San Joaquin County Employees Retirement Association A G E N D A ADMINISTRATIVE COMMITTEE MEETING SAN JOAQUIN COUNTY EMPLOYEES RETIREMENT ASSOCIATION BOARD OF RETIREMENT FRIDAY, JUNE 5, 2020 AT 8:00 AM Location: via Zoom Client 0.01 In accordance with current state and local emergency proclamations and orders, this Board Meeting will be held virtually via Zoom Client. The public may only attend the meeting by (1) clicking here https://us02web.zoom.us/j/89974308236 and following the prompts to enter your name and email, or (2) calling (669) 219-2599 or (669) 900-9128 and entering Meeting ID 89974308236#. Persons who require disability-related accommodations should contact SJCERA at (209) 468-9950 or [email protected]at least forty-eight (48) hours prior to the scheduled meeting time. Public comments, limited to 250 words or less, may be submitted by e-mailing [email protected]. Every effort will be made to read all comments received into the record, but some comments may not be read due to time limitations. Comments received after an agenda item will be made part of the official record on file with SJCERA if received prior to the end of the meeting. 1.0 ROLL CALL 2.0 PUBLIC COMMENT 2.01 E-mails received at [email protected], limited to 250 words or less, will be read into the record at this time. Comments received after this agenda item is completed will be made part of the official record on file with SJCERA if received prior to the end of the meeting. Public comment is expected to be civil and courteous. Except as otherwise permitted by the Ralph M. Brown Act (California Government Code Sections 54950 et seq.), no deliberation, discussion or action may be taken by the Board on items not listed on the agenda. Members of the Board may, but are not required to: (1) briefly respond to statements made or questions posed by persons addressing the Board; (2) ask a brief question for clarification; or (3) refer the matter to staff for further information. 3.0 CONSENT ITEMS 3.01 CHIEF EXECUTIVE OFFICER (CEO) PERFORMANCE REVIEW COMMITTEE CHARTER 4 01 Proposed draft of CEO Performance Review Committee Charter 5 3.02 CEO PERFORMANCE REVIEW POLICY 6 01 Proposed revisions to CEO Performance Review Policy - Mark-up 7 02 Proposed revisions to CEO Performance Review Policy - Clean 20 6 South El Dorado Street, Suite 400 • Stockton, CA 95202 (209) 468-2163 • [email protected] • www.sjcera.org SJCERA Administrative Committee Meeting • 6/5/2020 • Page 1
Transcript
San Joaquin County EmployeesRetirement Association
A G E N D AADMINISTRATIVE COMMITTEE MEETING
SAN JOAQUIN COUNTY EMPLOYEES RETIREMENT ASSOCIATIONBOARD OF RETIREMENT
FRIDAY, JUNE 5, 2020AT 8:00 AM
Location: via Zoom Client
0.01 In accordance with current state and local emergency proclamations and orders,this Board Meeting will be held virtually via Zoom Client.
The public may only attend the meeting by (1) clicking herehttps://us02web.zoom.us/j/89974308236 and following the prompts to enter yourname and email, or (2) calling (669) 219-2599 or (669) 900-9128 and enteringMeeting ID 89974308236#.
Persons who require disability-related accommodations should contact SJCERAat (209) 468-9950 or [email protected] at least forty-eight (48) hours prior tothe scheduled meeting time.
Public comments, limited to 250 words or less, may be submitted by [email protected]. Every effort will be made to read all commentsreceived into the record, but some comments may not be read due to timelimitations. Comments received after an agenda item will be made part of theofficial record on file with SJCERA if received prior to the end of the meeting.
1.0 ROLL CALL2.0 PUBLIC COMMENT
2.01 E-mails received at [email protected], limited to 250 words or less, willbe read into the record at this time. Comments received after this agenda item iscompleted will be made part of the official record on file with SJCERA if receivedprior to the end of the meeting. Public comment is expected to be civil andcourteous.
Except as otherwise permitted by the Ralph M. Brown Act (California GovernmentCode Sections 54950 et seq.), no deliberation, discussion or action may be takenby the Board on items not listed on the agenda. Members of the Board may, butare not required to: (1) briefly respond to statements made or questions posed bypersons addressing the Board; (2) ask a brief question for clarification; or (3) referthe matter to staff for further information.
Administrative Committee Meeting San Joaquin County Employees’ Retirement Association
Agenda Item 3.01 June 5, 2020 SUBJECT: CEO Performance Review Committee Charter SUBMITTED FOR: _ X _ CONSENT l___ ACTION ___ INFORMATION RECOMMENDATION The CEO Performance Review Committee recommends, through the Administrative Committee, that the Board of Retirement approve the proposed CEO Performance Review Committee Charter to codify the committee’s purpose, responsibilities, and authority. PURPOSE Documenting each Committee’s purpose, responsibilities, and authority supports good governance and succession planning, and helps ensure the continued smooth functioning of the organization when there is turnover either in Board membership or staff. DISCUSSION Good governance is based on clearly defined and well-understood roles and responsibilities. SJCERA made significant progress in this realm in the last few years when it established clear lines of authority and accountability between the Board and the CEO, and the CEO and other staff positions, and when it adopted the Charters for the Audit and Administrative Committees. The CEO Performance Review Committee changed from an Ad Hoc to a standing committee in August 2019. While existing trustees may understand the committee’s purpose, documenting each committee’s roles, responsibilities, and authority will help ensure continued smooth operation and governance of the organization, which becomes especially important during times of transition. Staff worked with the Committee to document its Charter. Much of the Charter’s content already existed in the CEO Performance Review policy, so it was deleted from the policy and moved to the Charter. _________________________ JOHANNA SHICK Chief Executive Officer
1 of 1
CEO Performance Review Committee Charter
1 2 3 I. Establishment 4
A) The Board of Retirement established the CEO Performance Review Committee 5 to fulfill its fiduciary duties of loyalty, skill, care and diligence across all facets of 6 SJCERA governance, including assuring effective executive management. 7
8 II. Membership 9
A) The Board Chair appoints members to the Committee, in accordance with 10 SJCERA’s Bylaws. 11 12
B) In making committee appointments, the Board Chair shall consider, to the 13 extent possible, the following factors: 14 1) Retention of no more than 50 percent of the previous year’s committee; 15 2) Membership mix of elected and appointed trustees; and 16 3) Inclusion of a trustee with knowledge of County human resources 17
practices. 18 19
III. Meetings 20 A) The Committee meets at least once annually, during the first quarter of the 21
calendar year. 22 23
IV. Responsibilities 24 A) Document the Board’s collective assessment of the CEO’s performance 25 B) Develop a recommendation to the full Board regarding the CEO’s 26
compensation, in accordance with the CEO Performance Review policy and the 27 CEO’s employment agreement. 28
29 V. Authority 30
A) The CEO Performance Review Committee is an advisory committee to the 31 Board. All Committee actions must be ratified or adopted by the Board. 32 33
VI. History 34 July 10, 2020 Adopted by Board of Retirement 35
36 37
Certification of Board Adoption: 38 39 40 41 Clerk of the Board Date 42
43
Administrative Committee Meeting San Joaquin County Employees’ Retirement Association
Agenda Item 3.02 June 5, 2020 SUBJECT: CEO Performance Review Policy SUBMITTED FOR: _ X _ CONSENT l___ ACTION ___ INFORMATION RECOMMENDATION The CEO Performance Review Committee recommends, through the Administrative Committee, that the Board of Retirement approve the proposed revisions to CEO Performance Review policy. PURPOSE To refine and clarify the policy based on the Committee’s experience using it. DISCUSSION While the majority of the policy remains unchanged, the changes summarized below are intended to streamline the document, reflect recent changes to the Committee, and/or improve clarity.
1. Moved language from the policy to the Committee’s Charter, that addressed issues of the Committee’s establishment, membership, responsibilities and authority.
2. Made non-substantive changes to improve brevity and correct spelling. 3. Aligned the timing of the appointment of the Committee with that of all other Board
Committees. 4. Documented support that staff currently provides to the Committee chair. 5. Clarified the open and closed session meetings required for discussion of performance and
compensation. _________________________ JOHANNA SHICK Chief Executive Officer
I. Purpose A. To fulfill the Board of Retirement’s fiduciary duties of loyalty, skill, care and diligence
across all facets of SJCERA governance, including assuring effective executive management, this policyTo provides guidelines and procedures for the systematic assessment of Chief Executive Officer (CEO) performance.
B. To support SJCERA’s mission, vision and values by enhancing enhance CEO and
organizational effectiveness, this policy seeks to by ensure ensuring that:
1. SJCERA’s mandates are being carried out appropriately, that 2. Tthe working relationship between the Board and the CEO is effective and
strong, and 1.3. that tThe CEO is provided with specific expectations and feedback regarding
his/her performance.
II. Frequency and Content A. CEO performance is evaluated annually against clearly defined objectives and
expectations, which are developed jointly by the CEO and trustees.
1. Objectives and expectations may include SJCERA’s achievement of financial and organizational goals, and service targets, as well as effective human resource management, progress on implementing SJCERA strategy, and other Board directives.
III. Objectives
A. The CEO Performance Review includes two objectives: assessment of performance
during the past fiscal year and development of goals for the upcoming year. The evaluation should document past successes and targeted achievements, future objectives and goals, and also the CEO’s ability, vision, strategy and resources to achieve those aims.
IV. Process and Timeline
A. The CEO Performance Review will proceed according to the following process and
timeline: 1. October
a. The CEO presents to the Board of Retirement for their approval written goals for the upcoming calendar year.
b. Goals should include performance targets and personal/development goals. c. The approved goals will be incorporated into the staff goals and budget, and
considered by the Board and the CEO Performance Review Committee in the performance and compensation review process.
SJCERA BOARD POLICY / CEO Performance Review Policy / Page 2 of 4
2. December
a. The Board Chair appoints a committee for yearly CEO Performance Review.
In making committee appointments, the Board Chair shall consider, to the extent possible, the following factors: retention of no more than 50 percent of the previous year’s committee; membership mix of elected and appointed trustees; and inclusion of a trustee with knowledge of County human resources practices.
a. The CEO presents a budget, which identifies necessary funding to achieve
approved goals. b. The CEO provides the Committee Chair a schedule of proposed due dates
for tasks outlined in this policy. The schedule will consider, among other things, Board meeting dates and required approvals.
3. January
a. The CEO reports on accomplishments on prior-year goals to the full board at its regularly scheduled meeting in open session.
b. In closed session, the CEO provides to all Board members a self-evaluation for the Board’s consideration in completing their overall evaluation.
c. CEO Performance Feedback Worksheets (Attachment A) are distributed to all Board members.
d. The CEO Performance Review Committee meets and appoints a Committee Chair, if the Board Chair did not assign a Committee Chair when making committee assignments. The Committee Chair is responsible for gathering the Worksheets, compiling/summarizing results, relaying trustee comments during review discussions and, in collaboration with the committee, drafting the performance review memo.
e. The Worksheets shall be returned to the Committee Chair. The Chair shall set a due date that is no later than month-end. i. The Committee Chair consolidates feedback into the Consolidated
Trustee Feedback form (Attachment B) and drafts a memo using the Memo Template (Attachment C) reflecting the collective assessment of the CEO’s performance. The Committee Chair distributes the consolidated feedback and draft memo to the CEO Performance Review Committee.
ii. The Committee Chair may have one-on-one discussions as needed to
clarify trustees’ individual input, provided appropriate care is taken to ensure compliance with the Brown Act.
4. February/March
SJCERA BOARD POLICY / CEO Performance Review Policy / Page 3 of 4
a. The committee meets, without staff present, to review and provide input on the memo based on the consolidated feedback, including assisting with summarizing the feedback, determining the key accomplishments, and making suggestions for further development (if any) to include in the memo. The committee will also formulate a recommendation regarding compensation in accordance with Section IV(A)(4)(g) of this policy and the CEO’s employment agreement.
b. The Committee Chair distributes the summarized feedback and committee-approved draft memo to the trustees and the CEO. i. The trustees may have one-on-one discussions with the Committee
Chair as needed regarding the draft memo, provided appropriate care is taken to ensure compliance with the Brown Act.
c. The Board Chair and the Committee Chair meet with the CEO to discuss the feedback.
d. The CEO meets with the Board in closed session to discuss the performance review memo and feedback. i. Upon completion of IV.A.4.dthe closed session, the Board Chair signs
the memo, obtains the CEO signature acknowledging receipt, provides a copy of the review memo to the CEO, and submits the original signed memo to the County Human Resources Department (44 North San Joaquin Street, Suite 330, Stockton, CA 95202) for inclusion in the CEO’s personnel file.
ii. Upon completion of IV.A.4.dthe closed session, all Board members shall shred or otherwise destroy all feedback, notes, drafts, emails, and any other related documents and correspondence, whether paper or electronic, that were produced or obtained, sent or received, as part of the CEO Review Process.
e. The Board subsequently meets in closed session, without the CEO in attendance, to discuss authorizes merit, equity, or incentive compensation increases, if any, based on performance. Such increases, if any, shall be in addition to any COLA increases awarded to the Executive Unit. i. Compensation for the CEO position shall be included in a market survey
of total compensation every three years, to ensure its competitiveness. 1. The County Human Resources Division conducts total compensation
surveys for County department heads.
ii. The Board may authorize incentive compensation if it determines the goals approved pursuant to Section IV.A.1 have been achieved. Such incentive compensation shall not exceed 10 percent of the CEO’s annual base salary, increase base pay, or be included as part of the CEO’s retirement-eligible compensation.
SJCERA BOARD POLICY / CEO Performance Review Policy / Page 4 of 4
iii. In accordance with the Brown Act, the Board must vote on any merit, equity, or incentive compensation increases, in open session. This open session vote, if any, is scheduled for the next available Board meeting’s open session, typically in March. Discussion or action on proposed compensation increases shall occur in compliance with the requirements of the Brown Act.
5. June
a. CEO provides mid-year progress report on calendar year goals presented to the Board pursuant to Section IV(A)(1).
b. Board discusses mid-year progress and performance with CEO present in closed session. i. This meeting is intended to assist the Board in monitoring the
organization’s progress toward the annual goals, to provide an opportunity to adjust expectations in light of new circumstances, and to provide the opportunity for the CEO to make adjustments, if needed, during the second half of the calendar year.
6. August
a. The Board Chair appoints CEO Performance Review committee members.
V. Policy Review
A. Staff shall review this Policy annually to ensure that it remains relevant, appropriate,
and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. History
06/08/2018 Adopted Policy 06/29/2018 Staff updated format 07/12/2019 Amended to make Committee a standing committee with appointment
considerations, clarified Committee’s role, and integrated compensation review into the process
07/10/2020 Amended to align the committee appointment timing with other standing committees, remove text included in committee charter, assign responsibility for proposing schedule of tasks, and clarify compensation discussion and decision requirements.
Certification of Board Adoption: Clerk of the Board Date
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Understands the long-term view of SJCERA's strengths, challenges and opportunities and is aware of industry issues. Articulates and acts as a role model for mission and core values. Anticipates issues, responds to changes affecting SJCERA and brings forward workable alternatives and solutions. Provides direction and support to the Board regarding its fiduciary obligations and governance role. Brings new strategic concepts to the organization. Receptive to change. Makes decisions with integrity. Builds depth and breadth of technical expertise and effectively makes decisions based on technical knowledge.
Inspires confidence, established credibility with Board, staff, members and participating employers. Takes a long-term view and builds a shared vision with others that is understood at all levels of the organization. Creates and drives critical change initiatives throughout the organization. Provides open leadership so the senior management team understands the drivers of organizaitonal success. Empowers the senior management team to drive organizational success. Models the highest of ethics, values and integrity at all times; fosters a culture of ethical behavior. Forecasts trends, invites innovation and development of creative strategies and practical solutions to issues and challenges. Builds an organization that makes thoughtful choices in a timely manner. Displays courage and appropriately makes
Each Trustee is asked to reflect and comment on the CEO's performance during the Review Period. For each of the evaluation categories, descriptions have been provided to assist you with assigning a score of 1 (the minimum score) through 5 (the maximum), or a half-point increment in between. The CEO's self-assessment has also been provided for your reference. Wherever possible, please include observations or specific examples that support your assessment. The Chair of the CEO Performance Review Ad Hoc Committee will compile the results to produce an overall Board assessment. In consultation with the Ad Hoc Committee and the CEO, the Ad Hoc Committee Chair will utilize these materials to draft a memorandum to the CEO, documenting the Board's collective assessment of the CEO's performance and serving as a foundation for productive, two--way dialogue between the Board and the CEO. Note: these worksheets are considered confidential personnel records and should not be shared, discussed or disclosed outside of the CEO Performance Review process. Please return your completed CEO Performance Review Worksheet to the Ad Hoc Committee Chair on or before the deadline.
CEO Name:____________________________________ Review Period:________________ to _________________
Is often unaware of politically sensitive situations.Demonstrates poor judgment in public interactions. Often runs into crises because of weak leadership/management.Does not communicate a link between organizational goals and employee responsibilities.Does not analyze trends and prepare for the future. Consistently out of touch with work going on.Consistently makes poor ethical decisions.
Leadership General Comments or Examples:
1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Manages SJCERA's activities in compliance with laws, policies, and regulations. Understands and respects the Board's policy role; implements Board direction. Recommends, formulates and implements operating policies and procedures to comply with laws, plan provisions, and/or best practices. Delivers performance as measured by key metrics in core business areas. Exhibits effective problem solving. Meets deadlines. Oversees the development of reasonable budgets, communicates them to the Board, and operates within budgetary limits.Uses financial resources prudently to support the mission; cuts unnecessary spending. Assesses the value of programs and activities; makes changes as needed.Assesses and advises on adequacy of security of all official documents and technology systems.Ensures adequate internal controls. Receives a clean financial audit.Maintains a safe, healthy and environmentally sound workplace.
Proactively monitors legislation and regulations for changes; assesses impact on SJCERA; effectively manages implementation of required changes. Actively redesigns operations, processes, and procedures to improve efficiency, effectiveness, or better meet stakeholder needs. Identifies and removes problems hindering peak performance. Designs intermittent feedback loops to gauge the progress on budget and business goals. Effectively balances risk in decision making. Consistently achieves high levels of productivity and quality in work product.
Man
agem
ent
Management General Comments or Examples:
Unacceptable 1
SJCERA's activities are frequently out of compliance with laws, policies, regulations. Fails to understand and act upon requests from the Board in a timely manner. Failed to manage in several situations, causing a breakdown in service quality and timeliness. Makes little or no effort to assess risks or keep current on changes that may require adjustments. Loses sight of the financial big picture. Does not control expenditures well. Does not accept responsibility when problems arise.
1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Completes organizational goals on time or renegotiates expectations in light of unexpected circumstances.Develops and attains Board approval on appropriate goals to address organizational needs.
Leads SJCERA staff to achieve SJCERA's goals on time and within budget.Engages the SJCERA leadership team in proposing specific, measurable goals and concrete outcomes. Demonstrates results that meet or exceed stated objectives.
Unacceptable 1
Goa
l Atta
inm
ent
Plans poorly.Most goals are not completed, late or regularly over budget.Fails to act upon Board direction. Project results do not reflect the direction given by the Board.
Goal Attainment General Comments or Examples:
1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Actively works with stakeholders to identify and work through issues.Effectively represents SJCERA to members, employers, the media and the general public.Projects a positive image of the organization. Surveys members and uses feedback to identify opportunities for improvement.
Makes an active effort to build rapport. Communicates a compelling and inspiring vision for SJCERA. Maintains a leadership presence that builds others' confidence in the organization. Looks for continuous improvement opportunities in relationships with employers and participants. Member feedback shows a consistent high level of satisfaction.
Stak
ehol
der
Rel
atio
ns
Frequently ignores employers' or participants' needs.Allows issues to escalate as a result of untimely resolution.
Stakeholder Relations General Comments or Examples:
Unacceptable 1 1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Effectively communicates with the Board and staff, keeping them informed. Presents information logically, clearly and concisely; makes complex issues understandable.Demonstrates proficient written and verbal communication/presentation skills.Willing to accept and consider differing viewpoints and constructive feedback.Works collaboratively with the Board, counsel and employer representatives.Provides well-balanced information and clear recommendations/analysis to assist the board in its decision making. Ably serves as Clerk of the Board; minutes are accurate, complete and on time.
Recommendations are thoroughly researched and insightful, and presented in a clear and concise manner. Clearly and persuasively communicates on a broad range of topics inside and outside the organization. Effectively addresses both large and small groups. Effectively handles both friendly and hostile situations with ease. Encourages and embraces candid feedback and constructive suggestions from the Board, staff and stakeholders. Effectively uses the Board for counsel.
Frequently shows annoyance or impatience; is condescending or impolite. Does not inform Board of potential problems.Does not accept responsibility; reacts defensively when issues arise. Is inaccessible or unapproachable; two-way, open dialogue with staff is rare.
Communication Skills General Comments or Examples:
Com
mun
icat
ion
Skill
s Unacceptable
1 1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Shares the praise for successes; takes responsibility for failures.Attracts, engages and retains a talented, diverse workforce.Effectively delegates to staff and outside service providers with appropriate safeguards.Maintains Fosters a positive working environment by providing a climate of fairness, cooperation, civility and professionalism.Ensures all employees are informed of SJCERA policies, procedures and strategic direction.Sets clear standards of performance for staff. Provides clear, specific and timely performance feedback; rewards superior performance; works to improve undesirable performance.Ensures adequate cross functional training and succession planning for key positions.Provides opportunities for individual growth and career development.Works to establish a climate that welcomes and promotes respect for diversity. Encourages collaboration among staff across divisional boundaries.Manages in accordance with applicable labor laws and agreements.Staff training and development goals are incorporated in the performance review process.
Demonstrates a superior ability to attract and select employee and consultant talent. Uses a variety of innovative methods to attract the right individuals. Fosters a sense of community and inclusion. Creates and/or continously improves upon a positive working environment.Creates an atomsphere that fosters teamwork, creativity and participation. Creates a framework that allows teams to work effectively and efficiently. Coaches and develops direct reports and emerging leaders to high performancetheir fullest potential. Sets realistic expectations that are both achievable and provide opportunity for growth. Possesses a strong knowledge of labor laws and agreements and develops that knowledge in others. Fosters a culture of continuous learning that is fully integrated throughout the work force.
Team Management General Comments or Examples:
Blames other for problems.Selects unqualified individuals, resulting in a poor work product or waste of time/money; fails to hold non--performers accountable.Fails to get qualified candidates on consulting projects.Fails to involve leadership and staff appropriately. Does not appropriately develop staff to perform responsibilities.The organization suffers from significant "key person" risk.Is unaware of or fails to comply with applicable labor laws and agreements. Staff participation in training and development is discouraged.
Category and Scores Comments (Copy all trustees’ comments for each category into the corresponding space provided below.) LEADERSHIP Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
MANAGEMENT Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
GOAL ATTAINMENT Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
STAKEHOLDER RELATIONS Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
COMMUNICATION SKILLS Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
TALENT MANAGEMENT Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
ATTACHMENT B
San Joaquin County Employees' Retirement Association
6 South El Dorado Street, Suite 400 • Stockton, CA 95202 (209) 468-2163 • [email protected] • www.sjcera.org
ATTACHMENT C
TO: (NAME) Chief Executive Officer FROM: (NAME) Board Chair DATE: SUBJECT: (YEAR) CEO Performance Review Overview Feedback The Board of Retirement reviewed your performance across six dimensions: Management, Leadership, Goal Attainment, Stakeholder Relations, Communication Skills, and Talent Management. The Board’s scores (average and range) and representative comments are provided below.
1. Leadership Scores: Average: Range (high and low scores): Summarized Comments:
2. Management Scores: Average: Range (high and low scores): Summarized Comments:
3. Goal Attainment Scores: Average: Range (high and low scores): Summarized Comments:
SJCERA / CEO Performance Review/MM/DD/YYYY/ Page 2 of 2
4. Stakeholder Relations Scores: Average: Range (high and low scores): Summarized Comments:
5. Communication Skills Scores: Average: Range (high and low scores): Summarized Comments:
6. Talent Management
Scores: Average: Range (high and low scores): Summarized Comments:
Significant Accomplishments (optional, delete section if not used) Suggestions for Further Development (optional, delete section if not used) Conclusion Approved by the SJCERA Board of Retirement. (NAME), Board Chair Acknowledgement of Receipt
(NAME), CEO
I. Purpose A. To provide guidelines and procedures for the systematic assessment of Chief
Executive Officer (CEO) performance.
B. To enhance CEO and organizational effectiveness, by ensuring that:
1. SJCERA’s mandates are being carried out appropriately, 2. The working relationship between the Board and the CEO is effective and
strong, and 3. The CEO is provided with specific expectations and feedback regarding his/her
performance.
II. Frequency and Content A. CEO performance is evaluated annually against clearly defined objectives and
expectations, which are developed jointly by the CEO and trustees.
1. Objectives and expectations may include SJCERA’s achievement of financial and organizational goals, and service targets, as well as effective human resource management, progress on implementing SJCERA strategy, and other Board directives.
III. Objectives
A. The CEO Performance Review includes two objectives: assessment of performance
during the past fiscal year and development of goals for the upcoming year. The evaluation should document past successes and targeted achievements, future objectives and goals, and also the CEO’s ability, vision, strategy and resources to achieve those aims.
IV. Process and Timeline
A. The CEO Performance Review will proceed according to the following process and
timeline: 1. October
a. The CEO presents to the Board of Retirement for their approval written goals for the upcoming calendar year.
b. Goals should include performance targets and personal/development goals. c. The approved goals will be incorporated into the staff goals and budget, and
considered by the Board and the CEO Performance Review Committee in the performance and compensation review process.
SJCERA BOARD POLICY / CEO Performance Review Policy / Page 2 of 4
2. December
a. The CEO presents a budget, which identifies necessary funding to achieve
approved goals. b. The CEO provides the Committee Chair a schedule of proposed due dates
for tasks outlined in this policy. The schedule will consider, among other things, Board meeting dates and required approvals.
3. January
a. The CEO reports on accomplishments on prior-year goals to the full board at its regularly scheduled meeting in open session.
b. In closed session, the CEO provides to all Board members a self-evaluation for the Board’s consideration in completing their overall evaluation.
c. CEO Performance Feedback Worksheets (Attachment A) are distributed to all Board members.
d. The CEO Performance Review Committee meets and appoints a Committee Chair, if the Board Chair did not assign a Committee Chair when making committee assignments. The Committee Chair is responsible for gathering the Worksheets, compiling/summarizing results, relaying trustee comments during review discussions and, in collaboration with the committee, drafting the performance review memo.
e. The Worksheets shall be returned to the Committee Chair. The Chair shall set a due date that is no later than month-end. i. The Committee Chair consolidates feedback into the Consolidated
Trustee Feedback form (Attachment B) and drafts a memo using the Memo Template (Attachment C) reflecting the collective assessment of the CEO’s performance. The Committee Chair distributes the consolidated feedback and draft memo to the CEO Performance Review Committee.
ii. The Committee Chair may have one-on-one discussions as needed to
clarify trustees’ individual input, provided appropriate care is taken to ensure compliance with the Brown Act.
4. February/March
a. The committee meets, without staff present, to review and provide input on
the memo based on the consolidated feedback, including assisting with summarizing the feedback, determining the key accomplishments, and making suggestions for further development (if any) to include in the memo. The committee will also formulate a recommendation regarding compensation in accordance with Section IV(A)(4)(g) of this policy and the CEO’s employment agreement.
SJCERA BOARD POLICY / CEO Performance Review Policy / Page 3 of 4
b. The Committee Chair distributes the summarized feedback and committee-approved draft memo to the trustees and the CEO. i. The trustees may have one-on-one discussions with the Committee
Chair as needed regarding the draft memo, provided appropriate care is taken to ensure compliance with the Brown Act.
c. The Board Chair and the Committee Chair meet with the CEO to discuss the feedback.
d. The CEO meets with the Board in closed session to discuss the performance review memo and feedback. i. Upon completion of IV.A.4.d, the Board Chair signs the memo, obtains
the CEO signature acknowledging receipt, provides a copy of the review memo to the CEO, and submits the original signed memo to the County Human Resources Department (44 North San Joaquin Street, Suite 330, Stockton, CA 95202) for inclusion in the CEO’s personnel file.
ii. Upon completion of IV.A.4.d, all Board members shall shred or otherwise destroy all feedback, notes, drafts, emails, and any other related documents and correspondence, whether paper or electronic, that were produced or obtained, sent or received, as part of the CEO Review Process.
e. The Board subsequently meets in closed session, without the CEO in attendance, to discuss merit, equity, or incentive compensation increases, if any, based on performance. Such increases, if any, shall be in addition to any COLA increases awarded to the Executive Unit. i. Compensation for the CEO position shall be included in a market survey
of total compensation every three years, to ensure its competitiveness. 1. The County Human Resources Division conducts total compensation
surveys for County department heads.
ii. The Board may authorize incentive compensation if it determines the goals approved pursuant to Section IV.A.1 have been achieved. Such incentive compensation shall not exceed 10 percent of the CEO’s annual base salary, increase base pay, or be included as part of the CEO’s retirement-eligible compensation.
iii. In accordance with the Brown Act, the Board must vote on any merit, equity, or incentive compensation increases, in open session. This open session vote, if any, is scheduled for the next available Board meeting’s open session, typically in March.
5. June
a. CEO provides mid-year progress report on calendar year goals presented to the Board pursuant to Section IV(A)(1).
SJCERA BOARD POLICY / CEO Performance Review Policy / Page 4 of 4
b. Board discusses mid-year progress and performance with CEO present in closed session. i. This meeting is intended to assist the Board in monitoring the
organization’s progress toward the annual goals, to provide an opportunity to adjust expectations in light of new circumstances, and to provide the opportunity for the CEO to make adjustments, if needed, during the second half of the calendar year.
6. August
a. The Board Chair appoints CEO Performance Review committee members.
V. Policy Review
A. Staff shall review this Policy annually to ensure that it remains relevant, appropriate,
and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. History
06/08/2018 Adopted Policy 06/29/2018 Staff updated format 07/12/2019 Amended to make Committee a standing committee with appointment
considerations, clarified Committee’s role, and integrated compensation review into the process
07/10/2020 Amended to align the committee appointment timing with other standing committees, remove text included in committee charter, assign responsibility for proposing schedule of tasks, and clarify compensation discussion and decision requirements.
Certification of Board Adoption: Clerk of the Board Date
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Understands the long-term view of SJCERA's strengths, challenges and opportunities and is aware of industry issues. Articulates and acts as a role model for mission and core values. Anticipates issues, responds to changes affecting SJCERA and brings forward workable alternatives and solutions. Provides direction and support to the Board regarding its fiduciary obligations and governance role. Brings new strategic concepts to the organization. Receptive to change. Makes decisions with integrity. Builds depth and breadth of technical expertise and effectively makes decisions based on technical knowledge.
Inspires confidence, established credibility with Board, staff, members and participating employers. Takes a long-term view and builds a shared vision with others that is understood at all levels of the organization. Creates and drives critical change initiatives throughout the organization. Empowers the senior management team to drive organizational success. Models the highest of ethics, values and integrity at all times; fosters a culture of ethical behavior. Forecasts trends, invites innovation and development of creative strategies and practical solutions to issues and challenges. Builds an organization that makes thoughtful choices in a timely manner. Displays courage and appropriately makes sound decisions.
Each Trustee is asked to reflect and comment on the CEO's performance during the Review Period. For each of the evaluation categories, descriptions have been provided to assist you with assigning a score of 1 (the minimum score) through 5 (the maximum), or a half-point increment in between. The CEO's self-assessment has also been provided for your reference. Wherever possible, please include observations or specific examples that support your assessment. The Chair of the CEO Performance Review Ad Hoc Committee will compile the results to produce an overall Board assessment. In consultation with the Ad Hoc Committee and the CEO, the Ad Hoc Committee Chair will utilize these materials to draft a memorandum to the CEO, documenting the Board's collective assessment of the CEO's performance and serving as a foundation for productive, two--way dialogue between the Board and the CEO. Note: these worksheets are considered confidential personnel records and should not be shared, discussed or disclosed outside of the CEO Performance Review process. Please return your completed CEO Performance Review Worksheet to the Ad Hoc Committee Chair on or before the deadline.
CEO Name:____________________________________ Review Period:________________ to _________________
Is often unaware of politically sensitive situations.Demonstrates poor judgment in public interactions. Often runs into crises because of weak leadership/management.Does not communicate a link between organizational goals and employee responsibilities.Does not analyze trends and prepare for the future. Consistently out of touch with work going on.Consistently makes poor ethical decisions.
Leadership General Comments or Examples:
1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Manages SJCERA's activities in compliance with laws, policies, and regulations. Understands and respects the Board's policy role; implements Board direction. Recommends, formulates and implements operating policies and procedures to comply with laws, plan provisions, and/or best practices. Delivers performance as measured by key metrics in core business areas. Exhibits effective problem solving. Meets deadlines. Oversees the development of reasonable budgets, communicates them to the Board, and operates within budgetary limits.Uses financial resources prudently to support the mission; cuts unnecessary spending. Assesses the value of programs and activities; makes changes as needed.Assesses and advises on adequacy of security of all official documents and technology systems.Ensures adequate internal controls. Receives a clean financial audit.Maintains a safe, healthy and environmentally sound workplace.
Proactively monitors legislation and regulations for changes; assesses impact on SJCERA; effectively manages implementation of required changes. Actively redesigns operations, processes, and procedures to improve efficiency, effectiveness, or better meet stakeholder needs. Identifies and removes problems hindering peak performance. Designs intermittent feedback loops to gauge the progress on budget and business goals. Effectively balances risk in decision making. Consistently achieves high levels of productivity and quality in work product.
Man
agem
ent
Management General Comments or Examples:
Unacceptable 1
SJCERA's activities are frequently out of compliance with laws, policies, regulations. Fails to understand and act upon requests from the Board in a timely manner. Failed to manage in several situations, causing a breakdown in service quality and timeliness. Makes little or no effort to assess risks or keep current on changes that may require adjustments. Loses sight of the financial big picture. Does not control expenditures well. Does not accept responsibility when problems arise.
1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Completes organizational goals on time or renegotiates expectations in light of unexpected circumstances.Develops and attains Board approval on appropriate goals to address organizational needs.
Leads SJCERA staff to achieve SJCERA's goals on time and within budget.Engages the SJCERA leadership team in proposing specific, measurable goals and concrete outcomes. Demonstrates results that meet or exceed stated objectives.
Unacceptable 1
Goa
l Atta
inm
ent
Plans poorly.Most goals are not completed, late or regularly over budget.Fails to act upon Board direction. Project results do not reflect the direction given by the Board.
Goal Attainment General Comments or Examples:
1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Actively works with stakeholders to identify and work through issues.Effectively represents SJCERA to members, employers, the media and the general public.Projects a positive image of the organization. Surveys members and uses feedback to identify opportunities for improvement.
Makes an active effort to build rapport. Communicates a compelling and inspiring vision for SJCERA. Maintains a leadership presence that builds others' confidence in the organization. Looks for continuous improvement opportunities in relationships with employers and participants. Member feedback shows a consistent high level of satisfaction.
Stak
ehol
der
Rel
atio
ns
Frequently ignores employers' or participants' needs.Allows issues to escalate as a result of untimely resolution.
