The Memphis Light, Gas and Water (MLGW) Retirement/Pension Plan provides defined benefit retirement benefits to employees of the largest three-service municipal utility in the United States. MLGW serves customers in Memphis and Shelby County, Tennessee, providing electricity, natural gas, and water services. The pension plan manages approximately $2 billion in assets and is overseen by an investment committee responsible for portfolio strategy and manager selection.
Investment Strategy
The MLGW Retirement Plan maintains a diversified investment portfolio across domestic and international equities, fixed income, real estate, and alternative investments. The plan’s investment committee sets asset allocation policy based on actuarial analyses and capital market assumptions, with the objective of generating returns sufficient to meet long-term pension obligations. The portfolio balances growth-oriented equity positions with income-generating fixed income holdings and diversifying alternative investments. The plan utilizes external investment managers across asset classes, selected through competitive processes with guidance from external investment consultants. As a utility-sponsored plan, the fund benefits from stable employer contributions supported by MLGW’s regulated revenue streams.
Private Markets Approach
The plan allocates approximately 8% of its portfolio to alternative investments, including private equity and real estate. The private equity program includes commitments to diversified buyout and growth equity funds managed by established institutional managers. The real estate allocation targets core and value-add strategies through commingled fund vehicles that provide diversification across property types and geographies. Given the plan’s moderate scale, the alternatives program focuses on a select number of high-quality manager relationships rather than broad diversification across numerous partnerships. The investment committee evaluates alternative investment opportunities with attention to manager track record, fee structures, and alignment of interest, maintaining a disciplined approach to private markets that reflects the plan’s long-term pension obligations.
Frequently Asked Questions
What is the Memphis Light, Gas and Water Retirement Plan?
The MLGW Retirement/Pension Plan provides defined benefit retirement benefits to employees of Memphis Light, Gas and Water, the largest three-service municipal utility in the United States. The plan manages approximately $2 billion in assets.
How does the MLGW pension plan invest?
The plan maintains a diversified portfolio across equities, fixed income, real estate, and alternatives. Approximately 8% of assets are allocated to alternative investments. The plan's investment committee oversees portfolio strategy.
What is Memphis Light, Gas and Water?
MLGW is the largest three-service municipal utility in the United States, providing electricity, natural gas, and water to customers in Memphis and Shelby County, Tennessee. It is a division of the City of Memphis.
