Teamsters Central States, Southeast & Southwest Areas Pension Fund returned -0.81% for the year ended Dec. 31, underperforming the 0.37% median return of its Wilshire Trust Universe Comparison Service benchmark, said a recently posted report on the pension fund’s website.
For the three years ended Dec. 31, the Rosemont, Ill.-based pension fund, whose assets totaled $16.1 billion as of Dec. 31, returned an annualized 8.06%, outpacing the median Wilshire TUCS’ 7.54% return.
Northern Trust Asset Management, which is named as fiduciary of the pension fund and oversees 50% of the fund’s assets in an active management style, reported mixed results for the year ended Dec. 31. Northern Trust’s equity composite return was -2.73%, outperforming its -3.04% custom benchmark return, while Northern Trust’s fixed-income composite return was -4.49%, underperforming its -3.4% custom benchmark return.
For the year, ended Dec. 31, the pension fund’s total equity return was -0.22%, outpacing the -0.36% median return of its TUCS benchmark, while the total fixed-income return was -1.8%, underperforming the -0.05% median TUCS return. For the three years, ended Dec. 31, the pension fund’s total equity return was an annualized 11.78%, outperforming the 11.7% TUCS median return, while the total fixed-income return was an annualized 0.32%, underperforming the 1.83% TUCS median return.
The pension fund’s total assets were down 9.7% as of Dec. 31 compared to a year earlier.
The entire pension fund’s asset allocation, which is set by Northern Trust, was 60% equity, 35% fixed income, 4% other and 1% cash as of Dec. 31.
Central States, which is designated as “critical and declining status” under the Multiemployer Pension Reform Act of 2014, projects its will become insolvent in 2024.
Under the MPRA, the pension fund last year applied to the Department of the Treasury to cut pension benefits for most participants in order to forestall insolvency. Its application is pending.
David H. Coar, Central States independent special counsel, reported the investment returns and updated the pension fund’s status to Judge Milton I. Shadur, U.S. District Court in Chicago, under a consent decree the Central States pension fund has with the Department of Labor.