(November 13, 2013) — The Wyoming Retirement System (WRS) has appointed Sam Masoudi as its new CIO, replacing John Johnson who pleaded guilty to insider trading earlier this year.
Masoudi, formerly a managing director of Tulane University’s endowment, will begin running the $7 billion pension plan—which is responsible for approximately 65,000 participants—from December 3.
“With Sam’s diverse investment background, he will provide excellent leadership to the investment management team,” said Ruth Ryerson, executive director of WRS.
Masoudi has previously served as a portfolio manager and founder of investment fund Silver Peak Capital Management, director at private equity firm Veronis, Suhler & Associates, and assistant vice president at real estate investment banking group Kidder Peabody and PaineWebber.
The new CIO will inherit a 78.6% funded defined benefit plan with total unfunded liabilities of $1.5 billion.
His predecessor Johnson pleaded guilty to illicit trading in March for activities in 2008—two years prior to joining WRS—and was dismissed from the pension fund within a week.
The Securities and Exchange Commission revealed Johnson had gained $136,000 from the illegal trades.
Prior to the financial scandal, Johnson told aiCIO in 2012 he was concerned with the impact market volatility would have on his fund: “The volatility being presented in the market due largely to sovereign debt issues pervading the investment environment is out of our control.”
To provide cushion against such unforeseeable instability, Johnson said he had turned to fixed income—at the expense of WRS’ equity portfolio.
Masoudi will also face recent changes in state policy requiring public employees to contribute more to their retirement.
Under the 2013 law, the employee contribution rate has increased from 7% to 7.5% in October. The employer contribution is also expected to rise in 2014, from 7.12% to 7.62%.
These changes will help put the pension fund back on track, according to Ryerson. “It doesn’t look as healthy as it did last year, but that’s due to the change in assumptions,” she said.
WRS reduced its actuarial-assumed return from 8% to 7.74%, due to increasing longevity.
Related content: Public Fund CIO Pleads Guilty in Insider Trading Scheme, What Keeps Wyoming’s Pension CIO Up at Night?, Why Wyoming’s Pension System Lost Faith in Alpha, and Wyoming Pension: Time for a Fund Manager Fee Structure Makeover