Stakeholder Relations General Comments or Examples:
Unacceptable 1 1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Effectively communicates with the Board and staff, keeping them informed. Presents information logically, clearly and concisely; makes complex issues understandable.Demonstrates proficient written and verbal communication/presentation skills.Willing to accept and consider differing viewpoints and constructive feedback.Works collaboratively with the Board, counsel and employer representatives.Provides well-balanced information and clear recommendations/analysis to assist the board in its decision making. Ably serves as Clerk of the Board; minutes are accurate, complete and on time.
Recommendations are thoroughly researched and insightful, and presented in a clear and concise manner. Clearly and persuasively communicates on a broad range of topics inside and outside the organization. Effectively addresses both large and small groups. Effectively handles both friendly and hostile situations with ease. Encourages and embraces candid feedback and constructive suggestions from the Board, staff and stakeholders. Effectively uses the Board for counsel.
Frequently shows annoyance or impatience; is condescending or impolite. Does not inform Board of potential problems.Does not accept responsibility; reacts defensively when issues arise. Is inaccessible or unapproachable; two-way, open dialogue with staff is rare.
Communication Skills General Comments or Examples:
Com
mun
icat
ion
Skill
s Unacceptable
1 1.5 4.53.52.5
Needs Improvement
2 Satisfactory
3
Above Average
4Outstanding
5Shares the praise for successes; takes responsibility for failures.Attracts, engages and retains a talented, diverse workforce.Effectively delegates to staff and outside service providers with appropriate safeguards.Maintains a positive working environment by providing a climate of fairness, cooperation, civility and professionalism.Ensures all employees are informed of SJCERA policies, procedures and strategic direction.Sets clear standards of performance for staff. Provides clear, specific and timely performance feedback; rewards superior performance; works to improve undesirable performance.Ensures adequate cross functional training and succession planning for key positions.Provides opportunities for individual growth and career development.Works to establish a climate that welcomes and promotes respect for diversity. Encourages collaboration among staff across divisional boundaries.Manages in accordance with applicable labor laws and agreements.Staff training and development goals are incorporated in the performance review process.
Demonstrates a superior ability to attract and select employee and consultant talent. Uses a variety of innovative methods to attract the right individuals. Creates and/or continously improves upon a positive working environment.Creates a framework that allows teams to work effectively and efficiently. Coaches and develops direct reports and emerging leaders to high performance. Sets realistic expectations that are both achievable and provide opportunity for growth. Possesses a strong knowledge of labor laws and agreements and develops that knowledge in others. Fosters a culture of continuous learning that is fully integrated throughout the work force.
Team Management General Comments or Examples:
Blames other for problems.Selects unqualified individuals, resulting in a poor work product or waste of time/money; fails to hold non--performers accountable.Fails to get qualified candidates on consulting projects.Fails to involve leadership and staff appropriately. Does not appropriately develop staff to perform responsibilities.The organization suffers from significant "key person" risk.Is unaware of or fails to comply with applicable labor laws and agreements. Staff participation in training and development is discouraged.
Category and Scores Comments (Copy all trustees’ comments for each category into the corresponding space provided below.) LEADERSHIP Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
MANAGEMENT Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
GOAL ATTAINMENT Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
STAKEHOLDER RELATIONS Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
COMMUNICATION SKILLS Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
TALENT MANAGEMENT Trustee Scores (list all): ____________ ________________________________ Average Trustee Score:____________ CEO Self-Score:__________________
ATTACHMENT B
San Joaquin County Employees' Retirement Association
6 South El Dorado Street, Suite 400 • Stockton, CA 95202 (209) 468-2163 • [email protected] • www.sjcera.org
ATTACHMENT C
TO: (NAME) Chief Executive Officer FROM: (NAME) Board Chair DATE: SUBJECT: (YEAR) CEO Performance Review Overview Feedback The Board of Retirement reviewed your performance across six dimensions: Management, Leadership, Goal Attainment, Stakeholder Relations, Communication Skills, and Talent Management. The Board’s scores (average and range) and representative comments are provided below.
1. Leadership Scores: Average: Range (high and low scores): Summarized Comments:
2. Management Scores: Average: Range (high and low scores): Summarized Comments:
3. Goal Attainment Scores: Average: Range (high and low scores): Summarized Comments:
SJCERA / CEO Performance Review/MM/DD/YYYY/ Page 2 of 2
4. Stakeholder Relations Scores: Average: Range (high and low scores): Summarized Comments:
5. Communication Skills Scores: Average: Range (high and low scores): Summarized Comments:
6. Talent Management
Scores: Average: Range (high and low scores): Summarized Comments:
Significant Accomplishments (optional, delete section if not used) Suggestions for Further Development (optional, delete section if not used) Conclusion Approved by the SJCERA Board of Retirement. (NAME), Board Chair Acknowledgement of Receipt
(NAME), CEO
Administrative Committee Meeting San Joaquin County Employees’ Retirement Association
Agenda Item 4.0 June 5, 2020 SUBJECT: Board Administration Policies and Bylaws Amendments SUBMITTED FOR: __ CONSENT l_X__ ACTION ___ INFORMATION RECOMMENDATION Staff requests that the Committee recommend to the full Board the adoption of the proposed amendments to the policies described below. PURPOSE To amend policies to ensure that they remain relevant, appropriate, and in compliance, per Section III.C of the Administrative Committee Charter. DISCUSSION In accordance with the Board’s requirement that staff review one-third of the policies annually, the following amendments are proposed to the Board’s administration policies:
• Bylaws – Added a Jurisdiction section that includes language for contracts, agreements, and/or partnerships; updated the section on subpoenas to include the CEO as approved by Board action on 5/7/19; removed duplicative language regarding election of trustees; clarified the order of the agenda and succession of the presiding officer for Board meetings; improved clarity in the Membership section and other non-substantive changes throughout the document.
• Cash Management and Liquidity Policy – Increased the reporting threshold from $35 million to $50 million, updated the liquidity pool funding source, and other non-substantive changes
• Disability Retirement Policy and Procedures – Added clarity regarding a hearing before the Board versus a referee. Hearings before the Board, if required will be conducted in the same manner as a hearing before a referee. Added a prehearing conference, which allows the applicant, the fund attorney and the referee to meet for the purpose of resolving any evidentiary, discovery and/or other disputes or issues prior to the hearing. The order and timing of some of the processes was also clarified and added a section to clearly defines noncompliance and the potential consequences.
___________________ ___________________ Kathy Herman Chris Wisdom Assistant Chief Executive Officer Investment Officer
SAN JOAQUIN County Employees’ Retirement Association
BYLAWS Revised & Adopted by the Board of Retirement on 1/12/2018 7/10/2020 Adopted by the Board of Supervisors on 3/20/2018 __/__/2020
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Pursuant to California Government Code Sections 31525 and 31526, these bylaws are As adopted by the Board of Retirement and approved by the San Joaquin County Board of Supervisors pursuant to California Government Code Sections 31525 and 31526. In the event a conflict arises between these bylaws and the County Employees Retirement Law, the Public Employees’ Pension Reform Act, the Internal Revenue Code or any other applicable state or federal statutes arise, the law shall prevail.
Table of Contents
PART I - GENERAL Page
SECTION 1. NAME ................................................................................................ 1
PART I - GENERAL SECTION 1. NAME A. The name of this retirement system is the “SAN JOAQUIN COUNTY EMPLOYEES’
RETIREMENT ASSOCIATION” (“SJCERA”). SECTION 2. PURPOSE A. SJCERA is established under the County Employees’ Retirement Law of 1937
(Chapter 3 of Part 3 of Division 4 of Title 3 of the California Government Code, Section 31450 et seq.) (hereinafter “the CERL”) for the purpose of carrying out the provisions of the CERL and the provisions of the Public Employees’ Pension Reform Act (Article 4 of Chapter 21 of Division 7 of Title 1 of the California Government Code, Section 7522, et seq.) (hereinafter “PEPRA”) within the County of San Joaquin. These bylaws govern the management and operation of the retirement system for the benefit of its membership, including its retired members and their survivors, dependents, and beneficiaries.
SECTION 3. JURISDICTION A. The Board of Retirement shall endeavor to include language substantially similar to
the following in any and all contracts, agreements, and/or partnerships entered into by the Board or its designee, subject to adjustments and modifications as deemed reasonable and appropriate by the Board or its designee in any given circumstance: “The parties hereto hereby submit to the jurisdiction of the Superior Court of California for San Joaquin County, or the United States District Court for the Eastern District of California, over any action, suits or proceedings arising out of or relating to this Agreement.”
SECTION 3 4. DEFINITIONS
A. Words, terms, and phrases used in these bylaws and SJCERA policies and procedures shall be given meaning as defined in the CERL or PEPRA unless otherwise specified in these bylaws.
1. Unless otherwise provided, any reference to “day” or “days” shall mean calendar days and shall include weekends and holidays. If a due date or deadline falls on a Saturday, Sunday or San Joaquin County designated holiday, the due date or deadline shall be the next regular business day.
2. Board shall mean Board of Retirement
3. CEO shall mean Chief Executive Officer or designee SECTION 4 5. ADMINISTRATION
4.1 5.1 General
A. Management of the retirement system is vested in the Board of Retirement
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(“Board”). Routine day-to-day administration of the retirement system is delegated to the Chief Executive Officer (CEO), who shall be that individual appointed by the Board pursuant to Government Code Section 31522.2.
B. The Board shall promulgate rules for matters relating to its administrative procedures, which shall be known as Board Administration Policies. Each Board Administration Policy shall be identified by title and purpose and may be adopted or amended at any regularly scheduled meeting of the Board by an affirmative vote of at least five (5) trustees. The CEO shall direct staff to maintain a record of all Board Administration Policies adopted or amended by the Board.
C. The CEO is responsible for the engagement, management, oversight and termination of all staff employed by SJCERA.
D. With regard to the exempt positions of the Assistant CEO (Assistant Retirement Administrator) and Chief Retirement Investment Officer (CRIO) (Retirement Investment Officer) appointed pursuant to Government Code Section 31522.3, the CEO is delegated the authority to select and appoint individuals to these positions, with the caveat that:
1. The selection and appointment of the Assistant CEO and the CRIO shall be submitted to the Board for Retirement for its concurrence and approval in accordance with Government Code Section 31522.3
2. The CEO shall at least annually meet with and evaluate the performance of the incumbent Assistant CEO and CRIO.
3. If at any time the CEO intends to dismiss an employee in either of these two positions, the CEO will present facts on the matter to the Board in closed session for the Board to exercise its authority under Government Code Section 31522.3.
E. All meetings of the Board shall be subject to the open meeting laws
applicable to local agencies, known as the Ralph M. Brown Act (Chapter 9 of Part 1 of Division 2 of Title 5 of the California Government Code, Section 54950 et seq.) (“The Brown Act”).
F. The Board shall meet at least once each month, and shall adopt and make
available to the public an annual meeting calendar each year, which may subsequently be modified as necessary by formal action of the Board in advance. Unless otherwise noticed in advance, meetings of the Board shall be convened in the SJCERA Boardroom, 6 S. El Dorado Street, Suite 400, Stockton, California.
G. Special meetings of the Board may be called at any time on the request of
any Officer of the Board or by any five (5) Members of the Board. Notice of the meeting shall be provided as required by the Brown Act.
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H. Board meetings may be reset or continued by the Board for good cause. If a meeting is reset or continued, the CEO shall give at least four (4) days’ notice of the date of the reset or continued meeting to Board Members who were not present at the time of re-setting or continuance.
4.2 5.2 Election and Appointment of Board Members
A. Pursuant to Government Code Section 31520.1, & 31520.5 and 31520.6 the
Board shall be composed of nine (9) members, one alternate safety member, and one alternate retired member.
B. The following procedure shall be established for the eElections of the second,
third, seventh, eighth, and alternate members: shall be conducted pursuant to Government Code Sections 31520.1, 31520.5 and 31523 and Board of Supervisors Resolution R-04-68.
1. The election shall be conducted by the County Registrar of Voters who shall
establish the filing dates for candidates, the method of election, all election rules, the election date, and who also shall conduct the election and certify the results.
2. In the event there are more than two candidates for any elective position, a
candidate must receive a majority of the votes cast to be elected. Should no candidate receive a majority of the votes cast, the County Registrar of Voters shall provide for a run-off election between the two candidates receiving the greatest number of votes.
C. Except as otherwise provided by law, an appointed member of the Board shall
continue to serve beyond the prescribed term until a successor is duly qualified and appointed. The Alternate Safety Member shall serve as provided in Government Code Section 31520.1. The Alternate Retired Member shall serve as provided in Government Code Sections 31520.5 and 31520.6.
D. Each Board member must receive a minimum of twenty-four (24) hours of trustee education within the first two years of assuming office and for every subsequent two-year period the person continues as a member of the Board. Such education shall include at least two hours of training every two years in general ethics principles and ethics laws relevant to the person’s public service as a Board member.
4.3 5.3 Procedures
A. ROBERT’S RULES OF ORDER shall guide the Board in its proceedings, except as otherwise provided in these bylaws or the CERL. The Chairperson shall have a vote on all questions and motions and shall not be required to relinquish the chair in order to participate in discussions. The order of
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business shall may include, but is not be limited to: Roll Call Pledge of Allegiance Approval of Minutes Public Comment Benefit Applications / Investment Issues and Transactions Investment Matters and Administration Matters Communications Staff and Committee Reports and Recommendations Comments from the Public Correspondence Adjournment
B. The Board Chairperson may make changes in the above order at their
discretion.
C. The order of business may also include one or more closed sessions in accordance with and as allowed by the Brown Act as needed to conduct the Board’s business.
D. Five Members of the Board shall constitute a quorum. Subject to paragraph E C below, no motion may be passed or business transacted except in matters dealing with hearings without at least five (5) affirmative votes.
E. Disability retirement hHearings conducted by the Board must have at least seven (7) members in attendance and will be conducted as detailed in Board policy.
F. Communications and requests shall be made in writing and directed to the Board in care of the CEO. The substance of such communications and requests, and requiring Board action thereon, shall be noted in the minutes of the Board meeting.
4.4 5.4. Board Officers
A. At the first meeting in July of each year, the Board shall elect, pursuant to open nomination, one of its members as Chairperson, one of its members as Vice- Chairperson, and one of its members as Secretary, each to hold office for a term of the later of one (1) year or until a successor is duly elected. Should any officer fail for any reason to complete a full term, the Board shall elect a successor for the balance of the unexpired term at its next meeting. The County Treasurer shall serve ex-officio as the Treasurer for SJCERA.
B. Chairperson
1. The Chairperson of the Board is the presiding officer at all Board meetings,
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and shall conduct the meetings in accordance with these bylaws and applicable rules and statutes. The Chairperson shall appoint Board members to standing and ad hoc committees of the Board, which shall consist of no fewer than three and no more than four Board members. Upon approval or adoption by the Board, the Chairperson shall sign all minutes, resolutions, orders or other documents of the Board. The Chairperson, or designee is authorized to sign on behalf of SJCERA any contracts, agreements, or other documents and forms required to effect the decisions and commitments approved by the Board or to comply with statutory or regulatory requirements.
C. Vice Chairperson
1. The Vice Chairperson will assume the duties of the Chairperson when the Chairperson is absent. When serving as Chairperson, the Vice Chairperson shall have all of the powers of the Chairperson and shall assume all of the duties of the Chairperson.
D. Secretary
1. The Secretary shall certify meeting minutes, resolutions, and orders of the Board as approved or adopted by the Board.
2. The Secretary will assume the duties of Chairperson in the simultaneous absence of both the Chair and Vice Chair. When serving as Chairperson, the Secretary shall have all the powers of the Chairperson and shall assume all of the duties of the Chairperson.
E. Clerk of the Board
1. The CEO or designee shall serve as Clerk of the Board and shall cause to be recorded in the minutes the time and place of each meeting, the name of each member present, all official acts and discussions of the Board, the votes given (except where the action is unanimous) and, where requested by a dissenting or approving member, a Board member’s dissent or approval. The Clerk shall cause the minutes to be reduced to written form forthwith and presented for Board approval at its next regularly scheduled meeting. The minutes shall be signed by the Chairperson and certified by the Secretary and shall become a part of the Board’s permanent record. Upon approval or adoption by the Board, the CEO shall have the authority to sign on behalf of SJCERA any contracts, agreements, or other documents, and forms required to effect the decisions and commitments approved by the Board or to comply with statutory or regulatory requirements.
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4.5 5.5 Subpoenas
A. Subpoenas powers shall may be issued for disability or administrative hearings, or other matters as determined vested in the by Board officers, CEO, and/or referee in accordance with Government Code Section 31535 and Board policy.
B. The Chairperson or, if unavailable, the Vice Chair person and Secretary of the Board are hereby authorized to issue and sign subpoenas for documents and/or attendance at hearings authorized by the Board, upon request of a party to the hearing.
C. B. Witnesses subpoenaed may be provided a witness fee and/or reimbursement for necessary travel. The amount to be paid and the party responsible for payment shall be established by Board policy.
4.6 5.6 Education and Travel
A. The Board of Retirement and designated staff have a fiduciary duty to shall obtain education on matters of public pension investments and administration in accordance with Government Code Sections 31522.8 and 53237.1 and Board policy. To execute this duty, this Board shall establish and maintain policies and guidelines for approval and reimbursement of education and travel related expenses.
4.7 5.7 Conflict of Interest and Disclosure
A. The Board shall establish and maintain a Conflict of Interest Code applicable to its Board members, investment managers and designated staff employees as required by the Political Reform Act and the California Code of Regulations. Statements of Economic Interests will be filed with and maintained by the Clerk of the Board of Retirement.
SECTION 5 6. MEMBERSHIP
5.1 6.1 General
A. Membership shall be as defined by the CERL or PEPRA as supplemented by these bylaws.
B. Mandatory Membership:
1. Every employee of San Joaquin County or SJCERA participating employerwho is appointed to a permanent full-time position shall be a member.
2. Superior Court Officers and their attaches and the Public Administrator shallbe included in SJCERA pursuant to the CERL.
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C. Exclusions from membership: Every employee of the County of San Joaquin or of any district included in the SJCERA appointed to a permanent full-time position, as specified in the ordinances of the County of San Joaquin or resolutions of districts, shall be a member as follows:
1. Employees who are appointed to a position or employed under contract for a period not to exceed 1,560 hours in any consecutive twelve (12) month period, seasonal employees, intermittent employees, or part-time employees, are excluded from membership in SJCERA. After successful completion of a pre-employment physical, if required for that job classification; and
2. On the first day of the next payroll period following appointment to a
permanent full-time position, if hired prior to September 22, 2003; or
3. On the first day of employment in a permanent full-time position, if hired on or after September 22, 2003.
D. Optional Membership: Employees who are appointed to a position for a period
not to exceed a total of nine (9) months in any consecutive twelve (12) month period, seasonal employees, intermittent employees, or part-time employees are excluded from membership in the SJCERA. Elected officials, filing a declaration with the Board to become a member, shall become a member as of the beginning of the payroll period in which the declaration is filed. Persons employed under contract for a period not to exceed a total of nine (9) months in any consecutive twelve (12) month period providing services requiring professional, highly technical skills are ineligible for membership. 1. Persons who are age 60 or older when they are first employed in a position
requiring SJCERA membership may make an irrevocable election to waive membership. The election shall be evidenced by the employee’s signature on a waiver of membership form provided by SJCERA.
2. Elected Officials, who wish to become (or remain) SJCERA members must file a declaration with the Board.
E. Employees eligible for SJCERA membership shall become members as
follows: Superior Court Officers and their attaches and the Public Administrator shall be included in the SJCERA pursuant to the CERL. 1. Hired before September 22, 2003: on the first day of the next payroll period
following appointment to a permanent full-time position, or
2. Hired on or after September 22, 2003: on the first day of employment in a permanent full-time position.
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3. An Elected Official opting into membership shall become a member as of the beginning of the payroll period in which the declaration is filed.
F. A person who is first employed in a position requiring membership in SJCERA
who is age 60 years or older at the time such employment commences may make an irrevocable election to waive membership. The election shall be evidenced by the employee’s signature on a waiver of membership form provided by SJCERA.
G. The Board may, from time-to-time, determine by classification of position, other
than those specifically provided by the CERL, the eligibility for membership and shall list those job classifications that are included in the safety retirement category.
H. A member who is eligible for reciprocity shall allow SJCERA to coordinate with
a member’s reciprocal retirement system in establishing the dates of membership and termination so that there is no overlap of membership between the systems. SJCERA will adjust the membership date if necessary, provided that date shall be no later than 12 weeks after the member commenced SJCERA-covered employment, and adjust the termination date if necessary, provided that date is no earlier than 12 weeks prior to the date the member terminated SJCERA-covered employment.
5.2 6.2 Application for Membership
A. Every employee of the County of San Joaquin or a participating employer special district who is or becomes a member of the SJCERA shall complete a Member Certification Enrollment form supplied by SJCERA, including the employee’s date of birth, date employment began, and employing department or participating employer district, and execute the sworn statement therein. It is the appointing authority’s duty to assure ensure that all eligible employees complete the required sworn statement form and to forward the statement immediately to SJCERA.
B. In lieu of a sworn statement, the submission by the member’s employer to the
retirement association of the information otherwise required in paragraph (A) in a form determined by Board policy.
C. Every employee who is eligible for SJCERA membership in the SJCERA
also shall submit a certified copy of the employee’s birth certificate or, if unobtainable, other proof of age as determined by outlined in the Board policy will be accepted.
D. In the event of a discrepancy in age, for actuarial analysis and determination of contribution rates, the birth date resulting in the oldest age for determining age-based contribution rates shall prevail.
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5.3 6.3 Designation of Beneficiary
A. Every member at the time of retirement shall submit evidence of marriage or registered domestic partnership (RDP) if the member’s designated beneficiary is the member’s spouse/RDP and the member elects an option pursuant to Sections 31760 et seq. of the Government Code. In lieu of a marriage or registered domestic partnership certificate, alternative documents as determined by Board policy will be accepted.
B. Every member, at the time of retirement, shall submit proof of age for any
designated beneficiary or beneficiaries selected pursuant to the exercise of an option contained within Section 31760 et seq. of the Government Code. Proof of age shall be as described in Section 5.2 of these bylaws.
C. RDPs Registered domestic partners, as defined in California Family Code Section 297, of SJCERA members have the same rights, protections, and benefits, and are subject to the same responsibilities, obligations, and duties as are granted to or imposed upon spouses of SJCERA members.
SECTION 6 7. SERVICE RETIREMENT
A. In addition to the provisions of the CERL and PEPRA pertaining to service retirement, an application for service retirement shall be deemed complete when the following have been submitted:
1. (i) aA written application on forms supplied by the SJCERA,
2. (ii) pProof of age of the member and beneficiary as provided in Sections 65.2 and 65.3,
3. (iii) eEvidence of marriage or registered domestic partnership of the beneficiary as required in Section 6 5.3, and
4. (iv) dDesignation of the option elected by the retiring member on the form provided by the SJCERA.
B. Upon retirement, a member shall be furnished with a copy of their retirement application and options form which includes the effective date of retirement, their retirement allowance and any other information that the CEO or designee determines is appropriate and in the member’s’ best interest. This shall serve as an annuity certificate.
SECTION 7 8. DISABILITY RETIREMENT
A. The Board shall promulgate rules to ensure the fair and efficient proceedings of disability cases. These rules shall be referred to as Disability Retirement Policy and Procedures.
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SECTION 8 9. AMENDMENTS
A. These bylaws may be amended at any regularly scheduled Board meeting by an affirmative vote of at least 5 (five) members of the Board. The bylaws become effective when approved by the Board of Supervisors.
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HISTORY 12/08/2017: SECTION 3. DEFINITIONS – Added definitions of day, Board and CEO,
extended the applicability of the definitions to SJCERA policies and procedures. SECTION 4. ADMINISTRATION - Added Subsection 4.1.B, promulgation of
Board Administration Policies; Subsection 4.2.C deleted erroneous reference to elected and added the word safety; Subsection 4.4 – added authority for CEO to sign contracts/agreements with Board approval; Subsections 4.5 – 4.10 – Repealed and converted to Corrections of Errors or Omissions policy; Added Subsection 4.5 – Subpoenas; Added Subsection 4.6 – Education and Travel; Subsection 4.11 - Conflict of Interest and Disclosure, renumbered to 4.7
SECTION 5. MEMBERSHIP – Added Subsection 5.1.B.2 and 5.1.B.3, regarding first day of employment; Subsection 5.2.B - Repealed and converted to Age Verification policy
SECTION 6. MEMBER CONTRIBUTIONS – Repealed and converted to Member Contributions and Interest Posting policy
SECTION 7. SERVICE RETIREMENT – Renumbered to Section 6 SECTION 8. DISABILITY RETIREMENT – Revised, Renumbered to Section 7;
Subsections 8.2 – 8.10, SECTION 9. HEARING BEFORE A REFEREE, SECTION 10. HEARING BEFORE THE BOARD, and SECTION 11. RULES OF EVIDENCE - Repealed and converted to Disability Retirement policy and procedures
SECTION 12. DISSOLUTION OF MARRIAGE OR REGISTERED DOMESTIC PARTNERSHIP - Repealed and converted to Dissolution of Marriage or Registered Domestic Partnership policy
SECTION 13 – AMENDMENTS – Renumbered to Section 8 SECTION 20. PURPOSE AND SCOPE - Repealed and incorporated by existing
Repealed and converted to Compensation Earnable Annual Limit – IRC 401(a)(17) policy
SECTION 22. ROLLOVERS - 401(a)(31) & 402(c) - Repealed and converted to Rollovers – IRC 401(a)(31) & 402(c) policy
SECTION 23. NORMAL RETIREMENT AGE - 401(a)(36) - Repealed and converted to Normal Retirement Age – IRC 401(a)(36) policy
SECTION 24. RETURN TO WORK and BONA FIDE SEPARATION FROM SERVICE - 401(a) – Repealed and converted to Return to Work and Bona Fide Separation from Service - IRC 401(a) policy
SECTION 25. REQUIRED MINIMUM DISTRIBUTIONS - 401(a)(9) - Repealed and converted to Required Minimum Distributions – IRC 401(a)(9) policy
SECTION 26. ANNUAL BENEFIT LIMIT - 415(b) - Repealed and converted to Annual Benefit Limit – IRC 415(b) policy
SECTION 27. ANNUAL ADDITIONS LIMIT - 415(c) - Repealed and converted to Annual Additional Limit – IRC 415(c) policy
SECTION 28. RETIREE MEDICAL BENEFITS ACCOUNTS - 401(h) - Repealed and converted to Retiree Medical Benefits Accounts – IRC 401(h) policy
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07/10/2020: Added a Jurisdiction section, clarified the Administration and Membership sections, and other non-substantive changes
SAN JOAQUIN County Employees’ Retirement Association
BYLAWS Revised & Adopted by the Board of Retirement on 7/10/2020 Adopted by the Board of Supervisors on __/__/2020
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Pursuant to California Government Code Sections 31525 and 31526, these bylaws are adopted by the Board of Retirement and approved by the San Joaquin County Board of Supervisors. In the event a conflict arises between these bylaws and the County Employees Retirement Law, the Public Employees’ Pension Reform Act, the Internal Revenue Code or any other applicable state or federal statutes, the law shall prevail.
Table of Contents
PART I - GENERAL Page
SECTION 1. NAME ................................................................................................ 1
PART I - GENERAL SECTION 1. NAME A. The name of this retirement system is the “SAN JOAQUIN COUNTY EMPLOYEES’
RETIREMENT ASSOCIATION” (“SJCERA”). SECTION 2. PURPOSE A. SJCERA is established under the County Employees’ Retirement Law of 1937
(Chapter 3 of Part 3 of Division 4 of Title 3 of the California Government Code, Section 31450 et seq.) (hereinafter “the CERL”) for the purpose of carrying out the provisions of the CERL and the provisions of the Public Employees’ Pension Reform Act (Article 4 of Chapter 21 of Division 7 of Title 1 of the California Government Code, Section 7522, et seq.) (hereinafter “PEPRA”) within the County of San Joaquin. These bylaws govern the management and operation of the retirement system for the benefit of its membership, including its retired members and their survivors, dependents, and beneficiaries.
SECTION 3. JURISDICTION A. The Board of Retirement shall endeavor to include language substantially similar to
the following in any and all contracts, agreements, and/or partnerships entered into by the Board or its designee, subject to adjustments and modifications as deemed reasonable and appropriate by the Board or its designee in any given circumstance: “The parties hereto hereby submit to the jurisdiction of the Superior Court of California for San Joaquin County, or the United States District Court for the Eastern District of California, over any action, suits or proceedings arising out of or relating to this Agreement.”
SECTION 4. DEFINITIONS
A. Words, terms, and phrases used in these bylaws and SJCERA policies and procedures shall be given meaning as defined in the CERL or PEPRA unless otherwise specified in these bylaws.
1. Unless otherwise provided, any reference to “day” or “days” shall mean calendar days and shall include weekends and holidays. If a due date or deadline falls on a Saturday, Sunday or San Joaquin County designated holiday, the due date or deadline shall be the next regular business day.
2. Board shall mean Board of Retirement
3. CEO shall mean Chief Executive Officer or designee SECTION 5. ADMINISTRATION
5.1 General
A. Management of the retirement system is vested in the Board of Retirement
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(“Board”). Routine day-to-day administration of the retirement system is delegated to the Chief Executive Officer (CEO), who shall be that individual appointed by the Board pursuant to Government Code Section 31522.2.
B. The Board shall promulgate rules for matters relating to its administrative procedures, which shall be known as Board Administration Policies. Each Board Administration Policy shall be identified by title and purpose and may be adopted or amended at any regularly scheduled meeting of the Board by an affirmative vote of at least five (5) trustees. The CEO shall direct staff to maintain a record of all Board Administration Policies adopted or amended by the Board.
C. The CEO is responsible for the engagement, management, oversight and termination of all staff employed by SJCERA.
D. With regard to the exempt positions of the Assistant CEO (Assistant Retirement Administrator) and Retirement Investment Officer (RIO) appointed pursuant to Government Code Section 31522.3, the CEO is delegated the authority to select and appoint individuals to these positions, with the caveat that:
1. The selection and appointment of the Assistant CEO and the RIO shall be submitted to the Board for Retirement for its concurrence and approval in accordance with Government Code Section 31522.3
2. The CEO shall at least annually meet with and evaluate the performance of the incumbent Assistant CEO and RIO.
3. If at any time the CEO intends to dismiss an employee in either of these two positions, the CEO will present facts on the matter to the Board in closed session for the Board to exercise its authority under Government Code Section 31522.3.
E. All meetings of the Board shall be subject to the open meeting laws
applicable to local agencies, known as the Ralph M. Brown Act (Chapter 9 of Part 1 of Division 2 of Title 5 of the California Government Code, Section 54950 et seq.) (“The Brown Act”).
F. The Board shall meet at least once each month, and shall adopt and make
available to the public an annual meeting calendar each year, which may subsequently be modified as necessary by formal action of the Board in advance. Unless otherwise noticed in advance, meetings of the Board shall be convened in the SJCERA Boardroom, 6 S. El Dorado Street, Suite 400, Stockton, California.
G. Special meetings of the Board may be called at any time on the request of
any Officer of the Board or by any five (5) Members of the Board. Notice of the meeting shall be provided as required by the Brown Act.
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H. Board meetings may be reset or continued by the Board for good cause. If a meeting is reset or continued, the CEO shall give at least four (4) days’ notice of the date of the reset or continued meeting to Board Members who were not present at the time of re-setting or continuance.
5.2 Election and Appointment of Board Members
A. Pursuant to Government Code Section 31520.1, 31520.5 and 31520.6 the
Board shall be composed of nine (9) members, one alternate safety member, and one alternate retired member.
B. Elections of the second, third, seventh, eighth, and alternate members shall be
conducted pursuant to Government Code Sections 31520.1, 31520.5 and 31523 and Board of Supervisors Resolution R-04-68.
C. Except as otherwise provided by law, an appointed member of the Board shall
continue to serve beyond the prescribed term until a successor is duly qualified and appointed.
5.3 Procedures
A. ROBERT’S RULES OF ORDER shall guide the Board in its proceedings, except as otherwise provided in these bylaws or the CERL. The Chairperson shall have a vote on all questions and motions and shall not be required to relinquish the chair in order to participate in discussions. The order of business may include, but is not be limited to:
Roll Call Pledge of Allegiance Approval of Minutes Public Comment Benefit Applications Investment Matters and Administration Matters Staff and Committee Reports and Recommendations Correspondence Adjournment
B. The Board Chairperson may make changes in the above order at their
discretion.
C. The order of business may also include one or more closed sessions in accordance with and as allowed by the Brown Act as needed to conduct the Board’s business.
D. Five Members of the Board shall constitute a quorum. Subject to paragraph E
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below, no motion may be passed or business transacted except in matters dealing with hearings without at least five (5) affirmative votes.
E. Hearings conducted by the Board must have at least seven (7) members in attendance and will be conducted as detailed in Board policy.
F. Communications and requests shall be made in writing and directed to the Board in care of the CEO. The substance of such communications and requests requiring Board action shall be noted in the minutes of the Board meeting.
5.4. Board Officers
A. At the first meeting in July of each year, the Board shall elect, pursuant to open nomination, one of its members as Chairperson, one of its members as Vice- Chairperson, and one of its members as Secretary, each to hold office for a term of the later of one (1) year or until a successor is duly elected. Should any officer fail for any reason to complete a full term, the Board shall elect a successor for the balance of the unexpired term at its next meeting. The County Treasurer shall serve ex-officio as the Treasurer for SJCERA.
B. Chairperson
1. The Chairperson of the Board is the presiding officer at all Board meetings, and shall conduct the meetings in accordance with these bylaws and applicable rules and statutes. The Chairperson shall appoint Board members to standing and ad hoc committees of the Board, which shall consist of no fewer than three and no more than four Board members. Upon approval or adoption by the Board, the Chairperson shall sign all minutes, resolutions, orders or other documents of the Board. The Chairperson, or designee is authorized to sign on behalf of SJCERA any contracts, agreements, or other documents and forms required to effect the decisions and commitments approved by the Board or to comply with statutory or regulatory requirements.
C. Vice Chairperson
1. The Vice Chairperson will assume the duties of the Chairperson when the Chairperson is absent. When serving as Chairperson, the Vice Chairperson shall have all of the powers of the Chairperson and shall assume all of the duties of the Chairperson.
D. Secretary
1. The Secretary shall certify meeting minutes, resolutions, and orders of the Board as approved or adopted by the Board.
2. The Secretary will assume the duties of Chairperson in the simultaneous absence of both the Chair and Vice Chair. When serving as Chairperson,
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the Secretary shall have all the powers of the Chairperson and shall assume all of the duties of the Chairperson.
E. Clerk of the Board
1. The CEO or designee shall serve as Clerk of the Board and shall cause to be recorded in the minutes the time and place of each meeting, the name of each member present, all official acts and discussions of the Board, the votes given (except where the action is unanimous) and, where requested by a dissenting or approving member, a Board member’s dissent or approval. The Clerk shall cause the minutes to be reduced to written form forthwith and presented for Board approval at its next regularly scheduled meeting. The minutes shall be signed by the Chairperson and certified by the Secretary and shall become a part of the Board’s permanent record. Upon approval or adoption by the Board, the CEO shall have the authority to sign on behalf of SJCERA any contracts, agreements, or other documents, and forms required to effect the decisions and commitments approved by the Board or to comply with statutory or regulatory requirements.
