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Right-Sizing Private Investments for the Evolving Pension

Most defined benefit (DB) plans—including public, multi-employer, and even frozen corporate plans—can benefit from private investment (PI) strategies. It is common knowledge that private investments offer important value in the form of increased expected investment returns, and that they can be instrumental in improving funded status. Despite this, many plan sponsors still abruptly cut off PI commitments or do not optimize their usage as the plan matures.

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A Ripe Environment for Value Valuations

As investors who employ a bottom-up process when seeking quality companies, we’re intrigued with the growing valuation discount between our portfolios and their respective indices. We find it compelling that today we can purchase a higher-quality portfolio for a discounted price relative to the index, creating an attractive entry point for our actively managed small- to mid-cap value strategies. But before we get to that, let’s take a step back and look at how we got here.

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Markets and Economy Pivot from Inflation and Monetary Policy Fears to a Weak Global Economy

NEWS RELEASE - Northern Trust, a global asset manager, expects 2023 to be a turbulent year as conditions pivot from inflation and monetary policy fears to a weak global economy, but the firm also expects market volatility to somewhat temper due to lower inflation and a pause in central bank interest rate increases. A reduction in rates is not seen as likely. 

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Association Members Will Likely Want to Keep Watch Over This Senate Committee

TEXPERS System Members will likely keep an eye on the Senate Committee on State Affairs, which reviews legislation under its purview, including pension regulations, during the 88th Legislative Session. 

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House Debates Rules While Senate Draws Terms During Frist Week of 88th Legislative Session

The first week of Texas' 88th Legislative Session is in recess until Jan. 17, ending a day of debates in the House and drawing of terms in the Senate. 

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Pension Review Board Creates New Website for Minimum Educational Training

The Pension Review Board recently launched a new Minimum Educational Training website, according to a memo the state agency distributed to Texas public pension trustees and administrators on Jan. 9. 

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Jim Smith Resigns as TEXPERS Board President, Sherry Mose Moves into the Position from Vice President

James "Jim" A. Smith has resigned from the Texas Association of Public Employee Retirement Systems’ Board of Directors.

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Texas Legislators End Frist Day of 88th Legislative Session

UPDATE 1/10/23 - Texas' 88th legislative session adjourned on Jan. 10 after completing opening ceremonies during which Gov. Greg Abbott congratulated newly elected and re-elected members of the House and Senate as well as Rep. Dade Phelan, R-Beaumont, who was reelected today as House Speaker for the session.

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Poverty Increased Among Seniors in 2021

People 65 and older experienced an increase in poverty in 2021, according to the official poverty measure from the U.S. Census Bureau. The Bureau recently highlighted data from its Poverty in the United States: 2021 report originally released in September 2022 as the nation prepares to observe Poverty Awareness Month in the United States this January 2023.

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Spending Bill Vote Likely to Push Through Secure Act 2.0 Before Christmas

Legislation that includes retirement provisions affecting public safety employees and state and local government retirement plans is nearing passage on Capitol Hill as part of an end-of-year omnibus spending bill. 

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Actuarial Valuation Report, Funding Soundness Restoration Plan on Agenda for Dec. 8 PRB Meeting

At 10 a.m. CST on Thursday, Dec. 8, the Texas Pension Review Board will meet to review the actuarial soundness and compliance of state and local government public retirement systems. Those interested in managing public employee pension systems may attend in person or via videoconference. 

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Lt. Gov. Says COLA Adjustment and Pay Raise for Teachers Are Necessary

Lt. Gov. Dan Patrick said teacher pay needs to increase, a cost-of-living adjustment is necessary, and if there is money to write a 13th check, he will support it. He made the statements during a press conference on Nov. 30, during which he laid out his 21 priorities for the 2023 legislative session, which begins Jan. 10.

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921 Bills Prefilled for Texas' 88th Legislative Session

Nov. 14 was the first day of bill prefiling for Texas' upcoming 88th Legislative Session, and 921 bills and resolutions were filed (646 House bills and 198 Senate bills). 

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Heading to The Polls? Here's What You Need to Know

It's election day in the United States. Here's what you need to know as you head to the polls.

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IRS Releases Updated Retirement Plan Contribution Limits for Defined Benefit Plans

The federal tax provision that limits the amount of an "annual benefit" that an individual can receive from a tax-qualified defined benefit pension plan will increase from $245,000 in 2022 to $265,000 in 2023.  

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European Financial Services and the Macro Outlook: Misconceptions and Realities

Political and diplomatic turmoil in Europe have, perhaps inevitably, led to misconceptions about the economic landscape and the continent’s financial services industry. In reality, differences with the US market are far narrower than expected and a significant opportunity exists for an experienced control investor.

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The Energy Transition and the Search for Energy Security: Implications and Opportunities for Listed Infrastructure

Natural gas prices have surged in recent months. Acute supply concerns in Europe have predominantly driven the surge, which has been exacerbated by severe heat waves that have increased demand for power and reduced traditional power generation capacity.

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Is Shipping Cost Inflation About to Peak?

From their peak earlier this year, the spot trucking rates have been in decline, marking a shift versus prior years. Given how impactful the inflation in shipping costs had been across the broader economy from 2020 to 2022, the recent change in trend has widespread implications for many companies.

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Pension Fund Leaders Have Opportunity to Engage With U.S. Census Bureau

Pension administrators and trustees having the ability to access and engage with the government and its data is a necessity. The U.S. Census Bureau is allowing you to do just that. 

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Going Concern Uncertainties and Severe Financial Stress Disclosure Task Force Formed

The Governmental Accounting Standards Board has formed a task force to assist with a project to address disclosure issues related to going concerns, uncertainties, and severe financial stress plan sponsors may be facing.

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