Illinois Teachers’ Fund To Stick With PIMCO, But Backup Plan Remains in Place

In the weeks since Bill Gross’ departure from PIMCO, dozens of public pension funds around the country have carefully considered whether to stay with the firm or move on.

In late September, one of the largest plans in the country, the Florida Retirement Systems, announced it was cutting PIMCO in favor of BlackRock.

The Illinois Teachers’ Retirement System announced Thursday it would keep its assets with PIMCO, but would still be watching the firm closely. From Pensions & Investments:

Illinois Teachers’ Retirement System, Springfield, will not terminate any of the nine strategies managed for it by Pacific Investment Management Co., but likely will keep the company on its watchlist.

The $45.3 billion pension fund’s investment staff has had “backup portfolio managers” lined up since rumors started swirling earlier this year of the departure of William H. Gross, co-founder and former chief investment officer, said Scottie Bevill, senior investment officer for fixed income and real assets, to trustees at an investment committee meeting on Wednesday.

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PIMCO manages a total of about $3 billion for the pension fund — all fixed-income, credit or global tactical asset allocation approaches — representing about 6.6% of total fund assets.

PIMCO has been on the pension fund’s watchlist for personnel changes since February, when Mohamed El-Erian, PIMCO’s former co-chief investment officer, announced he would leave the firm.

Trustees approved the proposed watchlist, with PIMCO on it, during the investment committee meeting. The full board must approve the committee’s recommendation at its Friday meeting.

Pension funds that have PIMCO on their watchlists include: the Texas Municipal Retirement System, Indiana Public Retirement System, New York City Employee Retirement System, and the Hawaii Employees’ Retirement System.