5.5 Subpoenas
A. Subpoenas may be issued for disability or administrative hearings, or other
matters as determined by Board officers, CEO, and/or referee in accordance with Government Code Section 31535 and Board policy.
B. Witnesses subpoenaed may be provided a witness fee and/or reimbursement for necessary travel. The amount to be paid and the party responsible for payment shall be established by Board policy.
5.6 Education and Travel A. The Board and designated staff shall obtain education on matters of public
pension investments and administration in accordance with Government Code Sections 31522.8 and 53237.1 and Board policy. To execute this duty, this Board shall establish and maintain policies and guidelines for approval and reimbursement of education and travel related expenses.
5.7 Conflict of Interest and Disclosure
A. The Board shall establish and maintain a Conflict of Interest Code applicable to its Board members, investment managers and designated staff as required by the Political Reform Act and the California Code of Regulations. Statements of Economic Interests will be filed with and maintained by the Clerk of the Board of Retirement.
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SECTION 6. MEMBERSHIP
6.1 General
A. Membership shall be as defined by the CERL or PEPRA as supplemented by these bylaws.
B. Mandatory Membership:
1. Every employee of San Joaquin County or SJCERA participating employer who is appointed to a permanent full-time position shall be a member.
2. Superior Court Officers and their attaches and the Public Administrator shall be included in SJCERA pursuant to the CERL.
C. Exclusions from membership:
1. Employees who are appointed to a position or employed under contract for a period not to exceed 1,560 hours in any consecutive twelve (12) month period, seasonal employees, intermittent employees, or part-time employees, are excluded from membership in SJCERA.
D. Optional Membership:
1. Persons who are age 60 or older when they are first employed in a position
requiring SJCERA membership may make an irrevocable election to waive membership. The election shall be evidenced by the employee’s signature on a waiver of membership form provided by SJCERA.
2. Elected Officials, who wish to become (or remain) SJCERA members must file a declaration with the Board.
E. Employees eligible for SJCERA membership shall become members as
follows: 1. Hired before September 22, 2003: on the first day of the next payroll period
following appointment to a permanent full-time position, or
2. Hired on or after September 22, 2003: on the first day of employment in a permanent full-time position.
3. An Elected Official opting into membership shall become a member as of the beginning of the payroll period in which the declaration is filed.
F. The Board may, from time-to-time, determine by classification of position, other
than those specifically provided by the CERL, the eligibility for membership and shall list those job classifications that are included in the safety retirement category.
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G. A member who is eligible for reciprocity shall allow SJCERA to coordinate with
a member’s reciprocal retirement system in establishing the dates of membership and termination so that there is no overlap of membership between the systems. SJCERA will adjust the membership date if necessary, provided that date shall be no later than 12 weeks after the member commenced SJCERA-covered employment, and adjust the termination date if necessary, provided that date is no earlier than 12 weeks prior to the date the member terminated SJCERA-covered employment.
6.2 Application for Membership
A. Every employee of the County of San Joaquin or a participating employer who is or becomes a member of SJCERA shall complete a Member Certification form supplied by SJCERA, including the employee’s date of birth, date employment began, and employing department or participating employer. It is the appointing authority’s duty to ensure that all eligible employees complete the required form and to forward immediately to SJCERA.
B. In lieu of a sworn statement, the submission by the member’s employer to the
retirement association of the information otherwise required in paragraph (A) in a form determined by Board policy.
C. Every employee who is eligible for SJCERA membership shall submit proof
of age as outlined in the Board policy. D. In the event of a discrepancy in age, the birth date resulting in the oldest age for
A. Every member at the time of retirement shall submit evidence of marriage or registered domestic partnership (RDP) if the member’s designated beneficiary is the member’s spouse/RDP and the member elects an option pursuant to Sections 31760 et seq. of the Government Code. In lieu of a marriage or registered domestic partnership certificate, alternative documents as determined by Board policy will be accepted.
B. Every member, at the time of retirement, shall submit proof of age for any
designated beneficiary or beneficiaries selected pursuant to the exercise of an option contained within Section 31760 et seq. of the Government Code. Proof of age shall be as described in Section 5.2 of these bylaws.
C. RDPs, as defined in California Family Code Section 297, of SJCERA members have the same rights, protections, and benefits, and are subject to the same responsibilities, obligations, and duties as are granted to or imposed upon spouses of SJCERA members.
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SECTION 7. SERVICE RETIREMENT
A. In addition to the provisions of the CERL and PEPRA pertaining to service retirement, an application for service retirement shall be deemed complete when the following have been submitted:
1. A written application on forms supplied by the SJCERA,
2. Proof of age of the member and beneficiary as provided in Sections 6.2 and 6.3,
3. Evidence of marriage or registered domestic partnership of the beneficiary as required in Section 6.3, and
4. Designation of the option elected by the retiring member on the form provided by SJCERA.
B. Upon retirement, a member shall be furnished with a copy of their retirement application and options form which includes the effective date of retirement, their retirement allowance and any other information that the CEO or designee determines is appropriate and in the member’s best interest. This shall serve as an annuity certificate.
SECTION 8. DISABILITY RETIREMENT
A. The Board shall promulgate rules to ensure the fair and efficient proceedings of disability cases. These rules shall be referred to as Disability Retirement Policy and Procedures.
SECTION 9. AMENDMENTS
A. These bylaws may be amended at any regularly scheduled Board meeting by an affirmative vote of at least 5 (five) members of the Board. The bylaws become effective when approved by the Board of Supervisors.
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HISTORY 12/08/2017: SECTION 3. DEFINITIONS – Added definitions of day, Board and CEO,
extended the applicability of the definitions to SJCERA policies and procedures. SECTION 4. ADMINISTRATION - Added Subsection 4.1.B, promulgation of
Board Administration Policies; Subsection 4.2.C deleted erroneous reference to elected and added the word safety; Subsection 4.4 – added authority for CEO to sign contracts/agreements with Board approval; Subsections 4.5 – 4.10 – Repealed and converted to Corrections of Errors or Omissions policy; Added Subsection 4.5 – Subpoenas; Added Subsection 4.6 – Education and Travel; Subsection 4.11 - Conflict of Interest and Disclosure, renumbered to 4.7
SECTION 5. MEMBERSHIP – Added Subsection 5.1.B.2 and 5.1.B.3, regarding first day of employment; Subsection 5.2.B - Repealed and converted to Age Verification policy
SECTION 6. MEMBER CONTRIBUTIONS – Repealed and converted to Member Contributions and Interest Posting policy
SECTION 7. SERVICE RETIREMENT – Renumbered to Section 6 SECTION 8. DISABILITY RETIREMENT – Revised, Renumbered to Section 7;
Subsections 8.2 – 8.10, SECTION 9. HEARING BEFORE A REFEREE, SECTION 10. HEARING BEFORE THE BOARD, and SECTION 11. RULES OF EVIDENCE - Repealed and converted to Disability Retirement policy and procedures
SECTION 12. DISSOLUTION OF MARRIAGE OR REGISTERED DOMESTIC PARTNERSHIP - Repealed and converted to Dissolution of Marriage or Registered Domestic Partnership policy
SECTION 13 – AMENDMENTS – Renumbered to Section 8 SECTION 20. PURPOSE AND SCOPE - Repealed and incorporated by existing
Repealed and converted to Compensation Earnable Annual Limit – IRC 401(a)(17) policy
SECTION 22. ROLLOVERS - 401(a)(31) & 402(c) - Repealed and converted to Rollovers – IRC 401(a)(31) & 402(c) policy
SECTION 23. NORMAL RETIREMENT AGE - 401(a)(36) - Repealed and converted to Normal Retirement Age – IRC 401(a)(36) policy
SECTION 24. RETURN TO WORK and BONA FIDE SEPARATION FROM SERVICE - 401(a) – Repealed and converted to Return to Work and Bona Fide Separation from Service - IRC 401(a) policy
SECTION 25. REQUIRED MINIMUM DISTRIBUTIONS - 401(a)(9) - Repealed and converted to Required Minimum Distributions – IRC 401(a)(9) policy
SECTION 26. ANNUAL BENEFIT LIMIT - 415(b) - Repealed and converted to Annual Benefit Limit – IRC 415(b) policy
SECTION 27. ANNUAL ADDITIONS LIMIT - 415(c) - Repealed and converted to Annual Additional Limit – IRC 415(c) policy
SECTION 28. RETIREE MEDICAL BENEFITS ACCOUNTS - 401(h) - Repealed and converted to Retiree Medical Benefits Accounts – IRC 401(h) policy
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07/10/2020: Added a Jurisdiction section, clarified the Administration and Membership sections, and other non-substantive changes
SJCERA BOARD POLICY / Cash Management and Liquidity Policy Page 1 of 3
I. Purpose
A. The purpose of this policy is to establish general guidelines for cash flow management to ensure that sufficient cash is available for the day-to-day operational needs of the system in order to pay SJCERA retirement benefit expenses, operating expenses, and handle fund manager capital calls.
II. Background
A. Northern Trust Liquidity Pool Account A.
1. SJCERA’s cash and short-term investments are managed by The Northern Trust (NT), SJCERA’s master custodian bank, and the San Joaquin County Treasurer office. SJCERA uses NT’s Short-Term Investment Fund (STIF) which is invested in high-grade money market instruments with very short maturities.
B. Cash Accounts in County Treasurer
1. Cash necessary for SJCERA’s daily operations and administrative expenses is pooled with other County funds for short-term investment by the County Treasurer. There are two cash accounts held in the County Treasurer. The Operation fund is used for the receipt of contributions from employers and payment of contribution withdrawals to members. The Administration fund is used to pay SJCERA’s administrative expenses.
2. The County is responsible for the control and safekeeping of all instruments of title and for all investment of the pooled funds. These two cash accounts are monitored daily by the Retirement Financial Officer. If cash is needed in these cash accounts, in consultation with SJCERA’s Executive Management and investment consultant, the Retirement Financial Officer will initiate the funds transfer from the NT Liquidity Pool Account to replenish these two cash accounts to meet operations and administrative expenses.
III. Liquidity
A. To facilitate liquidity requirements, SJCERA established and maintains a Liquidity Pool with the Master Custodian Bank to:
1. Accept biweekly transfers of member and employer retirement contributions
and monthly sick leave bank benefit payment reimbursements deposited by the
BoardAdministrationPolicy
CashManagementandLiquidityPolicy
SJCERA BOARD POLICY / Cash Management and Liquidity Policy Page 2 of 3
County (as paying agent for all participating employers) into SJCERA’s Operation Fund
2. Pay benefits and expenses
3. Facilitate funding of capital calls
4. Provide the margin and liquidity necessary for the Cash Overlay program that is maintained by the Cash Overlay Manager
5. Daily sweep of cash balance from Commingled Fund, Private Real Estate and Private Equity managers
B. The Liquidity Pool will be funded to contain a sufficient reserve and will be
monitored monthly. At a minimum, the Liquidity Pool will contain a one-month payment reserve and will be replenished by the end of any month in which the balance is less than a one-month payment reserve. The funding sources of the Liquidity Pool will be in accordance with the SJCERA's Strategic Asset Allocation Policy and Cash Overlay Program Policy. The Liquidity Pool is invested in the Master Custodian Bank's Short Term Investment Fund and part of the Cash Overlay Program. In addition, Northern Trust is authorized to transfer on a daily basis all available U.S. dollar cash balances of each account to NT Liquidity Pool Account. Northern Trust will monitor and identify cash balances that exist as of the close of each business day, and that such cash balance, if any, will then be transferred to the NT Liquidity Pool Account.
C. When cash is needed in the Liquidity Pool, in consultation with SJCERA’s investment consultant, staff will determine the appropriate funding sources. Funding sources may include accounts with greater liquidity, lower transaction costs, or accounts which are overweight compared to their target allocation.funding sources would include the accounts with the most liquid, low transaction costs, and lower expected alpha, whether or not that that account has the greatest overweight compared to target allocation. The cash overlay manager facilitates synthetic rebalancing of assets to policy allocation.
1. Authority to move cash between manager accounts and SJCERA’s Liquidity
Pool, or to liquidate assets, up to a maximum of $35,000,000$50,000,000 [MOU1]per transaction will be accomplished at the staff level at the authority of the Chief Executive Officer.
2. Liquidation of assets to fund the Liquidity Pool in excess of $35,000,000$50,000,000 per transaction will be submitted to the Board for approval. In the rare event that time does not permit action by the Board, the Chief Executive Officer, in consultation with SJCERA’s investment consultant, will seek approval from the Board Chair. The Board Chair may grant such approval. Any asset liquidation in excess of $35,000,000$50,000,000 approved by the Board Chair must be reported to the full Board at its next
SJCERA BOARD POLICY / Cash Management and Liquidity Policy Page 3 of 3
meeting. Funding of new managers or strategies from an existing manager’s mandate will be submitted to the Board for approval.
3. Generally, fixed income interest will be reinvested by SJCERA’s Fixed Income
asset managers. However, based on SJCERA’s projected cash demands such as paying benefits and expenses, the Chief Executive Officer, in consultation with SJCERA’s investment consultants, may direct one or more of the Fixed Income asset managers to distribute, rather than reinvest, fixed income interest to SJCERA until further notice. Subsequently, based on SJCERA’s projected cash demands and in consultation with SJCERA’s investment consultants, the Chief Executive Officer may direct one or more Fixed Income asset managers to reinvest fixed income interest again.
IV. Communications A. The staff will report to Chief Executive Officer all cash management activity
including:
1. Quarterly Cash Activities Report; 2. Annual Cash Flow Statement with Fixed Income Interest, Contributions and
Benefit Payment; 3. Resolutions pertaining to Liquidation of Assets/Transfer of Funds in excess of
$35,000,000$50,000,000 per transaction.
V. Policy Review Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. History
02/25/2011 Adopted by Board of Retirement as INV 0600 01/24/2014 Adopted by Board of Retirement as INV 0620 09/26/2014 Revised by the Board of Retirement as ADMIN 0108 06/26/2015 Revised by the Board of Retirement as ADMIN 0108 06/29/2018 Reviewed, no content changes, staff updated format 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Revised to increase reporting threshold to $50 million, update Liquidity
Pool funding sources, and other non-substantive changes
Certification of Board Adoption: Clerk of the Board Date
SJCERA BOARD POLICY / Cash Management and Liquidity Policy Page 1 of 3
I. Purpose
A. The purpose of this policy is to establish general guidelines for cash flow management to ensure that sufficient cash is available for the day-to-day operational needs of the system in order to pay SJCERA retirement benefit expenses, operating expenses, and handle fund manager capital calls.
II. Background
A. Northern Trust Liquidity Pool Account
1. SJCERA’s cash and short-term investments are managed by The Northern Trust (NT), SJCERA’s master custodian bank, and the San Joaquin County Treasurer office. SJCERA uses NT’s Short-Term Investment Fund (STIF) which is invested in high-grade money market instruments with very short maturities.
B. Cash Accounts in County Treasurer
1. Cash necessary for SJCERA’s daily operations and administrative expenses is pooled with other County funds for short-term investment by the County Treasurer. There are two cash accounts held in the County Treasurer. The Operation fund is used for the receipt of contributions from employers and payment of contribution withdrawals to members. The Administration fund is used to pay SJCERA’s administrative expenses.
2. The County is responsible for the control and safekeeping of all instruments of title and for all investment of the pooled funds. These two cash accounts are monitored daily by the Retirement Financial Officer. If cash is needed in these cash accounts, in consultation with SJCERA’s Executive Management and investment consultant, the Retirement Financial Officer will initiate the funds transfer from the NT Liquidity Pool Account to replenish these two cash accounts to meet operations and administrative expenses.
III. Liquidity
A. To facilitate liquidity requirements, SJCERA established and maintains a Liquidity Pool with the Master Custodian Bank to:
1. Accept biweekly transfers of member and employer retirement contributions
and monthly sick leave bank benefit payment reimbursements deposited by the
BoardAdministrationPolicy
CashManagementandLiquidityPolicy
SJCERA BOARD POLICY / Cash Management and Liquidity Policy Page 2 of 3
County (as paying agent for all participating employers) into SJCERA’s Operation Fund
2. Pay benefits and expenses
3. Facilitate funding of capital calls
4. Provide the margin and liquidity necessary for the Cash Overlay program that is maintained by the Cash Overlay Manager
5. Daily sweep of cash balance from Commingled Fund, Private Real Estate and Private Equity managers
B. The Liquidity Pool will be funded to contain a sufficient reserve and will be
monitored monthly. At a minimum, the Liquidity Pool will contain a one-month payment reserve and will be replenished by the end of any month in which the balance is less than a one-month payment reserve. The funding sources of the Liquidity Pool will be in accordance with the SJCERA's Strategic Asset Allocation Policy. The Liquidity Pool is invested in the Master Custodian Bank's Short Term Investment Fund. In addition, Northern Trust is authorized to transfer on a daily basis all available U.S. dollar cash balances of each account to NT Liquidity Pool Account. Northern Trust will monitor and identify cash balances that exist as of the close of each business day, and that such cash balance, if any, will then be transferred to the NT Liquidity Pool Account.
C. When cash is needed in the Liquidity Pool, in consultation with SJCERA’s investment consultant, staff will determine the appropriate funding sources. Funding sources may include accounts with greater liquidity, lower transaction costs, or accounts which are overweight compared to their target allocation.
1. Authority to move cash between manager accounts and SJCERA’s Liquidity
Pool, or to liquidate assets, up to a maximum of $50,000,000 per transaction will be accomplished at the staff level at the authority of the Chief Executive Officer.
2. Liquidation of assets to fund the Liquidity Pool in excess of $50,000,000 per transaction will be submitted to the Board for approval. In the rare event that time does not permit action by the Board, the Chief Executive Officer, in consultation with SJCERA’s investment consultant, will seek approval from the Board Chair. The Board Chair may grant such approval. Any asset liquidation in excess of $50,000,000 approved by the Board Chair must be reported to the full Board at its next meeting. Funding of new managers or strategies from an existing manager’s mandate will be submitted to the Board for approval.
3. Generally, fixed income interest will be reinvested by SJCERA’s Fixed Income
asset managers. However, based on SJCERA’s projected cash demands such as paying benefits and expenses, the Chief Executive Officer, in consultation
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with SJCERA’s investment consultants, may direct one or more of the Fixed Income asset managers to distribute, rather than reinvest, fixed income interest to SJCERA until further notice. Subsequently, based on SJCERA’s projected cash demands and in consultation with SJCERA’s investment consultants, the Chief Executive Officer may direct one or more Fixed Income asset managers to reinvest fixed income interest again.
IV. Communications
A. The staff will report to Chief Executive Officer all cash management activity including:
1. Quarterly Cash Activities Report; 2. Annual Cash Flow Statement with Fixed Income Interest, Contributions and
Benefit Payment; 3. Resolutions pertaining to Liquidation of Assets/Transfer of Funds in excess of
$50,000,000 per transaction.
V. Policy Review
Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. History
02/25/2011 Adopted by Board of Retirement as INV 0600 01/24/2014 Adopted by Board of Retirement as INV 0620 09/26/2014 Revised by the Board of Retirement as ADMIN 0108 06/26/2015 Revised by the Board of Retirement as ADMIN 0108 06/29/2018 Reviewed, no content changes, staff updated format 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Revised to increase reporting threshold to $50 million, update Liquidity
Pool funding sources, and other non-substantive changes
Certification of Board Adoption: Clerk of the Board Date
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I. Purpose A. The purpose of this policy is to provide a procedure for acting upon
applications to the Board for rights, benefits and privileges inuring to Members of SJCERA. It is intended that applications be fairly and expeditiously processed, that the applicant and the Board have fair notice of any required hearing, and consider sufficient facts to arrive at a true and fair decision on the application. For the purposes of a fair hearing, the Board shall act as an independent body, finding facts and applying law. Upon receipt of the CEO’s recommendation, the Board may approve, dismiss, or deny the application, or take other appropriate action authorized by the California Employees’ Retirement Law (CERL) or the Public Employees’ Pension Reform Act (PEPRA).
II. Definitions
A. Unless the context otherwise requires, the definitions in this section shall governthe construction of this policy and procedures.
1. “Interested Party” means any person, including an Applicant, a Memberto whom an Application pertains, the Fund, and any authorizedrepresentatives of each of them, disclosed by the records of SJCERA or bythe Application to have a legal interest in the subject matter of theApplication.
2. “Applicant” means any person or entity that has filed an application fordisability retirement benefits, which may include any Member of SJCERA,the head of the office or department in which the Member is or was lastemployed, the Board or its agents, or any other person claiming benefits,rights, or privileges under the CERL or PEPRA.
3. “Application” means a claim for benefits, rights, or privileges under CERLor PEPRA submitted to SJCERA by an Applicant on a form authorized bySJCERA for that purpose.
4. “Application Packet” means the documents that an Applicant is required toprovide to SJCERA before an Application will be deemed submitted or filedfor processing and evaluation. These documents include: a completed andsigned application form, completed and signed questionnaires, signedauthorizations for release of information, all relevant medical records andreports, and such other documents and information reasonably required bySJCERA pursuant to this policy and procedure.
5. “Board” means the San Joaquin County Board of Retirement.
BoardAdministrationPolicy
DisabilityRetirementPolicyandProcedure
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6. “Board’s Counsel” means the County Counsel or other counsel designated by the Board pursuant to Government Code Section 31529.9.
7. “The Fund” means the trust fund created by the Board pursuant to Government Code Section 31588 and administered under the CERL solely for the benefit of the Members and retired Members of the system and his/her survivors and beneficiaries. The Fund shall be a real Party in interest at all disability hearings conducted under this policy and independent legal counsel shall represent the Fund in such hearings.
8. “Disability Medical Provider” means medical, psychiatric, or other healthcare experts retained by SJCERA to examine Members and provide opinion evidence regarding permanent disability and causation issues.
9. “Retirement Office” means the physical office of the San Joaquin County Employees’ Retirement Association (SJCERA) currently located at 6 South El Dorado Street Suite 400, Stockton, CA 95202.
10. “Member” means the SJCERA member who is the subject of the Application or on whose behalf the Application is filed.
11. “Fund’s Counsel” means the attorney retained by SJCERA to represent the interests of the Fund in investigating and evaluating Applications, providing recommendations to SJCERA, and representing the Fund before the Board.
12. References to written notice or any notice in writing from or by SJCERA mean that such notice may be delivered electronically, by first class mail or certified mail at the discretion of the CEO.
III. Representation by Counsel A. Any Interested Party, at that Party’s expense, may hire and be represented by
an attorney subject to the provisions of this section. No Applicant is required to have an attorney at any time. It is advised, however, that Applicants consider retaining an experienced attorney knowledgeable in CERL and disability retirement matters.
B. If any Interested Party becomes represented by an attorney, either such Party
or such attorney shall promptly file with the Retirement Office and serve upon all other Interested Parties written notice of such representation, including the attorney’s name, address, and telephone number. Unless appearing with an Interested Party at a hearing, an attorney shall not be deemed counsel of record until such notice of representation is duly filed and served. The Interested Party shall be deemed represented by said attorney until written notice of withdrawal or substitution of said attorney is filed with SJCERA and served on all other Interested Parties.
C. The failure to retain an attorney or to provide written notice of representation by
such attorney shall in no event be considered good cause, in and of itself, to delay any proceeding under this policy and procedure.
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IV. Communication with Individual Board Members
A. The Board is the decision-maker for all disability retirement applications. As such, communications concerning the merits or substance of an application between any Board member and any Interested Party or his/her representatives are forbidden until the Board’s decision is final and the time to appeal by writ or otherwise has expired. This prohibition shall remain in effect during the pendency of any writ, appeal, and rehearing. A copy of the Ex Parte Communication Policy can be found at www.sjcera.org.
V. Confidential Records
A. All individual records of Members (including, but not limited to, reports, sworn statements, medical reports and records, applications, notices, orders, and findings and decision relating to an application for disability retirement) are confidential and shall not be disclosed by SJCERA to anyone except as set forth in these procedures, upon order of a court of competent jurisdiction, or upon written authorization by the Member.
VI. Application Process
A. Disability retirement Applications may be filed by SJCERA Members, the head of the office or department in which the Member is or was last employed, the Board or its agents, any other person acting on a Member’s behalf, or as authorized by CERL.
B. Claim
1. A claim for disability retirement shall be made by filing with the Retirement Office a complete Application Packet. The Application shall not be deemed complete or filed until the Applicant has submitted all of the following to the Retirement Office:
a) An Application, on a form approved by SJCERA for that purpose, signed and complete with all requested information therein. The Application shall include a specific description of the injuries, conditions, and diagnoses that give rise to that alleged permanent incapacity.
b) Signed authorizations for release of medical and other information deemed by SJCERA relevant to a full and complete evaluation of the Application.
c) A physician's statement in a form approved by SJCERA for that purpose complete with all requested information therein, signed and dated by the physician, stating that the Member is permanently incapacitated.
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d) Copies of all medical/psychiatric reports and records relevant to theclaims made in the Application.
e) All other documents and information that support the granting of theApplication.
C. Initial Review of the Application Packet
1. Within 30 days of receipt of an Application Packet for filing, SJCERA shallreview the submitted Application Packet and determine whether the application is complete and acceptable for filing. If the Application is determined to be complete, SJCERA shall notify the Applicant that the Application has been accepted for filing. A complete Application shall be deemed filed as of the date SJCERA received the Application.
2. If the Application Packet is determined to be incomplete or otherwisedeficient, SJCERA shall notify the Applicant of the deficiency(ies) and that the application has been rejected for filing
D. Further Information Required from Applicant
1. If at any time during the pendency of the Application, the Applicant changes,in any material way, the facts or claims set forth in the Application, theApplicant shall immediately file with the Retirement Office and serve on allParties written notice of such change, including any changes in employmentor accommodation and any medical evidence supporting such anamendment. The failure to do so, may, in the discretion of the Board,preclude the Applicant from asserting the facts so alleged or introducingevidence with respect thereto. Notice of any such amendment shall begiven, in writing, to Retirement Office within ten (10) days of the datethereof, and in no event later than thirty (30) days prior to any proceedingbefore the Board or Rreferee.
2. At any time during the pendency of an Application or in connection with anyre-evaluation of the Member’s disability status permitted under CERL, theBoard or SJCERA may, by written notice to the Applicant or Member,require that the Applicant or Member produce within 30 days any or all ofthe following items. Said items shall be accompanied by a declaration (ona form approved by SJCERA for that purpose) signed by the Applicant orMember under penalty of perjury affirming that the Applicant or Member hasmade a diligent search and reasonable inquiry and that no other responsiveitems exist.
a) Copies of records, reports, notes, statements, documents, photographs,or other writings, within the definition of Evidence Code Section 250.
b) A narrative report of the Member’s current medical condition, and a listof the names and contact information for all of the Member’s healthcareproviders.
.
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c) Written responses to written questions concerning any matter that is
reasonably calculated to lead to the discovery of evidence that would be admissible at a hearing. Said written responses shall be accompanied by a declaration (on a form approved by SJCERA for that purpose) signed by the Applicant or Member under penalty of perjury affirming the truthfulness and completeness of the responses.
3. Any Interested Party shall be entitled to notice and take oral depositions in the manner prescribed by the California Code of Civil Procedure, except that there shall be no distinction between the depositions of expert and non-expert witnesses, and the provisions of the California Code of Civil Procedure pertaining to the depositions of expert witnesses shall not apply. The Party noticing a deposition shall pay any and all deposition costs and the fees to which a witness may be entitled.
4. If the Applicant or Member fails or refuses to comply with any notice or demand made pursuant to this section, SJCERA may do the following:
a) Suspend action on the Application until such time as the Applicant or
Member complies in full with all such requests. SJCERA shall give all Parties written notice of the suspension. During the period of suspension none of the applicable time limits with respect to the processing of the Application shall apply.
b) If the Applicant or Member fails, after the passage of one hundred twenty (120) days, from the date of suspension as set forth above, within thirty (30) days thereafter, and further provided that there is an absence of good cause for the failure specified herein, the Board may declare that the Application is dismissed with prejudice.
C. Initial Review of the Application Packet
Upon receiving a completed Application Packet, SJCERA shall, within thirty
(30) days, based upon eligibility and evidence provided, notify the Applicant, of whether the application materials provided are sufficient to proceed and provide information regarding the next steps.
1. The failure of an Applicant to diligently pursue an Application, including the submission of any and all written documentation required by this policy, may result in the dismissal of the Application. Upon the Board’s own motion or a recommendation by the CEO, and written notice to the Applicant, the Board may dismiss any Application which the Board finds, upon consideration of the facts, is not being diligently pursued.
E. Investigation and Evaluation 1. Before an administrative recommendation is made to the Board or a hearing
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before a Rreferee is set, the following shall be completed:
a.) Within 90 days after an Application is accepted for filing filed, SJCERA will request any and all records that may be relevant to the determination of the Application. These may include, but are not necessarily limited to, the following: medical, psychiatric, psychological, chiropractic, physical therapy, and acupuncture records; radiology and ultrasound records; electrodiagnostic testing records; laboratory (blood, urine, pathology, etc.) testing records; psychological testing records; personnel and human resources records, incident and injury reports; reports prepared by any law enforcement agency; the Member’s complete worker’s compensation file pertaining to the subject claim and other potentially related claims including all medical records, reports, deposition transcripts, etc.; HIV and alcohol treatment/testing records in cases where these conditions are at issue.
b.) SJCERA shall require a written statement from the department regarding employment status, job duties, work restrictions and accommodations, if any.
c.) All records pertaining to the Application will be provided to the Disability
Medical Provider and the Fund’s Counsel.
d.) The Fund’s Counsel and/or the Disability Medical Provider will review and summarize the records. The Fund’s Counsel will coordinate independent medical examination(s) as necessary and appropriate.
e.) Additional records may be requested or subpoenaed of the Applicant or others.
f.) All medical examinations required of the Member are completed and reports thereof have been submitted to SJCERA.
g.) The Fund’s Counsel will review medical findings and other evidence and make recommendations to the CEO.
h.) Applicant is notified of pending action.
i. If the Fund’s Counsel determines based upon findings and SJCERA procedures that the Applicant has met his/her burden of proof to show eligibility for a disability retirement benefit, staff will place the matter on the closed session consent calendar at a Board of Retirement meeting with a recommendation to grant the application.
ii. If the Fund’s Counsel determines based upon findings and SJCERA procedures that the Applicant has not met his/her burden of proof to receive a disability retirement benefit, the CEO will be notified,. tThe Applicant will be notified and given the option to request a hearing. (See below.)
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F. Medical Examinations 1. Members may be required to undergo one or more medical or psychiatric
examinations by a physician or physicians of SJCERA’s choice as necessary to evaluate the conditions and diagnoses presented in the Application. Such examinations may be unnecessary in the following cases: (1) where the Member has already been examined by at least one qualified medical expert and there is overwhelming and undisputed medical evidence that the Member is permanently incapacitated, such that referring the Member to another examination would be futile; and (2) where the Applicant has not submitted substantial medical evidence that the Member is permanently incapacitated, such that referring the Member to an examination would be unjustified.
2. Members must cooperate during the medical or psychiatric examination
process and, if requested, must promptly provide additional medical records and information, or submit to additional examinations.
3. SJCERA shall at least fifteen (15) days before the appointment date, serve
the Member (and all Parties) with written notice of the date, time and place of the medical or psychiatric examination Notice may be served electronically and/or by first-class mail through the US Postal Service. If the Member is unable to keep the examination appointment, the Member or his/her attorney shall notify SJCERA or the Fund’s Counsel in writing of such fact at least ten (10) calendar days before the scheduled examination. Failure to provide such notice and appear for the medical examination without good cause may result in the Board assessing medical cancellation fees against the Member.
4. The cost of such examinations shall be borne by SJCERA. If the examination is at a facility located outside of San Joaquin County, Members may request reimbursement from SJCERA for mileage costs incurred to attend such examination.
5. A Member’s failure to submit to a duly scheduled examination or failure to cooperate with the examination without good cause shall result in the dismissal of the Application with prejudice.
G. Penalties for Failure to Comply with Disability Retirement Procedures. 1. The failure of an Applicant to comply with the requirements set forth in these
procedures may result in a recommendation to dismiss the Application. Upon the Board’s own motion or a recommendation by the CEO, and 30 days’ written notice to the Applicant without cure, the Board may:
a) Dismiss any Application in which the Board finds the Applicant to be non-compliant with these procedures. Failure to comply includes, but is not limited to: failure to submit to a duly noticed medical examination, failure to cooperate with any medical examination without good cause,
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failure, or refusal to comply with, any notice or demand made pursuant to this policy, failure to cooperate in the formal hearing process, and failure to comply with any order of the Board or the Referee.
b) Dismiss the Application with prejudice upon a finding of bad faith actions, dilatory or frivolous tactics causing undue delay in the proceedings, disobedience to a lawful order, and/or obstruction of the due course of a hearing proceeding.
H. CEO’s Recommendation
1. The CEO may recommend to the Board that a Member be retired for service-connected or nonservice-connected disability retirement benefits. The recommendation shall be in writing and include:
a) A determination of permanent physical or mental incapacity for the performance of the Member’s duties;
b) A determination whether the incapacity is the result of an injury or disease arising out of and in the course of the Member’s employment;
c) A summary of the evidence in support of the recommendation.
I. Setting the Matter for Hearing
1. If, after investigation, the CEO determines that the Applicant has failed to meet his/her burden of proof regarding any element legally necessary for the granting of the Application, SJCERA will notify the Applicant will be notified of its decision in writing, giving the applicant the following options, if applicable:
a) If the Applicant has met his/her burden of proof regarding permanent incapacity but not service connectedness:, the Applicant may amend the Application from service connected to non-service connected to permit SJCERA to recommend that the Board grant a non-service connected disability retirement without need for hearing.
i. The Applicant may amend the Application from service connected to nonservice-connected to permit SJCERA to recommend that the Board grant a non-service connected disability retirement without need for hearing; or
ii. The Applicant may request both of the following: a hearing on the issue of service-connection, and a request that the Board grant a nonservice-connected disability retirement;
b) Stipulate to waive the right to hearing and withdraw the Application. with prejudice.
c) Request a hearing on all issues presented by the Application.
2. If SJCERA does not receive a written response is not received from the
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Applicant within thirty (30) calendar days after issuing the above referenced written notice in VI.I. 1, SJCERA will recommend that the Board dismisseny the Application with prejudice pursuant to section VI.G for lack of diligence noncompliance at the next available regularly scheduled meeting of the Board of Retirement.
3. In cases where, as set forth in VI.I.1.a above, SJCERA gives the Applicant has the option of choosing opted to amend the Application from service connected to non-service connected disability retirement, or where the Applicant requests a nonservice-connected disability retirement and a hearing on the issue of service-connection, and the Applicant chooses to do so, SJCERA will recommend that the Board grant non-service connected disability retirement.
4. The Applicant may withdraw the Application at any time prior to the Board’s final determination. Any withdrawal of an application prior to the assignment to a Referee shall be deemed a withdrawal without prejudice. A withdrawal without prejudice means that any re-submission of the withdrawn application will be considered a new application that must meet all filing requirements, including timely filing requirements. Any withdrawal of an application after the assignment to a Referee will be deemed to be with prejudice. An application withdrawn with prejudice precludes subsequent submission of the withdrawn application based on the same disability, injury or disease in the absence of new evidence.
