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HomeMy WebLinkAboutCOMM - Meeting Minutes - 282 - 2-18-2021 - RETIREMENT1 1 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA Minute No. 282 February 18, 2021 The quarterly meeting of the Washington County Retirement Board was held at approximately 10:47 a.m. on Thursday, February 18, 2021, in the Public Meeting Room and via teleconference with the following members being present: Commissioners Diana Irey Vaughan, Nick Sherman and Larry Maggi, Controller Michael Namie, and Treasurer Tom Flickinger. Also present: Director of Finance Joshua J. Hatfield, Chief Clerk Cindy Griffin and via teleconference was Lee Martin, Ph.D. representing Marquette Associates. Approval of Minutes Mrs. Vaughan entertained a motion to approve Minute No. 281 dated December 2, 2021. The motion was moved by Mr. Sherman and seconded by Mr. Maggi that the above -mentioned minutes be approved as written. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously. Public Comment None. Treasurer's Report Mr. Flickinger stated the November and December 2020 statements were submitted to the participants via email. It was moved by Mr. Flickinger and seconded by Mr. Namie to accept the reconciliations of the above -mentioned statements. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously. Retirement Allowance Report Bank Balance as of November 1, 2020 $ 212,397.71 Transfers In 647,953.63 Add: ACH Credit 295,279.27 Less: Cancelled Checks (142,570.35) Less: ACH Debits (821,239.74) Bank Balance as of November 30, 2020 $ 191,820.52 Transfer Out (125,424.96) ACH Return (.02) Less: Outstanding Checks (40,335.63) Less: Retirement Check Run (26,059.91) Reconciled Balance as of November 30, 2020 $ -0- 112 MINUTE BOOK RETIREMENT BOARD IMR I IMIT D F16Q7QPc)j D WASHINGTON COUNTY, PENNSYLANIA Bank Balance as of December 1, 2020 $ 191,820.52 Transfers In 1,548,631.04 Add: ACH Credit 511,997.78 Less: Cancelled Checks (130,196.78) Less: Other Debits (1,137,713.81) Less: ACH Debits (843,063.30) Bank Balance as of December 31, 2020 $ 141,475.45 Less: Outstanding Checks (109,708.33) Less: Retirement Check Run (31,767.12) Reconciled Balance as of December 31, 2020 $ -� Requisitions Mr. Namie stated that requisitions for the months of December 2020 and January 2021 totaled $2,074,495.16. It was moved by Mr. Namie and seconded by Mr. Maggi that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously. Distributions December 2020 Check Payee Amount 2111 Washington County Cash Disbursement Account $ 50,949.88 2112 Terry L. Giles 33.68 2113 Virginia Abbey 2,243.46 2114 Erin Arnold 637.76 2115 Kenneth Bright 8,872.96 2116 Jason Cole 484.67 2117 Judith Hough 3,462.32 2118 Robert Miller 2,117.44 2119 Andrew Molinaro 46,691.92 2120 Stacy Proia 1,275.15 2121 John Tobin 17,084.00 2122 Brent Williams 9,664.15 2123 Lettie Wilson 3,466.31 2124 Savanah Woy 4,655.00 2125 Washington County Regular Payroll Escrow Account 20,243.98 2126 Washington County Regular Payroll Escrow Account 2,576.03 Transfer PNC Bank 78,149.92 j 1 113 j MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA Transfer Washington County Retirement Account 793,257.53 Total December 2020 Distributions $ 1.045.866.16 January 2021 Check Payee Amount 2128 Janet Snoke $ 188.84 2129 Tammy Stamm 162.59 2130 Pamela V. Tarr 162.60 2131 Virginia Grosheim 162.60 2132 Bobby Chambers 356.52 2133 Matthew Kalich 4,367.33 2134 Joshua Klaus 318.95 3135 Kevin Phillips 2,973.72 2136 Ameriprise Trust Co. as Trustee of Bette Jo Puskarich 41,521.11 2137 Breann Sirianni 3,925.34 2138 Tamara I. Tustin 4,728.13 2122 Brent Williams (Void) (9,664.15) 2139 Morgan Stanley as Trustee of IRA of Brent Williams 12,081.15 2140 Raymond James as Trustee of IRA - Kathy J McDonough 72,709.38 2141 Washington County Cash Disbursement Account 29,943.47 2142 James Joshua Talbert 317.77 2143 Washington County Regular Payroll Escrow Account 20,358.24 Transfer PNC Bank 54,339.06 Transfer Washington County Retirement Account 789,676.35 Total January 2021 Distributions 1.028.629.00 Old Business None. "T"--- "---!'---- Mrs. Vaughan entertained a motion to approve a request from Kristie Salzman to purchase part-time service credit dated August 29, 2009 to October 2, 2011, in the amount of $4,044.77. It was moved by Mr. Namie and seconded by Mr. Maggi that the service credit request be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously 114 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA Mrs. Vaughan entertained a motion to approve a request from Heather Sheatler to purchase unpaid leave of absence time dated August 13, 2009 to October 4, 2009, and May 23, 2011 to October 23, 2011, in the amount of $3,151.51. It was moved by Mr. Namie and seconded by Mr. Maggi that the service credit request be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman - yes; Mrs. Vaughan — yes. Motion passed unanimously Mrs. Vaughan entertained a motion to approve the 2021 Washington County Retirement Fund Budget. It was moved by Mr. Namie who made a note for the record that the Board of Commissioners also approved the budget submitted during the annual budget process in the amount of $12,703,584.00. Mr. Sherman seconded the motion to approve the budget. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously Mrs. Vaughan entertained a motion to approve the purchase of Employee Benefit Statements from Korn Ferry at a cost of $1.85 per statement for the approximate total cost of $1,380.10. The cost per statement remains unchanged from 2020. It was moved by Mr. Namie and seconded by Mr. Maggi that the Employee Benefit Statements purchase be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. Flickinger — yes; Mr. Maggi — yes; Mr. Sherman — yes; Mrs. Vaughan — yes. Motion passed unanimously Portfolio Presentation — Lee Martin, Ph.D. — Marquette Associates Mr. Martin began with a brief discussion on the market environment stating that the GDP slowed in the fourth quarter, but it is still fairly strong, increasing by an annual rate of 4.0%. Slower growth is expected in Q1, but the GDP is expected to accelerate for the remainder of 2021. With U.S. savings at its highest and the next round of stimulus coming, consumers are waiting to start spending. Business investment to build back diminished inventories and a strong housing market due to low interest rates are also factors contributing to the expectation of an acceleration of 115 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA GDP. Globally, growth has slowed as well, but expectations of a recovery in 2021 is likely as a result of stimulus programs. The combined global stimulus enacted by policymakers has reached almost $30 trillion with austerity not likely in the short-term, due to lessons learned after the Global Financial Crisis. With regard to returns, Mr. Martin stated that after the first month of the fourth quarter in 2020, the market took off with U.S. stocks up 14.7%, international up 16.1% and emerging markets up 19.7% on the back of the vaccine approvals. The big outlier is U.S. equities up 20.9% for the year even after the large market sell-off in Q1. Looking at fixed income, U.S. core bonds were slightly positive for Q4 with high -yield up 6.5%. All sectors finished positive for the quarter with energy at 29.8% and financials at 25.3% outperforming defensive counterparts. Although value stocks outperformed growth stocks for the quarter, growth stocks outperformed value stocks by over 3 5 percentage points for the year, something that Mr. Martin has not seen in 20 years. Mr. Martin gave the example that there is no logic for the fact that companies that began the year with negative earnings expectations returned 46.9% while profitable companies returned only 17.4%. He pointed out that the County's high yield fixed income investments would be reduced to safeguard against any potential future spread expansion since the spreads are now back below long term averages. Mr. Martin commented on the topics to watch in 2021 which include COVID and containment, new administration policies related to spending, infrastructure and taxes and the impact that retail investors may have on the markets. He stated that the impact may be volatile in the short-term but expects no meaningful impact on the broad global equity markets over the longer term The County's pension fund ended the quarter at $192.3 million, a Q4 gain of $16.5 million and a return of 9.5%, right at benchmark. Positive attribution came from growth and alternatives including defensive equity, real estate, infrastructure and timber/farmland. Negative attribution came from defensive high -quality equities and treasuries. The fund returned 10.5% for the year gaining $17.4M. The 5-year return was 9.4% gaining $64.1 M. Longterm, the fund gained $115.1 M over the last 10 years returning 8.5%, outperforming the benchmark (7.2%). Mr. Martin stated that over half of the fund balance is made up of gains. Looking ahead, Mr. Martin highlighted the consideration of an emerging markets strategy, lowering the allocation to Twin Capital, reducing high yield exposure and adding private equity and private debt allocations to help meet the 6.5% target rate of return that provides the necessary liquidity to manage growing negative cashflow. Mr. Martin stated that the County pension fund mix is nicely diversified with alternatives, etc., not too far off of the average public fund slightly below the median with more fixed income essential in meeting the level of outflows. The lower ARR affords the more conservative approach even in the equity composite which has slightly higher percentages in defensive lower volatility equities such as healthcare and staples. He added that the equity holdings do include the top five tech stocks, just not at the high benchmark allocations. With regard to fixed income, the County mix of treasuries, investment grade and high yield is yieldiing 1.0% to maturity as compared to the ATTEST: 116 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA 118 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA This page is blank.