Meet Francois Pellerin, new head of US Public and Taft-Hartley DB at State Street

Francois Pellerin joined State Street in March. We sat down with him recently to ask about his career to this point, what drew him to his current role, and his vision for State Street’s work with defined benefit (DB) plans.

How did you come to work in defined benefit pensions?

I was good with numbers as a child, and I enjoyed resolving problems. When it came time to go to college, I was told that actuaries got paid to help clients solve complex problems using math. That seemed like a good fit! So I got a degree in actuarial sciences in Quebec, where I grew up, and got a job as a retirement actuarial associate in Montreal.

I came to the United States in 1999, looking to live the American Dream. A large actuarial consulting firm hired me, even though I didn’t speak English when I first arrived. There, I realized that developing solutions to complex problems was only half of the fun—the other half was interacting with clients to explain and implement those solutions. Eventually I wanted to solve broader problems, so in 2003, I attended the Haas School of Business at Berkeley and earned my MBA.

Over the last 27 years, I have had the fortune to help DB clients solve business challenges from actuarial consulting, investment banking, and asset management standpoints. In my most recent role prior to joining State Street, I implemented a wide array of custom outsourced CIO (OCIO) solutions to help DB sponsors manage risk. People who know me refer to me as a “solutions guy”—I find it rewarding and interesting to take a challenge and figure out how to solve it by leveraging a team of investment and actuarial subject matter experts.

What drew you to State Street?

I specifically sought a company that would give me access to a broad, deep array of tools that I could use to design and implement DB solutions. That’s State Street. Here, our team can truly adopt a product-agnostic consultative approach. For example, our open-architecture framework allows us to provide clients with best-in-class investment ideas, regardless of the asset class.

Because best execution is critical in our line of business, I was also looking for a firm that had a strong track record of successfully implementing durable and flexible solutions for clients. My interaction with the OCIO group quickly put me at ease on that front. State Street has a solutions engine that can tackle almost any problem you can throw at it. State Street has had OCIO mandates since 1994—about as far back as OCIO goes. That was very appealing. Being solution-oriented at State Street is not lip service, it’s part of the culture.

Last and certainly not least is the sheer size of State Street’s DB book of business—second largest in the US with over $400 billion. This is a testament to State Street’s strength in retirement investing. No firm can achieve such market share by accident. It is the result of State Street’s ability to act as clients’ trusted advisor by providing products and solutions that fit their needs.

What are you most looking forward to working on as State Street’s new head of US Defined Benefit Investment Strategy?

Strategically, I’m excited about growing our DB footprint by further leveraging our broad resources. Specifically, the alignment of our fixed income, OCIO, independent fiduciary, public policy, PRT, alternatives, and distribution capabilities will allow State Street to expand its ability to improve client outcomes. In addition, very few firms have the DB/DC capabilities we have. This competitive advantage positions us to help clients increase the efficiency and reduce the cost of their overall retirement programs.

I am also excited about specific ways to connect DB sponsors’ needs and State Street’s core competencies. For example, we have over 17 hedging vehicles that third-party investors can use to hedge virtually any liability profile. And we are about to launch an offering for well-funded frozen plans that want to lock in their surplus, either as a bridge to an upcoming PRT or as a long-term, low-cost, low-risk solution.

What is your vision for State Street’s work in public plans?

We will continue innovating to develop strategies and solutions that can help public DB plans produce better risk-adjusted returns. In addition, we plan to leverage our actuarial expertise to help clients solve strategic and operational challenges. For example, we can help mature, underfunded public plans solve liquidity issues stemming from negative cash flows, or we can explore how public and multiemployer plans may be able to use custom LDI solutions to reduce risk for a portion of their plans, capitalizing on certain actuarial or reporting rules.

Strategically, we can help public and Taft-Hartley sponsors think about how they can use investment solutions to minimize regulatory risks. For Taft-Hartley plans specifically, we can help design solutions to manage the risk of becoming “critically underfunded,” which could force the sponsors to provide notices to participants, cut back benefits, or contribute more money to the plan.

About Francois Pellerin

Francois Pellerin is a managing director at State Street Investment Management and head of US DB Investment Strategy. In this role, Francois leads State Street’s efforts in growing its market share from US DB plans by working to align the firm’s capabilities and market positioning with the needs of US DB investors.

Francois was most recently at Fidelity, leading the Multi-Asset Class Solutions business, where he was responsible for growing their LDI, OCIO, and pension risk transfer offerings. Prior to Fidelity, Francois was the head of UBS’ Asset Liability Investment Solutions group, where he was responsible for leading the firm’s North American pension risk management business. Francois also worked at the Investment Banking divisions of JPMorgan and Citi, as well as at Towers Perrin. Francois started his career in the investments industry in 1995 as an actuary at Morneau Sobeco Ernst & Young in Montreal.

Francois earned his bachelor’s degree in actuarial sciences at Université Laval and his MBA from the University of California at Berkeley. He is a Fellow of the Society of Actuaries, a Chartered Enterprise Risk Analyst, and a member of the CFA Institute.

Join the conversation on defined benefit innovation

We invite you to join us as Francois Pellerin leads State Street’s defined benefit group into the future. Connect with us to learn more about how the DB investment strategy landscape is shifting, share your perspectives, and discover how our expertise can support your organization. Reach out today to start a conversation.

To learn more, contact us at InstitutionalUS@ssga.com