VII. Hearings Before the Board A Referee
A. Referral to Referee
1. If the Applicant timely requests a hearing, the matter shall be referred for hearing de novo before a Board-appointed Referee. The Rreferee shall be provided by the Office of Administrative Hearings of the State of California or by a prescreened panel of acceptable Rreferees selected by SJCERA. Compensation for the Rreferee shall be determined by the CEO and shall be paid by SJCERA.
2. The referee shall conduct a hearing in accordance with the hearing procedures set forth in this policy for hearing before the Board with the term “Referee” substituted for “Board” wherever warranted by the context.
B. If the Applicant requests a hearing, Notification of Referral to Referee and Statement of Issues; Certification of Issues, Documents and Witnesses
1. Before a hearing date is set, the following notifications and certifications shall be provided the hearing on the Application shall be held at the earliest date agreeable to the Parties. SJCERA will set the Application for hearing before a referee as follows:
a) The Fund’s Counsel shall A letter will notify the Applicant in writing that SJCERA has referred the matter to hearing before a Rreferee and that a
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Rreferee will be appointed and a hearing scheduled as soon as SJCERA receives the certification required by this section. The written notice will further advise that if SJCERA does not receive the required certification within 30 calendar days, SJCERA will recommend that the Board dismiss the Application with prejudice for lack of diligence pursuant to section VI.F above.
b) The written notice will include the following:
i. A list of issues to be determined at the hearing and the names and contact information of all witnesses that may be called by the Fund’s Counsel to testify at the hearing.
ii. A copy of SJCERA’s Disability Retirement Policy and Procedures.
iii. An electronic copy of all medical records, reports, and other documents in SJCERA’s file that have been obtained as part of the disability retirement application process. may be introduced as evidence at the hearing.
c) Notwithstanding anything in this subdivision, unless otherwise ordered by the Referee or the Board, SJCERA shall only furnish psychiatric medical reports and records to a treating physician designated by the member in writing.
d) Enclosed with the notice letter to the Applicant will be a certification form which will require the Applicant to certify the following:
i. That there are has no additional documents to introduce as evidence at the hearing other than those provided to the Applicant in electronic form along with SJCERA’s letter. If there are additional documents, the Applicant must provide them to SJCERA along with the signed certification form. Unless otherwise ordered by the Referee or by stipulation of the parties, any documents not produced with the certification will be barred from introduction as evidence at hearing.
ii. State wWhether the Applicant will be represented by an attorney at the hearing and, if so, the name and contact information for the attorney.
iii. The certification form will require that the Applicant List the names and contact information for any witnesses the Applicant intends to call to testify at the hearing. Unless otherwise ordered by the Referee or by stipulation of the parties, any witnesses not identified by the Applicant on the certification shall be barred from testifying at the hearing.
C. Setting the Hearing Date
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1. Within 30 days of the timely receipt of the Applicant’s certification of documents and witnesses, the Fund’s Counsel shall contact the Applicant or their attorney to select a mutually agreeable hearing date. The hearing date selected must be no later than 90 days after the filing of the Applicant’s certification of documents and witnesses. If an Applicant fails to respond to SJCERA’s reasonable requests to set a hearing date, SJCERA may either schedule a hearing date or notify the Applicant in writing that continued failure to confer on a hearing date may result in dismissal of the Application for lack of diligence. If the Interested Parties cannot agree on a hearing date, either Interested Party may request a prehearing conference with the Presiding Judge of the Office of Administrative Hearings to set the hearing date.
D. Presiding Officer Time and Place of Hearings
The Chairperson shall preside over all hearings. The Chairperson shall exercise reasonable control over the proceedings and in addition to other duties, shall rule on the admissibility of evidence and shall order a Party to yield the floor when orderly and expeditious conduct of the hearing requires it. The Chairperson may permit questioning and other participation in the proceedings by Board members or others as will best serve the purpose of the hearing.
1. Unless the parties and the Referee agree otherwise, all hearings shall take place at SJCERA, 6 South El Dorado Street, Suite 400, Stockton, CA. When the date and time of the hearing are selected, SJCERA shall notify the parties and the Referee of the time and place of the hearing.
2. Unless the parties and the Referee agree otherwise, all hearings are deemed set for one full day, beginning at 9:30 a.m. Hearings which are not completed by the end of the day shall be continued to the next agreeable hearing date which shall be no more than 30 days from the initial hearing date.
E. Prehearing Conferences
1. At the request of any Interested Party, a prehearing conference may be scheduled with the Referee for the purpose of resolving any evidentiary, discovery and/or other prehearing disputes or issues. Prehearing conferences may be conducted personally or telephonically. Following the prehearing conference, the Referee may issue any orders relating to briefing, discovery, and/or the conduct of the hearing, including the final exchange of documents and witnesses.
2. Unless otherwise stipulated by the parties, a prehearing conference is mandatory in all cases where the Applicant is unrepresented by counsel.
F. Determining Issues
1. The Board Referee shall determine all issues set forth in the written statement of issues required by this policy by a preponderance of the
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evidence, including the following, if applicable:
a) Whether the Member was employed prior to January 1, 1981, and was required as a condition to such employment to execute a waiver for the alleged disability under Government Code Section 31009;
b) Whether the Member is disabled, that is, whether there is a substantial mental or physical incapacity to perform the Member’s normal and usual employment duties;
c) Whether the disability is permanent, that is, whether as a reasonable medical probability the disability is likely to persist indefinitely;
d) Whether, for non-service-connected disability, the Member has completed five (5) years of service;
e) Whether for a service-connected disability:
i. the incapacity is a result of injury or disease
ii. the injury or disease arose out of and in the course of the Member’s employment; and
iii. the employment contributed substantially to the incapacity;
f) Whether, for Members described in Government Code Sections 31720.5, 31720.6, 31720.7 or 31720.9 alleging heart trouble, cancer, blood-borne infectious disease, or illness due to exposure to biochemical substances:
i. the Member has completed five (5) years of safety service, if
required;
ii. the Member has the condition alleged;
iii. the Member is permanently incapacitated due to the condition alleged;
iv. the condition developed while a qualified Member of SJCERA;
v. and whether the presumption of the relevant Government Code Section has been rebutted
G. Conduct of Hearing
1. A stenographic reporter shall record the proceedings of all hearings authorized by the Board at SJCERA’s cost. Any transcription and copies shall be charged to the requesting Party. The hearing shall be considered closed. The Chairperson or Clerk Referee shall mark for identification only, and not as evidence, all exhibits submitted by the parties, which should include:
a) the completed Application Packet;
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b) the notice of hearing, with proof of service on the Applicant;
c) other documents required to be submitted by this policy including, without limitation, relevant medical reports, medical records, employment records, worker’s compensation records, etc.
2. Hearing Process.
a) The Chairperson shall announce the matter and ask for appearances by all parties, which shall be recorded in the minutes and in the official file of the hearing. The Chairperson shall ask if all parties are ready to proceed and, if so, or if the Chairperson otherwise rules for good cause, the hearing shall be opened. Each Party may make an opening statement.
b) Each other Party then shall present evidence, in the order determined by the Referee in accordance with each Party’s burden of proof and burden of presenting evidence to establish such proof.
c) The Clerk or other person authorized by the Chairperson shall read the Application and the statement of issues. Each Party may cross-examine witnesses.
d) Unless otherwise determined by the Board for good cause, the Applicant shall have the burden of producing evidence necessary to establish the issues. Rebuttal evidence may be presented.
e) Each Party may make oral closing arguments.
f) Upon the conclusion of all closing arguments, the Referee shall determine if all parties are ready to submit the matter for decision, and if so, or if the Referee otherwise orders for good cause, the Referee shall close the hearing and declare the matter submitted to the Board for decision upon the evidence and the instructions of law by the Board’s Counsel.
k) At the conclusion of the hearing, the Board may recess into closed session of the Board members and the Board’s counsel to deliberate on the matter, to develop its findings and reach a decision.
l) At or before the next regularly scheduled meeting or specially called meeting, the Board shall render its decision orally, in open session.
m) Unless waived by all parties to the hearing, any finding or decision of the Board must be made by a majority vote of the members present throughout the hearing. A tie vote on any issue raised by the Application results in a failure to find in favor of that issue and constitutes a denial of the Application, or that portion of the Application, to which the issue relates. The alternate member may cast a ballot in the absence of a regular elected member if the alternate member has attended the entire hearing and has heard and considered all evidence and testimony
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involved.
H. Stipulations
1. Nothing in these procedures may be construed as preventing the parties from stipulating to lesser time requirements than prescribed in these procedures. The Referee may, upon written notice and for good cause shown, lengthen or shorten the times specified in these procedures.
VIII. Rules of Evidence
A. Burden of Proof
1. The Applicant has the burden of proving by a preponderance of the evidence each affirmative issue on which the Application depends as identified in the statement of issues submitted by the Fund’s Counsel. In addition, if the Applicant seeks to assert one or more of the legislative presumptions afforded by Government Code Sections 31720.5 (heart trouble), 31720.6 (cancer), 31720.7 (blood-borne infectious disease), or 31720.9 (illness due to exposure to biochemical substances), then the Applicant first must establish his/her or her entitlement to invoke the asserted presumption by offering prima facie evidence of each foundational element required by the applicable Government Code section(s), and the presumption(s) so invoked shall be rebuttable as provided in the applicable section(s).
B. Evidence
1. Oral evidence shall be taken only on oath or affirmation. Unless expressly waived by an opposing Party, all written evidence shall be sworn to or given under penalty of perjury, subject to Subsection E, below.
C. Witnesses
1. Each Party may call and examine witnesses, introduce exhibits, and cross-examine and impeach any witness on any matter relevant to the issues. If the Applicant or any other Party does not testify on that Party’s own behalf, that Party may be called and examined as if under cross-examination under Evidence Code Section 776.
D. Refusal of Witness
1. Refusal by an Applicant or Party to submit to examination or to answer relevant questions shall be grounds for considering those questions to be answered unfavorably to the refusing Party for the purpose of that hearing, and for denying the relief or benefits sought by the refusing Party.
E. Hearing Conduct
1. The hearing need not be conducted according to the technical rules of law relating to evidence and witnesses. Any relevant evidence shall be admitted
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if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule that might make improper the admission of such evidence over objection in civil actions. Hearsay evidence may be used for the purpose of supplementing or explaining any direct evidence but shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions.
F. Certified Copies
1. Certified copies of the reports and records of any governmental agency, division or bureau, will be accepted as evidence in lieu of the original thereof.
G. Deposition Transcripts/Video Recordings
1. Any Party may offer, and the Referee Board shall receive into evidence, any relevant deposition transcript and/or video recording thereof if: (1) the deposition was taken in the manner provided by law or by stipulation of the Parties; and (2) at least twenty (20) calendar days before the hearing the offering Party delivered a copy of the transcript and/or video recording of the deposition to all Parties along with notice of intent to introduce same into evidence. Nothing herein shall require or permit receiving into evidence any deposition testimony to which objection is properly raised if such testimony would be inadmissible were the witness present and testifying at the hearing. Deposition transcripts/video recordings shall be admissible notwithstanding that the deponent is available to testify. Depositions of experts, including medical experts, may be introduced in lieu of live testimony pursuant to Code of Civil Procedure Section 2025.620(d)
H. Written Medical Reports As Evidence
1. A written medical report bearing the signature of the medical witness shall be admissible in evidence as the author’s direct testimony. Such medical reports shall not be inadmissible on the basis that they constitute hearsay. Each Party has the right to cross-examine the authors of medical reports pursuant to a subpoena issued and served in compliance with these procedures.
I. Subpoena Powers and Witness Fees
1. Subpoena powers shall be vested in the Board officers, the CEO and the Referee in accordance with Government Code Section 31535. Subpoenas may be issued according to the CERL. Subpoenas shall be requested through the Board’s Counsel or the Fund’s Counsel who shall transmit the request to SJCERA. Subpoenas issued shall be transmitted to the Party requesting the subpoena. The requesting Party shall have the sole responsibility for serving and enforcing the subpoena and for paying all costs associated with the subpoena.
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2. A written motion to quash a subpoena may be made to the Referee Board on one or more of the following grounds, which shall be clearly and fully stated in the motion and supported by declarations under penalty of perjury:
a) Compliance will be unduly burdensome or against public policy.
b) The things subpoenaed are privileged by law.
c) The things subpoenaed are irrelevant or unnecessary to the proceedings.
d) The things subpoenaed have not been described with sufficient clarity to enable the witness to comply. Before it commences or continues with the proceeding, the Board Referee shall wholly or partially grant or deny the motion to quash.
3. The Party calling a witness to testify (whether by subpoena or otherwise) shall be solely responsible for paying any expert or nonexpert witness fees, mileage charges, and other costs associated with the witness’ testimony. Non-expert witness fees and mileage charges shall be calculated as provided by law.
J. Service of Proposed Findings of Fact and Recommended Decision
1. After closing the hearing, the Rreferee will prepare a summary of the evidence received, findings of fact, conclusion of law, and a recommended decision. In accordance with the provisions of Government Code Section 31533, the findings of fact and proposed recommendation of the Rreferee shall be served on the CEO, who in turn shall distribute a copy to all parties.
2. Either Party may submit written objections to the Rreferee’s recommended decision to SJCERA within ten (10) calendar days from the date SJCERA distributes the notice to all parties. The non-objecting Party may submit their response to the objections 10 days after the filing of the objections. The written objections and response shall be incorporated into the record submitted to the Board Referee’s for its consideration.
K. Board’s Decision
1. Upon receipt and review of the recommended decision of the Rreferee and any filed objections and responses from the referee thereto, the Board may:
a.) Approve and adopt the recommended decision of the Rreferee, or
b.) Refer the Application to the Rreferee for further hearing and/or consideration, or
c.) Require a written transcript or summary of all testimony plus all other evidence received by the Rreferee to be submitted by the CEO to the Board. Following its receipt and review of the transcript and evidence,
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the Board shall:
i. Take action as is appropriate to the evidence and the provisions of the CERL, or
ii. Refer the matter back to the Rreferee with or without instruction for further proceedings; or
iii. Set the matter for hearing de novo before itself. The Board shall hear and decide the matter as if it had not been referred to the R referee. Unless otherwise allowed by the Board, the hearing shall be confined to the evidence, witnesses, and issues set forth in the certification and statement required by this policy. All hearings before the Board shall require the attendance of at least the same seven (7) members and shall be conducted as if it were a hearing held before a Referee in accordance with this policy.
IX. Rehearing Appeal Final Decision
A. The Board’s decision on the Referee’s recommended decision shall become final upon notice of the decision on all parties, including the employer.
B. Judicial Review. In those cases where a Party or Applicant is entitled to judicial review of the proceedings before the Board, any petition for writ of mandate shall be filed with the superior court within ninety (90) days from the date the notice of this Board’s decision is mailed to the Party or Applicant or is delivered to the Party or Applicant. Where a timely petition for rehearing is filed as provided in A above, the time for filing a petition for writ of mandate seeking judicial review shall expire ninety (90) days after SJCERA mails to the Applicant or Party (1) notice that the petition for rehearing is denied or (2) notice of the Board’s decision following a rehearing, whichever occurs later.
X. Law Prevails
A. In the event a conflict between this policy and the County Employees Retirement
Law, the Public Employees’ Pension Reform Act, or other applicable statutes arises, the law shall prevail.
XI. Policy Review
A. Staff shall review this policy every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must, be approved by the Board of Retirement in accordance with the bylaws. Effective upon adoption.
XII. History
3/1/2018 Bylaw Sections 8, 9, 10 & 11 Converted to Board Policy and Board of
Supervisor approved Bylaws
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06/28/2018 Staff updated format 08/10/2018 Modified the definitions of Applicant and Application to conform with
SJCERA’s adopted code sections 07/12/2019 Revised to include definitions, add requirements that an application must
meet before being filed, allow the member to elect not to go to hearing, allow the use of depositions, clarify mileage reimbursement may be requested for out-of-county travel to SJCERA-scheduled examinations, and specify that SJCERA may determine an examination is not required in some cases.
7/10/2020 Amended to clarify the use of a Referee for hearings, the order of the prehearing and hearing process, subpoena options, and penalties for noncompliance.
Certification of Board Adoption:
Clerk of the Board Date
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I. Purpose A. The purpose of this policy is to provide a procedure for acting upon
applications to the Board for rights, benefits and privileges inuring to Members of SJCERA. It is intended that applications be fairly and expeditiously processed, that the applicant and the Board have fair notice of any required hearing, and consider sufficient facts to arrive at a true and fair decision on the application. For the purposes of a fair hearing, the Board shall act as an independent body, finding facts and applying law. Upon receipt of the CEO’s recommendation, the Board may approve, dismiss, or deny the application, or take other appropriate action authorized by the California Employees’ Retirement Law (CERL) or the Public Employees’ Pension Reform Act (PEPRA).
II. Definitions
A. Unless the context otherwise requires, the definitions in this section shall governthe construction of this policy and procedures.
1. “Interested Party” means any person, including an Applicant, a Memberto whom an Application pertains, the Fund, and any authorizedrepresentatives of each of them, disclosed by the records of SJCERA or bythe Application to have a legal interest in the subject matter of theApplication.
2. “Applicant” means any person or entity that has filed an application fordisability retirement benefits, which may include any Member of SJCERA,the head of the office or department in which the Member is or was lastemployed, the Board or its agents, or any other person claiming benefits,rights, or privileges under the CERL or PEPRA.
3. “Application” means a claim for benefits, rights, or privileges under CERLor PEPRA submitted to SJCERA by an Applicant on a form authorized bySJCERA for that purpose.
4. “Application Packet” means the documents that an Applicant is required toprovide to SJCERA before an Application will be deemed submitted or filedfor processing and evaluation. These documents include: a completed andsigned application form, completed and signed questionnaires, signedauthorizations for release of information, all relevant medical records andreports, and such other documents and information reasonably required bySJCERA pursuant to this policy and procedure.
5. “Board” means the San Joaquin County Board of Retirement.
BoardAdministrationPolicy
DisabilityRetirementPolicyandProcedure
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6. “Board’s Counsel” means the County Counsel or other counsel designated by the Board pursuant to Government Code Section 31529.9.
7. “The Fund” means the trust fund created by the Board pursuant to Government Code Section 31588 and administered under the CERL solely for the benefit of the Members and retired Members of the system and his/her survivors and beneficiaries. The Fund shall be a real Party in interest at all disability hearings conducted under this policy and independent legal counsel shall represent the Fund in such hearings.
8. “Disability Medical Provider” means medical, psychiatric, or other healthcare experts retained by SJCERA to examine Members and provide opinion evidence regarding permanent disability and causation issues.
9. “Retirement Office” means the physical office of the San Joaquin County Employees’ Retirement Association (SJCERA) currently located at 6 South El Dorado Street Suite 400, Stockton, CA 95202.
10. “Member” means the SJCERA member who is the subject of the Application or on whose behalf the Application is filed.
11. “Fund’s Counsel” means the attorney retained by SJCERA to represent the interests of the Fund in investigating and evaluating Applications, providing recommendations to SJCERA, and representing the Fund before the Board.
12. References to written notice or any notice in writing from or by SJCERA mean that such notice may be delivered electronically, by first class mail or certified mail at the discretion of the CEO.
III. Representation by Counsel A. Any Interested Party, at that Party’s expense, may hire and be represented by
an attorney subject to the provisions of this section. No Applicant is required to have an attorney at any time. It is advised, however, that Applicants consider retaining an experienced attorney knowledgeable in CERL and disability retirement matters.
B. If any Interested Party becomes represented by an attorney, either such Party
or such attorney shall promptly file with the Retirement Office and serve upon all other Interested Parties written notice of such representation, including the attorney’s name, address, and telephone number. Unless appearing with an Interested Party at a hearing, an attorney shall not be deemed counsel of record until such notice of representation is duly filed and served. The Interested Party shall be deemed represented by said attorney until written notice of withdrawal or substitution of said attorney is filed with SJCERA and served on all other Interested Parties.
C. The failure to retain an attorney or to provide written notice of representation by
such attorney shall in no event be considered good cause, in and of itself, to delay any proceeding under this policy and procedure.
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IV. Communication with Individual Board Members
A. The Board is the decision-maker for all disability retirement applications. As such, communications concerning the merits or substance of an application between any Board member and any Interested Party or his/her representatives are forbidden until the Board’s decision is final and the time to appeal by writ or otherwise has expired. This prohibition shall remain in effect during the pendency of any writ, appeal, and rehearing. A copy of the Ex Parte Communication Policy can be found at www.sjcera.org.
V. Confidential Records
A. All individual records of Members (including, but not limited to, reports, sworn statements, medical reports and records, applications, notices, orders, and findings and decision relating to an application for disability retirement) are confidential and shall not be disclosed by SJCERA to anyone except as set forth in these procedures, upon order of a court of competent jurisdiction, or upon written authorization by the Member.
VI. Application Process
A. Disability retirement Applications may be filed by SJCERA Members, the head of the office or department in which the Member is or was last employed, the Board or its agents, any other person acting on a Member’s behalf, or as authorized by CERL.
B. Claim
1. A claim for disability retirement shall be made by filing with the Retirement Office a complete Application Packet. The Application shall not be deemed complete or filed until the Applicant has submitted all of the following to the Retirement Office:
a) An Application, on a form approved by SJCERA for that purpose, signed and complete with all requested information therein. The Application shall include a specific description of the injuries, conditions, and diagnoses that give rise to that alleged permanent incapacity.
b) Signed authorizations for release of medical and other information deemed by SJCERA relevant to a full and complete evaluation of the Application.
c) A physician's statement in a form approved by SJCERA for that purpose complete with all requested information therein, signed and dated by the physician, stating that the Member is permanently incapacitated.
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d) Copies of all medical/psychiatric reports and records relevant to the claims made in the Application.
e) All other documents and information that support the granting of the Application.
C. Initial Review of the Application Packet
1. Within 30 days of receipt of an Application Packet for filing, SJCERA shall review the submitted Application Packet and determine whether the application is complete and acceptable for filing. If the Application is determined to be complete, SJCERA shall notify the Applicant that the Application has been accepted for filing. A complete Application shall be deemed filed as of the date SJCERA received the Application.
2. If the Application Packet is determined to be incomplete or otherwise deficient, SJCERA shall notify the Applicant of the deficiency(ies) and that the application has been rejected for filing
D. Further Information Required from Applicant
1. If at any time during the pendency of the Application, the Applicant changes, in any material way, the facts or claims set forth in the Application, the Applicant shall immediately file with the Retirement Office and serve on all Parties written notice of such change, including any changes in employment or accommodation and any medical evidence supporting such an amendment. The failure to do so, may, in the discretion of the Board, preclude the Applicant from asserting the facts so alleged or introducing evidence with respect thereto. Notice of any such amendment shall be given, in writing, to Retirement Office within ten (10) days of the date thereof, and in no event later than thirty (30) days prior to any proceeding before the Board or Referee.
2. At any time during the pendency of an Application or in connection with any
re-evaluation of the Member’s disability status permitted under CERL, the Board or SJCERA may, by written notice to the Applicant, require that the Applicant produce within 30 days any or all of the following items. Said items shall be accompanied by a declaration (on a form approved by SJCERA for that purpose) signed by the Applicant under penalty of perjury affirming that the Applicant has made a diligent search and reasonable inquiry and that no other responsive items exist.
a) Copies of records, reports, notes, statements, documents, photographs,
or other writings, within the definition of Evidence Code Section 250. b) A narrative report of the Member’s current medical condition, and a list
of the names and contact information for all of the Member’s healthcare providers.
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c) Written responses to written questions concerning any matter that is reasonably calculated to lead to the discovery of evidence that would be admissible at a hearing. Said written responses shall be accompanied by a declaration (on a form approved by SJCERA for that purpose) signed by the Applicant under penalty of perjury affirming the truthfulness and completeness of the responses.
3. Any Interested Party shall be entitled to notice and take oral depositions in the manner prescribed by the California Code of Civil Procedure, except that there shall be no distinction between the depositions of expert and non-expert witnesses, and the provisions of the California Code of Civil Procedure pertaining to the depositions of expert witnesses shall not apply. The Party noticing a deposition shall pay any and all deposition costs and the fees to which a witness may be entitled.
E. Investigation and Evaluation 1. Before an administrative recommendation is made to the Board or a hearing
before a Referee is set, the following shall be completed:
a.) Within 90 days after an Application is accepted for filing, SJCERA will request any and all records that may be relevant to the determination of the Application. These may include, but are not necessarily limited to, the following: medical, psychiatric, psychological, chiropractic, physical therapy, and acupuncture records; radiology and ultrasound records; electrodiagnostic testing records; laboratory (blood, urine, pathology, etc.) testing records; psychological testing records; personnel and human resources records, incident and injury reports; reports prepared by any law enforcement agency; the Member’s complete worker’s compensation file pertaining to the subject claim and other potentially related claims including all medical records, reports, deposition transcripts, etc.; HIV and alcohol treatment/testing records in cases where these conditions are at issue.
b.) SJCERA shall require a written statement from the department regarding employment status, job duties, work restrictions and accommodations, if any.
c.) All records pertaining to the Application will be provided to the Disability
Medical Provider and the Fund’s Counsel.
d.) The Fund’s Counsel and/or the Disability Medical Provider will review and summarize the records. The Fund’s Counsel will coordinate independent medical examination(s) as necessary and appropriate.
e.) Additional records may be requested or subpoenaed of the Applicant or others.
f.) All medical examinations required of the Member are completed and
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reports thereof have been submitted to SJCERA.
g.) The Fund’s Counsel will review medical findings and other evidence and make recommendations to the CEO.
h.) Applicant is notified of pending action.
i. If the Fund’s Counsel determines based upon findings and SJCERA procedures that the Applicant has met his/her burden of proof to show eligibility for a disability retirement benefit, staff will place the matter on the closed session consent calendar at a Board of Retirement meeting with a recommendation to grant the application.
ii. If the Fund’s Counsel determines based upon findings and SJCERA procedures that the Applicant has not met his/her burden of proof to receive a disability retirement benefit, the CEO will be notified. The Applicant will be notified and given the option to request a hearing. (See below.)
F. Medical Examinations
1. Members may be required to undergo one or more medical or psychiatric
examinations by a physician or physicians of SJCERA’s choice as necessary to evaluate the conditions and diagnoses presented in the Application. Such examinations may be unnecessary in the following cases: (1) where the Member has already been examined by at least one qualified medical expert and there is overwhelming and undisputed medical evidence that the Member is permanently incapacitated, such that referring the Member to another examination would be futile; and (2) where the Applicant has not submitted substantial medical evidence that the Member is permanently incapacitated, such that referring the Member to an examination would be unjustified.
2. Members must cooperate during the medical or psychiatric examination
process and, if requested, must promptly provide additional medical records and information, or submit to additional examinations.
3. SJCERA shall at least fifteen (15) days before the appointment date, serve
the Member (and all Parties) with written notice of the date, time and place of the medical or psychiatric examination Notice may be served electronically and/or by first-class mail through the US Postal Service. If the Member is unable to keep the examination appointment, the Member or his/her attorney shall notify SJCERA or the Fund’s Counsel in writing of such fact at least ten (10) calendar days before the scheduled examination. Failure to provide such notice and appear for the medical examination without good cause may result in the Board assessing medical cancellation fees against the Member.
4. The cost of such examinations shall be borne by SJCERA. If the examination
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is at a facility located outside of San Joaquin County, Members may request reimbursement from SJCERA for mileage costs incurred to attend such examination.
G. Penalties for Failure to Comply with Disability Retirement Procedures. 1. The failure of an Applicant to comply with the requirements set forth in these
procedures may result in a recommendation to dismiss the Application. Upon the Board’s own motion or a recommendation by the CEO, and 30 days’ written notice to the Applicant without cure, the Board may:
a) Dismiss any Application in which the Board finds the Applicant to be non-compliant with these procedures. Failure to comply includes, but is not limited to: failure to submit to a duly noticed medical examination, failure to cooperate with any medical examination without good cause, failure, or refusal to comply with, any notice or demand made pursuant to this policy, failure to cooperate in the formal hearing process, and failure to comply with any order of the Board or the Referee.
b) Dismiss the Application with prejudice upon a finding of bad faith actions, dilatory or frivolous tactics causing undue delay in the proceedings, disobedience to a lawful order, and/or obstruction of the due course of a hearing proceeding.
H. CEO’s Recommendation
1. The CEO may recommend to the Board that a Member be retired for service-connected or nonservice-connected disability retirement benefits. The recommendation shall be in writing and include:
a) A determination of permanent physical or mental incapacity for the performance of the Member’s duties;
b) A determination whether the incapacity is the result of an injury or disease arising out of and in the course of the Member’s employment;
c) A summary of the evidence in support of the recommendation.
I. Setting the Matter for Hearing
1. If, after investigation, the CEO determines that the Applicant has failed to meet his/her burden of proof regarding any element legally necessary for the granting of the Application, the Applicant will be notified of its decision in writing, giving the applicant the following options, if applicable:
a) If the Applicant has met his/her burden of proof regarding permanent incapacity but not service connectedness:
i. The Applicant may amend the Application from service connected to nonservice-connected to permit SJCERA to recommend that the Board grant a non-service connected disability retirement without
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need for hearing; or
ii. The Applicant may request both of the following: a hearing on the issue of service-connection, and a request that the Board grant a nonservice-connected disability retirement;
b) Stipulate to waive the right to hearing and withdraw the Application.
c) Request a hearing on all issues presented by the Application.
2. If a written response is not received from the Applicant within thirty (30) calendar days after issuing the written notice in VI.I.1, SJCERA will recommend that the Board dismiss the Application pursuant to section VI.G for noncompliance at the next available regularly scheduled meeting of the Board of Retirement.
3. In cases where, as set forth in VI.I.1.a above, the Applicant has opted to amend the Application from service connected to non-service connected disability retirement, or where the Applicant requests a nonservice-connected disability retirement and a hearing on the issue of service-connection, SJCERA will recommend that the Board grant non-service connected disability retirement.
4. The Applicant may withdraw the Application at any time prior to the Board’s final determination. Any withdrawal of an application prior to the assignment to a Referee shall be deemed a withdrawal without prejudice. A withdrawal without prejudice means that any re-submission of the withdrawn application will be considered a new application that must meet all filing requirements, including timely filing requirements. Any withdrawal of an application after the assignment to a Referee will be deemed to be with prejudice. An application withdrawn with prejudice precludes subsequent submission of the withdrawn application based on the same disability, injury or disease in the absence of new evidence.
VII. Hearings Before A Referee
A. Referral to Referee
1. If the Applicant timely requests a hearing, the matter shall be referred for hearing de novo before a Board-appointed Referee. The Referee shall be provided by the Office of Administrative Hearings of the State of California or by a prescreened panel of acceptable Referees selected by SJCERA. Compensation for the Referee shall be determined by the CEO and shall be paid by SJCERA.
B. Notification of Referral to Referee and Statement of Issues; Certification of Issues, Documents and Witnesses
1. Before a hearing date is set, the following notifications and certifications shall be provided:
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a) The Fund’s Counsel shall notify the Applicant in writing that SJCERA has referred the matter to hearing before a Referee and that a Referee will be appointed and a hearing scheduled as soon as SJCERA receives the certification required by this section. The written notice will further advise that if SJCERA does not receive the required certification within 30 calendar days, SJCERA will recommend that the Board dismiss the Application for lack of diligence pursuant to section VI.F above.
b) The written notice will include the following:
i. A list of issues to be determined at the hearing and the names and contact information of all witnesses that may be called by the Fund’s Counsel to testify at the hearing.
ii. A copy of SJCERA’s Disability Retirement Policy and Procedures.
iii. An electronic copy of all medical records, reports, and other documents in SJCERA’s file that have been obtained as part of the disability retirement application process.
c) Notwithstanding anything in this subdivision, unless otherwise ordered by the Referee or the Board, SJCERA shall only furnish psychiatric medical reports and records to a treating physician designated by the member in writing.
d) Enclosed with the notice to the Applicant will be a form which will require the Applicant to certify the following:
i. That there are no additional documents to introduce as evidence at the hearing other than those provided to the Applicant in electronic form along with SJCERA’s letter. If there are additional documents, the Applicant must provide them to SJCERA along with the signed certification form. Unless otherwise ordered by the Referee or by stipulation of the parties, any documents not produced with the certification will be barred from introduction as evidence at hearing.
ii. Whether the Applicant will be represented by an attorney at the hearing and, if so, the name and contact information for the attorney.
iii. List the names and contact information for any witnesses the Applicant intends to call to testify at the hearing. Unless otherwise ordered by the Referee or by stipulation of the parties, any witnesses not identified by the Applicant on the certification shall be barred from testifying at the hearing.
C. Setting the Hearing Date
1. Within 30 days of the timely receipt of the Applicant’s certification of
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documents and witnesses, the Fund’s Counsel shall contact the Applicant or their attorney to select a mutually agreeable hearing date. The hearing date selected must be no later than 90 days after the filing of the Applicant’s certification of documents and witnesses. If an Applicant fails to respond to SJCERA’s reasonable requests to set a hearing date, SJCERA may either schedule a hearing date or notify the Applicant in writing that continued failure to confer on a hearing date may result in dismissal of the Application for lack of diligence. If the Interested Parties cannot agree on a hearing date, either Interested Party may request a prehearing conference with the Presiding Judge of the Office of Administrative Hearings to set the hearing date.
D. Time and Place of Hearings
1. Unless the parties and the Referee agree otherwise, all hearings shall take place at SJCERA, 6 South El Dorado Street, Suite 400, Stockton, CA. When the date and time of the hearing are selected, SJCERA shall notify the parties and the Referee of the time and place of the hearing.
2. Unless the parties and the Referee agree otherwise, all hearings are deemed set for one full day, beginning at 9:30 a.m. Hearings which are not completed by the end of the day shall be continued to the next agreeable hearing date which shall be no more than 30 days from the initial hearing date.
E. Prehearing Conferences
1. At the request of any Interested Party, a prehearing conference may be scheduled with the Referee for the purpose of resolving any evidentiary, discovery and/or other prehearing disputes or issues. Prehearing conferences may be conducted personally or telephonically. Following the prehearing conference, the Referee may issue any orders relating to briefing, discovery, and/or the conduct of the hearing, including the final exchange of documents and witnesses.
2. Unless otherwise stipulated by the parties, a prehearing conference is mandatory in all cases where the Applicant is unrepresented by counsel.
F. Determining Issues
1. The Referee shall determine all issues set forth in the written statement of issues required by this policy by a preponderance of the evidence, including the following, if applicable:
a) Whether the Member was employed prior to January 1, 1981, and was
required as a condition to such employment to execute a waiver for the alleged disability under Government Code Section 31009;
b) Whether the Member is disabled, that is, whether there is a substantial mental or physical incapacity to perform the Member’s normal and
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usual employment duties;
c) Whether the disability is permanent, that is, whether as a reasonable medical probability the disability is likely to persist indefinitely;
d) Whether, for non-service-connected disability, the Member has completed five (5) years of service;
e) Whether for a service-connected disability:
i. the incapacity is a result of injury or disease
ii. the injury or disease arose out of and in the course of the Member’s employment; and
iii. the employment contributed substantially to the incapacity;
f) Whether, for Members described in Government Code Sections 31720.5, 31720.6, 31720.7 or 31720.9 alleging heart trouble, cancer, blood-borne infectious disease, or illness due to exposure to biochemical substances:
i. the Member has completed five (5) years of safety service, if
required;
ii. the Member has the condition alleged;
iii. the Member is permanently incapacitated due to the condition alleged;
iv. the condition developed while a qualified Member of SJCERA;
v. and whether the presumption of the relevant Government Code Section has been rebutted
G. Conduct of Hearing
1. A stenographic reporter shall record the proceedings of all hearings authorized by the Board at SJCERA’s cost. Any transcription and copies shall be charged to the requesting Party. The hearing shall be considered closed. The Referee shall mark for identification only, and not as evidence, all exhibits submitted by the parties, which should include:
a) the completed Application Packet;
b) the notice of hearing, with proof of service on the Applicant;
c) other documents required to be submitted by this policy including, without limitation, relevant medical reports, medical records, employment records, worker’s compensation records, etc.
