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HomeMy WebLinkAboutCOMM - Agenda - 5-18-2022RETIREMENT BOARD MEETING May 19, 2022 1. Opening of Meeting. 2. Approval of Minute No. 286 dated February 17, 2022. 3. Public Comment. 4. Treasurer's Report: Bank Reconciliations — December 2021. 5. Requisitions: Requisitions — February 2022-April 2022. 6. Old Business. 7. New Business: A. Approval of a request from Robert Lonick to purchase prior service time dated December 17, 1998 to July 20, 1999 and September 7, 2004 to November 8, 2004 in the amount of $2,848.32. B. Portfolio Presentation: Lee Martin, Ph.D. — Marquette Associates. 8. Adjournment. Minute No. 286 February 17, 2022 The quarterly meeting of the Washington County Retirement Board was held at approximately 3:00 p.m. on Thursday, Februarey 17, 2022, in the public meeting room with the following members being present: Commissioners Diana Irey Vaughan, Larry Maggi and Nick Sherman; Treasurer Tom Flickinger. Also present: Finance Director Joshua Hatfield; County Solicitor Jana Grimm; Chief Clerk Cindy Griffin; Secretary Paula Jansante; Executive Assistant Marie Trossman; Chief of Staff Michael Namie; and Lee Martin, Ph.D. representing Marquette Associates. Approval of Minutes Mrs. Vaughan entertained a motion to approve Minute No. 285 dated December 1, 2021. The motion was moved by Mr. Sherman and seconded by Mr. Maggi,* , the above -mentioned minutes be approved as written. No discussion followed. Roll call vote taken: Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Shs; Mrs. V Motion passed unanimously. w Public Comment None. Treasurer's Reports Mr. Flickmger ented th v nk Reconions for November 2021. It was moved by Mr. .F Flickinger and seconded b S accept- conciliations of the above -mentioned W statemen Mrs n paused tour the lad ecemberd January and Mr. Flickinger responded that neither monies not complete max. Roll ca?e taken: Mr. Flickmyes; Mr ggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed"° m,1 Retirement Allowance Report Bank Balance as of November 1, 2021 $ 293,491.85 Deposits to Checking Account -0- Transfers In 671,704.45 Add: ACH Credit 289,210.23 Less: Cancelled Checks (289,783.57) Less: ACH Debits (862,598.09) Bank Balance as of November 30, 2021 $ 102,024.87 Less: Outstanding Checks (68,991.68) Less: Retirement Check Run (33,033.19) Reconciled Balance as of November 30, 2021 $___0__ Requisitions Mr. Flickinger stated that requisitions for the months of December 2021 and January 2022 totaled $2,374,023.52 It was moved by Mr. Flickinger and seconded by Mr. Sherman that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously. Distributions Check 2283 2284 2285 2286 2287 228 `a 228 2290 2291 2292 Transfer Transfer National Slovak Ashcrom Leeann Howell ' Justice Ottey-Jones Belli Stein VKWWRI ;t ounty Regular Payroll Escrow Account %O . on County Cash Disbursement Account PNC Bank Washington Co Retirement Account Total December 2022 Distributions Amount 19479.07 600.14 10,795.33 3,112.3 11,000.00 323.93 1,099.35 9886.06 24,13.42 60,176.92 62,727.32 825,234.80 ncn can nn Check 2294 2295. 2296 2297 2298 2299 2300 2301 2302 2303 2304 2305 2306 2393 2307 Old Business January 2022 Payee Estate of Elizabeth Carol Shawley Robin Joyce Amos Michael L Garber Walter W Garber William R Garber Jr Dustin Vandivner Joyelle Carter Kimberly A F k - Stifel As Trustee if IRS �Achael Anthony Iert GBU Finacial Life as Trust f IRA: A Sici Landis County Rular P Cash DA-bursemnet Acct Co. Retirment Acct January 2022 Distributions Amount 530.58 21,702.92 21,702.92 21,702.92 21,702.92 56.79 1,761.87 12,047.61 15,870.11 16,690.97 15,021.85 160,608.65 25,019.26 19,487.90 9.51 123,952.93 838,584.13 1,316,453.82 None. New Business Mrs. Vaughan entertained a motion to approve the 2022 Washington County Retirement Fund budget. It was moved by Mr. Sherman and seconded by Mr. Maggi that the above -mentioned budget be approved. No discussion followed. Roll call vote taken: Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughn entertained a motion to approve of the purchase of Employee Benefit Statements from Korn Ferry at a cost of $1.85 per statement for a total approximate cost of $1337.55. The cost per statement remains unchanged from 2021. It