Press Release

PBGC Names Six Firms for Smaller Asset Managers Program

Issued by PBGC [Pension Benefit Guaranty Corporation]

Jan. 19, 2024

WASHINGTON, D.C. — The Pension Benefit Guaranty Corporation (PBGC) has selected six investment management firms to participate in its Smaller Asset Managers Program.

PBGC started the Smaller Asset Managers Program (SAMP) as a pilot program in 2015 to reduce barriers to competition and to create opportunities for smaller asset investment management firms. Before the pilot program, PBGC’s investment management contracts were out of reach for small firms because the minimum required assets under management, often in the billions of dollars, were too large for small firms to qualify.

The six selected firms are:

• Longfellow Investment Management, Boston, Massachusetts
• New Century Advisors, Bethesda, Maryland
• Pugh Capital, Seattle, Washington
• Merganser Capital Management, Boston, Massachusetts
• National Investment Services, Milwaukee, Wisconsin
• Ramirez Asset Management, New York, New York

PBGC selected the six firms through a competitive procurement process, and smaller asset managers are subject to the same diligence, risk management, and reporting requirements as PBGC’s larger asset managers. Three of the firms selected, Longfellow Investment Management, New Century Advisors, and Pugh Capital are returning to the program after being part of the pilot program.

With the success of the pilot, PBGC’s Board of Directors approved making the SAMP an ongoing component of the investment program in 2022. As under the pilot, SAMP firms will manage a portion of PBGC’s U.S. core fixed income assets, which includes an assortment of investments such as U.S. government securities, mortgage-backed securities, and corporate bonds, among others. U.S. core fixed income is an asset class where active management has historically added value.

The firms will be evaluated on their performance against the Bloomberg U.S. Aggregate Bond Index, a gauge for investment-grade bonds that was also used during the pilot program.

To be considered for the SAMP, asset managers had to meet the following requirements: manage at least $250 million in assets, register with the Securities and Exchange Commission for the past five years, and comply with the Employee Retirement Income Security Act (ERISA) standards.

Asset managers also had to maintain a positive net worth and acquire an ERISA fidelity bond in the amount of $1 million, which would protect PBGC from losses due to fraud or dishonest practices. Additional insurance included errors and omissions coverage valued at a minimum of $2 million. Asset managers also must behave as a fiduciary, to always act in the best interest of PBGC.

About PBGC

PBGC protects the retirement security of over 31 million American workers, retirees, and beneficiaries in both single-employer and multiemployer private sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is directly responsible for the benefits of nearly 1.4 million participants and beneficiaries in failed single-employer pension plans. The Single-Employer Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multiemployer Program is financed by insurance premiums and investment income. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies

Editor's note: This press release has been issued by the company named above, not BenefitsLink. Reliance on information in this press release might be prudent only after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by BenefitsLink.