Penn SERS Board Names James Nolan Permanent CIO

The Pennsylvania State Employees’ Retirement System (Penn SERS) board took only a little over six weeks to remove the word “acting” from James Nolan’s title and make him the permanent CIO of the $35 billion pension fund.

Nolan had been promoted from deputy CIO to acting CIO last month when Seth Kelly abruptly resigned after less than a year on the job to “pursue another career opportunity.” Kelly had joined Penn SERS last July from the Missouri State Employees’ Retirement System, where he had worked for nearly 16 years and was CIO for nearly four years.

“Like many public pension funds across the country, SERS has gone through a number of major changes over the past few years,” SERS Board Chairman David Fillman said in a statement. “Jim has been with us throughout that entire time. He brings both continuity, as we continue to build a strong and successful investment team, and character, which is an important aspect of leadership, as has been evidenced by his steady focus on doing what is best for SERS and our members and participants.”

The Penn SERS board also approved an updated target asset allocation that lowered the investment in less-liquid assets, such as cutting the real estate target by 1%, while increasing the allocation to public equity by 6%. The board said it expects the move to increase returns while lowering fees. It also set a high allocation to liquid assets that have a low correlation to fixed income.

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Additionally, the board also left its current assumed rate of investment return of 7.0% unchanged and said it has chosen Korn Ferry to be its actuary for the next five years, pending required state contract approvals.

In other business, Executive Director Terri Sanchez said the pension fund is making its telework plans, which were implemented due to the COVID-19 pandemic, permanent in a move to attract more talent.

“It is much more likely that candidates from the large, diverse pools in the larger metropolitan areas of Pennsylvania would consider working for SERS, if they are not required to relocate to Harrisburg from their current Pennsylvania home,” Sanchez said.

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Penn SERS CIO Seth Kelly Resigns

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Penn SERS Returns 11.1% in 2020

Tags: assumed rate, CIO, David Fillman, James Nolan, Pennsylvania State Employees Retirement System (SERS), Seth Kelly, target asset allocation, Terri Sanchez

Sen. Patty Murray, D-Washington, and Rep. Lauren Underwood, D-Illinois, have reintroduced The Women’s Retirement Protection Act of 2021 (WRPA) to help close the retirement gender gap by addressing the financial challenges that disproportionately affect women.

The proposed legislation would expand eligibility for employer-sponsored retirement plans to more part-time workers—most of whom are women, according to the bill’s sponsors. It also would expand existing spousal protections to prevent one spouse from undermining a couple’s retirement resources without the other’s knowledge and consent.

According to a draft of the bill, the median income for women 65 and older is 83% of the median income for men in the same age range because women’s retirement preparedness often lags significantly behind that of men. It also said that, among people ages 75 and older, 13.2% of women live in poverty, compared with 8.8% of men. And women make up two-thirds of low-wage workers—who are less likely to participate in a retirement plan—despite accounting for less than half of the entire workforce.

The bill also cited statistics showing that women working year-round full-time lose on average more than $400,000 over a 40-year career, which would require women to work almost a decade longer than men to make up the difference. And the gap is even wider for Black and Latina women at more than $960,400 and close to $1.2 million, respectively.

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Murray and Underwood said the bill was needed even more now than before because the economic difficulties that came with the COVID-19 pandemic affected women, particularly women of color, more than they did men. This is due to their overrepresentation in industries that the pandemic severely affected.

“COVID-19 has upended the finances of families across the country and led to severe job loss, especially in sectors [such as] child care that disproportionately employ women,” Murray said in a statement. “Even before this pandemic, women in America typically had less money saved for retirement, in part because they were paid less than their male counterparts for the same work throughout their careers.”

The bill proposes to:

Extend existing spousal protections for defined benefit (DB) plans to include defined contribution (DC) plans to prevent a spouse from making decisions that might undermine retirement resources without the other’s consent.
Reduce the minimum participation standards for part-time workers to be eligible for a retirement plan to two years from three.
Increase access to information about retirement and savings tools by providing grants for community-based organizations to provide information and financial tools to women.
Provide grants for community-based organizations that help low-income women and survivors of domestic abuse obtain qualified domestic relations orders (QDROs), which allow for the division of retirement benefits and ensure they receive the retirement benefits they are entitled to after a divorce or separation.

“Inequities, like investments, compound over time,” said Murray, “which is why it is so critical we take action now to address how this pandemic and other challenges are undermining women’s financial futures.”