Kodak to outsource oversight of pension investments

Kodak to outsource oversight of pension investments
The company's move to disband its in-house team and shift the work to NEPC is being driven by the pension system's overfunding.
FEB 29, 2024
By  Bloomberg

Eastman Kodak Co. is disbanding the team that manages the firm’s $4 billion of pension investments, according to people with knowledge of the matter. 

The former giant of the photography world, which now also focuses on manufacturing advanced materials and chemicals, has begun notifying its investment managers that it’s shifting oversight of the pension program to Boston-based NEPC, said the people, all of whom requested anonymity to discuss confidential information. 

The move is being driven by the fact that the pension system is overfunded, according to the people. The overfunded status has soared from just over $100 million at the end of 2019 to about $1.2 billion at the end of 2022, an amount that represents more than half of Kodak’s assets. 

That came as rising interest rates pushed down the present value of its future pension liabilities for the more than 37,000 participants that receive benefits in the long-standing program. 

The pension plans have also benefited from strong performance. Kodak’s plans generated $1.1 billion of returns in the three years through 2022, roughly double the $541 million that was expected. The largest US plan had almost three-quarters of its assets in private equity and hedge funds.

The plans had about $4.2 billion in assets at the end of 2022, the latest year that the company has disclosed.

Chief investment officer Thomas Mucha leads the pension team, which manages more than $7 billion in total retirement assets supporting current and former employees, according to Mucha’s LinkedIn profile. 

A representative for NEPC said the company can’t comment on clients. Eastman Kodak didn’t immediately respond to a request for comment. 

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