US - The Pension Benefit Guaranty Corporation (PBGC) has adopted a diversified investment policy which it claims will give it a 57% likelihood of achieving full funding within ten years, compared to 19% under its previous policy.
The PBGC, which had an accumulated deficit of US$14bn at the end of the 2007 financial year, currently has approximately $55bn to invest.
Under the new policy, it will allocate 45% of its assets to a diversified set of fixed-income investments, 45% to diversified equity investments and 10% to alternative investment classes.
The agency's previous policy set an equity investment target of 15-25%, although the actual level of equity investments was 28% at the end of financial year 2007.
Millard said: "The PBGC is responsible for the pensions of 1.3 million Americans, but we don't currently have the resources to keep all of our future commitments.
"The new investment policy adopted by the PBGC board of directors will better manage our invested assets."
The policy was adopted after an extensive review process that began in mid-2007. The review evaluated current and alternative investment policies over 5-, 10- and 20-year periods.
The review showed that the diversified portfolio adopted by the board would have outperformed the current asset mix 98% of the time over rolling 20-year periods.
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