2. Hearing Process.
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a) Each Party may make an opening statement.
b) Each other Party then shall present evidence, in the order determined by the Referee in accordance with each Party’s burden of proof and burden of presenting evidence to establish such proof.
c) Each Party may cross-examine witnesses.
d) Rebuttal evidence may be presented.
e) Each Party may make oral closing arguments.
f) Upon the conclusion of all closing arguments, the Referee shall determine if all parties are ready to submit the matter for decision, and if so, or if the Referee otherwise orders for good cause, the Referee shall close the hearing and declare the matter submitted for decision.
H. Stipulations
1. Nothing in these procedures may be construed as preventing the parties from stipulating to lesser time requirements than prescribed in these procedures. The Referee may, upon written notice and for good cause shown, lengthen or shorten the times specified in these procedures.
VIII. Rules of Evidence A. Burden of Proof
1. The Applicant has the burden of proving by a preponderance of the evidence each affirmative issue on which the Application depends as identified in the statement of issues submitted by the Fund’s Counsel. In addition, if the Applicant seeks to assert one or more of the legislative presumptions afforded by Government Code Sections 31720.5 (heart trouble), 31720.6 (cancer), 31720.7 (blood-borne infectious disease), or 31720.9 (illness due to exposure to biochemical substances), then the Applicant first must establish his/her or her entitlement to invoke the asserted presumption by offering prima facie evidence of each foundational element required by the applicable Government Code section(s), and the presumption(s) so invoked shall be rebuttable as provided in the applicable section(s).
B. Evidence
1. Oral evidence shall be taken only on oath or affirmation. Unless expressly waived by an opposing Party, all written evidence shall be sworn to or given under penalty of perjury, subject to Subsection E, below.
C. Witnesses
1. Each Party may call and examine witnesses, introduce exhibits, and cross-examine and impeach any witness on any matter relevant to the issues. If the Applicant or any other Party does not testify on that Party’s own behalf,
SJCERA BOARD POLICY / Disability Policy and Procedure Page 13 of 16
that Party may be called and examined as if under cross-examination under Evidence Code Section 776.
D. Refusal of Witness
1. Refusal by an Applicant or Party to submit to examination or to answer relevant questions shall be grounds for considering those questions to be answered unfavorably to the refusing Party for the purpose of that hearing, and for denying the relief or benefits sought by the refusing Party.
E. Hearing Conduct
1. The hearing need not be conducted according to the technical rules of law relating to evidence and witnesses. Any relevant evidence shall be admitted if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule that might make improper the admission of such evidence over objection in civil actions. Hearsay evidence may be used for the purpose of supplementing or explaining any direct evidence but shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions.
F. Certified Copies
1. Certified copies of the reports and records of any governmental agency, division or bureau, will be accepted as evidence in lieu of the original thereof.
G. Deposition Transcripts/Video Recordings
1. Any Party may offer, and the Referee shall receive into evidence, any relevant deposition transcript and/or video recording thereof if: (1) the deposition was taken in the manner provided by law or by stipulation of the Parties; and (2) at least twenty (20) calendar days before the hearing the offering Party delivered a copy of the transcript and/or video recording of the deposition to all Parties along with notice of intent to introduce same into evidence. Nothing herein shall require or permit receiving into evidence any deposition testimony to which objection is properly raised if such testimony would be inadmissible were the witness present and testifying at the hearing. Deposition transcripts/video recordings shall be admissible notwithstanding that the deponent is available to testify. Depositions of experts, including medical experts, may be introduced in lieu of live testimony pursuant to Code of Civil Procedure Section 2025.620(d)
H. Written Medical Reports As Evidence
1. A written medical report bearing the signature of the medical witness shall be admissible in evidence as the author’s direct testimony. Such medical reports shall not be inadmissible on the basis that they constitute hearsay. Each Party has the right to cross-examine the authors of medical reports pursuant to a subpoena issued and served in compliance with these
SJCERA BOARD POLICY / Disability Policy and Procedure Page 14 of 16
procedures.
I. Subpoena Powers and Witness Fees
1. Subpoena powers shall be vested in the Board officers, the CEO and the Referee in accordance with Government Code Section 31535. Subpoenas shall be requested through the Fund’s Counsel who shall transmit the request to SJCERA. Subpoenas issued shall be transmitted to the Party requesting the subpoena. The requesting Party shall have the sole responsibility for serving and enforcing the subpoena and for paying all costs associated with the subpoena.
2. A written motion to quash a subpoena may be made to the Referee on one or more of the following grounds, which shall be clearly and fully stated in the motion and supported by declarations under penalty of perjury:
a) Compliance will be unduly burdensome or against public policy.
b) The things subpoenaed are privileged by law.
c) The things subpoenaed are irrelevant or unnecessary to the proceedings.
d) The things subpoenaed have not been described with sufficient clarity to enable the witness to comply. Before it commences or continues with the proceeding, the Referee shall wholly or partially grant or deny the motion to quash.
3. The Party calling a witness to testify (whether by subpoena or otherwise) shall be solely responsible for paying any expert or nonexpert witness fees, mileage charges, and other costs associated with the witness’ testimony. Non-expert witness fees and mileage charges shall be calculated as provided by law.
J. Service of Proposed Findings of Fact and Recommended Decision
1. After closing the hearing, the Referee will prepare a summary of the evidence received, findings of fact, conclusion of law, and a recommended decision. In accordance with the provisions of Government Code Section 31533, the findings of fact and proposed recommendation of the Referee shall be served on the CEO, who in turn shall distribute a copy to all parties.
2. Either Party may submit written objections to the Referee’s recommended decision to SJCERA within ten (10) calendar days from the date SJCERA distributes the notice to all parties. The non-objecting Party may submit their response to the objections 10 days after the filing of the objections. The written objections and response shall be incorporated into the record submitted to the Referee’s consideration.
K. Board’s Decision
1. Upon receipt and review of the recommended decision of the Referee and
SJCERA BOARD POLICY / Disability Policy and Procedure Page 15 of 16
any filed objections and responses, the Board may:
a.) Approve and adopt the recommended decision of the Referee, or
b.) Refer the Application to the Referee for further hearing and/or consideration, or
c.) Require a written transcript or summary of all testimony plus all other evidence received by the Referee to be submitted by the CEO to the Board. Following its receipt and review of the transcript and evidence, the Board shall:
i. Take action as is appropriate to the evidence and the provisions of
the CERL, or
ii. Refer the matter back to the Referee with or without instruction for further proceedings; or
iii. Set the matter for hearing de novo before itself. The Board shall hear and decide the matter as if it had not been referred to the Referee. Unless otherwise allowed by the Board, the hearing shall be confined to the evidence, witnesses, and issues set forth in the certification and statement required by this policy. All hearings before the Board shall require the attendance of at least the same seven (7) members and shall be conducted as if it were a hearing held before a Referee in accordance with this policy.
IX. Final Decision
A. The Board’s decision on the Referee’s recommended decision shall become final upon notice of the decision on all parties, including the employer.
B. Judicial Review. In those cases where a Party or Applicant is entitled to judicial review of the proceedings before the Board, any petition for writ of mandate shall be filed with the superior court within ninety (90) days from the date the notice of this Board’s decision is mailed to the Party or Applicant or is delivered to the Party or Applicant. Where a timely petition for rehearing is filed as provided in A above, the time for filing a petition for writ of mandate seeking judicial review shall expire ninety (90) days after SJCERA mails to the Applicant or Party (1) notice that the petition for rehearing is denied or (2) notice of the Board’s decision following a rehearing, whichever occurs later.
X. Law Prevails
A. In the event a conflict between this policy and the County Employees Retirement
Law, the Public Employees’ Pension Reform Act, or other applicable statutes arises, the law shall prevail.
XI. Policy Review
SJCERA BOARD POLICY / Disability Policy and Procedure Page 16 of 16
A. Staff shall review this policy every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must, be approved by the Board of Retirement in accordance with the bylaws. Effective upon adoption.
XII. History
3/1/2018 Bylaw Sections 8, 9, 10 & 11 Converted to Board Policy and Board of Supervisor approved Bylaws
06/28/2018 Staff updated format 08/10/2018 Modified the definitions of Applicant and Application to conform with
SJCERA’s adopted code sections 07/12/2019 Revised to include definitions, add requirements that an application must
meet before being filed, allow the member to elect not to go to hearing, allow the use of depositions, clarify mileage reimbursement may be requested for out-of-county travel to SJCERA-scheduled examinations, and specify that SJCERA may determine an examination is not required in some cases.
7/10/2020 Amended to clarify the use of a Referee for hearings, the order of the prehearing and hearing process, subpoena options, and penalties for noncompliance.
Certification of Board Adoption:
Clerk of the Board Date
Administrative Committee Meeting San Joaquin County Employees’ Retirement Association
Agenda Item 5.0 June 5, 2020 SUBJECT: Board Investment Policy Amendments SUBMITTED FOR: __ CONSENT l_X__ ACTION ___ INFORMATION RECOMMENDATION Staff requests that the Committee recommend to the full Board the adoption of the proposed amendments to the following policies: 5.01 Investment Manager Monitoring and Retention Policy 5.02 Investment Roles and Responsibilities Policy 5.03 Placement Agent Information Disclosure Policy 5.04 Proxy Voting Policy Staff requests that the Committee recommend to the full Board the adoption of the Strategic Asset Allocation Policy (Item 5.05) pending further updates based on input from the Consultant and repeal the following asset class specific policies: Cash and Overlay Policy, Credit Investment Policy, Crisis Risk Offset Investment Policy, Global Public Equity Investment Policy, Private Appreciation Investment Policy, Real Estate Investment Policy, Risk Parity Investment Policy, Stable Fixed Income Investment Policy. PURPOSE To amend policies to ensure that they remain relevant, appropriate, and in compliance, per Section III.C of the Administrative Committee Charter. DISCUSSION In accordance with the Board’s requirement that staff review one-third of the policies annually, the following amendments are proposed to the Board’s administration policies: 5.01 Investment Manager Monitoring and Retention Policy – Revised to clarify Consultant and Investment Officer roles, update procedures used to monitor investment managers, and remove Manager Strategy Summaries 5.02 Investment Roles and Responsibilities Policy – Added Purpose section, removed outdated policy numbers, and clarified roles 5.03 Placement Agent Information Disclosure Policy – Rewritten in a more streamlined and cohesive manner
June 5, 2020 Page 2 of 2 Agenda Item 5.0
5.04 Proxy Voting Policy – Revised to update Investment Officer job title and other non-substantive changes 5.05 Strategic Asset Allocation Policy – Revisions are in process and are expected to be completed before the July Board meeting. The revision has several objectives:
1. Modify the asset allocation targets to reflect the most recent allocation adopted by the Board and categorize the investments according to the updated asset class framework adopted by the Board.
2. Incorporate all pertinent content from the eight existing asset class specific policies, thereby allowing the Board to repeal them.
3. Updating language for clarity and brevity. ____________________ _________________________ JOHANNA SHICK CHRIS WISDOM Chief Executive Officer Retirement Investment Officer
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 1 of 9
I. Purpose
A. This policy outlines the SJCERA’s monitoring and retention of investment managers for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) Board adopted policies related to manager monitoring and retention. The policy and objectives allow for sufficient flexibility in the monitoring and retention process yet provide parameters that ensure prudence and care in the execution of the overall SJCERA investment program.
B. II. Background A. The SJCERA investment program is invested by a mix of professional external
managers to the asset allocation targets and ranges adopted by the Board and set forth in the Strategic Asset Allocation Policy. The targets are generally long-term and may deviate in the short-term as a result of interim market movement. This policyTo establishes general guidelines for monitoring investment manager effectiveness, identifying issues of concern, .
A.B. To and provideing a process for the Chief Investment OfficerInvestment Officer and the Investment Consultant(s), with oversight by the Chief Executive Officer, to employ when making decisions and recommendations to the Retirement Board concerning manager retention and evaluation. Copies of this policy shall be provided to all SJCERA Investment managers.
III.II. Policy OverviewDefinition of Status
A. While this policy establishes guidelines for manager monitoring, experience has shown that each manager's situation is unique, and must be analyzed on an individual basis, taking into account any specific circumstances affecting the manager or SJCERA relationship.
B. The Chief Investment OfficerInvestment OfficerConsultant(s) will classify the fund’s
managers into two status categories: Good Standing or Under Review. The Investment Consultant(s) will make this determination in accordance with this policy, and their professional and fiduciary judgment taking into account specific circumstances affecting the manager and/or SJCERA’s relationship.
1. Good Standing: Managers that have met the performance objectives and other
criteria established by the Board’s Policies will be considered to be in Good Standing on the Quarterly Performance Report
2. Under Review: Managers that fail to meet expectations in any of the five general
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 2 of 9
areas specified below under monitoring procedures will be Under Review.
IV. Monitoring Procedures
A. Managers will be monitored in five areas: 1. Investment performance (in context relative to a specific benchmark, objectives
of the investment manager’s fund and peer group if as appropriate); 2. Adherence to the firm's philosophy, process, and stated style; 3. Organizational and personnel continuity; 4. Guideline compliance, and, 5. Other.
B. Managers will be monitored on a continuous basis by the Chief Investment Officer
and the Investment Consultant(s) based on custodian’s holdings reports, monthly performance, manager announcements, the custodian's reporting, consultant(s) evaluations, and other inputs, such as conference calls, in-person meetings, email exchanges and qualitative factors.
C. SJCERA’s Investment Consultant(s) will prepare a quarterly report for the Board summarizing Tthese reviews will be summarized in the quarterly report prepared by SJCERA’s Consultant(s) for Board consideration, and shall reportstating on whether SJCERA’s expectations have been met. Those managers meeting the expectations of the above criteria will be categorized as in Good Standing.
V. Review Criteria
A. Managers may be placed Under Review if one or more of the criteria listed below
are met: 1. Under-performance: A manager may be placed under review when the
manager's net-of-fee performance falls below the agreed upon benchmark and/or when the investment manager does not perform as expected according to the mandate and investment style of the portfolio. A manager's expected tracking error will be used as a reference point in the short-term evaluation.
2. Adherence to Stated Philosophy, Process and Style: A manager may be placed under review if the Chief Investment Officer or Investment Consultant believes there has been a substantive change in the manager’s stated philosophy, process, or style.
3. Organizational Change: A manager may be placed under review when there has been a material change in the manager's organizational structure, ownership or personnel, which the Chief Investment Officer or Investment Consultant determines requires more intense due diligence. This category shall also include instances where a firm may be under investigation by regulatory agencies.
4. Violation of Guidelines: A manager may be placed under review when the
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 3 of 9
manager is materially out of compliance with any of the criteria established in the manager's Investment Guidelines. Subject to review and discussion with the manager, the manager will be expected to bring the portfolio into compliance. The manager shall provide recommended revisions to the guidelines in writing to the Chief Investment OfficerInvestment Consultant; however, SJCERA shall be under no obligation to accept such recommendations. The Board may grant exceptions on a case-by-case basis.
5. Other: The Board of Retirement may place a manager Under Review for other reasons deemed appropriate, including insufficient responsiveness to requests for information, non-attendance at meetings, or any other reason deemed appropriate by SJCERA.
5. B.
B. Managers who are placed “Under Review” may not be eligible for additional funding
and may also be subject to asset reductions. B. The Review process will require certain actions to be taken, as described below, in order to return to Good Standing.
C. Managers who are placed "Under Review" may not be eligible for additional funding and may also be subject to asset reductions.
D.C. If the Chief Investment OfficerInvestment Consultant determines, that any based on their review as described in Section V of this policy, that review criteria will adversely impact the manager’s ability to provide contracted investment services is adversely impacted, the manager may be recommended for immediate termination.
VI. Manager Notification
A. Copies of this policy shall be made available to all SJCERA Investment managers. B. The Chief Investment OfficerInvestment Consultant shall notify Managers in writing
of their status should they it fall Under Review.
VII. Reassessing Under Review Status A. The Investment Officer and Investment Consultant will continue to monitor the
manager on at least a quarterly basis, or more often if appropriate. The length of the review period may vary based on analysis and strategy.
B. The Investment Consultant will determine the appropriate course of action up to and including recommendation for termination to the Board.
A.C. Depending upon the Chief Investment OfficerInvestment Officer’s and Consultant’s analyses, and depending on the manager's style and strategy, the review period may vary. In no event will a manager be returned to Good Standing until the manager meets the criteria for Good Standing.
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 4 of 9
VIII. Termination
A. A recommendation to the Board for termination of the management contract will occur if there is a failure to correct or show improvement in the deficiencies that placed them in Under Review Status., show improvement or if the deficiencies are perceived to be irresolvable within a reasonable amount of time. 1. If the Chief Investment Officer and the Investment Consultant(s) believe(s) that
immediate action is necessary due to evidence of a manager engaging in illegal or unethical practices, or for other extraordinary reasons that cause the Chief Investment Officer and Consultant to believe that continued management is contrary to fiduciary standards of prudence, the Chief Investment OfficerInvestment Consultant is authorized by the Board to notify the manager in writing that trading on the account must cease immediately. Notice of such action and the termination recommendation will be presented to the Retirement Board for ratification at its next monthly meeting.
B. Nothing in this policy shall be construed to conflict with SJCERA’s right to terminate
an investment manager pursuant to the terms of their applicable investment management agreement.
IX. General Investment Guidelines / Restrictions
A. Each investment manager is expected to perform its fiduciary duties as a prudent
person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims and to conform with all State and Federal statutes governing the investment of retirement funds. The following restrictions apply to each separate account manager:
1. Purchases of securities issued by San Joaquin County without written consent
from the Board. 2. The manager shall promptly notify the Chief Executive Officer of any violation of
the guidelines and provide an explanation of the limit that was exceeded, an evaluation of the situation, the recommended course of action and the status of the corrective action proposed.
3. Whenever SJCERA invests in a commingled fund, rather than a separate
account, the stated rules and regulations of the manager’s commingled fund will take precedence over the SJCERA Investment Policy Guidelines.
X. Communications
A. Related to the monitoring and retention process, investment managers are expected to communicate with the Investment Consultant, Chief Executive Officer and Chief Investment OfficerInvestment Officer as follows:
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 5 of 9
1. Immediately
a. Violation of manager guidelines b. Any organizational or personnel changes impacting SJCERA’s account c. Any purchases or sales that result in unusual gains or losses are to be
reported in writing after each transaction
2. Monthly
a. Monthly Performance and attribution b. Positive certification of compliance with guidelines
3. Quarterly
a. Current Strategy b. Recent Investment Performance and attribution c. Summary of Key Personnel Changes d. New/Lost Accounts within the same mandate
4. Annually
a. Presentation to the Board/staff/consultant (as requested).
B. Additional information and reports may be required on a regular or ad hoc basis as requested by staff or consultant.
XI. Reporting
A. The Investment cConsultant(s)/staff report allocations and performance to the Board at least quarterly.
B. The Investment cConsultant(s) presents the Manager Monitoring Report to the Board at least quarterly
C. The Investment cConsultant/sStaff report to the Board on changes related to the investment managers and significant deviations in the performance as warranted.
XII. Responsibilities
A. The SJCERA Board 1. Approves the strategic policy for the overall investment program and
review/modify it as appropriate. 2. Approve the investment firms managing the underlying portfolios in the
investment program.
B. Consultant/Staff 1. Implement the policy. 2. Manage the overall investment program. 3. Monitor the investment managers. 4. Rebalance as necessary. 5. Report pertinent information about the program to the Board.
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 6 of 9
XIII. Manager Strategy Summaries
Manager Strategy Summaries are outlined below in the attached Exhibit A.
XIV.XII. Policy Review
Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
XV.XIII. History
05/30/2008 Adopted 10/06/2017 Revised 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Added General Investment Guidelines/Restrictions language and
Manager Strategy Summaries from other investment policies. 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Revised to clarify Consultant and Investment Officer Roles, update
procedures used to monitor investment managers, and remove Manager Strategy Summaries.
Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 7 of 9
EXHIBIT A
MANAGER STRATEGY SUMMARIES
ASSET CLASS MANAGER STRATEGY Credit Public Securities Stone Harbor Absolute Return Fixed
Income Stone Harbor Bank Loans Private Comingled Funds Crestline Opportunity
Fund II Direct Lending via hedge funds and co-investments
Medley Opportunity Fund II
Middle-market Direct Lending
Mesa West Real Estate Income Funds
Real Estate Financing
Raven Capital Opportunity Funds
Middle-market Direct Lending/Asset Acquisition
White Oak Summit Peer Fund
Direct Lending/Specialty Finance
Crisis Risk Offset (CRO) Dodge & Cox Long Duration Bonds Mount Lucas MLM Index Enhanced
(STF) Graham Capital Tactical Trend Portfolio
(STF) AQR Capital Style Premia Strategy (Alt
Risk Premia) P/E Global Diversified Global Macro
Strategy (Alt Risk Premia) Bridgewater Associates Pure Alpha and Pure
Alpha Major Markets (Alt Risk Premia)
Global Equities U.S. Public Equity BlackRock Passive U.S. Equity
(Russell 1000) Capital Prospects Small Cap Value Bernzott Channing Inview Keeley Pacific Ridge
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 8 of 9
Walthausen Non-U.S. Public Equity BlackRock Passive International
Equity Developed Markets (MSCI World ex. U.S.)
ASSET CLASS MANAGER STRATEGY PIMCO RAE
International Index Enhanced International Fundamental Developed Markets (MSCI EAFE)
PIMCO RAE Emerging Markets Index
Enhanced Fundamental Emerging Markets (MSCI EM)
Public Real Estate Securities Invesco U.S. Real Estate Securities (U.S. REITS)
BlackRock Passive International Developed (Ex-U.S.) Real Estate
Private Appreciation Ocean Avenue Comingled Fund Private Equity
Morgan Creek Multi-Strategy Comingled Private Equity Fund of Funds and Coinvestment Fund
Private Equity Real Estate Angelo Gordon Value Almanac Value Colony Realty Partners Value Greenfield Acquisition Opportunistic Miller Global Opportunistic Principal US Property Core (open-ended) Prologis Targeted US
Logistics Core (open-ended)
RREEF America REIT II
Core (open-ended)
Sarofim Multifamily Value Walton Street Opportunistic Risk Parity Bridgewater Associates All Weather Panagora Risk Parity Mult-Asset Stable Fixed Income Dodge and Cox Core Fixed Income DoubleLine Capital Total Return and Strategic
Mortgage Backed Securities
Prima Capital Advisors Commercial Mortgages, CMBS
Cash and Overlay Northern Trust Cash – Short Term Investment Fund (STIF)
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 9 of 9
Parametric Cash Overlay Program – Policy Overlay Service (PIOS)
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 1 of 5
I. Purpose
A. To establish general guidelines for monitoring investment manager effectiveness, identifying issues of concern.
B. To provide a process for the Investment Officer and Investment Consultant(s), with oversight by the Chief Executive Officer, to employ when making decisions and recommendations to the Board concerning manager retention and evaluation.
II. Definition of Status
A.
B. The Investment Consultant(s) will classify the fund’s managers into two status categories: Good Standing or Under Review. The Investment Consultant(s) will make this determination in accordance with this policy, and their professional and fiduciary judgment taking into account specific circumstances affecting the manager and/or SJCERA’s relationship.
1. Good Standing: Managers that have met the performance objectives and other
criteria established by the Board’s Policies will be considered to be in Good Standing on the Quarterly Performance Report
2. Under Review: Managers that fail to meet expectations in any of the five general areas specified below under monitoring procedures will be Under Review.
IV. Monitoring Procedures
A. Managers will be monitored in five areas:
1. Investment performance (relative to a specific benchmark, objectives of the investment manager’s fund and peer group as appropriate);
2. Adherence to the firm's philosophy, process, and stated style; 3. Organizational and personnel continuity; 4. Guideline compliance, and, 5. Other.
B. Managers will be monitored on a continuous basis by the Investment Officer and the
Investment Consultant(s) based on custodian’s holdings reports, monthly performance, manager announcements, the custodian's reporting, consultant(s) evaluations, and other inputs, such as conference calls, in-person meetings, email exchanges and qualitative factors.
C. SJCERA’s Investment Consultant(s) will prepare a quarterly report for the Board
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 2 of 5
summarizing these reviews and stating whether SJCERA’s expectations have been met. Those managers meeting the expectations of the above criteria will be categorized as in Good Standing.
V. Review Criteria
A. Managers may be placed Under Review if one or more of the criteria listed below
are met: 1. Under-performance: A manager may be placed under review when the
manager's net-of-fee performance falls below the agreed upon benchmark and/or when the investment manager does not perform as expected according to the mandate and investment style of the portfolio. A manager's expected tracking error will be used as a reference point in the short-term evaluation.
2. Adherence to Stated Philosophy, Process and Style: A manager may be placed under review if the Investment Consultant believes there has been a substantive change in the manager’s stated philosophy, process, or style.
3. Organizational Change: A manager may be placed under review when there has been a material change in the manager's organizational structure, ownership or personnel, which the Investment Consultant determines requires more intense due diligence. This category shall also include instances where a firm may be under investigation by regulatory agencies.
4. Violation of Guidelines: A manager may be placed under review when the manager is materially out of compliance with any of the criteria established in the manager's Investment Guidelines. Subject to review and discussion with the manager, the manager will be expected to bring the portfolio into compliance. The manager shall provide recommended revisions to the guidelines in writing to the Investment Consultant; however, SJCERA shall be under no obligation to accept such recommendations. The Board may grant exceptions on a case-by-case basis.
5. Other: The Board of Retirement may place a manager Under Review for other reasons deemed appropriate, including insufficient responsiveness to requests for information, non-attendance at meetings, or any other reason deemed appropriate by SJCERA.
B. Managers who are placed “Under Review” may not be eligible for additional funding
and may also be subject to asset reductions.
C. If the Investment Consultant determines, based on their review as described in Section V of this policy, that the manager’s ability to provide contracted investment services is adversely impacted, the manager may be recommended for immediate termination.
VI. Manager Notification
A. Copies of this policy shall be made available to all SJCERA Investment managers.
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 3 of 5
B. The Investment Consultant shall notify Managers in writing of their status should it fall Under Review.
VII. Reassessing Under Review Status A. The Investment Officer and Investment Consultant will continue to monitor the
manager on at least a quarterly basis, or more often if appropriate. The length of the review period may vary based on analysis and strategy.
B. The Investment Consultant will determine the appropriate course of action up to and including recommendation for termination to the Board.
C. In no event will a manager be returned to Good Standing until the manager meets the criteria for Good Standing.
VIII. Termination
A. A recommendation to the Board for termination of the management contract will occur if there is a failure to correct or show improvement in the deficiencies that placed them in Under Review Status.. 1. If the Investment Consultant(s) believe(s) that immediate action is necessary due
to evidence of a manager engaging in illegal or unethical practices, or for other extraordinary reasons that cause the Consultant to believe that continued management is contrary to fiduciary standards of prudence, the Investment Consultant is authorized by the Board to notify the manager in writing that trading on the account must cease immediately. Notice of such action and the termination recommendation will be presented to the Retirement Board for ratification at its next monthly meeting.
B. Nothing in this policy shall be construed to conflict with SJCERA’s right to terminate
an investment manager pursuant to the terms of their applicable investment management agreement.
IX. General Investment Guidelines / Restrictions
A. Each investment manager is expected to perform its fiduciary duties as a prudent
person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims and to conform with all State and Federal statutes governing the investment of retirement funds. The following restrictions apply to each separate account manager:
1. Purchases of securities issued by San Joaquin County without written consent
from the Board. 2. The manager shall promptly notify the Chief Executive Officer of any violation of
the guidelines and provide an explanation of the limit that was exceeded, an
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 4 of 5
evaluation of the situation, the recommended course of action and the status of the corrective action proposed.
3. Whenever SJCERA invests in a commingled fund, rather than a separate
account, the stated rules and regulations of the manager’s commingled fund will take precedence over the SJCERA Investment Policy Guidelines.
X. Communications
A. Related to the monitoring and retention process, investment managers are expected to communicate with the Investment Consultant, Chief Executive Officer and Investment Officer as follows: 1. Immediately
a. Violation of manager guidelines b. Any organizational or personnel changes impacting SJCERA’s account c. Any purchases or sales that result in unusual gains or losses are to be
reported in writing after each transaction
2. Monthly
a. Monthly Performance and attribution b. Positive certification of compliance with guidelines
3. Quarterly
a. Current Strategy b. Recent Investment Performance and attribution c. Summary of Key Personnel Changes d. New/Lost Accounts within the same mandate
4. Annually
a. Presentation to the Board/staff/consultant (as requested).
B. Additional information and reports may be required on a regular or ad hoc basis as requested by staff or consultant.
XI. Reporting
A. The Investment Consultant(s) report allocations and performance to the Board at least quarterly.
B. The Investment Consultant(s) present the Manager Monitoring Report to the Board at least quarterly
C. The Investment Consultant/Staff report to the Board on changes related to the investment managers and significant deviations in the performance as warranted.
XII. Policy Review
SJCERA BOARD POLICY / Investment Manager Monitoring and Communications Policy / Page 5 of 5
Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
XIII. History
05/30/2008 Adopted 10/06/2017 Revised 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Added General Investment Guidelines/Restrictions language and
Manager Strategy Summaries from other investment policies. 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Revised to clarify Consultant and Investment Officer Roles, update
procedures used to monitor investment managers, and remove Manager Strategy Summaries.
Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Investment Roles and Responsibilities / Page 1 of 5
I. Purpose
A. To outline the legal authority and fiduciary responsibilities of the Board of Retirement in administering SJCERA.
B. To assign specific roles to Staff and the Investment Consultant(s), thereby explicitly stating whic7h responsibilities the Board has discharged.
I.II. Legal Authority and Fiduciary Responsibilities
A. Introduction
1. The Board of Retirement (Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) has plenary authority and the fiduciary responsibility for investment of moneys and administration of SJCERA. The assets of a public pension or retirement system are held in trust, and the Board has exclusive control of the investment of SJCERA’s Trust Fund (Fund) assets. (California Constitution Article XVI, Section 17.)
B. Legal Authority
1. Under the California State Constitution and the County Employees Retirement Law of 1937 (CERL), the Board is authorized to invest in any form or type of investment deemed prudent by the Board pursuant to the requirements of CERL Section 31595, which provides in part:
a. Except as otherwise expressly restricted by the California Constitution and by law, the Board may, in its discretion, invest, or delegate the authority to invest, the assets of the Fund through the purchase, holding, or sale of any form or type of investment, financial instrument, or financial transaction when prudent in the informed opinion of the Board.
C. Fiduciary Responsibility
1. The Board and its officers and employees shall discharge their duties:
a. Solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system;
b. With the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
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familiar with these matters would use in the conduct of an enterprise of a like character and with like aims;
c. By diversifying the investments of the system so as to minimize the risk
of loss and to maximize the rate of return, unless under the circumstances it is clearly prudent not to do so; and
d. Recognizing that its duty to its participants and their beneficiaries takes
precedence over any other duty.
2. In discharging its fiduciary duties, the Board will exercise prudent judgment and to make these judgments will seek expert advice and guidance from the internal staff and external investment consultants. The Board’s judgment will reflect the prevailing facts and circumstances. The Board recognizes the importance of maintaining a long-term perspective when setting policy and asset allocation.
3. The series ofSJCERA’s investment policies (INV 0010 through INV 1400) collectively will serve as SJCERA’s Investment Policy Statement (IPS) and governs all asset classes and establishes the guidelines, policies and procedures for the management of SJCERA’s diversified investment portfolio. The IPS is subject to applicable provisions of law and the applicable limitations and requirements of SJCERA’s governance policies. The Board may amend, supplement or rescind its policies at any time at its discretion.
II.III. Governance: Roles and Responsibilities
A. The Board is responsible for formulating, adopting, and supervising the investment policies of SJCERA’s investment program, including, but not limited to, the following decisions.
1. Board Investment-Related Responsibilities
a. The Board is responsible for setting SJCERA’s investment philosophy, objectives, and risk tolerances, and for adopting the Trust Fund’s asset allocation that forms the basis of the implementation of the investment program. This includes:
a)
i. Decisions on which asset classes and benchmarks will be used in the investment programs;
b)
ii. The allocation to each asset class;
c)
iii. Risk tolerances for the total Trust Fund and individual asset classes;
SJCERA BOARD POLICY / Investment Roles and Responsibilities / Page 3 of 5
d)
iv. The operational policies that will implement the asset allocation; and
e)
v. The monitoring and reporting of the risk management and performance measurement of the investment program.
2. The Board is responsible for approving the specific policies required implement the investment program.
3. The Board is responsible for the approval of the general and any specialty investment and specialty consultants to the investment program.
4. The Custodian maintains custody of SJCERA’s assets and accounts for and reports on all of SJCERA’s assets. Given the importance of this role, the Board is responsible for the selection of the Custodian. SJCERA’s finance staff will provide supporting analysis and input to the Board in making this decision.
5. SJCERA’s external investment counsel reviews, edits and negotiates the legal documents and agreements related to investment contracts. County Counsel screens and approves recommends to the Board appropriate external investment counsel, in consultation with staff and the Board as appropriate for approval.
B. Investment Program Duties Delegated to Staff
1. Under the legal authority granted, the Board establishes the core operating principals of responsibility, accountability and transparency. Actions related to delegated authority should not result in any substantive change in the terms applicable to SJCERA’s investments and agreements.
2. The Board grants to SJCERA’s Chief Investment OfficerInvestment Officer (CIO) and staff as assisted by the appropriate advisors (e.g., investment and specialty consultants, actuary, legal counsel) the following authority and responsibilities: a. Recommend a plan to implement the Board-approved asset allocation
and related investment policies.
b. Rebalance assets to maintain the Board-approved asset allocation and risk limits.
c. Recommend firms to serve as the general investment and specialty consultants, investment counsel and other advisors to assist in the implementation of the investment program.
d. Oversee and monitor the investment consultants’ and other advisors’ compliance with their contract, management of their workload and quality of Board requested activities.
e. Recommend firms to serve as the Custodian and, if appropriate, the
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securities lending agent;
f. Provide input to the Board on the finalist firms to serve as InvestmentManagers;
g. Manage day-to-day investment operations;
i. Take action on time-sensitive, routine requests or administrativeitems related to SJCERA’s investment program;
ii. Manage liquidity needs and rebalance the Trust Fund;
iii. Implement manager transitions;
iv. Manage major changes in Asset Allocation;
v. Address and resolve violations of investment manager guidelines;
vi. Work with investment counsel to Iinclude enhanced language in sideletters related to limited partnership agreements;
vii. Negotiate, and monitor, manager fees and other outside vendor fees;
viii.vii. Monitor and evaluate work product of the General Investment Consultant and other advisors to the investment program;
ix.viii. Vote Fund/Manager level (not security level) proxies; and
x.ix. Amend LPAs or related documents for minor adjustments (e.g., closing dates or investment periods).
h. Report on its use of delegated authority monthly or at a frequency to bedetermined by the Board.
