The University of California board of regents lowered the expected rate of return for the $70 billion pension plan to 6.75% from 7.25%, a board of regents report shows.
The regents' consulting actuary, Segal Consulting, recommended in July that UC reduce its expected rate of return to 7%, after completing an experience study for the period July 1, 2014 through June 30, 2018. However, a board committee asked for an alternative recommendation for a lower investment return assumption, along with a proposal to also increase member contributions.
The board directed the UC's office of the president's staff to model options for increasing member contribution rates for consideration at the upcoming November board meeting.
Separately, UC Investments, the investment office overseeing the University of California's $125 billion investment portfolio including the pension plan, $25.6 billion defined contribution plan and the $13.4 billion endowment, hired Solovis to provide a technology platform to help the investment office with portfolio management, Stett Holbrook, spokesman for the UC office of the president, said in an email.
The platform also allows the UC's investment office to compile and process investment data used for analytics and reporting.
The expected cost savings for UC Investments over a decade is projected to be $2 million a year, a news release said.
"With over $125 billion in both public and private assets to manage across seven unique pools of capital, including a pension and endowment, UC Investments has a complex environment but a desire to be agile," said Arthur R. Guimaraes, chief operating officer of UC Investments, in an email. "The Solovis platform gave us the agile, flexible platform we needed to improve data management, streamline workflows and align our investment teams on a single platform for continued innovation and growth."
