US - Texas may double how much the $108bn Teacher Retirement System (TRS) can invest in hedge funds, which lawmakers say reduces risk from stock market volatility.
The pension could put as much as 10% of its assets in hedge funds under a bill from Representative John Otto, a Dayton Republican. The Legislature capped the allocation at 5% in 2007.
Having about 4% with hedge funds saved the pension about $900m during the stock market slide in 2008, Ronnie Jung, chief executive officer of the system, told the Pensions, Investments and Financial Services committee today in Austin.
"If we'd had more authority, we would have saved more money," he said.
The system's assets peaked at $112bn in 2007 and slumped to less than $80bn by early 2009, Jung said. Investments have rebounded to about $108bn, he added.
Texas allowed the teacher pension to hire external managers for as much as 30% of its assets in 2007. The fund paid $76.6m of fess to outsiders in 2010, led by $25.7m to Omega Advisors, a New York hedge fund founded by Leon Cooperman.
The plan returned 12.6% in the year through September, according to a December statement. Hedge-fund investments totalled $3.9bn on June 30 compared with $1.2bn five years earlier.
The Pensions and Lifetime Savings Association (PLSA) has revamped the standards for its Pension Quality Mark (PQM) in a bid to raise the quality of single-employer defined contribution schemes.
People approaching retirement are "systematically misjudging" their longevity and undervaluing annuities, the Institute for Fiscal Studies (IFS) says.
Professional Pensions is holding a breakfast briefing on engaging defined contribution (DC) members on 7 February.
Panellists at a PP webinar discuss October's High Court judgment on GMP equalisation, how schemes have responded, what their strategies should be, and how the industry can approach it.