C. The Role of Investment Consultants
1. SJCERA will employ a General Consultant and specialty consultants, asneeded, who serve as fiduciaries for the Trust Fund and work for the Boardin a direct role as the independent experts. The consultants will also workfor SJCERA’s staff to provide Board requested reports e.g., risk-returnanalysis, investment manager performance and monitoring analysis andoverall support.
2. The General Consultant and as appropriate, the Specialty Consultant(s)will:a. Provide an Asset/Liability Study in conjunction with SJCERA’s actuary;b. Provide governance and policy development;c. Provide global resources and deep research capabilities to perform due
diligence on existing and potential investment managers, conductmanager searches, investigate investment strategies, research asset
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classes and examine additional topics related to SJCERA’s investment program;
d. Monitor and report investment returns, benchmark returns, managerpeer group rankings, portfolio risk(s), and active management risk;.
e. Provide the Board and Staff with reports and analysis of material eventsaffecting the portfolio asset allocation, risk profile, and externalmanagers;
f. Analyze and advise on the annual and tri-annual Asset Allocationupdates;
g. Monitor portfolio performance attribution for the total Trust Fund andasset classes;
h. Perform external manager tracking, manager peer group ranking andbenchmark comparisons, performance reporting, and evaluation;
i. Advise the Board with respect to the investment program in general;.i.j. Negotiate, and monitor, manager fees and other outside vendor fees; j.k. Assist staff as requested.
III.IV. Policy Review
Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
IV.V. History08/03/2017 Adopted 07/05/2018 Reviewed, no changes required; Staff updated format 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Added Purpose section, removed outdated policy numbers, and
clarified roles.
Certification of Board Adoption
Clerk of the Board Date
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I. Purpose
A. To outline the legal authority and fiduciary responsibilities of the Board of Retirement in administering SJCERA.
B. To assign specific roles to Staff and the Investment Consultant(s), thereby explicitly stating which responsibilities the Board has discharged.
II. Legal Authority and Fiduciary Responsibilities
A. Introduction
1. The Board of Retirement (Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) has plenary authority and the fiduciary responsibility for investment of moneys and administration of SJCERA. The assets of a public pension or retirement system are held in trust, and the Board has exclusive control of the investment of SJCERA’s Trust Fund (Fund) assets. (California Constitution Article XVI, Section 17.)
B. Legal Authority
1. Under the California State Constitution and the County Employees Retirement Law of 1937 (CERL), the Board is authorized to invest in any form or type of investment deemed prudent by the Board pursuant to the requirements of CERL Section 31595, which provides in part:
a. Except as otherwise expressly restricted by the California Constitution and by law, the Board may, in its discretion, invest, or delegate the authority to invest, the assets of the Fund through the purchase, holding, or sale of any form or type of investment, financial instrument, or financial transaction when prudent in the informed opinion of the Board.
C. Fiduciary Responsibility
1. The Board and its officers and employees shall discharge their duties:
a. Solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system;
b. With the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudent person acting in a like capacity and
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familiar with these matters would use in the conduct of an enterprise of a like character and with like aims;
c. By diversifying the investments of the system so as to minimize the risk
of loss and to maximize the rate of return, unless under the circumstances it is clearly prudent not to do so; and
d. Recognizing that its duty to its participants and their beneficiaries takes
precedence over any other duty.
2. In discharging its fiduciary duties, the Board will exercise prudent judgment and to make these judgments will seek expert advice and guidance from the internal staff and external investment consultants. The Board’s judgment will reflect the prevailing facts and circumstances. The Board recognizes the importance of maintaining a long-term perspective when setting policy and asset allocation.
3. SJCERA’s investment policies collectively will serve as SJCERA’s Investment Policy Statement (IPS) and govern all asset classes and establish the guidelines, policies and procedures for the management of SJCERA’s diversified investment portfolio. The IPS is subject to applicable provisions of law and the applicable limitations and requirements of SJCERA’s governance policies. The Board may amend, supplement or rescind its policies at any time at its discretion.
III. Governance: Roles and Responsibilities
A. The Board is responsible for formulating, adopting, and supervising the investment policies of SJCERA’s investment program, including, but not limited to, the following decisions.
1. Board Investment-Related Responsibilities
a. The Board is responsible for setting SJCERA’s investment philosophy, objectives, and risk tolerances, and for adopting the Trust Fund’s asset allocation that forms the basis of the implementation of the investment program. This includes:
a)
i. Decisions on which asset classes and benchmarks will be used in the investment programs;
b)
ii. The allocation to each asset class;
c)
iii. Risk tolerances for the total Trust Fund and individual asset classes;
d)
iv. The operational policies that will implement the asset allocation; and
SJCERA BOARD POLICY / Investment Roles and Responsibilities / Page 3 of 5
e)
v. The monitoring and reporting of the risk management and performance measurement of the investment program.
2. The Board is responsible for approving the specific policies required implement the investment program.
3. The Board is responsible for the approval of the general and any specialty investment consultants to the investment program.
4. The Custodian maintains custody of SJCERA’s assets and accounts for and reports on all of SJCERA’s assets. Given the importance of this role, the Board is responsible for the selection of the Custodian. SJCERA’s finance staff will provide supporting analysis and input to the Board in making this decision.
5. SJCERA’s external investment counsel reviews, edits and negotiates the legal documents and agreements related to investment contracts. County Counsel screens and approves external investment counsel, in consultation with staff and the Board as appropriate.
B. Investment Program Duties Delegated to Staff
1. Under the legal authority granted, the Board establishes the core operating principals of responsibility, accountability and transparency. Actions related to delegated authority should not result in any substantive change in the terms applicable to SJCERA’s investments and agreements.
2. The Board grants to SJCERA’s Investment Officer (IO) and staff as assisted by the appropriate advisors (e.g., investment and specialty consultants, actuary, legal counsel) the following authority and responsibilities: a. Recommend a plan to implement the Board-approved asset allocation
and related investment policies. b. Rebalance assets to maintain the Board-approved asset allocation
and risk limits.
c. Recommend firms to serve as the general investment and specialty consultants, investment counsel and other advisors to assist in the implementation of the investment program.
d. Oversee and monitor the investment consultants’ and other advisors’ compliance with their contract, management of their workload and quality of Board requested activities.
e. Recommend firms to serve as the Custodian and, if appropriate, the securities lending agent;
f. Provide input to the Board on the finalist firms to serve as Investment Managers;
g. Manage day-to-day investment operations;
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i. Take action on time-sensitive, routine requests or administrative
items related to SJCERA’s investment program;
ii. Manage liquidity needs and rebalance the Trust Fund;
iii. Implement manager transitions;
iv. Manage major changes in Asset Allocation;
v. Address and resolve violations of investment manager guidelines;
vi. Work with investment counsel to include enhanced language in side letters related to limited partnership agreements;
vii. Monitor and evaluate work product of the General Investment Consultant and other advisors to the investment program;
viii. Vote Fund/Manager level (not security level) proxies; and
ix. Amend LPAs or related documents for minor adjustments (e.g., closing dates or investment periods).
h. Report on its use of delegated authority monthly or at a frequency to be
determined by the Board.
C. The Role of Investment Consultants
1. SJCERA will employ a General Consultant and specialty consultants, as needed, who serve as fiduciaries for the Trust Fund and work for the Board in a direct role as the independent experts. The consultants will also work for SJCERA’s staff to provide Board requested reports e.g., risk-return analysis, investment manager performance and monitoring analysis and overall support.
2. The General Consultant and as appropriate, the Specialty Consultant(s) will: a. Provide an Asset/Liability Study in conjunction with SJCERA’s actuary; b. Provide governance and policy development; c. Provide global resources and deep research capabilities to perform due
diligence on existing and potential investment managers, conduct manager searches, investigate investment strategies, research asset classes and examine additional topics related to SJCERA’s investment program;
d. Monitor and report investment returns, benchmark returns, manager peer group rankings, portfolio risk(s), and active management risk;
e. Provide the Board and Staff with reports and analysis of material events affecting the portfolio asset allocation, risk profile, and external
SJCERA BOARD POLICY / Investment Roles and Responsibilities / Page 5 of 5
managers; f. Analyze and advise on the annual and tri-annual Asset Allocation
updates;g. Monitor portfolio performance attribution for the total Trust Fund and
asset classes;h. Perform external manager tracking, manager peer group ranking and
benchmark comparisons, performance reporting, and evaluation;i. Advise the Board with respect to the investment program in general;j. Negotiate, and monitor, manager fees and other outside vendor fees;k. Assist staff as requested.
IV. Policy Review
Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
V. History 08/03/2017 Adopted 07/05/2018 Reviewed, no changes required; Staff updated format 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Added Purpose section, removed outdated policy numbers, and
clarified roles.
Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 1 of 10
I. Purpose
A. To describe the circumstances under which the San Joaquin County Employees’
Retirement Association (SJCERA) shall require the disclosure of payments to Placement Agents in connection with SJCERA investments in or through External Managers.
B. To help ensure that SJCERA’s investment decisions are made solely on the merits of the investment opportunity, are reasonable and prudent from a fiduciary perspective, and are consistent with SJCERA’s investment policy objectives.
II. Definitions
A. The terms “External Manager,” “Gifts” and “Placement Agent” shall have the
meanings given in Government Code sections 7513.8 and 82028. Unless otherwise defined within this policy, all other defined terms in this policy shall have the meanings given in Government Code sections 7513.8 and 82028.
B. “Consultant” means a person or firm, including key personnel of such firm(s), who are contractually retained by SJCERA to provide advice to SJCERA on investments, External Manager selection and monitoring, and other services.
III. Application
This Policy shall apply to all types of investment partners with whom SJCERA conducts business including, but not limited to, current investment managers and all investment managers being considered by SJCERA for an investment management engagement.
IV. Responsibilities
A. Each External Manager is responsible for:
1. Providing the following information (collectively, the “Placement Agent Disclosure Form”) to Staff promptly upon request.
a. A statement whether the External Manager, or any of its principals, employees, agents or affiliates has compensated or agreed to compensate, directly or indirectly, any person (whether or not employed by the External Manager) or entity to act as a Placement Agent in connection with any investment by SJCERA.
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b. A resume for each officer, partner or principal of the Placement Agent (and any employee providing similar services) detailing the person’s education, professional designations, regulatory licenses, and investment and work experience. If any such person is a current or former SJCERA Board member, employee or Consultant, or a member of the immediate family of any such person, this fact shall be specifically noted.
c. A description of any and all compensation of any kind provided or agreed to be provided to a Placement Agent, including the general structure and timing of such compensation.
d. A description of the services to be performed by the Placement Agent.
e. A copy of any and all agreements between the External
Manager and any third-party (non-employee) Placement Agent(s).
f. A statement as to whether the Placement Agent is utilized by
the External Manager with all clients or prospective clients or with only a subset of clients or prospective clients.
g. Whether any current or former SJCERA Board Member,
employee or Consultant suggested retention of the Placement Agent.
h. A statement whether the Placement Agent or any of its
affiliates are registered as a lobbyist with any state or national government, or with the Securities and Exchange Commission or the Financial Industry Regulatory Association or any similar regulatory agent in a country other than the United States and the details of such registration or explanation of why no registration is required.
i. Representing to SJCERA that the External Manager is solely
responsible for any fees, compensation or expenses for any Placement Agent and that SJCERA will not pay any such items.
j. A statement that the External Manager agrees and
understands that, for two years after leaving their position, former board members or administrators shall not receive compensation for appearing before or communicating with a
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SJCERA Board member or staff for the purpose of influencing the Board to take certain action regarding investments.
k. Representing to SJCERA that the External Manager
understands and agrees that all of the information provided to SJCERA pursuant to this Policy is public information and subject to disclosure under the Public Records Act.
2. Providing an update of any changes to any of the information
included in the Placement Agent Disclosure Form within 30 days of the occurrence of the change in information.
3. Causing its engaged Placement Agent, prior to acting as a Placement Agent with regard to SJCERA, to disclose to Staff any campaign contribution, gift or other item of value made or given to any member of the SJCERA Board or Staff or Consultant during the prior twenty-four month period.
4. Causing its engaged Placement Agent, during the time it is
receiving compensation in connection with a SJCERA investment, to disclose to Staff any campaign contribution, gift or other item of value made or given to any member of the SJCERA Board or Staff or Consultant, during such period.
B. Staff is responsible for all of the following:
1. Assure that an agreement to comply with this Policy is incorporated
in all current and future investment manager agreements.
2. Assure that all existing External Managers complete and submit the Placement Agent Information Disclosure to SJCERA in a timely manner.
3. Assure that an External Manager candidate completes and submits
the disclosure information to SJCERA before consideration by the Board for an investment management engagement.
4. Provide the Board with the disclosure information before any
investment decision by the SJCERA Board with respect to that manager.
5. Promptly advise the Board of any material violation of this Policy.
C. Sanctions in the event of a material omission or inaccuracy in the Disclosure
can include, but are not limited to:
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1. For failure to disclose a relationship with a third party Placement Agent the reimbursement to SJCERA of an amount equal to the amounts paid or promised to be paid to that Placement Agent in connection with any investment by SJCERA.
2. Immediate termination of the investment management engagement without penalty, or withdrawal without penalty from the limited partnership, limited liability company, or other investment vehicle, or suspension of any further capital contributions (and any fees on these re-called commitments) to limited partnership, limited liability company, or other investment vehicle.
3. A prohibition on the External Manager or Placement Agent from
soliciting new investment from SJCERA for five (5) years. This prohibition may be reduced by a majority vote of the Board upon a showing of good cause.
4. The SJCERA Board shall determine which, if any, sanctions will
apply in a given case based on the nature of the violation and any other relevant legal parameters.
D. All parties responsible for implementing, monitoring, and complying with this
Policy should consider the spirit as well as the literal expression of the Policy. In cases where there is uncertainty whether a disclosure should be made, the Policy should be interpreted to require such disclosure.
I. Purpose
A. SJCERA’s Board Members, employees and consultants are subject to numerous legal requirements related to ethical conduct, compliance with their fiduciary responsibilities, and to prevent conflicts of interest. The purpose of this Policy regarding the disclosure of Placement Agent fees and relationships is to enhance the transparency of the investment decision-making process by requiring broad, timely and updated disclosure of the existence of any relationships between SJCERA’s investment managers and individuals or entities serving as a compensated representative of the investment manager for the purpose of securing an investment with SJCERA.
B. This Policy sets forth the circumstances under which SJCERA shall require the disclosure of payments to Placement Agents in connection with SJCERA’s investments in or through External Managers.
C. This Policy is intended to apply broadly to all of the types of investment partners with whom SJCERA does business, including the general partners, managers, investment managers and sponsors of hedge funds, private equity funds, real estate funds and infrastructure funds, retained pursuant to a contract.
D. The goal of the Placement Agent Disclosure Policy is to ensure that SJCERA’s investment decisions are made solely on the merits of the investment opportunity,
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from a reasonable and prudent fiduciary perspective, and consistent with SJCERA’s Investment Policy and Objectives.
II. Legal Requirements
A. State law prohibits a member or employee of a public retirement board from having any personal interest in the making of an investment for the board, or in the gains or profits that accrue from those investments. Government Code section 7513.85, added by Chapter 301, Statutes of 2009 (AB 1584, Hernandez), requires public pensions or state retirement systems to develop and implement a placement agent disclosure policy, as defined, in connection with the system investments in or through External Managers. Government Code section 7513.87, added by Chapter 668, Statutes of 2010 (AB 1743), modified the definition of Placement Agent so that internal staff of External Managers are now included within the definition, except for those employees of an External Manager who spends one-third or more of their time, during a calendar year, managing the securities or assets owned, controlled, invested, or held by the External Manager. Chapter 704, Statutes of 2010 (SB 398, Hernandez) clarified Government Code section 7513.87 to exclude from definition of “Placement Agent” an External Manager who is a registered investment advisor or broker-dealer either participating in, or providing services to SJCERA pursuant to a contract awarded through, a competitive bidding process and who has agreed to a fiduciary standard of care.
III. Strategic Objectives
A. Ensure that SJCERA investment decisions are consistent with the total fund’s policy.
B. Increase the pool of information available to SJCERA Board Members, staff and consultants when evaluating an investment opportunity.
C. Enhance transparency and confidence in SJCERA’s investment decision-making.
IV. Application A. Notwithstanding the statutory exclusions from the definition of Placement Agent,
this Placement Agent Information Disclosure Policy shall apply to all External Managers being considered by SJCERA for an investment management engagement, and to existing agreements with External Managers if, after the date this Policy is adopted, the term of the agreement is extended, there is any increased commitment of funds by SJCERA pursuant to the existing agreement or there is an amendment to the substantive terms of an existing agreement, including the fees or compensation payable to the External Manager.
V. Definitions
A. External Manager: A foreign or domestic individual, corporation, partnership,
limited partnership, limited liability company or association that is either: 1. Seeking to be, or is, retained by SJCERA to manage a portfolio of securities
or other assets for compensation; or
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2. Engaged, or proposed to be engaged, in the business of investing, reinvesting, owning, holding, or trading securities or other assets and who offers or sells, or has offered or sold, securities to SJCERA.
B. Placement Agent: A foreign or domestic individual, corporation, partnership,
limited partnership, limited liability company or association hired, engaged, or retained by, or serving for the benefit of or on behalf of, an External Manager, as defined, or on behalf of another Placement Agent, who acts or has acted for compensation as a finder, solicitor, marketer, consultant, broker, or other intermediary in connection with the offer or sale of the securities, assets, or services of an External Manager to SJCERA or an investment vehicle, as defined, either directly or indirectly. This definition does not apply to:
1. An employee, officer, director, equity holder, partner, member, or trustee of an External Manager who spends one-third or more of his or her time, during a calendar year, managing the securities or assets owned, controlled, invested, or held by the External Manager,
2. An employee, officer, or director of an External Manager or of an affiliate of an External Manager, if all of the following apply:
a. The External Manager is registered as an investment adviser or a broker-dealer with the Securities and Exchange Commission or, if exempt from or not subject to registration with the Securities and Exchange Commission, any appropriate state securities regulator.
b. The External Manager is participating in a competitive bidding process, such as a request for proposals, or has been selected through that process and is providing services pursuant to a contract executed as a result of that competitive bidding process.
c. The External Manager, if selected through competitive bidding process described above in section (b), has agreed to a fiduciary standard of care, as defined by the standards of conduct applicable to SJCERA.
3. Investment Vehicle: A foreign or domestic corporation, partnership, limited
partnership, limited liability company, association, or other entity constituting or managed by an External Manager in which SJCERA is the majority investor and that is organized in order to invest with, or retain the investment management services of, other External Managers.
4. Consultant: Person(s) or firm(s), including key personnel of such firm(s), who are
contractually retained by SJCERA to provide advice to SJCERA on investments, External Manager selection and monitoring, and other services, but who do not exercise investment discretion.
VI. Responsibilities
A. Each External Manager is responsible for:
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1. Providing the following information (Placement Agent Information Disclosure) to SJCERA Staff at the time investment discussions are initiated by the External Manager:
a. A statement whether the External Manager or any of its principals,
employees, agents or affiliates has compensated or agreed to compensate, directly or indirectly, any person or entity to act as a Placement Agent in connection with any investment by SJCERA.
b. A resume for each officer, partner or principal of any entity acting as
a Placement Agent detailing the person’s education, professional designations, regulatory licenses and investment and work experience. It should be specifically noted if any such individual is a current or former SJCERA Board Member, employee or consultant, or a member of the immediate family of any such person.
c. A description of any and all compensation of any kind provided or
agreed to be provided to a Placement Agent, including the nature, timing and value thereof. Compensation to Placement Agents shall include compensation to third parties who are retained in order to solicit an investment from SJCERA based substantially on SJCERA’s decision to invest with the External Manager.
d. A description of the services to be performed by the Placement
Agent.
e. A copy of any and all agreements between the External Manager and the Placement Agent.
f. The names of any current or former SJCERA Board Member,
employee or consultant who suggested the retention of the Placement Agent.
g. A statement whether the Placement Agent or any of its affiliates are
registered with the Securities and Exchange Commission or the Financial Industry Regulatory Association or any similar regulatory agent in a country other than the United States and the detail of such registration or explanation of why no registration is required.
h. A statement as to whether the entity acting as a Placement Agent is
utilized by the Investment Manager or Manager Candidate with all clients or prospective clients or with only a subset of clients or prospective clients.
i. A statement whether the Placement Agent, or any of its affiliates, is
registered as a lobbyist with any state or national government.
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2. Representing and warranting the accuracy of the information included in the Placement Agent Information Disclosure in any final written agreement with a continuing obligation to update any such information within five business days of any change in the information.
3. Causing its engaged Placement Agent, prior to acting as a Placement Agent
with regard to SJCERA, to disclose to Staff any campaign contribution, gift or other item of value made or given to any member of the SJCERA board or staff, or consultant, during the prior twenty-four month period.
4. Causing its engaged Placement Agent, during the time it is receiving
compensation in connection with an SJCERA investment, to disclose to Staff any campaign contribution, gift or other item of value made or given to any member of the SJCERA board or staff, or consultant, during such period.
5. Fully cooperating with SJCERA Staff in monitoring and assuring compliance
with the Placement Agent Disclosure Policy. B. SJCERA’s Consultant and Investment Staff (“Staff”) are responsible for all of
the following:
1. Providing External Managers and Placement Agents with a copy of this Policy at the time that due diligence in connection with a prospective investment or engagement begins.
2. Confirming that the Placement Agent Disclosure has been received prior to
the completion of due diligence and any recommendation to proceed with the engagement of the External Manager or the decision to make any investment.
3. For new contracts and amendments to contracts existing as of the date of
this Policy, securing the agreement of the External Manager in the final written agreement between SJCERA and the External Manager to provide SJCERA the following remedies in the event that there was or is a material omission or inaccuracy in the Placement Agent Information Disclosure or any other violation of the Policy:
a. Whichever is greater, the reimbursement of any management or
advisory fees for two years or an amount equal to the amounts paid or promised to be paid to the Placement Agent; and
b. The authority to terminate immediately the investment management contract or other agreement with the External Manager without penalty, to withdraw without penalty from the limited partnership, limited liability company or other investment vehicle, or to cease making further capital contributions (and paying any fees on these recalled commitments) to
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 9 of 10
the limited partnership, limited liability company or other investment vehicle.
4. For new contracts and amendments to contracts existing as of the date of
the Policy, confirming that the final written agreement between SJCERA and the External Manager provides that the External Manager shall be solely responsible for, and SJCERA shall not pay (directly or indirectly), any fees, compensation or expenses for any Placement Agent used by the External Manager.
5. Prohibiting any External Manager or Placement Agent from soliciting new
investments from SJCERA for five years after they have committed a material violation of the Policy; provided, however, that SJCERA’s Board, by majority vote at a noticed, public meeting, may reduce this prohibition upon a showing of good cause.
6. Providing copies of the Disclosure of Placement Agent and Placement
Agent Information Disclosure referred to in Section VI-A to the Board, the Chief Executive Officer and the Chief Investment Officer.
7. Providing a report to the Board containing (a) the names and amount of
compensation agreed to be provided to each Placement Agent by each External Manager as reported in the Placement Agent Information Disclosures, and (b) any material violations of this Policy; and maintaining the report as a public record.
C. All parties responsible for implementing, monitoring and complying with the
Placement Agent Disclosure Policy should consider the spirit as well as the literal expression of the Policy. In cases where there is uncertainty whether a disclosure should be made pursuant to the Placement Agent Disclosure Policy, the Policy should be interpreted to require disclosure.
VII.V. Policy Review
Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VIII.VI. History
05/21/2010 Adopted 01/28/2011 Revised 01/27/2012 Revised 07/05/2018 Staff reviewed, no changes required; updated format
04/12/2019 Policy Review section amended to at least once every three years
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 10 of 10
07/10/2020 Rewritten
Certification of Board Adoption Clerk of the Board Date
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 1 of 4
I. Purpose
A. To describe the circumstances under which the San Joaquin County Employees’
Retirement Association (SJCERA) shall require the disclosure of payments to Placement Agents in connection with SJCERA investments in or through External Managers.
B. To help ensure that SJCERA’s investment decisions are made solely on the merits of the investment opportunity, are reasonable and prudent from a fiduciary perspective, and are consistent with SJCERA’s investment policy objectives.
II. Definitions
A. The terms “External Manager,” “Gifts” and “Placement Agent” shall have the
meanings given in Government Code sections 7513.8 and 82028. Unless otherwise defined within this policy, all other defined terms in this policy shall have the meanings given in Government Code sections 7513.8 and 82028.
B. “Consultant” means a person or firm, including key personnel of such firm(s), who are contractually retained by SJCERA to provide advice to SJCERA on investments, External Manager selection and monitoring, and other services.
III. Application
This Policy shall apply to all types of investment partners with whom SJCERA conducts business including, but not limited to, current investment managers and all investment managers being considered by SJCERA for an investment management engagement.
IV. Responsibilities
A. Each External Manager is responsible for:
1. Providing the following information (collectively, the “Placement Agent Disclosure Form”) to Staff promptly upon request.
a. A statement whether the External Manager, or any of its principals, employees, agents or affiliates has compensated or agreed to compensate, directly or indirectly, any person (whether or not employed by the External Manager) or entity to act as a Placement Agent in connection with any investment by SJCERA.
b. A resume for each officer, partner or principal of the Placement Agent (and any employee providing similar
BoardInvestmentPolicy
PlacementAgentInformationDisclosure
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 2 of 4
services) detailing the person’s education, professional designations, regulatory licenses, and investment and work experience. If any such person is a current or former SJCERA Board member, employee or Consultant, or a member of the immediate family of any such person, this fact shall be specifically noted.
c. A description of any and all compensation of any kind provided or agreed to be provided to a Placement Agent, including the general structure and timing of such compensation.
d. A description of the services to be performed by the Placement Agent.
e. A copy of any and all agreements between the External
Manager and any third-party (non-employee) Placement Agent(s).
f. A statement as to whether the Placement Agent is utilized by
the External Manager with all clients or prospective clients or with only a subset of clients or prospective clients.
g. Whether any current or former SJCERA Board Member,
employee or Consultant suggested retention of the Placement Agent.
h. A statement whether the Placement Agent or any of its
affiliates are registered as a lobbyist with any state or national government, or with the Securities and Exchange Commission or the Financial Industry Regulatory Association or any similar regulatory agent in a country other than the United States and the details of such registration or explanation of why no registration is required.
i. Representing to SJCERA that the External Manager is solely
responsible for any fees, compensation or expenses for any Placement Agent and that SJCERA will not pay any such items.
j. A statement that the External Manager agrees and
understands that, for two years after leaving their position, former board members or administrators shall not receive compensation for appearing before or communicating with a SJCERA Board member or staff for the purpose of influencing the Board to take certain action regarding investments.
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 3 of 4
k. Representing to SJCERA that the External Manager understands and agrees that all of the information provided to SJCERA pursuant to this Policy is public information and subject to disclosure under the Public Records Act.
2. Providing an update of any changes to any of the information
included in the Placement Agent Disclosure Form within 30 days of the occurrence of the change in information.
3. Causing its engaged Placement Agent, prior to acting as a Placement Agent with regard to SJCERA, to disclose to Staff any campaign contribution, gift or other item of value made or given to any member of the SJCERA Board or Staff or Consultant during the prior twenty-four month period.
4. Causing its engaged Placement Agent, during the time it is
receiving compensation in connection with a SJCERA investment, to disclose to Staff any campaign contribution, gift or other item of value made or given to any member of the SJCERA Board or Staff or Consultant, during such period.
B. Staff is responsible for all of the following:
1. Assure that an agreement to comply with this Policy is incorporated
in all current and future investment manager agreements.
2. Assure that all existing External Managers complete and submit the Placement Agent Information Disclosure to SJCERA in a timely manner.
3. Assure that an External Manager candidate completes and submits
the disclosure information to SJCERA before consideration by the Board for an investment management engagement.
4. Provide the Board with the disclosure information before any
investment decision by the SJCERA Board with respect to that manager.
5. Promptly advise the Board of any material violation of this Policy.
C. Sanctions in the event of a material omission or inaccuracy in the Disclosure
can include, but are not limited to:
1. For failure to disclose a relationship with a third party Placement Agent the reimbursement to SJCERA of an amount equal to the amounts paid or promised to be paid to that Placement Agent in connection with any investment by SJCERA.
SJCERA BOARD POLICY / Placement Agent Information Disclosure Policy / Page 4 of 4
2. Immediate termination of the investment management
engagement without penalty, or withdrawal without penalty from the limited partnership, limited liability company, or other investment vehicle, or suspension of any further capital contributions (and any fees on these re-called commitments) to limited partnership, limited liability company, or other investment vehicle.
3. A prohibition on the External Manager or Placement Agent from
soliciting new investment from SJCERA for five (5) years. This prohibition may be reduced by a majority vote of the Board upon a showing of good cause.
4. The SJCERA Board shall determine which, if any, sanctions will
apply in a given case based on the nature of the violation and any other relevant legal parameters.
D. All parties responsible for implementing, monitoring, and complying with this
Policy should consider the spirit as well as the literal expression of the Policy. In cases where there is uncertainty whether a disclosure should be made, the Policy should be interpreted to require such disclosure.
V. Policy Review Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. History
05/21/2010 Adopted 01/28/2011 Revised 01/27/2012 Revised 07/05/2018 Staff reviewed, no changes required; updated format
04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Rewritten
Certification of Board Adoption Clerk of the Board Date
SJCERA BOARD POLICY / Proxy Voting / Page 1 of 1
I. Purpose
A. The Board of Retirement of the San Joaquin County Employees' Retirement Association has the significant responsibility in participating in all equity fund proxy voting. Careful review and research is necessary to make voting decisions in the best interest of the Fund and timely filing of proxy votes in essential.
B. The Board of Retirement delegates the filing of all proxy votes to the Fund’s Investment Managers, with the following requirements:
1. Investment Managers will review and timely cast all proxy votes on behalfof the Retirement Board;
2. Investment Managers will be responsible to insure that their reasons forvoting on behalf of the Fund will primarily result in supporting or improvingthe shareholder’s interest.
3. When significant or unusual issues arise on proxy voting matters thatwould directly impact the shareholders’s interest, the Investment Managerswill timely contact the Chief Executive Officer (CEO)or Chief InvestmentOfficer (IO) regarding the issue and make a recommendation on the proxyvote.
4. Should the Chief Executive OfficerCEO or Chief Investment OfficerIOdisagree with the recommendation, the Chair of the Retirement Board willbe contacted and his or her decision shall be final.
II. Policy ReviewA. Staff shall review this Policy at least once every three years to ensure that it
remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with its bylaws.
III. History11/01/1991 Board adopted policy 09/24/2010 Updated format and title changes 07/05/2018 Reviewed, no changes required; Staff updated format 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Revised to update IO job title and other non-substantive changes.
Certification of Board Adoption
Clerk of the Board Date
BoardInvestmentPolicy
ProxyVotingPolicy
SJCERA BOARD POLICY / Proxy Voting / Page 1 of 1
I. Purpose
A. The Board of Retirement of the San Joaquin County Employees' Retirement Association has the significant responsibility in participating in all equity fund proxy voting. Careful review and research is necessary to make voting decisions in the best interest of the Fund and timely filing of proxy votes in essential.
B. The Board of Retirement delegates the filing of all proxy votes to the Fund’s Investment Managers, with the following requirements:
1. Investment Managers will review and timely cast all proxy votes on behalf of the Retirement Board;
2. Investment Managers will be responsible to insure that their reasons for voting on behalf of the Fund will primarily result in supporting or improving the shareholder’s interest.
3. When significant or unusual issues arise on proxy voting matters that would directly impact the shareholders’ interest, the Investment Managers will timely contact the Chief Executive Officer (CEO)or Investment Officer (IO) regarding the issue and make a recommendation on the proxy vote.
4. Should the CEO or IO disagree with the recommendation, the Chair of the Retirement Board will be contacted and his or her decision shall be final.
II. Policy Review A. Staff shall review this Policy at least once every three years to ensure that it
remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with its bylaws.
III. History 11/01/1991 Board adopted policy 09/24/2010 Updated format and title changes 07/05/2018 Reviewed, no changes required; Staff updated format 04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Revised to update IO job title and other non-substantive changes.
Certification of Board Adoption
Clerk of the Board Date
BoardInvestmentPolicy
ProxyVotingPolicy
SJCERA BOARD POLICY / Strategic Asset Allocation 1 of 713
I. PURPOSE
A. A. This PolicyTo outlines SJCERA’s the goals, and investment objectives for the San Joaquin County Employees’ Retirement Association (SJCERA), and provides general guidelines for managing the SJCERA’s investment program. s
A. of SJCERA, andTo defines certain specific provisions that will governing how the goals and objectives are to be achieved.
B.
C. This policy supersedes any prior Board adopted policies related to asset allocation. II. INVESTMENT BELIEFS
A. General 1. We believe that rRisk for SJCERA is the inability to meet benefit obligations
when due. 2. We believe that the paramount duty of the SJCERA Board is to Prudently
managinge the assets of the Plan in a prudent manneris the Board’s paramount duty.
3. We believe that SJCERA should monitor current and future benefit obligations to ensure long-term solvency of the Plan.
B. Investment Strategy 1. We believe that SJCERA should invest its assets and manage its liabilities so
as to increase the likelihood of paying all benefit obligations over time. 2. We believe that SJCERA should seek a long-term rate of return that exceeds
inflation, while recognizing and managing the need to maintain adequate liquidity to pay benefits.
3. We believe that SJCERA should invest globally, seeking investment opportunities in a variety of asset classes and management styles, in order to improve the likelihood of being able to meet benefit obligations over time.
4. We believe that SJCERA should make meaningful commitments that will improve performance and where possible, take advantage of lower fee schedules, while providing adequate diversification.
C. Pattern of Investment Returns
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StrategicAssetAllocationPolicy
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1. We believe tThe volatility of investment returns is as important as the level of returns in determining SJCERA’s ability to meet future benefit obligations.
2. We believe we SJCERA should be able to reduce the volatility of the SJCERA portfolio returns and the risk of large portfolio drawdowns through diversification, opportunistic allocations, and passive investing where appropriate.
3. Therefore we believe that aActions to manage volatility should be appropriately integrated into the investment decision-making process.
