The $43 billion Missouri Public School and Education Employee Retirement Systems, Jefferson City, plans to decrease its allocation to public risk assets and bump up its long-term target allocation to private risk assets, Executive Director M. Steve Yoakum said Tuesday.
PSRS/PEERS will slowly reduce its allocation to public risk — which includes equities, corporate bonds and hedge funds — to 45% from 55%, and move those assets to its private risk sleeve, which had a long term target of 25% that will now increase to 35%, Mr. Yoakum said in a phone interview.
The move is "not a reaction to the coronavirus at all," but based off an asset liability study that was completed in February after a six-month process, he said.
The asset allocation change will not happen over a specific time frame, but slowly, "on an opportunistic basis based on the markets," he added.
Despite current market volatility caused by the coronavirus pandemic, PSRS/PEERs has not made any immediate changes within its investment portfolio.
"The volatility causes us some pause, and it also gives us some opportunities. We think right now there might be some bargains in U.S. equities," Mr. Yoakum said.
The main hurdle amid the pandemic has been making sure that defined benefit payouts for some 98,000 retirees continue seamlessly and on-time each month — and that other administrative duties continue as retirement system staff work remotely, Mr. Yoakum said.
"Our teachers in Missouri are not covered by Social Security so our benefits are their primary, if not only, benefit that they are going to receive," he said, noting that business continuity efforts have so far continued without hiccups.
The pension plans are also currently in a season in which many members retire. Because of stay-at-home measures, all in-person counseling about retirement options have been moved to web-based or telephone-based sessions, Mr. Yoakum said.
"The fact that we are actually testing our disaster recovery plan in this way is not something we anticipated," Mr. Yoakum. "It has showed us that the time and training has paid off."
