To all members of AFICS/NY,
As Co-Chairs of the AFICS/NY Pension Committee, we wanted to bring to your attention the below message we have received from Mr. Pedro Guazo, RSG for UNJSPF, on a subject of great interest to AFICS/NY members and all other UNJSPF retirees and beneficiaries,
Suzanne Bishopric and John Dietz,
Co-Chairs of AFICS/NY Pension Committee:
“Operational plan to temporarily manage 65% of the fixed income portfolio using external advisors
Why was the plan proposed?:
Although the Fund has performed positively overall, the fixed income portfolio has underperformed for 15 years. The fixed income portfolio will have a new benchmark on 1 July 2022, the Director resigned effective 28 February 2022 and the recruitment of that post, together with the four new posts approved by the General Assembly, will take some months. As a result, the team proposed to temporarily use external advisors to manage part of the portfolio to improve the performance of their portfolio.
What does the plan entail?:
Up to 65% of the fixed income portfolio (equivalent to 18% of the total portfolio) will be managed passively (just following the benchmark without taking risks) by external advisors under the instructions, supervision and control of the team. The allocation will be reviewed periodically with the objective to internalize those portfolios once the team is complete and the performance of the portfolios managed internally (35%) is positive.
How will the external advisors be selected?:
Following proper competitive processes and due diligence, in full adherence to rules and regulations, a group of at least three advisors will be selected.
What will the additional cost be?:
The additional annual cost is expected to be less than 3 million dollars.
What will the financial benefit be?:
The expected annual profit is expected to be 60 million dollars.
What is the regulatory framework in which the plan is based?:
The plan is compliant with the Investment Policy Statement endorsed by the United Nations Joint Staff Pension Board and the General Assembly in 2019.
Which governing mechanisms oversaw this plan?:
The Internal Investment Committee (composed by multi-disciplinary experts of the Office Of Investment Management, chaired by the Chief Investment Officer), the United Nations Joint Staff Pension Board and the Investments Committee (external advisory group of experts appointed by the General Assembly) endorsed the plan between 18 February 2022 and 10 March 2022.
Pedro Guazo
RSG for UNJSPF Investments”