked, government bonds were increased to 6% of the portfolio from zero previously.

 

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