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Kathleen Gallagher Steers Ford’s Retirement Course

As Ford Motor’s CIO of benefit plans, she’s isolated pension risk from the Big 3 automaker’s core business.

It’s a given that a CIO knows a lot about investments. But Kathleen Gallagher, CIO of benefit plans at Ford Motor Co. since 2007, has in-depth knowledge of the automotive industry and the challenges that have plagued it for decades. That’s because she has held executive positions like global risk management director in finance for Ford Australia and controller for North American engine operations. That knowledge has been critical as she has helped transform the Detroit-based car company’s pension plan.

Gallagher, who joined Ford in 1985 after graduating with an MBA from Harvard Business School, oversees $65 billion in global defined benefit assets, including the $41 billion U.S. pension fund. She also has investment oversight for Ford’s $14 billion in U.S. defined contribution assets.

As the strategist behind Ford’s pioneering effort to reduce the risk its pension plan poses to its core business, Gallagher is a closely watched leader in the defined benefit world. “The role, obviously, is to develop and implement investment strategy, and manage the assets,” she says.

Gallagher’s job since 2007 has been to figure out how to safeguard assets for participants; this has evolved into a strategy of asset-liability management. “It’s more of a risk management job,” she says. “Every dollar in the portfolio has a job to do.” In 2012, Ford offered lump sums to 90,000 retirees and moved about $18 billion in liabilities off its balance sheet. Now the goal is to be fully funded and stay there. “We measure our success by our funded status volatility,” Gallagher says.

Return to the 2016 U.S. Money Masters.

Follow Julie Segal on Twitter at @julie_segal.

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Moore Foundation
 
manager lifetime achievement
David Booth
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Elizabeth Crisafi
San Diego City Employees’ Retirement System Health System
Scott Pittman
Mount Sinai Health System Large Endowment
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