Searches and Hires

San Francisco targets third-party administrator search for 457 plan

Pension fund also allocates $500 million to carbon-constrained global equity strategy

San Francisco City & County Employees' Retirement System will begin a search within the next week for a third-party administrator for its $3.5 billion 457 plan, said Norm Nickens, board secretary, in an email.

SFERS will issue an RFP for due diligence purposes, and because current administrator Prudential Financial's contract is set to expire on Jan. 31, 2019. The firm is invited to rebid.

The RFP will be posted on the retirement system's website. Proposals are due at 5 p.m. PDT on May 16. Finalist presentations are scheduled for July 25, with a decision expected shortly thereafter.

Deferred compensation plan consultant Callan is assisting.

Separately, the $23.7 billion pension fund hired Generation Investment Management to run up to $500 million in active global equities. The hiring is part of the pension fund's six-point plan to reduce fossil-fuel holdings that its board approved in January. The first point was to adopt a carbon-constrained strategy. Generation Investment Management's active global equity strategy is "70%-80% less carbon intensive than the MSCI World benchmark," according to Wednesday board meeting materials. Generation was founded in 2004 by former Vice President Al Gore. Funding comes from an internally managed S&P 500 index fund (ex-tobacco), Mr. Nickens said.

The board materials also updated the progress of the other points of the plan, one of which is the hiring of a director of ESG investing. A final offer to a potential candidate is scheduled to take place by the end of the month with a start date still to be determined, and that new person will assist in the continued pursuit of renewable energy and carbon-constrained investments. Staff is recommending two further investments of up to $500 million with two additional public equity managers with no exposure to the Carbon Underground 200, which consists of the largest 100 public coal companies and 100 public oil and gas companies.

Investment consultant NEPC assisted with the Generation Investment Management hiring.