Home > News > Newsmakers > Britt Harris, Texas Endowment to Review Investments in ‘Scrutinized Entities’
Newsmakers

Britt Harris, Texas Endowment to Review Investments in ‘Scrutinized Entities’

Compliance procedures expanded to include companies at risk of being sanctioned by US.

By Michael Katz

The University of Texas/Texas A&M Investment Management Co. (UTIMCO), which oversees the $22 billion Permanent University Fund for the two university systems, is expanding its sanctions compliance procedures to include companies that are considered scrutinized entities at risk of becoming sanctioned by the US government.

“UTIMCO currently is compiling a list of scrutinized entities that will be reviewed with the board’s risk committee to determine how they will be addressed,” Britt Harris, UTIMCO’s chief investment officer, said in a release. “The financial impact to the endowment is expected to be minimal.”

Although scrutinized entities have not been officially sanctioned by the US government, they are known to conduct business with companies that are sanctioned, and therefore could potentially be sanctioned in the future.

Because of this, says UTIMCO, the market value of the companies could be negatively affected, which would in turn diminish the value of the endowments UTIMCO manages. Current targets of US government sanctions include companies based in North Korea, Syria, Sudan, Russia, and Iran, among others.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

While many of these countries are considered “rogue nations,” the list of scrutinized entities includes some mainstream international companies. For example, according to the Texas Government Code, companies engaged in scrutinized business operations in Iran include UK-based Lloyd’s Banking Group, Italian and Spanish telecommunications operators Telecom Italia and Telefonica, mining company Glencore, and Korean automaker Hyundai.

UTIMCO said that as a fiduciary, it already complies with US sanctions laws that prohibit investments in sanctioned companies, and in accordance with investment policies approved by the UT System Board of Regents. The firm said the new additional procedures will extend the same prohibitions to include scrutinized entities.

“UTIMCO’s prudent investment decisions demonstrate not only legal compliance with US law,” Jeffery Hildebrand, chairman of the UTIMCO board of directors, said in a release, “but high ethical and fiduciary standards as it proactively considers divesting from companies that are closely connected with sanctioned companies.”

Tags: , , ,

Home > News > Research > Society of Actuaries Sees Pension Obligations Shrinking Slightly
Research

Society of Actuaries Sees Pension Obligations Shrinking Slightly

The body’s annual mortality scale shows beneficiaries dying a bit earlier due to a hike in some leading causes of death.

By Chris Butera

A slight decline in life expectancy due to a rise in mortality rates from three of the top 10 causes of death has led the Society of Actuaries to believe pension plans could see their obligations reduced a bit compared to last year’s scale.

The organization’s annual mortality improvement scale, or MP-2018, calculated that fund responsibilities could drop between 0.3% and 0.6% for men, and between 0.2% and 0.4% for women, when calculated using a 4% discount rate.  The new scale was released Tuesday.

The reason for the mortality change is a jolt in deaths over the year from unintentional injuries (up 9.7%), Alzheimer’s disease (3.1%), and suicide (1.5%), according to the Centers for Disease Control and Prevention (CDC).

The society’s analysis determined that the life expectancy for private pension members decreased by a little less than a month for women (age 87.61), and just over a month in men (age 85.6), compared to 2017. This means the average beneficiary will receive their pensions for 22.61 and 20.6 years, respectively, on average.

For more stories like this, sign up for the CIO Alert newsletter.

The yearly chart is made after data is collected and analyzed by the society from the Social Security Administration, the Centers for Disease Control and Prevention, the Centers for Medicare and Medicaid Services, and the US Census Bureau.

Dale Hall, the Society of Actuaries’ managing director of research, said the new scale continued trends that began in 2010.But, he added, because the age groups show varied levels of mortality, it is “imperative for industry professionals to perform their own calculations, using the demographics of their pension population to determine the impact of implementing MP-2018 on their individual plan.”

Tags: , ,

«