III. INVESTMENT OBJECTIVE
A. The funding obligations of SJCERA are long-term in nature; consequently, the investment of portfolio assets should have a long-term focus. The assets shall be invested in accordance with sound investment practices that emphasize long-term investment fundamentals. The investment objective for SJCERA assets is to achieve long-term investment returns that allow the plan to meet all earned benefit payments to plan participants. It is expected that this objective can be obtained through a well-diversified portfolio structure in a manner consistent with this Policy. Accordingly, the investment of these assets shall be guided by the following underlying principles:
1. To achieve a positive rate of return over the long-term that significantly contributes to meeting SJCERA’s objectives, including achieving the actuarial assumption for rate of return and satisfying expected benefit payment obligations;
2. To provide for asset growth at a rate in excess of the rate of inflation and of the liability growth rate of SJCERA;
3. To earn a sufficient rate of return while minimizing exposure to losses or wide swings in market value.
IV. STRATEGIC ASSET ALLOCATION POLICY
A. Strategic Asset Allocation — Asset/Liability
1. The Board regularly adopts and implements an asset allocation policy that is predicated on a number of factors, including:
a. A projection of actuarial assets, liabilities, benefit payments and required contributions;
b. Historical and expected long-term capital market risk and return behavior;
c. An assessment of future economic conditions, including inflation and interest rate levels; and
d. The current and projected funding status of the Plan.
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2. The asset allocation will be determined through appropriate studies undertaken
by the consultant(s) retained by the Board. The allocation study will include all asset classes deemed prudent and appropriate by the Board. The Board, with the aid of the investment consultant, will determine the assumptions and criteria to be used in the asset allocation study. The following assumptions and criteria will be so determined:
a. The expected return from each asset category.
b. The expected standard deviation of each asset category.
c. The minimum acceptable return over a given time period.
d. The net contribution as a percent of payroll.
e. The expected payroll growth rate.
3. The resulting asset allocation will be approved by the Board with input from SJCERA staff and the investment consultant. The asset allocation study will be performed on cycle with the actuarial experience study. Appropriate adjustments to the existing portfolio will then be made in the most expeditious and appropriate manner.
4. On a more frequent, periodic basis, SJCERA staff and the investment
consultant, will analyze the portfolio structure of each asset class. Analysis shall include:
a. Appropriateness of asset class and manager benchmarks,
b. Alignment structure of individual portfolios with asset class benchmarks based on manager holdings and mandate,
c. Evaluation of whether the asset class is structured in a manner that is
consistent with the Board’s objectives,
d. Analysis of underperforming managers, and
e. Overall risk profile of the asset class.
5. Pursuant to the diversification of the investments of SJCERA assets so as to minimize the risk of large losses, the assets of SJCERA shall be diversified according to the specified long-term target percentages:
STRATEGIC ASSET ALLOCATION (Approved October 2015September 2019)
Asset Class Long-Term Target
Min Max
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Beginning January 1, 2016, aAllocations to public real estate securities pursuant to the Real Estate Investment Policy are part of the Global Public Equity allocation; and allocations to private equity real estate pursuant to the Policy are part of the Private Appreciation allocation. The target allocation to real estate investments is 10% of the total portfolio: . As of Revision 8 to this policy, 3% of the total portfolio is allocated to public real estate securities, and 7% of the total portfolio is allocated to private equity real estate investments. The allocation across public and private real estate investments is determined by the Board pursuant to the Policy. If the Board changes the target allocation for real estate investments is changed, a revised strategic asset allocation and conforming revisions to this policy will must be approved by the Board.
6. The allocation goal recognizes that at any time equity and fixed income Investment Managers may have transactional cash on hand.
7. Financial derivatives may be used within prudent limits to manage risk, lower
transaction costs, or augment returns. V. ALLOCATIONS AND PORTFOLIO REBALANCING GUIDELINES
A. The Board adopts an asset allocation that maintains a broadly diversified portfolio appropriate for a retirement plan. The Board will make a minimum commitment of one percent or $25 million, whichever is greater, for the smaller asset classes such as private real estate and private appreciation. For Risk Parity and CRO, the minimum commitment will be two percent or $50 million, whichever is greater.
1. General Guidelines a. The Board delegates the authority to rebalance the asset allocation to the
Chief Investment Officer. b. Staff and consultant will develop a plan and outline the timeframe for
accomplishing the proposed rebalancing. c. Staff and consultant will coordinate with the appropriate internal and
external parties to implement the rebalancing. d. Staff will report the rebalancing activity to the Board.
2. Rebalancing/Transitioning to New Asset Allocation Targets a. The target allocation to each asset class and to investment styles within
asset classes is expected to remain stable over most market cycles. When new asset allocation targets are adopted, the Board’s goal is to transition
SJCERA BOARD POLICY / Strategic Asset Allocation 5 of 713
the physical assets and to reach the target optimal portfolio in a timely manner.
b. With respect to the target strategic allocations to each asset class, to the sub-asset classes and to investment managers, the Board, in consultation with its investment consultant, will establish rebalancing range limitations. The ranges for each asset/sub-asset class are established as twenty percent (20%) of the target.
c. Due to the illiquid and time-lagging nature of private investments, and the patience needed to select high-quality managers; it will take time to achieve the target(s) for the Private Appreciation and Credit asset classes. If the Private Appreciation and/or Credit classes are above or below their targets, the remaining public markets asset classes will also be above or below target to balance the portfolio.
3. Ongoing Monitoring and Rebalancing the Asset Allocation Targets
In addition, after strategic allocation targets are met, aAsset values change over time due to market activity. The actual asset mix of the SJCERA portfolio may diverge from the target allocations established by the Board and marginal rebalancing is necessary. If Allowing Plan assets are allowed to deviate too far from the target allocations, there is a risks that the portfolio will failing to meet the investment objectives set by the Board. On the other hand, Conversely, continually rebalancing of to the asset allocation targets may result in significant transaction costs.
a. SJCERA staff and the investment consultant will monitor the portfolio’s asset allocation relative to the strategic target allocations. If the actual allocations fall within the defined ranges, no rebalancing will be required.
b. If actual allocations to an asset class, or to a sub-asset class or investment manager, fall outside the predetermined range, SJCERA staff and the investment consultant will review, discuss and develop recommendations for rebalancing back to the mid-point between the end of the range that was exceeded and the target allocation.
c. In making its recommendations for any required rebalancing, the investment consultant and staff should prioritize implementation procedures as follows: i. Investing net contributions into asset classes that are below their
range limitations; ii. Drawing cash out of the portfolio (for benefit payments and expenses)
from asset classes that are above their range limitations (using interest payments, rental revenues and dividends); and
iii. Selling assets from asset classes/portfolios that exceed the target range(s), and buying assets in asset classes/portfolios that are below the target range(s).
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d. Within the total SJCERA portfolio, the Cash Overlay Program as defined in the Cash and Overlay Policy may be implemented: SJCERA employs a cash overlay program, which seeks to provide the disciplined maintenance of target asset allocations. The program has four potential elements: 1) invest unallocated cash, 2) invest managers’ cash, 3) manage transitions and 4) maintain target allocation. The Fund’s actual allocations are compared to its targets on a daily basis. If actual allocations differ from targets by more than a predetermined tolerance level, the fund is synthetically rebalanced using futures contracts. The Board determines which elements of the cash overlay program are to be employed, and staff is responsible for managing the program.
VI. TOTAL FUND PERFORMANCE OBJECTIVE AND MEASUREMENT PERIOD
A. The total fund performance objective is to achieve a total return net of fees and expenses that equals or exceeds the policy benchmark over a full market cycle as defined by the Board. The return of a hypothetical portfolio represented by a policy benchmark consisting of public market indices weighted according to asset allocation targets. The long-term strategic policy benchmark consists of the following passive public market indices and weights listed below:
PORTFOLIO POLICY BENCHMARK
ASSET CLASS LONG TERM TARGET
BENCHMARK
Global Public Equities 3032% MSCI ACWI IMI Index ND (net dividend) Stable Fixed Income 10% BC Aggregate Index Credit 1417% 50% BC High Yield, 50% S&P/LTSA Lev. Loans Risk Parity 1410% 90-Day T-bills + 4% Private Appreciation 1216% MSCI ACWI Index ND + 2%
Crisis Risk Offset (CRO) 2015% 3 Part Custom (33% BTOP 50, 33% BC long Duration Treasuries, 33% at 5% annual)
1. The Policy Benchmark will be created and used to measure the performance
results of the total portfolio. The combined performance of all investment portfolios assigned to an asset class will be measured against the policy benchmark for that asset class. Each portfolio within a strategic asset class will be measured against an appropriate benchmark for that investment/strategy.
2. Performance results for SJCERA investment assets and for each Investment Manager shall be calculated and evaluated quarterly and presented to the Board for review. This Total Portfolio Benchmark will be included in evaluation reports presented to the Board for review.
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VII. ASSET CLASS-SPECIFIC GUIDELINES
A. Cash and Overlay Policy and Guidelines
1. Cash investments (STIF) Manager
a. The Cash Manager will invest the cash balances of all accounts with a cash component held at the custody bank product selected by SJCERA.
2. Cash Overlay Manager
a. The cash overlay program manager may:
i. Overlay Unallocated Cash: Monitor SJCERA’s overall positions daily
and synthetically invest unallocated cash using financial futures contracts.
ii. Overlay Manager Cash: Monitor SJCERA’s managers’ cash positions daily and synthetically invest un-invested portions using financial futures contracts.
iii. Manager Transitions: Assist with manager transitions as directed by SJCERA. As transition events arise, each transition issue will be reviewed individually with the objectives of maintaining a seamless transition to target market exposure and minimizing transition costs.
iv. Maintain Target Allocation: Calculate SJCERA’s actual allocation and compare to target allocations. If actual allocations differ from targets by more than SJCERA’s predetermined tolerance level, the SJCERA fund is synthetically rebalanced to target on an overlay basis using financial futures contracts.
Performance Measurement Standard
Cash (STIF) - The performance of cash assets is expected to maintain a 40th percentile ranking versus a database of STIF and cash accounts and to outperform a 91-day U.S. Treasury Bill Index. The Cash Overlay Manager is primarily expected to securitize unallocated cash. It is anticipated that the cash overlay manager may add incremental value to the total portfolio of approximately 0.05% to 0.15% annually in an environment where returns on equity and fixed income investments exceed returns on cash. The short-term benchmark is the 91-day U.S. Treasury Bill Index. The complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
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B. Credit Policy and Guidelines The general strategies used to create a diversified portfolio for the Credit Investment Program may include: 1. Investments in Credit may be in the form of separate accounts, commingled
funds or fund-of-funds vehicles 2. Portfolio weightings between liquid and illiquid credit investments shall be a
function of the specific risk and return profile of an investment opportunity and the Program’s overall needs and the target to Credit as approved by the Board.
Performance Measurement Standard
1. Credit investments are expected to achieve attractive risk-adjusted returns and, by definition, possess a higher degree of risk with higher total return potential and expectations than stable fixed income investments.
2. The long-term (3-5 years) expected performance objective of the Program
shall be the return of a blended policy benchmark consisting of 50% BC U.S. High Yield and 50% S&P/LTSA leveraged loan index. Performance for this asset class is reported one quarter in arrears.
3. Each Credit investment manager has a benchmark and performance
objective as outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy.
C. Crisis Risk Offset
Policy and Guidelines There are three equally weighted components of the CRO class:
1. Long Duration
a) Portfolios of long-dated (maturities in excess of 10 years) high-quality bonds (Treasuries and Government-backed high-quality agencies).
b) Portfolios of cash-collateralized derivatives that mirror the performance of
long-dated high-quality bonds.
2. Systematic Trend Following
a) Long-short portfolios using both cash and derivatives-based instruments to capture both periodic appreciation and periodic depreciation trends that evolve and dissipate across a very wide array of liquid global markets.
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Risk/volatility is calibrated to a pre-determined level using cash and derivatives-based leverage.
3. Alternative Risk Premia
a) Long-short portfolios using both cash and derivatives-based instruments to capture well-researched/documented non-market risk premia (e.g., momentum, carry, value, low-volatility, etc.) on a continuous basis, using an array of liquid global markets. Risk/volatility is calibrated to a pre-determined level using cash and derivatives-based leverage.
Performance Measurement Standard
1. Given the long-term nature of CRO strategies, the overall asset class will be
measured against a custom benchmark that is 33% Barclays Capital Long Duration Treasuries, 33% Barclays Top 50 managed futures index (BTop50), and 33% at a 5% annual return.
2. Long Duration strategies will collectively be benchmarked to the BC Long
Duration Treasuries index. Systematic Trend Following strategies will collectively be benchmarked to the BTop50 Index. Alternative Risk Premia strategies will collectively be benchmarked to a 5% annual return.
3. Individual managers/strategies may also have other benchmarks.
4. It is expected that over a full market cycle the managers and the asset class will
outperform the benchmarks.
D. Global Public Equity
Policy and Guidelines The following outlines the general strategies utilized in the Global Public Equity
investment program: 1. A mix of professional external equity investment managers approved by
the Board will implement the program. 2. In markets that are generally considered efficient; passive, structured or
enhanced index strategies may be used to promote a diversified portfolio, while controlling risk and minimizing costs.
3. Active or specialty managers are used to invest in markets that are less efficient and should actively seek to add value while managing risk.
4. Global Public Equity includes investments made pursuant to a U.S., non-U.S. or global public equity mandate as defined by SJCERA.
5. Global Public Equity includes investments in U.S. and non-U.S. public real estate securities as defined in the Real Estate Investment Policy.
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Performance Measurement Standard Each Global Public Equity investment manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy and the complete evaluation measurement period will coincide with market cycles defined by the performance of the index. E. Private Appreciation
Policy and Guidelines
The general strategies used to create a diversified portfolio for the Private Appreciation investment program may include:
1. Venture capital, leverage buy-outs, mezzanine, distressed and secondary’s.
2. Private equity real estate investments as defined in the Real Estate Investment Policy.
3. Investments in Private Equity may be in the form of separate accounts,
commingled funds or fund-of-funds vehicles.
4. Portfolio weightings between private equity and private equity real estate investments shall be a function of the specific risk and return profile of an investment opportunity and the Program’s overall needs and the target to private equity real estate as approved by the Board.
Performance Measurement Standard
1. Private appreciation investments are expected to achieve attractive risk-adjusted returns and, by definition, possess a higher degree of risk with a higher return potential than traditional investments. Accordingly, total rates of return from private appreciation investments are expected to be greater than those that might be obtained from conventional public equity or debt investments.
2. The long-term (5-10 years) expected performance objective of the Program shall be the return of the MSCI ACWI Index plus a 200 basis point risk premium. Use of the MSCI ACWI Index reflects the opportunity cost of investing in private appreciation versus publicly traded common stocks. Performance for this asset class is reported one quarter in arrears.
3. Each Private Appreciation Manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy.
SJCERA BOARD POLICY / Strategic Asset Allocation 11 of 713
F. Real Estate
Policy and Guidelines
1. SJCERA has approved a target real estate allocation of ten percent (10%) of
the total fund for real estate investments. The target allocation was set forth following an asset allocation study conducted by the Systemʼs investment consultant.
2. New commitments approved by the Board to individual managers within this
asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
3. SJCERA will endeavor to achieve the target allocation over a period of time
and seeks to achieve this target by averaging into the market. 4. Beginning January 1, 2016, allocations to private equity real estate are
included in SJCERA’s Private Appreciation asset class, and allocations to public real estate securities are included in SJCERA’s Global Public Equity asset class.
5. Public real estate investment timing will also be carefully evaluated and an
average cost investment over two to three years will be considered. 6. The actual sector investment decisions will be partially driven by an ongoing
evaluation conducted by the investment consultant regarding the relative value between each sector within the assets class.
Performance Measurement Standard
1. The long-term objective for the SJCERA real estate portfolio is a real rate of return (adjusted for inflation) of six percent (6%), net of investment management fees. This return shall be calculated on a time-weighted basis using industry standard reporting methodologies as defined by AIMR/GIPS and the National Council of Real Estate Investment Fiduciaries (“NCREIF”).
2. b. The benchmarks used to evaluate managers and the real estate asset
class performance will be the NCREIF Fund Index-Open-End Diversified Core Equity (“ODCE”) index (net) plus 100 basis points for private real estate investments and the National Association of Real Estate Investment Trust (“NAREIT”) Index for domestic public real estate securities and the EPRA/NAREIT Developed Ex. U.S. index for non-domestic public real estate securities.
SJCERA BOARD POLICY / Strategic Asset Allocation 12 of 713
G. Risk Parity
SJCERA has two strategies related to Risk Parity:
1. A Beta portfolio in which risk is balanced across asset classes that respond in dissimilar manners to different economic environments, such that the underperformance in one asset class may be offset by the outperformance of another asset class with an opposite bias to that environment.
2. An actively managed portfolio in which risk is balanced across asset classes, but the investment manager has discretion to actively tilt the portfolio to factors or asset classes that may provide additional return or manage the overall volatility of the portfolio.
Performance Measurement Standard Given the long-term nature of Risk Parity strategies, benchmark for the Risk Parity asset class and each Risk Parity manager will be the 90-day T-bill + 4% objective. It is expected that over a full market cycle these managers and the asset class will outperform this objective. H. Stable Fixed Income
Policy and Guidelines Within the context of available investment opportunities and the Board’s assessment of risk, the Stable Fixed Income program seeks to:
1. Achieve a return consistent with the Board’s desire to control asset volatility. 2. Ensure the protection of the shorter-term liabilities with lower volatility
instruments such as fixed income securities. 3. Provide diversification to the overall investment program.
Performance Measurement Standard
1. Each Stable Fixed Income Manager has a benchmark and performance
objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy and the complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
2. The long-term (3-5 years) expected performance objective of the Stable Fixed
Income investment program is the return of the Barclays Capital U.S. Aggregate Index.
VIII. POLICY REVIEW
SJCERA BOARD POLICY / Strategic Asset Allocation 13 of 713
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VIIIIX. HISTORY 10/12/2007 Adopted by Board of Retirement 09/26/2008 Revised by Board of Retirement modifying asset allocation
targets 05/05/2009 Revised by Board of Retirement modifying asset allocation
targets 02/26/2010 Revised by Board of Retirement modifying asset allocation target
ranges 07/27/2012 Revised by Board of Retirement modifying ranges for sub-asset
classes and adding cash overlay program 12/14/2012 Revised by Board of Retirement regarding changes to long-term
benchmarks 04/26/2013 Revised by Board of Retirement adding the Real Asset class 05/09/2014 Revised by Board of Retirement modifying asset allocation
targets 11/13/2015 Revised by Board of Retirement moving public real estate to the
Global Public Equity class 06/10/2016 Revised by Board of Retirement moving public real estate to the
Global Public Equity class 08/16/2017 Revised by Board of Retirement modifying asset allocation
targets 11/03/2017 Revised by Board of Retirement establishing minimum threshold
commitments 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language that already exists in the Investment
Manager and Communications Policy 04/12/2019 Policy Review section amended to at least once every three
years 07/10/2020 Revised by Board of Retirement modifying asset allocation
targets and incorporating asset class-specific policies’ guidelines and performance measurement standards
Certification of Board Adoption Clerk of the Board Date
SJCERA BOARD POLICY / Strategic Asset Allocation 1 of 13
I. PURPOSE
A. To outline SJCERA’s goals, objectives, and guidelines for managing SJCERA’s investment program.
B. To define provisions governing how the goals and objectives are to be achieved. II. INVESTMENT BELIEFS
A. General 1. Risk is the inability to meet benefit obligations when due. 2. Prudently managing the assets of the Plan is the Board’s paramount duty. 3. SJCERA should monitor current and future benefit obligations to ensure long-
term solvency of the Plan.
B. Investment Strategy 1. SJCERA should invest its assets and manage its liabilities so as to increase
the likelihood of paying all benefit obligations over time. 2. SJCERA should seek a long-term rate of return that exceeds inflation, while
recognizing and managing the need to maintain adequate liquidity to pay benefits.
3. SJCERA should invest globally, seeking investment opportunities in a variety of asset classes and management styles, in order to improve the likelihood of being able to meet benefit obligations over time.
4. SJCERA should make meaningful commitments that will improve performance and where possible, take advantage of lower fee schedules, while providing adequate diversification.
C. Pattern of Investment Returns 1. The volatility of investment returns is as important as the level of returns in
determining SJCERA’s ability to meet future benefit obligations. 2. SJCERA should be able to reduce the volatility of the portfolio returns and the
risk of large portfolio drawdowns through diversification, opportunistic allocations, and passive investing where appropriate.
3. Actions to manage volatility should be integrated into the investment decision-making process.
III. INVESTMENT OBJECTIVE
BoardInvestmentPolicy
StrategicAssetAllocationPolicy
SJCERA BOARD POLICY / Strategic Asset Allocation 2 of 13
A. The funding obligations of SJCERA are long-term in nature; consequently, the investment of portfolio assets should have a long-term focus. The assets shall be invested in accordance with sound investment practices that emphasize long-term investment fundamentals. The investment objective for SJCERA assets is to achieve long-term investment returns that allow the plan to meet all earned benefit payments to plan participants. It is expected that this objective can be obtained through a well-diversified portfolio structure in a manner consistent with this Policy. Accordingly, the investment of these assets shall be guided by the following underlying principles:
1. To achieve a positive rate of return over the long-term that significantly contributes to meeting SJCERA’s objectives, including achieving the actuarial assumption for rate of return and satisfying expected benefit payment obligations;
2. To provide for asset growth at a rate in excess of the rate of inflation and of the liability growth rate of SJCERA;
3. To earn a sufficient rate of return while minimizing exposure to losses or wide swings in market value.
IV. STRATEGIC ASSET ALLOCATION POLICY
A. Strategic Asset Allocation — Asset/Liability
1. The Board regularly adopts and implements an asset allocation policy that is predicated on a number of factors, including:
a. A projection of actuarial assets, liabilities, benefit payments and required contributions;
b. Historical and expected long-term capital market risk and return behavior;
c. An assessment of future economic conditions, including inflation and interest rate levels; and
d. The current and projected funding status of the Plan.
2. The asset allocation will be determined through appropriate studies undertaken by the consultant(s) retained by the Board. The allocation study will include all asset classes deemed prudent and appropriate by the Board. The Board, with the aid of the investment consultant, will determine the assumptions and criteria to be used in the asset allocation study. The following assumptions and criteria will be so determined:
a. The expected return from each asset category.
b. The expected standard deviation of each asset category.
SJCERA BOARD POLICY / Strategic Asset Allocation 3 of 13
c. The minimum acceptable return over a given time period.
d. The net contribution as a percent of payroll.
e. The expected payroll growth rate.
3. The resulting asset allocation will be approved by the Board with input from SJCERA staff and the investment consultant. The asset allocation study will be performed on cycle with the actuarial experience study. Appropriate adjustments to the existing portfolio will then be made in the most expeditious and appropriate manner.
4. On a more frequent, periodic basis, SJCERA staff and the investment
consultant, will analyze the portfolio structure of each asset class. Analysis shall include:
a. Appropriateness of asset class and manager benchmarks,
b. Alignment structure of individual portfolios with asset class benchmarks based on manager holdings and mandate,
c. Evaluation of whether the asset class is structured in a manner that is
consistent with the Board’s objectives,
d. Analysis of underperforming managers, and
e. Overall risk profile of the asset class.
5. Pursuant to the diversification of the investments of SJCERA assets so as to minimize the risk of large losses, the assets of SJCERA shall be diversified according to the specified long-term target percentages:
STRATEGIC ASSET ALLOCATION (Approved September 2019)
Allocations to public real estate securities are part of the Global Public Equity allocation; and allocations to private equity real estate are part of the Private Appreciation allocation. The target allocation to real estate investments is 10%
SJCERA BOARD POLICY / Strategic Asset Allocation 4 of 13
of the total portfolio: 3% is allocated to public real estate securities, and 7% is allocated to private equity real estate investments. . If the Board changes the target allocation for real estate investments, a revised strategic asset allocation and conforming revisions to this policy must be approved by the Board.
6. The allocation goal recognizes that at any time equity and fixed income Investment Managers may have transactional cash on hand.
7. Financial derivatives may be used within prudent limits to manage risk, lower
transaction costs, or augment returns. V. ALLOCATIONS AND PORTFOLIO REBALANCING GUIDELINES
A. The Board adopts an asset allocation that maintains a broadly diversified portfolio appropriate for a retirement plan. The Board will make a minimum commitment of one percent or $25 million, whichever is greater, for the smaller asset classes such as private real estate and private appreciation. For Risk Parity and CRO, the minimum commitment will be two percent or $50 million, whichever is greater.
1. General Guidelines a. The Board delegates the authority to rebalance the asset allocation to the
Investment Officer. b. Staff and consultant will develop a plan and outline the timeframe for
accomplishing the proposed rebalancing. c. Staff and consultant will coordinate with the appropriate internal and
external parties to implement the rebalancing. d. Staff will report the rebalancing activity to the Board.
2. Rebalancing/Transitioning to New Asset Allocation Targets a. The target allocation to each asset class and to investment styles within
asset classes is expected to remain stable over most market cycles. When new asset allocation targets are adopted, the Board’s goal is to transition the physical assets and to reach the target optimal portfolio in a timely manner.
b. With respect to the target strategic allocations to each asset class, to the sub-asset classes and to investment managers, the Board, in consultation with its investment consultant, will establish rebalancing range limitations. The ranges for each asset/sub-asset class are established as twenty percent (20%) of the target.
c. Due to the illiquid and time-lagging nature of private investments, and the patience needed to select high-quality managers; it will take time to achieve the target(s) for the Private Appreciation and Credit asset classes. If the Private Appreciation and/or Credit classes are above or below their targets, the remaining public markets asset classes will also be above or below target to balance the portfolio.
3. Ongoing Monitoring and Rebalancing the Asset Allocation Targets
SJCERA BOARD POLICY / Strategic Asset Allocation 5 of 13
Asset values change over time due to market activity. The actual asset mix of the SJCERA portfolio may diverge from the target allocations established by the Board and marginal rebalancing is necessary. Allowing Plan assets to deviate too far from the target allocations, risks failing to meet the investment objectives set by the Board. Conversely, continually rebalancing to the asset allocation targets may result in significant transaction costs.
a. SJCERA staff and the investment consultant will monitor the portfolio’s asset allocation relative to the strategic target allocations. If the actual allocations fall within the defined ranges, no rebalancing will be required.
b. If actual allocations to an asset class, or to a sub-asset class or investment manager, fall outside the predetermined range, SJCERA staff and the investment consultant will review, discuss and develop recommendations for rebalancing back to the mid-point between the end of the range that was exceeded and the target allocation.
c. In making its recommendations for any required rebalancing, the investment consultant and staff should prioritize implementation procedures as follows: i. Investing net contributions into asset classes that are below their
range limitations; ii. Drawing cash out of the portfolio (for benefit payments and expenses)
from asset classes that are above their range limitations (using interest payments, rental revenues and dividends); and
iii. Selling assets from asset classes/portfolios that exceed the target range(s), and buying assets in asset classes/portfolios that are below the target range(s).
d. Within the total SJCERA portfolio, the Cash Overlay Program may be implemented: SJCERA employs a cash overlay program, which has four potential elements: 1) invest unallocated cash, 2) invest managers’ cash, 3) manage transitions and 4) maintain target allocation. The Board determines which elements of the cash overlay program are to be employed, and staff is responsible for managing the program.
VI. TOTAL FUND PERFORMANCE OBJECTIVE AND MEASUREMENT PERIOD
A. The total fund performance objective is to achieve a total return net of fees and expenses that equals or exceeds the policy benchmark over a full market cycle as defined by the Board. The return of a hypothetical portfolio represented by a policy benchmark consisting of public market indices weighted according to asset allocation targets. The long-term strategic policy benchmark consists of the following passive public market indices and weights listed below:
PORTFOLIO POLICY BENCHMARK
SJCERA BOARD POLICY / Strategic Asset Allocation 6 of 13
ASSET CLASS LONG TERM TARGET
BENCHMARK
Global Public Equities 32% MSCI ACWI IMI Index ND (net dividend) Stable Fixed Income 10% BC Aggregate Index Credit 17% 50% BC High Yield, 50% S&P/LTSA Lev. Loans Risk Parity 10% 90-Day T-bills + 4% Private Appreciation 16% MSCI ACWI Index ND + 2%
Crisis Risk Offset (CRO) 15% 3 Part Custom (33% BTOP 50, 33% BC long Duration Treasuries, 33% at 5% annual)
1. The Policy Benchmark will be created and used to measure the performance
results of the total portfolio. The combined performance of all investment portfolios assigned to an asset class will be measured against the policy benchmark for that asset class. Each portfolio within a strategic asset class will be measured against an appropriate benchmark for that investment/strategy.
2. Performance results for SJCERA investment assets and for each Investment Manager shall be calculated and evaluated quarterly and presented to the Board for review. This Total Portfolio Benchmark will be included in evaluation reports presented to the Board for review.
VII. ASSET CLASS-SPECIFIC GUIDELINES
A. Cash and Overlay Policy and Guidelines
1. Cash investments (STIF) Manager
a. The Cash Manager will invest the cash balances of all accounts with a cash component held at the custody bank product selected by SJCERA.
2. Cash Overlay Manager
a. The cash overlay program manager may:
i. Overlay Unallocated Cash: Monitor SJCERA’s overall positions daily
and synthetically invest unallocated cash using financial futures contracts.
ii. Overlay Manager Cash: Monitor SJCERA’s managers’ cash positions daily and synthetically invest un-invested portions using financial futures contracts.
SJCERA BOARD POLICY / Strategic Asset Allocation 7 of 13
iii. Manager Transitions: Assist with manager transitions as directed by SJCERA. As transition events arise, each transition issue will be reviewed individually with the objectives of maintaining a seamless transition to target market exposure and minimizing transition costs.
iv. Maintain Target Allocation: Calculate SJCERA’s actual allocation and compare to target allocations. If actual allocations differ from targets by more than SJCERA’s predetermined tolerance level, the SJCERA fund is synthetically rebalanced to target on an overlay basis using financial futures contracts.
Performance Measurement Standard
Cash (STIF) - The performance of cash assets is expected to maintain a 40th percentile ranking versus a database of STIF and cash accounts and to outperform a 91-day U.S. Treasury Bill Index. The Cash Overlay Manager is primarily expected to securitize unallocated cash. It is anticipated that the cash overlay manager may add incremental value to the total portfolio of approximately 0.05% to 0.15% annually in an environment where returns on equity and fixed income investments exceed returns on cash. The short-term benchmark is the 91-day U.S. Treasury Bill Index. The complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
B. Credit Policy and Guidelines The general strategies used to create a diversified portfolio for the Credit Investment Program may include: 1. Investments in Credit in the form of separate accounts, commingled funds
or fund-of-funds vehicles 2. Portfolio weightings between liquid and illiquid credit investments shall be a
function of the specific risk and return profile of an investment opportunity and the Program’s overall needs and the target to Credit as approved by the Board.
Performance Measurement Standard
1. Credit investments are expected to achieve attractive risk-adjusted returns and, by definition, possess a higher degree of risk with higher total return potential and expectations than stable fixed income investments.
2. The long-term (3-5 years) expected performance objective of the Program
shall be the return of a blended policy benchmark consisting of 50% BC
SJCERA BOARD POLICY / Strategic Asset Allocation 8 of 13
U.S. High Yield and 50% S&P/LTSA leveraged loan index. Performance for this asset class is reported one quarter in arrears.
3. Each Credit investment manager has a benchmark and performance
objective as outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy.
C. Crisis Risk Offset
Policy and Guidelines There are three equally weighted components of the CRO class:
1. Long Duration
a) Portfolios of long-dated (maturities in excess of 10 years) high-quality bonds (Treasuries and Government-backed high-quality agencies).
b) Portfolios of cash-collateralized derivatives that mirror the performance of
long-dated high-quality bonds.
2. Systematic Trend Following
a) Long-short portfolios using both cash and derivatives-based instruments to capture both periodic appreciation and periodic depreciation trends that evolve and dissipate across a very wide array of liquid global markets. Risk/volatility is calibrated to a pre-determined level using cash and derivatives-based leverage.
3. Alternative Risk Premia
a) Long-short portfolios using both cash and derivatives-based instruments to capture well-researched/documented non-market risk premia (e.g., momentum, carry, value, low-volatility, etc.) on a continuous basis, using an array of liquid global markets. Risk/volatility is calibrated to a pre-determined level using cash and derivatives-based leverage.
Performance Measurement Standard
1. Given the long-term nature of CRO strategies, the overall asset class will be
measured against a custom benchmark that is 33% Barclays Capital Long Duration Treasuries, 33% Barclays Top 50 managed futures index (BTop50), and 33% at a 5% annual return.
2. Long Duration strategies will collectively be benchmarked to the BC Long
Duration Treasuries index. Systematic Trend Following strategies will collectively be benchmarked to the BTop50 Index. Alternative Risk Premia strategies will collectively be benchmarked to a 5% annual return.
SJCERA BOARD POLICY / Strategic Asset Allocation 9 of 13
3. Individual managers/strategies may also have other benchmarks.
4. It is expected that over a full market cycle the managers and the asset class will
outperform the benchmarks.
D. Global Public Equity
Policy and Guidelines The following outlines the general strategies utilized in the Global Public Equity
investment program: 1. A mix of professional external equity investment managers approved by
the Board will implement the program. 2. In markets that are generally considered efficient; passive, structured or
enhanced index strategies may be used to promote a diversified portfolio, while controlling risk and minimizing costs.
3. Active or specialty managers are used to invest in markets that are less efficient and should actively seek to add value while managing risk.
4. Global Public Equity includes investments made pursuant to a U.S., non-U.S. or global public equity mandate as defined by SJCERA.
5. Global Public Equity includes investments in U.S. and non-U.S. public real estate securities as defined in the Real Estate Investment Policy.
Performance Measurement Standard Each Global Public Equity investment manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy and the complete evaluation measurement period will coincide with market cycles defined by the performance of the index. E. Private Appreciation
Policy and Guidelines
The general strategies used to create a diversified portfolio for the Private Appreciation investment program may include:
1. Venture capital, leverage buy-outs, mezzanine, distressed and secondary’s.
2. Private equity real estate investments as defined in the Real Estate Investment Policy.
SJCERA BOARD POLICY / Strategic Asset Allocation 10 of 13
3. Investments in Private Equity may be in the form of separate accounts, commingled funds or fund-of-funds vehicles.
4. Portfolio weightings between private equity and private equity real estate investments shall be a function of the specific risk and return profile of an investment opportunity and the Program’s overall needs and the target to private equity real estate as approved by the Board.
Performance Measurement Standard
1. Private appreciation investments are expected to achieve attractive risk-adjusted returns and, by definition, possess a higher degree of risk with a higher return potential than traditional investments. Accordingly, total rates of return from private appreciation investments are expected to be greater than those that might be obtained from conventional public equity or debt investments.
2. The long-term (5-10 years) expected performance objective of the Program shall be the return of the MSCI ACWI Index plus a 200 basis point risk premium. Use of the MSCI ACWI Index reflects the opportunity cost of investing in private appreciation versus publicly traded common stocks. Performance for this asset class is reported one quarter in arrears.
3. Each Private Appreciation Manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy.
F. Real Estate
Policy and Guidelines
1. 2. 3. 4. Beginning January 1, 2016, allocations to private equity real estate are
included in SJCERA’s Private Appreciation asset class, and allocations to public real estate securities are included in SJCERA’s Global Public Equity asset class.
5. Public real estate investment timing will also be carefully evaluated and an
average cost investment over two to three years will be considered.
SJCERA BOARD POLICY / Strategic Asset Allocation 11 of 13
6. The actual sector investment decisions will be partially driven by an ongoing evaluation conducted by the investment consultant regarding the relative value between each sector within the assets class.
