Ohio Bureau of Workers’ Compensation, Columbus, will search for passive equity and fixed-income managers to run the $1.5 billion Disabled Workers Relief Fund II and the $322 million Black Lung Fund in the first half of 2016, spokeswoman Melissa Vince said.
The bureau will issue an RFP sometime in the first half of the year due to impending contract expirations of current managers State Street Global Advisors and BlackRock. Both will be invited to rebid.
SSgA runs a $541 million passive domestic intermediate-term fixed-income portfolio, a $521 million passive Treasury inflation-protected securities portfolio and a $329 million passive domestic all-cap equity portfolio for the Disabled Workers Relief Fund II, and a $127 million passive domestic intermediate-term fixed income portfolio, a $126 million passive Treasury inflation-protected securities portfolio, and a $47 million passive domestic all-cap equity portfolio for the Black Lung Fund.
BlackRock runs $147 million and $22 million passive international equity portfolios for the Disabled Workers Relief Fund II and Black Lung Fund, respectively.
In October, the board of directors approved changing the $541 million passive domestic intermediate-term fixed income portfolio in the DWRF II, which is currently benchmarked to the Barclays Capital U.S. Aggregate Bond index, to a long-duration portfolio once the search is completed.
The change was recommended because long-term DWRF II liabilities have an estimated average duration of 18 years “with few payments projected over the next 10 years,” Mr. Dunn said in the memo.
A decision is expected sometime in the third quarter of 2016. Investment consultant RVK is assisting.