Texas Teachers’ Hires CalSTRS, Illinois Teachers’ Officials

The Teacher Retirement System of Texas has added two new pension veterans to its roster to boost its emerging manager program and internal operations.

Introduced at Friday’s board meeting, Kirk Sims will direct the $153 billion pension plan’s $5.7 billion fledgling manager objective. He will also oversee a $3 billion injection for its Emerging Manager 3.0 Program, which funds innovations among rising investment professionals. The project started in 2005. Sylvia Bell, the pension fund’s chief operating officer, currently runs the portfolio.

Sims comes from the Teacher Retirement System of Illinois ($51.4 billion), where he worked on its $7 billion Minority Investment Program as well as the plan’s $750 million Emerging Manager Program.

Sims will start on March 1 and report to Jase Auby, the fund’s deputy chief investment officer. Bell will step down from her emerging manager responsibilities to better focus on her COO job.

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The meeting also saw the hire of Andrew Roth as the fund’s new chief operations and administration officer, who will start in April. Roth replaces 2018 retiree Ken Welch and will report to executive director Brian Guthrie, who said the new head’s “demonstrated leadership ability and fresh perspective” will assist in “valuable contributions from day one.”

Roth is moving halfway across the country as he trades in his sunglasses and board shorts for spurs and a ten-gallon hat. He is exiting another large fund, the $221 billion California State Teachers’ Retirement System.

Roth was the benefits and services executive officer there for four years, and a director of client outreach and guidance for three. He also worked in other California state agencies, such as the departments of public health, business oversight, social services, and the Bureau of State Audits.

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Tags: Andrew Roth, Emerging Managers, Kirk Sims, Pension, Teachers Retirement System, Texas

Commercial truck manufacturer Navistar International’s Canadian subsidiary Navistar Canada ULC has purchased group annuity contracts from RBC Life Insurance and iA Financial Group on behalf of its defined benefit pension plans to transfer approximately $268 million in obligations and related assets to the two Canadian insurers.

The company said the move was designed to strengthen its balance sheet by lowering risk volatility in its pension plan obligations.

Under the terms of the agreements, the two Canadian insurers will issue annuities covering the responsibility for pension benefits owed to approximately 1,750 Navistar pension participants and beneficiaries. This represents the majority of Navistar’s pension plan members in Canada. The insurers will begin administering all benefits to these members beginning May 1. The company also said that pension benefits for plan participants will not change.

“These transactions continue our objective to de-risk the balance sheet and manage future pension obligations,” Walter Borst, CFO of Navistar International Corp., said in a release, “while retirees and their beneficiaries will receive equivalent pension benefits from highly rated insurance companies, who have strong expertise in long-term management of retirement benefits.”

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Once the transactions are completed, benefits for plan participants will be protected under Assuris, the not-for-profit organization that protects Canadian policyholders if their life insurance company should fail. Prior to the deal, the plan was under the protection of the Canadian Pension Benefits Guarantee Fund, which provides protection to Ontario members and beneficiaries of privately sponsored single-employer defined benefit pension plans in the event of plan sponsor insolvency.

As a result of the transactions, which were funded by existing plan assets and required no cash contributions to Navistar Canada’s pension plans, Navistar reduced its pension plan benefit obligations by approximately 8%. The company said it expects to recognize a non-cash pension settlement charge of approximately $142 million ($104 million after-tax) in its fiscal Q1 2019 financial results that will be excluded in its non-GAAP results. The company said that going forward, the transactions will reduce Navistar’s non-operating financial risk and administrative costs.

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Tags: Annuity, Navistar, Navistar Canada, Pension, RBC Life Insurance