Alaska pension funds map out allocations for $3 billion state contribution

Alaska Retirement Management Board, Juneau, has made preliminary plans for how it will allocate the $3 billion infusion to the Public Employees' Retirement System and Teachers' Retirement System from the state Constitutional Budget Reserve Fund, said Judith Hall, liaison officer, in an e-mail.

The assets, which were appropriated in the capital budget for fiscal year 2015, will be received in three installments on July 15, Nov. 13 and March 10, Ms. Hall wrote.

Preliminary planning for the first $1 billion transfer is $400 million to international managers, $200 million to a State Street Global Advisors Russell 1000 index fund, $100 million to a new external fixed-income portfolio and $300 million to internally managed fixed income.

It has not been determined which international managers will receive the $400 million, Ms. Hall wrote.

The board's target asset allocation for fiscal year 2015 is 26% broad domestic equity, 25% global equity ex-U.S., 17% real assets, 12% fixed income, 9% private equity, 5% absolute return, and 3% each alternative equity strategies and cash equivalents.

The contribution will transfer $1 billion to the $15.1 billion Public Employees' Retirement System and $2 billion into the $6.2 billion Teachers' Retirement System.

The budget appropriation was done in conjunction with a new state law that calls for future contributions to be calculated based on level pay amortization and extends the amortization period to 2039. The law and contribution are part of an effort to boost PERS' and TRS' funded status to 68.8% and 73.3%, respectively, said Angela Rodell, commissioner of revenue for the state. PERS and TRS were 61.3% and 52.1% funded, respectively, as of June 30, 2013.

The pension funds are administered by the Alaska Retirement Management Board, which oversees more than $25 billion in retirement assets.