New Mexico Educational Retirement Board, Santa Fe, committed $50 million to Bluescape Energy Recapitalization & Restructuring Fund IV, an energy private equity fund managed by Bluescape Energy Partners, said Bob Jacksha, CIO of the $13 billion pension fund, in an email.
New Mexico Educational has previously invested with the manager, which focuses on making value-oriented investments in the upstream oil and gas and power industries.
Separately, the investment committee at its March 21 meeting decided to recommend to the board minor changes to its real assets policy. Among the recommended changes, the pension fund would include changing farmland investing to agriculture, a broader category. Agriculture includes investment in fixed assets in addition to land, while farmland is primarily a land investment, Mr. Jacksha said.
Agriculture is a sector within the pension fund's 4.5% natural resources target. New Mexico ERB does not have suballocations to agriculture or any of the other natural resources sectors such as energy and timber. Some 1% of ERB's total portfolio is currently invested in farmland.
In other news, a bill backed by the pension fund passed the state Legislature on March 23 giving the pension fund a one-time employer contribution increase of 0.25 percentage points effective July 1, said Jan Goodwin, executive director, in an interview. Pension fund officials had wanted a 1-percentage-point increase each year for three years, which would have increased employer contributions to 16.9% from 13.9%. ERB officials had sought the larger increase to get the pension plan to 100% funding within 30 years and to have parity with the 16.99% employer contribution rate of the $14.6 billion New Mexico Employees Retirement Association, Santa Fe, PERA also received a 0.25-percentage-point employer contribution increase.
The bill also increased the minimum retirement age of employees hired on or before July 1, 2019, to 58 years old from 55. Among them is a requirement that any salary increase of more than 30% would have to be in place for several years — depending on the size of the salary hike — before the increase can be included in the final retirement benefit calculations. The higher the salary increase amount, the longer it will take for the raise to be fully recognized, Ms. Goodwin explained. Another anti-spiking provision requires PERA retirees now working for ERB to make pension contributions. PERA retirees working for ERB do not currently make contributions.