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Almost Heaven? West Virginia State Pensi...

Evans, Richard B.,...

Case

Almost Heaven? West Virginia State Pension Funds and Investing in Equity

Evans, Richard B.; Bennett, Tate; Kalogeropoulos, Demitri

F-2092 | Published April 17, 2025 | 10 pages Case

Collection: Darden School of Business

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This case explores asset allocation of a portfolio and the associated diversification using the West Virginia’s state pension funds’ possible move into equity investments after previously holding only bonds. The protagonist, Craig Slaughter, is the executive director of the West Virginia Investment Management Board. As such, he is empowered to purchase equities following the passage of an amendment to the state’s constitution that allowed pension funds to allocate up to 60% of their portfolios toward stock investments. Students use asset-class return data from the cases to explore portfolio diversification through calculating the expected risk and return that West Virginia could see by allocating different levels of stock and bond categories. A key objective of the case is for students to consider the unfunded actuarial liabilities of West Virginia pension funds in making their decision. The case encourages students to think about the relationship between risk and return while demonstrating the precise benefit of diversification.