was moved by Mr. Sherman and seconded by Mr. Maggi that the above -mentioned purchase be approved. No discussion followed. Roll call vote taken: Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughn entertained a motion to approve a requ z om Natalie Mazza to purchase prior service time dated August 5, 2002 to July 24, 2004 in the uuri 2,065.96. It was moved by Mr. Sherman and No discussion followed. Roll call vote taken: Mr. Flickinger — yes; Mr. Motion passed unanimously. Portfolio Presentation- Mrs. Vaughan mo Associates to b Jeft exp noted tha_ "lf sdl� added business: La Mr. Ma egan th Washington Cod dad produced mid -teen re J environment. Mr. Martin above -mentioned request s; Mrs. Vaughan — yes. Update introducing Lee Martin of Marquette Policy Statement (IPS). Mr. Martin quickly Sloane, and that two new partners were of the End of Year report. He stated that He pointed out that four out of the past five years had a lot of gains to help protect in the current strained the market environment and pointed out that GDP did retreat in the third quarter but accelerated in the fourth quarter. Consumer spending drives about 2/3 of the GDP economy in the US. He noted that inventory accumulation, where businesses start to build out inventory, is a creed of the GDP. Mrs. Vaughn asked Mr. Martin if he's seen that people are really investing in remodel projects. Mr. Martin responded that there's been an awful amount and he will address it in inflation. He went on that business investment is expected to continue through 2022 due to the need to build business inventory back. He state that the hope is people will continue to spend because that is what drives our economy and the January numbers have come out and, even with inflation, people are continuing to spend. Mrs. Vaughn asked if people are saving less or are they saving same, to which Mr. Martin responded that they have more money saved because of the stimulus and the aide from the last couple of years. Which led to his next point of inflation. Mr. Martin noted the problems with global supply chains, particularly in the US. Additionally, trucker strikes and lockdowns in China are making it more and more difficult to move goods, which subsequently has catalyzed inflation Moving on to sticky inflation, particularly in real estate, Mr. Martin stated that 18 months ago pointed to the end of the real estate market, and as it sits now, it's probably up over 20% this year. Everything is lifted in the real asset world, and the same with home prices. This is starting to affect the cost of renting. There needs to be a big spurt of new builds, because there isn't enough housing. For some people, it would actually be cheaper to pay a mortgage than to rent. Mr. Flickinger asks what the impact of the bond and equity market will be, pointing out that the Federal Government is raising the interest rate and inflation is still rising. Mr. Martin answers this by saying pressure is on equities, and the bond market is down this year. Aggregate Bonds are already down four percent this year. The Federal Government plans to have six or more 25 basis point rate hikes over the next two years, beginning in March. There has also been some talk of theral Government kicking March off with a 50 basis point increase in March to combat inflati�t it seems unlikely. - ,= Finally, Mr. Martin moves on to the global econom� _ that, in the developed world, inflation is a problem everywhere, but not as high a� in the US oes on to state that the one fi exception is China right now. Mr. Martin recalfif last year, China r-a! gagged down the aig emerging markets because of the tech regulations a fhe issues J had wit she real estate markets. He pointed to speaking about that over the s r ' jVlartin goes of '� xplain that where everyone has started to tighten ases, China actually gone the opposite way and has actually stated to stimulate their eco , att ve lower les. Which is why China has leads the equity markets s - 2022 Transitioning to s, rtin pomul%lead the way in 2021, up 25 percent — mainly drive grave std s. Howev d'far this year, the grave stocks and tech stocks have been pummeled. The gd n we do > ave much in those stocks. Emerging markets were ne = of caused _ergmg infol