Indiana Public Retirement System, Indianapolis, on Friday approved hiring Voya Financial as record keeper for the system's $7 billion annuity savings account program, pending contract negotiations.
Voya will replace Xerox, which had been the program's record keeper since 2007. Along with Xerox, Aon Hewitt and Empower Retirement were the other finalists.
An RFP was issued June 29. Callan Associates, consultant to the program, assisted.
Also, the system board tentatively approved MetLife as lifetime annuity service provider for the program, pending final approval by the board in 2016 to outsource annuity management, said Steve Russo, executive director. INPRS now handles those duties in-house, but a bill signed by Indiana Gov. Mike Pence in April 2014 allows the board to outsource such management starting in 2017.
The system, which has $29.4 billion in overall assets, also committed a combined $60 million to TSG7 A and B funds, buyout funds managed by TSG Consumer Partners, to invest in North American middle-market companies.
Separately, the system returned -1.83% for the four months ended Oct. 31, 0.11% for the first 10 months of 2015 and -0.82% for the year ended Oct. 31. The system's custom benchmark returned -1.63%, 0.17% and -0.82%, respectively.
Scott Davis, interim chief investment officer, told the board that all asset classes struggled, particularly from July through September. For October, the system returned 2.15%. Its 6.9% commodities allocation had the steepest decline, with losses of 17.51% for four months, 17.52% for 10 months and 32.41% for the year, all ended Oct. 31. Jeffrey MacLean, CEO at Verus, INPRS' defined benefit investment consultant, told board members that while the returns “have been painful, they're doing exactly what you'd expect them to do” with low inflation, and the portfolio is geared toward long-term protection against high inflation.
The 13.2% private equity portfolio had the highest return over four months, 10 months and year ended Oct. 31, at 4%, 9.97% and 11.36%, respectively.
