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Member, Beacon International Group, Ltd.
WASHINGTON—The Pension Benefit Guaranty Corp. on Friday announced a new investment policy for the assets it holds.
Under the new investment policy, the agency will invest about 30% of available assets in equities and 70% in fixed-income instruments. The investment policy, which permits an actual allocation range of plus or minus five percentage points, was approved by the PBGC's board of directors, which is made up of the secretaries of the Commerce, Labor and Treasury departments.
According to the agency's latest annual report for the year ended Sept. 30, 2010, 31.1% of the PBGC's portfolio was in equities, down from 37.2% at the end of the previous fiscal year. Cash and fixed income represented about 66% of the total investible assets at the end of the latest fiscal year, up from 60% at the end of the previous fiscal year. The remainder was invested in alternatives, including private equity, private debt and real estate.
In 2008, the PBGC adopted an investment policy under which it was to invest about 45% of available assets in equities, 45% in fixed income investments and 10% in alternative investments. In 2009, the PBGC board decided to roll back the percentage of assets invested in equities closer to 30%, sources said at the time.
Hazel Bradford is a reporter for Pensions & Investments, a sister publication of Business Insurance.
Business Insurance Editor-at-Large Jerry Geisel contributed to this report.