China. Moving forward, bonds were flat for the xter. In real to with in n so high;�xed income returns were actually were negative. pte returns m6 are n ve. We have, however, benefitted from high -yield bonds, as they !A,!, -A, over 5% fo e year. r. Martin continues b saying that the real story pertains Y Y Y g rY to the inflation-sensassets T is up 2.4% and public real estate is up 4 1 % for the year. Private ,M, markets tend to follow �e� its by about 12 to 18 months, which is why private real estate z returns are starting to mimic iwliat we saw in public markets last year. Mr. Martin then reflects on the County's performance. We ended the year at just over $213 million, gaining about $10 million in the fourth quarter. As of now we are down to about $208 million. Our high quality equities are really performing well. Defensive equity added about 5% of over performance last year over its bench because people were buying stock options as insurance. The County put private equity and private credit in at the right time last year, as equities are going down, therefore we expect to see private equity and credits to increase. Over five years, which is the most important benchmark, is the assumed rate of return, which is 6.5%. During this time period, we have handedly out performed that — posting a return of 10.2%. Four out of our last five years, we have had a high double digit percentage return. We have a lot of gains which could come in handy because we expect a few tough years ahead, likely beginning this year. Moving forward, Mr. Martin elaborates on some changes made in the fourth quarter. We switched out the low volatility manager to MFS, the one that we've seen in OPEB for years. MFS is Marquette's number one low volatility manager. Also, in the defensive equity, we split it between Parametric and Newburger. This should yield more premium. Mr. Martin summarizes that the diversity in our portfolio has really set us up well for the likely tough upcoming years. After some discussion with regard to percentages allocated to private equity and public equity, Mrs. Vaughan entertained a motion to move 2% of public equity to private equity. It was moved by Mr. Flickenger to move 2% of public equity to private equity. Mr. Maggi seconded the motion. No discussion followed. Roll call vote taken: Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman . des, Vlrs. Vaughan — yes. Motion passed unanimously. After additional discussion, Mrs. Vaughan etttained a motion Love 1% from fixed income to private credit. It was moved by Mr. Fenger to move 1% fromf�d income to private credit. Mr. Maggi seconded the motion. r No discussion followed. Roll call vote taken: Mr. Flickinger_ -laggi — yes- r. She ar es; Mi Vaughan — yes. Motion Mov�.n�he mar�Ir:n stated-` at U.S. equities are up 10.2 basis points relative tip t 3 for the bend. Twin pital DividetCl Select, the local large cap defensive manager is over 1 % Manua ry, as expet�i in thr wironment. GW&K Small -Mid Cap Core has gone up nearly 4.5% every year. On the gbal seder. Martin noted we did lag by about 170 basis points for the fourth quar%e�,rwhich wasWuped in January. Artisan, Dodge & Cox Global Stock, Alliance Bernstein, and MFS G1 Low -MAlatility aided in this. Turning to the Non-U.S. Equity Composite, we outperformed by about ",q s points in the quarter and 2% in January, thanks to Schroder .T International Multi -Cap Equity Trust. Also, we added two new managers: one in the emerging markets, Wellington. Additionally, we added Harding Loevner International to give us some small cap exposure overseas. Moving to the Defensive Equity Composite, we are up about 5.9%, about 40 above the base. The Real Estate Composite brought in 22.0% last year. Since April of last year, TA Realty Core Fund returned 27% which is 10% above the index. Mr. Martin also noted that Timberland/Farmland returned 7%, and Infrastructure had a great year bringing in 6% for the year. He noted that Private Credit Composite delivered 2.5% for the year. Also, Private Equity was up 4.3%° for the fourth quarter. Finally, Mr. Martin announced that there would be some fee reductions coming up with MFS Global. The meeting was adjourned at 3:29 p.m. THE FOREGOING MINUTES SUBMITTED FOR APPROVAL: 2022 ATTEST: