Key Takeaways
- • Indiana Public Retirement System (INPRS) terminated a $2.5 billion Northern Trust Long TIPS commitment in September and merged it into the existing Northern Trust Short TIPS portfolio, which held $5.2 billion in plan assets as of Sept. 30.
- • INPRS terminated a $1.2 billion State Street Global Inflation-Linked Bonds commitment, shifting the mandate to a U.S. TIPS portfolio that held $2.6 billion as of Sept. 30.
- • INPRS terminated a $1 billion Bridgewater Global Government Inflation-Linked Bonds allocation, moving those assets to an ex-U.S. inflation-linked bond portfolio that held $2.8 billion as of Sept. 30.
- • The changes are part of an asset-liability study within the $53.5 billion defined benefit plan, with fixed-income ILB allocation at 15% as of June 30, in line with target.
Summary
Indiana Public Retirement System, based in Indianapolis, has restructured its inflation-linked bond (ILB) allocation within its $53.5 billion defined benefit plan as part of an asset-liability study. According to materials for the Oct. 30 board of trustees meeting, the system made three terminations in September, each tied to the study.
The largest structural change involved Northern Trust. INPRS terminated a $2.5 billion Long TIPS commitment managed by Northern Trust Asset Management and merged the portfolio into its existing Northern Trust Short TIPS portfolio. As of Sept. 30, the Short TIPS portfolio held $5.2 billion in plan assets, according to an investment report included with the meeting materials.
INPRS also terminated a $1.2 billion commitment to State Street Global Inflation-Linked Bonds, managed by State Street Investment Management. The system said it was shifting that portfolio to a U.S. TIPS portfolio. As of Sept. 30, State Street Investment Management's U.S. TIPS portfolio held $2.6 billion in plan assets.
Separately, INPRS terminated a $1 billion allocation to Bridgewater Global Government Inflation-Linked Bonds, managed by Bridgewater Associates, and shifted those portfolios to an ex-U.S. inflation-linked bond portfolio. As of Sept. 30, that ex-U.S. portfolio held $2.8 billion in plan assets.
The meeting materials did not provide further information on other funding sources for the portfolio. Within the DB plan, fixed-income ILB had an actual allocation of 15% as of June 30, equal to its target.
The largest structural change involved Northern Trust. INPRS terminated a $2.5 billion Long TIPS commitment managed by Northern Trust Asset Management and merged the portfolio into its existing Northern Trust Short TIPS portfolio. As of Sept. 30, the Short TIPS portfolio held $5.2 billion in plan assets, according to an investment report included with the meeting materials.
INPRS also terminated a $1.2 billion commitment to State Street Global Inflation-Linked Bonds, managed by State Street Investment Management. The system said it was shifting that portfolio to a U.S. TIPS portfolio. As of Sept. 30, State Street Investment Management's U.S. TIPS portfolio held $2.6 billion in plan assets.
Separately, INPRS terminated a $1 billion allocation to Bridgewater Global Government Inflation-Linked Bonds, managed by Bridgewater Associates, and shifted those portfolios to an ex-U.S. inflation-linked bond portfolio. As of Sept. 30, that ex-U.S. portfolio held $2.8 billion in plan assets.
The meeting materials did not provide further information on other funding sources for the portfolio. Within the DB plan, fixed-income ILB had an actual allocation of 15% as of June 30, equal to its target.
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