The Markets June 10, 2016

PBGC Selects Firms for Smaller Asset Manager Program

Each firm will be given a core fixed income mandate because “research indicates that smaller asset managers are likely to add value relative to the benchmark with these assets.”
Reported by

The Pension Benefit Guaranty Corporation (PBGC) selected five investment management firms to participate in its pilot program for Smaller Asset Managers.

The Smaller Asset Managers Pilot Program, announced last year, was created to reduce barriers that smaller investment firms face when competing for the agency’s business. Before the pilot program, these contracts were out of reach because the minimum required assets under management, often in the billions, were too large for small firms to qualify.

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Each of the firms will be responsible for investing $175 million in U.S. core fixed income instruments. PBGC selected U.S. core fixed income as the initial asset class for the pilot because research indicates that smaller asset managers are likely to add value relative to the benchmark with these assets. Additionally, the majority of PBGC’s assets are invested in fixed income.

The firms are:

  • C. S. McKee, LP, Pittsburgh, Pennsylvania;
  • LM Capital Group, LLC, San Diego, California;
  • Longfellow Investment Management Co., LLC, Boston, Massachusetts;
  • New Century Advisors, LLC, Chevy Chase, Maryland; and
  • Pugh Capital Management, Inc., Seattle, Washington.

The firms will be evaluated on their performance, after fees, against the portfolio benchmark (Barclays Capital US Aggregate Bond Index) over a full market cycle of highs and lows at an acceptable level of risk.

To be considered for the program, firms had to manage a minimum of $250 million in assets, have a five-year performance history, and undergo the same competitive evaluation as other PBGC money managers. Additionally, PBGC limited its allocations to no more than 20% of a firm’s assets under management, which the agency says is in keeping with industry standards.
Data & Research June 10, 2016

Working Past Age 65 Could Be the New Norm

Forty percent plan to switch career fields when they reach the traditional retirement age.
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Sixty percent of Americans 50 and older plan to work past age 65, according to a poll of 1,075 people by the Associated Press and NORC Center for Public Affairs. 

Additionally, 40% plan to switch jobs, and 25% have completed education or training to do so. For those 65 and older, 50% plan to change career fields. Twenty-five percent plan to never retire; among those earning less than $50,000, this rises to 33%, while for those earning $100,000 or more, this declines slightly to 20%.

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Twenty-five percent of adults age 50 or older have looked for a job in the past five years, but 60% have found it difficult to find one. In fact, 33% said it has been so difficult that they have given up. Even so, 20% of people between the ages of 65 and 75 are either working or looking for work. Older workers are split on whether their age is an asset or a liability, with 42% saying it is an advantage, 38% saying it is a disadvantage and 19% saying it doesn’t matter.

Older workers also lack confidence in their skills, with only 31% saying they are extremely or very confident they have the necessary skills to compete for jobs. Thirty-eight percent are somewhat confident, 19% are not very confident, and 10% are not at all confident.

The information comes at a time when the size of the older population is growing. Between 2003 and 2013, the number of Americans age 65 or older rose from 35.9 million to 44.7 million. By 2040, the number of people age 65 and older is expected to surge to 82.3 million, with this percentage of the American population rising from 14.1% in 2013 to 21.7% in 2040.

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