Eastman Kodak Co. is undergoing a significant change in its pension investment management, as it disbands the team responsible for overseeing its $4 billion pension investments, as per sources familiar with the matter.
The company, once a dominant force in the photography industry but now focused on advanced materials and chemicals manufacturing, is transitioning the oversight of its pension program to Boston-based NEPC. This shift entails notifying its investment managers of the change, as reported by individuals who preferred anonymity due to the sensitive nature of the information.
The decision to make this move is primarily motivated by the pension system’s overfunded status, according to the sources. The overfunded status has notably increased from just over $100 million at the end of 2019 to approximately $1.2 billion by the end of 2022. This amount now constitutes more than half of Kodak’s assets. The rise in interest rates has contributed to a decrease in the present value of future pension liabilities, benefiting the more than 37,000 participants enrolled in the program.
Additionally, Kodak’s pension plans have enjoyed robust performance, generating $1.1 billion in returns over the three-year period ending in 2022, which is roughly double the expected returns of $541 million. The largest plan in the United States allocated almost three-quarters of its assets to private equity and hedge funds.
As of the end of 2022, the pension plans held approximately $4.2 billion in assets, according to the company’s latest disclosure.
Thomas Mucha, the Chief Investment Officer, leads the pension team responsible for managing over $7 billion in total retirement assets supporting both current and former employees, according to Mucha’s LinkedIn profile.
While a representative for NEPC declined to comment on clients, Eastman Kodak has not yet responded to requests for comment.