Insight
Why LDI strategies fail in Taft-Hartley multi-employer pension funds
“LDI strategies don't work in Taft-Hartley for a lot of different reasons, but one of which, one major, I would say, political reason is that once you adopt an LDI type strategy, you are basically saying, These are my liabilities. They're not going to change. A…”
Assertion Not checkable as stated
Pension governance lag delayed private equity deployment by over two years
“And by the end of the process, it took us north of two years to actually go from the idea of investing in private equity to actually engaging the manager. And then of course, it takes years to actually fund private equity. So, you know, as a result, we missed …”
Assertion Supported
Pre-2008 Taft-Hartley pension plans avoided private equity and foreign equities
“Well, before 2008, 2009 financial crisis, you would be hard pressed to find a Taft-Hartley plan invested in private equity invested in emerging markets. It just didn't exist. In fact, in some industries, you would not even see plans invested in developed inter…”
Insight
Well-funded pension plans reliably trigger union-employer friction over benefit payouts
“The most obvious time where it does is When the union, you know, a plan is really well funded, the union trustees come in and say, we want to increase benefits. Inevitably, the increase being sought will make the employer trustees uncomfortable, and so even if…”
Disclosure
Broadway League funds use internal 7% return targets for conservatism
“A number of funds I sit on, we've established what we consider sort of an internal assumption that we, notwithstanding whatever the actuary certifies with the federal government, will say, You know, we want to use a seven percent return assumption because we w…”
Disclosure
One Broadway pension plan allocates 20% to PE, 15% to EM
“I have one plan in particular that the board has decided it needs to try to Really maximize returns and shoot for an eight plus percent return profile. And that means that we have, you know, 20% invested in private equity and 15% in emerging markets.”
Assertion Supported
OCIO models can be four to six times costlier than consultants
“Relative to the traditional consultants, an OCIO could be four, five, six times more expensive”
Disclosure
New OCIO fired 29 of 30 incumbent managers on Broadway plan
“When we went to an OCIO that had not had any Taft-Hartley experience before, the termination of existing managers and replacement was astonishing. I think there was maybe one manager out of 30 that they kept. Of the existing group.”
Disclosure
Broadway League fired investment consultant after trust eroded during PE process
“Once we finally got to the point where we had gotten the education, the RFP process and the discussions that went on between the consultant, the union trustees and the employer trustees created an environment where one side wasn't trusting the other side. And …”
Assertion Supported
No Broadway League pension plans exited equities during 2008 financial crisis
“And the 2008, 2009 financial crisis taught us that we should not act based on alarming data, alarming information, and none of the plans I sit on exited equities at any point in time. We just sat there and Bore it out, and we were rewarded in the end because w…”
Assertion Not checkable as stated
TARP proved hugely rewarding for the one Broadway pension that invested
“When we had the TARP program came about only one plan I sit on took advantage of TARP and it was, as we all know, is hugely, hugely successful and rewarding for those of us that got into it.”
Assertion Partly supported
Broadway League merged its union health plans from 11 to five
“When I started this job a little over 10 years ago, I believe there were 10, maybe 11 health plans, and now there are five. So there have been mergers, substantial, significant mergers on the health fund side.”
Disclosure
Broadway League funds represent $7 billion in pension and annuity assets
“We represent about seven billion dollars in our pension and annuity plans combined.”