Performance Measurement Standard
1. The long-term objective for the SJCERA real estate portfolio is a real rate of return (adjusted for inflation) of six percent (6%), net of investment management fees. This return shall be calculated on a time-weighted basis using industry standard reporting methodologies as defined by AIMR/GIPS and the National Council of Real Estate Investment Fiduciaries (“NCREIF”).
2. The benchmarks used to evaluate managers and the real estate asset class
performance will be the NCREIF Fund Index-Open-End Diversified Core Equity (“ODCE”) index (net) plus 100 basis points for private real estate investments and the National Association of Real Estate Investment Trust (“NAREIT”) Index for domestic public real estate securities and the EPRA/NAREIT Developed Ex. U.S. index for non-domestic public real estate securities.
G. Risk Parity
SJCERA has two strategies related to Risk Parity:
1. A Beta portfolio in which risk is balanced across asset classes that respond in dissimilar manners to different economic environments, such that the underperformance in one asset class may be offset by the outperformance of another asset class with an opposite bias to that environment.
2. An actively managed portfolio in which risk is balanced across asset classes, but the investment manager has discretion to actively tilt the portfolio to factors or asset classes that may provide additional return or manage the overall volatility of the portfolio.
Performance Measurement Standard Given the long-term nature of Risk Parity strategies, benchmark for the asset class and each Risk Parity manager will be the 90-day T-bill + 4% objective. It is expected that over a full market cycle these managers and the asset class will outperform this objective. H. Stable Fixed Income
Policy and Guidelines
SJCERA BOARD POLICY / Strategic Asset Allocation 12 of 13
Within the context of available investment opportunities and the Board’s assessment of risk, the Stable Fixed Income program seeks to:
1. Achieve a return consistent with the Board’s desire to control asset volatility. 2. Ensure the protection of the shorter-term liabilities with lower volatility
instruments such as fixed income securities. 3. Provide diversification to the overall investment program.
Performance Measurement Standard
1. Each Stable Fixed Income Manager has a benchmark and performance
objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy and the complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
2. The long-term (3-5 years) expected performance objective of the Stable Fixed
Income investment program is the return of the Barclays Capital U.S. Aggregate Index.
VIII. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
IX. HISTORY 10/12/2007 Adopted by Board of Retirement 09/26/2008 Revised by Board of Retirement modifying asset allocation
targets 05/05/2009 Revised by Board of Retirement modifying asset allocation
targets 02/26/2010 Revised by Board of Retirement modifying asset allocation target
ranges 07/27/2012 Revised by Board of Retirement modifying ranges for sub-asset
classes and adding cash overlay program 12/14/2012 Revised by Board of Retirement regarding changes to long-term
benchmarks 04/26/2013 Revised by Board of Retirement adding the Real Asset class 05/09/2014 Revised by Board of Retirement modifying asset allocation
targets 11/13/2015 Revised by Board of Retirement moving public real estate to the
Global Public Equity class
SJCERA BOARD POLICY / Strategic Asset Allocation 13 of 13
06/10/2016 Revised by Board of Retirement moving public real estate to the Global Public Equity class
08/16/2017 Revised by Board of Retirement modifying asset allocation targets
11/03/2017 Revised by Board of Retirement establishing minimum threshold commitments
07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language that already exists in the Investment
Manager and Communications Policy 04/12/2019 Policy Review section amended to at least once every three
years 07/10/2020 Revised by Board of Retirement modifying asset allocation
targets and incorporating asset class-specific policies’ guidelines and performance measurement standards
Certification of Board Adoption Clerk of the Board Date
SJCERA BOARD POLICY / Cash and Overlay Policy / Page 1 of 3
I. PURPOSE
A. This policy outlines the SJCERA’s treatment of cash and performance objectives
for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) Board adopted policies related to Cash and Cash Overlay. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensure prudence and care in the execution of the overall SJCERA investment program.
II. BACKGROUND
A. Within the context of available investment opportunities and the Board’s assessment of risk, the Cash and Cash Overlay Program:
1. There is no strategic asset allocation to Cash. 2. The Cash Overlay Program seeks to provide for the disciplined maintenance
of SJCERA’s target asset allocations.
III. INVESTMENT POLICY
A. The SJCERA investment program is invested by a mix of professional external managers to the asset allocation targets and ranges adopted by the Board and set forth in the Asset Allocation Policy. The targets are long-term and may deviate in the short-term as a result of interim market movement. Consideration will be given to market impact and costs when implementing any reallocations. The managers’ residual cash is invested in a Short-Term Investment Fund (STIF) with SJCERA’s Master Custodian Bank.
B. The Cash Overlay program uses financial futures contracts to overlay selected assets of SJCERA’s fund to bring a more exact match with its target allocations. The Cash Overlay program has the objectives to improve tracking relative to target allocations, improve portfolio efficiency and flexibility, and over the long term increase returns by being more fully invested to the allocation policy.
IV. PERFORMANCE MEASUREMENT STANDARD
A. Cash (STIF) - The performance of cash assets is expected to maintain a 40th
percentile ranking versus a database of STIF and cash accounts and to outperform a 91-day U.S. Treasury Bill Index.
BoardInvestmentPolicy
CashandOverlayPolicy
SJCERA BOARD POLICY / Cash and Overlay Policy / Page 2 of 3
B. The Cash Overlay Manager is primarily expected to provide for the disciplined maintenance of SJCERA’s target asset allocations. Secondarily, it is anticipated that the cash overlay manager may add incremental value to the total portfolio of approximately 0.05% to 0.15% annually in an environment where returns on equity and fixed income investments exceed returns on cash. The short-term benchmark is the 91-day U.S. Treasury Bill Index. The complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
V. INVESTMENT GUIDELINES/RESTRICTIONS
A. Whenever SJCERA invests in a commingled fund, rather than a separate account,
the stated rules and regulations of the manager’s commingled fund will take precedence over the SJCERA Investment Policy Guidelines.
1. Cash investments (STIF) Manager
a. The Cash Manager will invest the cash balances of all accounts with a cash
component held at the custody bank product selected by SJCERA.
2. Cash Overlay Manager
a. The Cash Overlay program is an overlay investment strategy that seeks to provide for the disciplined maintenance of SJCERA’s target asset allocations using financial futures contracts to overlay the selected assets of SJCERA’s target asset allocations. The objectives of the cash overlay program are to increase returns, improve tracking relative to target allocations, and improve portfolio efficiency and flexibility.
b. The cash overlay program manager will:
i. Overlay Unallocated Cash: Monitor SJCERA’s overall positions daily and synthetically invest unallocated cash using financial futures contracts.
ii. Overlay Manager Cash: Monitor SJCERA’s managers’ cash positions daily and synthetically invest un-invested portions using financial futures contracts.
iii. Manager Transitions: Assist with manager transitions as directed by SJCERA. As transition events arise, each transition issue will be reviewed individually with the objectives of maintaining a seamless transition to target market exposure and minimizing transition costs.
iv. Maintain Target Allocation: Calculate SJCERA’s actual allocation and compare to target allocations. If actual allocations differ from targets by more than SJCERA’s predetermined tolerance level, the SJCERA fund is synthetically rebalanced to target on an overlay basis using financial futures contracts.
SJCERA BOARD POLICY / Cash and Overlay Policy / Page 3 of 3
c. In times of volatile markets, SJCERA staff and consultant may discuss the predetermined tolerance levels with the Cash Overlay Manager and may initiate changes to the tolerance levels not to exceed +/-20% of the asset allocation targets. Such changes will be reported to the Board at the next Financial Meeting.
VI. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it
remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VII. HISTORY
04/15/2008 Board adopted policy 02/25/2011 Board revised policy 01/27/2012 Board reviewed; no changes to policy; replaced manager summary
NT STIF with NT Government STIF 01/24/2014 Board revised policy 07/05/2018 Staff Reviewed, updated format and name of cash overlay manager. 10/12/2018 Deleted redundant language and moved Manager Strategy
Summaries to the Investment Manager and Communications Policy.
04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Credit 1 of 2
I. PURPOSE
A. This policy outlines the Credit Investment Program and performance objectives for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) Board adopted policies related to credit investments. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensue prudence and care in the execution of the Credit Investment Program.
II. BACKGROUND
A. Within the context of available investment opportunities and the Board’s assessment of risk, the Credit Investment Program seeks to: 1. Achieve a return consistent with the Board’s desire to control asset volatility. 2. Possibility of return enhancement through active management 3. Provide income 4. Provide diversification to the overall SJCERA investment program.
III. INVESTMENT POLICY
A. The Credit Investment Program is invested by a mix of professional external managers to the asset allocation targets and ranges adopted by the Board and set forth in the Asset Allocation Policy.
B. New commitments approved by the Board to individual managers within this asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
C. The targets are long-term and may deviate in the short-term as a result of interim market movement. Consideration will be given to market impact and costs when implementing any reallocations within the Credit Program.
D. The general strategies used to create a diversified portfolio for the Credit
Investment Program may include: 1. Investments in Credit may be in the form of separate accounts, commingled
funds or fund-of-funds vehicles 2. Portfolio weightings between liquid and illiquid credit investments shall be a
function of the specific risk and return profile of an investment opportunity
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and the Program’s overall needs and the target to Credit as approved by the Board.
IV. PERFORMANCE MEASUREMENT STANDARD
A. Credit investments are expected to achieve attractive risk-adjusted returns and, by definition, possess a higher degree of risk with higher total return potential and expectations than stable fixed income investments.
B. The long-term (3-5 years) expected performance objective of the Program shall
be the return of a blended policy benchmark consisting of 50% BC U.S. High Yield and 50% S&P/LTSA leveraged loan index. Performance for this asset class is reported one quarter in arrears.
C. Each Credit investment manager has a benchmark and performance objective
as outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy.
V. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. HISTORY
06/24/2016 Adopted by Board of Retirement 11/03/2017 Revised by Board of Retirement establishing minimum threshold
commitments 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language and moved Manager Strategy
Summaries to the Investment Manager and Communications Policy
04/12/2019 Policy Review section amended to at least once every three years
07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Crisis Risk Offset 1 of 3
I. PURPOSE
A. This policy outlines the Crisis Risk Offset (CRO) program and performance objectives for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) Board adopted policies. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensure prudence and care in the execution of Risk Parity investments.
II. OBJECTIVE
A. Within the context of available investment opportunities and the Board’s assessment of risk, CRO investments seek to:
1. Diversify the entire portfolio and provide significant positive return during
growth crises
2. Provide a positive stand-alone return to risk
3. Be largely exposed to systematic market-based and non-market based risk premia expected to behave in a manner that is distinct and counter to equity growth risk.
B. There are three equally weighted components of the CRO class:
1. Long Duration - Consists of highly liquid long-maturity bonds or equivalent
(derivatives-based) investments. This component has proven to be the most responsive to equity-related market crises as global investors seek the highest-quality asset possible during such periods.
2. Systematic Trend Following - Consists of investment strategies that systematically seek to capture trending market behavior (either positive or negative) across dozens, if not hundreds, of different markets. There is significant evidence that shows positive returns can be generated by investing in persistent trends. In this respect, Systematic Trend Following strategies provide subsequent support/substitution to the Long Duration component during the mid-to-latter stages of a market crisis. Systematic Trend Following strategies trade in highly-liquid, transparent markets, making the capital invested easily accessible.
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3. Alternative Risk Premia - Consists of investment strategies that systematically seek to capture the long-term returns of certain well-known risk premia (e.g., value, carry, momentum, low-volatility, etc.) without being exposed to the markets where these risk premia reside. Over time these various risk premia are expected to produce positive returns that are generally unrelated to the other major market risk premia (e.g., equity, interest rates, inflation, etc.). Markets and instruments used by Alternative Risk Premia strategies are highly-liquid, but their capture requires significant leverage.
III. INVESTMENT POLICY
A. Long Duration
1. Portfolios of long-dated (maturities in excess of 10 years) high-quality bonds (Treasuries and Government-backed high-quality agencies).
2. Portfolios of cash-collateralized derivatives that mirror the performance of
long-dated high-quality bonds.
B. Systematic Trend Following
1. Long-short portfolios using both cash and derivatives-based instruments to capture both periodic appreciation and periodic depreciation trends that evolve and dissipate across a very wide array of liquid global markets. Risk/volatility is calibrated to a pre-determined level using cash and derivatives-based leverage.
C. Alternative Risk Premia
1. Long-short portfolios using both cash and derivatives-based instruments to capture well-researched/documented non-market risk premia (e.g., momentum, carry, value, low-volatility, etc.) on a continuous basis, using an array of liquid global markets. Risk/volatility is calibrated to a pre-determined level using cash and derivatives-based leverage.
D. The CRO investments are managed by external investment managers to the
asset allocation targets and ranges adopted by the Board and set forth in the Asset Allocation Policy.
E. New commitments approved by the Board to individual managers within this asset
class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
F. The target to CRO is long-term and may deviate in the short-term as a result of
interim market movement or ongoing rebalancing. Consideration will be given to market impact and costs when implementing any reallocations within the asset class.
SJCERA BOARD POLICY / Crisis Risk Offset 3 of 3
IV. PERFORMANCE MEASUREMENT STANDARD
A. Given the long-term nature of CRO strategies, the overall asset class will be measured against a custom benchmark that is 33% Barclays Capital Long Duration Treasuries, 33% Barclays Top 50 managed futures index (BTop50), and 33% at a 5% annual return.
B. Long Duration strategies will collectively be benchmarked to the BC Long
Duration Treasuries index. Systematic Trend Following strategies will collectively be benchmarked to the BTop50 Index. Alternative Risk Premia strategies will collectively be benchmarked to a 5% annual return.
C. Individual managers/strategies may also have other benchmarks.
D. It is expected that over a full market cycle the managers and the asset class will
outperform the benchmarks.
V. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. HISTORY
02/12/2016 Adopted by Board of Retirement 07/22/2016 Revised by Board of Retirement regarding termination of
investments 11/03/2017 Revised by Board of Retirement establishing minimum threshold
commitments 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language and moved Manager Strategy
Summaries to the Investment Manager and Communications Policy
04/12/2019 Policy Review section amended to at least once every three years
07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
Certification of Board Adoption: Clerk of the Board Date
SJCERA BOARD POLICY / Global Public Equity 1 of 2
I. PURPOSE
A. This policy outlines the Global Public Equity investment program and performance objectives for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior Board adopted policies related to U.S. and non-U.S. Equity. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensure prudence and care in the execution of the Global Public Equity investment program.
II. ROLE OF GLOBAL PUBLIC EQUITY
A. Within the context of available investment opportunities and the Board’s
assessment of risk, the Global Public Equity investment program seeks to: 1. Provide high long-term real returns while increasing overall investment
opportunities with higher risk 2. Hedge against active (pre-retirement) liabilities. 3. Provide diversification to the overall investment program.
III. INVESTMENT POLICY
A. The Global Public Equity investments are managed to the asset allocation targets and ranges adopted by the Board and set forth in the Strategic Asset Allocation Policy. The targets are long-term and may deviate in the short-term as a result of interim market movement. Consideration will be given to market impact and costs when implementing any reallocations within the Global Public Equity investment program. The following outlines the general strategies utilized in the Global Public Equity investment program: 1. A mix of professional external equity investment managers approved by
the Board will implement the program. 2. In markets that are generally considered efficient; passive, structured or
enhanced index strategies may be used to promote a diversified portfolio, while controlling risk and minimizing costs.
3. Active or specialty managers are used to invest in markets that are less efficient and should actively seek to add value while managing risk.
4. Global Public Equity includes investments made pursuant to a U.S., non-U.S. or global public equity mandate as defined by SJCERA.
5. Global Public Equity includes investments in U.S. and non-U.S. public
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SJCERA BOARD POLICY / Global Public Equity 2 of 2
real estate securities as defined in the Real Estate Investment Policy.
B. New commitments approved by the Board to individual managers within this asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
IV. PERFORMANCE MEASUREMENT STANDARD
A. Each Global Public Equity investment manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy and the complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
V. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
VI. HISTORY
11/09/2007 Adopted by Board of Retirement 05/30/2008 Revised by Board of Retirement adding small cap growth 09/24/2010 Revised by Board of Retirement regarding investment guidelines
and restrictions 09/28/2012 Revised by Board of Retirement changing policy from U.S. to
global mandate 06/10/2016 Revised by Board of Retirement adding public real estate
securities 11/03/2017 Revised by Board of Retirement establishing minimum threshold
commitments 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language and moved Manager Strategy
Summaries to the Investment Manager and Communications Policy
04/12/2019 Policy Review section amended to at least once every three years 07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation
Policy Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Private Appreciation 1 of 2
I. PURPOSE
A. This policy outlines the Private Appreciation investment program and performance objectives for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) related Board adopted policies. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensure prudence and care in the execution of the Private Appreciation investment program.
II. ROLE OF PRIVATE APPRECIATION
A. Within the context of available investment opportunities and the Board’s assessment of risk, the Private Appreciation investment program seeks to:
1. Provide high long-term real returns while increasing overall investment opportunities with higher risk, including illiquidity risk.
2. Hedge against active (pre-retirement) liabilities. 3. Provide diversification to the overall investment program.
III. INVESTMENT POLICY
A. The Private Appreciation investments are managed to the asset allocation targets and ranges adopted by the Board and set forth in the Strategic Asset Allocation Policy.
B. New commitments approved by the Board to individual managers within this asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
C. The targets are long-term and may deviate in the short-term as a result of interim market movement. Consideration will be given to market impact and costs when implementing any reallocations within the Private Appreciation investment program.
D. The general strategies used to create a diversified portfolio for the Private Appreciation investment program may include:
1. Venture capital, leverage buy-outs, mezzanine, distressed and secondary’s.
2. Private equity real estate investments as defined in the Real Estate Investment Policy.
3. Investments in Private Equity may be in the form of separate accounts,
commingled funds or fund-of-funds vehicles.
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SJCERA BOARD POLICY / Private Appreciation 2 of 2
4. Portfolio weightings between private equity and private equity real estate investments shall be a function of the specific risk and return profile of an investment opportunity and the Program’s overall needs and the target to private equity real estate as approved by the Board.
IV. PERFORMANCE MEASUREMENT STANDARD
A. Private appreciation investments are expected to achieve attractive risk-adjusted returns and, by definition, possess a higher degree of risk with a higher return potential than traditional investments. Accordingly, total rates of return from private appreciation investments are expected to be greater than those that might be obtained from conventional public equity or debt investments.
B. The long-term (5-10 years) expected performance objective of the Program shall be the return of the MSCI ACWI Index plus a 200 basis point risk premium. Use of the MSCI ACWI Index reflects the opportunity cost of investing in private appreciation versus publicly traded common stocks. Performance for this asset class is reported one quarter in arrears.
C. Each Private Appreciation Manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy.
IX. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
X. HISTORY
07/27/2012 Adopted by Board of Retirement 06/10/2016 Revised by Board of Retirement regarding strategy and
performance measurement standards 11/03/2017 Revised by Board of Retirement establishing minimum threshold
commitments 07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language and moved Manager Strategy
Summaries to the Investment Manager and Communications Policy
04/12/2019 Policy Review section amended to at least once every three years
07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
Certification of Board Adoption
Clerk of the Board Date
SJCERA BOARD POLICY / Real Estate Investment Policy 1 of 9
I. Purpose
A. The San Joaquin County Employees’ Retirement Association (“SJCERA” or the “System”) is establishing this Real Estate Investment Policy (“Policy”) that sets forth the purpose, long-term objectives, and policy for investing retirement fund assets (the “Fund”) in real estate. Included in this Policy will be a description of investment characteristics and risk management guidelines that will be used to implement the investment in the real estate asset class.
For purposes of this Policy, “real estate” includes private and public, equity and debt, domestic and international real estate investments.
II. Role of Real Estate
A. SJCERA has determined that the primary role of the real estate asset class is to provide for the following:
1. Diversification through low correlations with other asset classes, primarily the
U.S. equity markets.
2. Generate current income returns that are consistent with the long-term historical averages that real estate historically has generated.
3. Provide SJCERA with a hedge against inflation, which real estate has historically provided due to lease structures and the increases in material and labor costs during inflationary periods.
B. The System has determined that maximizing total return and liquidity are secondary
considerations relative to the objectives described above. In addition, accessing international real estate markets through public and private, and equity and debt real estate investments is also a secondary consideration.
III. Allocation to Real Estate Asset Class
A. SJCERA has approved a target real estate allocation of ten percent (10%) of the total fund for real estate investments. The target allocation was set forth following an asset allocation study conducted by the Systemʼs general consultant.
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SJCERA BOARD POLICY / Real Estate Investment Policy 2 of 9
B. New commitments approved by the Board to individual managers within this asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
C. SJCERA will endeavor to achieve the target allocation over a period of time and
seeks to achieve this target by averaging into the market. In order to avoid entering the real estate asset class at the height of the market, SJCERA will seek to control acquisitions through the use of these investment guidelines and by limiting the equity investment in private real estate to no more than 2.5% of the value of the entire retirement fund during any one calendar year. For example, if the Fundʼs total assets are $1.4 billion, net private real estate investment activity (new investments, less the value of dispositions or cash distributions) is limited to investing no more than $35 million of private real estate equity during any one calendar year.
D. Beginning January 1, 2016, allocations to private equity real estate are included in
SJCERA’s Private Appreciation asset class, and allocations to public real estate securities are included in SJCERA’s Global Public Equity asset class.
E. Public real estate investment timing will also be carefully evaluated and an average
cost investment over two to three years will be considered.
F. Following an asset allocation study conducted by SJCERAʼs general consultant with assistance from SJCERAʼs real estate consultant, SJCERA has established the following investment sector target ranges. The actual sector investment decisions will be partially driven by an ongoing evaluation conducted by the real estate consultant regarding the relative value between each sector within the assets class.
1. Return Objective
a. The long-term objective for the SJCERA real estate portfolio is a real rate
of return (adjusted for inflation) of six percent (6%), net of investment management fees. This return shall be calculated on a time-weighted basis using industry standard reporting methodologies as defined by AIMR/GIPS and the National Council of Real Estate Investment Fiduciaries (“NCREIF”).
b. The benchmarks used to evaluate managers and the real estate asset
class performance will be the NCREIF Fund Index-Open-End Diversified Core Equity (“ODCE”) index (net) plus 100 basis points for private real estate investments and the National Association of Real Estate Investment Trust (“NAREIT”) Index for domestic public real estate securities and the EPRA/NAREIT Developed Ex. U.S. index for non-domestic public real estate securities.
SJCERA BOARD POLICY / Real Estate Investment Policy 3 of 9
2. Investment Policies a. For purposes of this investment Policy, the real estate investment universe
is divided into the following sectors, with descriptive attributes to follow:
a. Core 1. Operating, stabilized and fully leased office, retail, industrial, or
apartment properties. 2. Core properties generally have institutional investment qualities
for size, physical attributes, and location. 3. Target nominal net returns of 6% to 8% per year with a high
proportion of the return generated from income and appreciation that generally matches or exceeds inflation.
4. Leverage typically moderate at less than 50% loan to value.
ii. Value Added 1. Office, retail, industrial, apartment, or hotel properties that have
moderate risk associated with their investment. 2. The additional risk associated with value-added investments is
generally a deficiency that is identifiable and correctable through leasing, re-development, management, and/or recapitalization. Other value added investments include lower risk non-traditional sectors such as parking lots or manufactured homes, which may feature incremental risk.
3. The expected nominal net returns for value added investments are 10% to 12% per year.
4. Leverage for value added investments is generally less than 65% loan to value.
iii. Opportunistic
1. Opportunistic investments are represented by all property types and locations, including international, development, highly leveraged hotels, and distressed properties.
2. Opportunistic investments generally have higher levels of risk. 3. Opportunistic investing includes distressed assets, financial
restructurings, and/or financial engineering opportunities (e.g., foreclosing on a mortgage and selling the equity interest) and potentially the purchase of REOCs.
4. Investment may also be made in non-traditional property types (e.g., self-storage), which typically contain greater risk.
5. Pension funds generally invest their opportunistic allocations in commingled fund vehicles in order to diversify their risks.
6. Opportunistic investments are expected to generate nominal net returns above 15% in order to compensate for the additional risk.
7. Opportunistic strategies often include a higher leverage component than core or value added strategies. Leverage is generally less than 75% loan to value, but may be higher in certain
SJCERA BOARD POLICY / Real Estate Investment Policy 4 of 9
cases.
iv. Public REITS 1. Public REITs are companies that predominantly own and operate
real estate assets and related services such as development and management.
2. REITs provide an attractive alternative for investment in certain sectors such as regional malls, large office properties and self-storage.
3. REITs do not allow for control over the assets or management. 4. Accounting nuances and lack of transparency mask performance
of underlying real estate in certain cases. Small size of investment universe and low float of company shares provides limited liquidity for large pension fund investors.
5. Agency costs due to structures limiting ownership to 9.9% of outstanding stock.
6. REITs have certain operating company risks associated with their investment.
7. REITs have historically had higher returns and higher standard deviations than private Core real estate with return expectations in the range of 10%-11% over the long-term.
v. Commercial Mortgages (if held in the Real Estate portfolio)
a) Returns are sensitive to interest rates, spreads and credit quality. Duration of portfolio is generally high due to yield maintenance prepayment penalties in most mortgages.
b) Bond-like risk/investment characteristics with real estate as collateral. Commercial mortgages are characterized by high security and minimal upside appreciation potential.
c) Opportunities for investment include private whole loans or commercial mortgage backed securities (CMBS) that may have increased liquidity compared to whole loans. CMBS securities are pools of mortgages traded on public markets.
d) CMBS securities can be purchased in various investment grades or below investment grade tranches generally yielding between 150-200 basis points above treasuries (AAA rated) to over 500-1,000 basis points above treasuries for below investment grade tranches. Liquidity can often be limited for CMBS securities during times of market uncertainty, especially for lower rated tranches.
b. The target ranges are based on the percentage of the total allocation, which
currently equals 10% of the Fundʼs assets:
SJCERA BOARD POLICY / Real Estate Investment Policy 5 of 9
Risk/Return Category Ranges
Sector Policy Range
Core 10% to 70%
Value Added 10% to 60%
Opportunistic 10% to 40%
Public REITs 0% to 30% Commercial Mortgages 0% to 20%
3. Investment Vehicles
a. SJCERA recognizes that real estate is generally an illiquid asset class. In
addition, the System recognizes that given its size, the benefits of investment vehicles that provide diversification across many properties, sectors, geographic locations and property types outweigh the advantages of vehicles that provide maximum control over each investment property. SJCERA may use the following structures for investment in real estate:
i. Commingled Funds
1. SJCERA will invest primarily in commingled fund vehicles due to the
benefits of pooling capital in order to minimize risk in a portfolio and to permit the System to gain exposure to a far greater number of properties, property types, locations, investment managers, and structures that are not feasible for investment through the separate account structure.
2. Where possible, SJCERA will seek to maximize investor control
through the commingled funds and seek to invest in structures where the interests of the fund sponsors are aligned with the System through governance and incentive fee structures.
ii. Separate Accounts
1. Wholly owning and controlling properties or public security accounts
that permit SJCERA to maximize control over the investment process. 2. Separate accounts generally align the interests of the investor with the
manager and permit the System to invest at lower costs (reduced fees).
3. The separate account relationships will be managed discretion
whereby the managers will be provided investment guidelines and given discretion to implement the strategy.
SJCERA BOARD POLICY / Real Estate Investment Policy 6 of 9
b. SJCERA will use commingled fund vehicles in its private real estate
investment activity and a separate account structure in its public REIT investment program.
c. SJCERA may consider separate accounts for its private market real estate
investments. Such investments by SJCERA shall be limited to no more than five percent (5%) of the total real estate allocation. Any separate account investment must be managed by a registered investment advisor (RIA), registered with the Securities and Exchange Commission, with experience overseeing real estate investments for public pension funds. In addition, the investment must conform to all risk management guidelines contained herein and adopted by SJCERA in the Implementation Plan.
4. Diversification
a. SJCERA will seek to control risk in its real estate investment program by
diversifying its investments by investment manager, property type and property location.
i. Investment Manager
1. SJCERA will limit the amount invested with one manager to no more
than thirty-percent 30% of the total allocation for private real estate investments. If one manager manages both public and private securities for the System, the limit will be increased to forty-percent (40%) of the total real estate allocation.
2. For public REIT and core real estate investments, each Investment Manager must be a registered investment advisor. In addition, newly hired private real estate value added, opportunistic and commercial mortgage fund managers should be RIAs.
b. Property Type Diversification
i. SJCERA will seek investments in each of the major property types as well
as investments in other non-traditional property types (e.g., hotels, timber, self-storage, parking) The target ranges for each of the property types are as follows:
Property Types Diversification Ranges
Property Type Policy Range
SJCERA BOARD POLICY / Real Estate Investment Policy 7 of 9
Office 10% to 50%
Retail 10% to 50%
Industrial 10% to 50%
Residential 10% to 50%
Hotel 0% to 20%
Other* 0% to 30%
*Other may include Agriculture, Infrastructure, and Timber related investments.
c. Regional Diversification
i. SJCERA will seek investments in each of the major domestic regions as
well as international investments. The target ranges for each of the regions are as follows:
Geographic Diversification Ranges
Region Policy Range
West Up to 45%
Midwest Up to 35%
South Up to 45%
East Up to 45%
International Up to 20%
5. Leverage
a. SJCERA recognizes that the use of leverage can be an effective means to increase overall returns from time to time on a risk-adjusted basis. The real estate consultant shall monitor the leverage level exposures of the Fund on a risk/return category basis (i.e., core, value, and opportunistic), within quarterly performance measurement reports. The leverage ranges established below are measured for the entire sub-class, therefore individual investments may have leverage above the category limits. The following table shows the leverage limitations for each sub-class:
LEVERAGE RANGES
Risk Range
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Aggregate Core Up to 50%
Aggregate Value Up to 65%
Aggregate Opportunistic Up to 75%
Total Real Estate Portfolio Up to 65%
6. Investment Size
a. The maximum investment size for any single private commingled investment fund shall be limited to fifteen-percent (15%) of the total real estate allocation. For private separate account investments, there shall be a limit of no more than five percent (5%) of the total real estate allocation. For public separate accounts, there shall be a limit of 25% of the total real estate allocation.
7. Valuations
a. SJCERAʼs policy is to carry its real estate investments at a value consistent
with the net asset valuations reported by each manager. The investment funds are required to comply with GAAP reporting requirements, including policies related to the valuation of assets. It is common that these valuations are subject to a third party audit on an annual basis.
b. The Staff and Consultant shall regularly monitor the valuations for each fund
and manager. There may be instances from time to time where, in the opinion of the Consultant, the valuations reported by a manager for a fund are not deemed to be reasonable. In those instances, the Consultant shall notify the Staff and Board and provide the Board with a recommendation for an adjustment of the valuation subject to Board approval.
c. In the event the Board accepts a valuation recommended by Consultant, the
Consultant shall provide an updated valuation opinion at least twice annually within 30 days after June 30 and December 31. These updated valuation reports shall be subject to Board review and the Board shall determine whether to accept the Consultantʼs valuation or return to the valuation reported by the manager. Any updated valuations will be reflected in the Consultantʼs performance reporting and the SJCERA Staff will implement the adjusted valuations in the accounting records.
IV. Policy Review
A. Staff shall review this Policy at least once every three years to ensure that it
remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
SJCERA BOARD POLICY / Real Estate Investment Policy 9 of 9
V. History
03/12/2004 Adopted by Board of Retirement 08/26/2005 Revised by Board of Retirement revising target ranges
percentages 11/18/2005 Revised by Board of Retirement by adding commercial
mortgages to sector targets 03/24/2006 Revised by Board of Retirement by revising the core target
range percentage 01/25/2008 Revised by Board of Retirement increasing target allocation
from seven percent to ten percent 04/08/2011 Revised by Board of Retirement requiring investment advisor be
registered with the Securities and Exchange Commission 06/22/2012 Revised by Board of Retirement adding regional diversification
ranges 12/14/2012 Revised by Board of Retirement regarding changes to
benchmark 06/10/2016 Revised by Board of Retirement regarding allocation of private
equity real estate to Private Appreciation class 07/05/2018 Staff reviewed, no content changes; updated format.
04/12/2019 Policy Review section amended to at least once every three years
07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
Certification of Board Adoption: Clerk of the Board Date
SJCERA BOARD POLICY / Risk Parity 1 of 2
I. PURPOSE
A. This policy outlines the Risk Parity programs and performance objectives for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) Board adopted policies. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensure prudence and care in the execution of Risk Parity investments.
II. OBJECTIVE
A. Within the context of available investment opportunities and the Board’s assessment of risk, Risk Parity investments seek to:
1. Achieve a return consistent with the Board’s desire to control asset volatility.
2. Provide balance to the overall portfolio during various economic environment scenarios.
3. Provide diversification to the overall investment program.
B. SJCERA has two strategies related to Risk Parity:
1. A Beta portfolio in which risk is balanced across asset classes that respond in dissimilar manners to different economic environments, such that the underperformance in one asset class may be offset by the outperformance of another asset class with an opposite bias to that environment.
2. An actively managed portfolio in which risk is balanced across asset classes, but the investment manager has discretion to actively tilt the portfolio to factors or asset classes that may provide additional return or manage the overall volatility of the portfolio.
III. INVESTMENT POLICY
A. The Risk Parity investments are managed by external managers to the asset allocation targets and ranges adopted by the Board and set forth in the Strategic Asset Allocation Policy.
B. New commitments approved by the Board to individual managers within this asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
C. The target to Risk Parity is long-term and may deviate in the short-term as a result of interim market movement or ongoing rebalancing. Consideration will be given
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to market impact and costs when implementing any reallocations within the program.
IV. PERFORMANCE MEASUREMENT STANDARD
A. Given the long-term nature of Risk Parity strategies, benchmark for the Risk Parity asset class and each Risk Parity manager will be the 90-day T-bill + 4% objective. It is expected that over a full market cycle these managers and the asset class will outperform this objective.
VIII. POLICY REVIEW
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
IX. HISTORY
07/27/2012 Adopted by Board of Retirement 01/22/2016 Revised by Board of Retirement regarding strategy and
performance measurement standards
11/03/2017 Revised by Board of Retirement establishing minimum threshold commitments
07/05/2018 Reviewed, no changes required; Staff updated format 10/12/2018 Deleted redundant language and moved Manager Strategy
Summaries to the Investment Manager and Communications Policy
04/12/2019 Policy Review section amended to at least once every three years
07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
Certification of Board Adoption
Clerk of the Board Date
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I. Purpose
A. This policy outlines the Stable Fixed Income investment program and performance objectives for the Board of Retirement (the Board) of the San Joaquin County Employees’ Retirement Association (SJCERA) Retirement Fund (the Fund) and supersedes any prior (portions of) Board adopted policies related to Fixed Income. The policy and objectives allow for sufficient flexibility in the management process to capture investment opportunities, yet provide parameters that ensue prudence and care in the execution of the Stable Fixed Income investment program.
II. Background
A. Within the context of available investment opportunities and the Board’s assessment of risk, the Stable Fixed Income program seeks to:
1. Achieve a return consistent with the Board’s desire to control asset volatility. 2. Ensure the protection of the shorter-term liabilities with lower volatility
instruments such as fixed income securities. 3. Provide diversification to the overall investment program.
III. Investment Policy
A. The Stable Fixed Income program is invested by a mix of professional external managers to the asset allocation targets and ranges adopted by the Board and set forth in the Asset Allocation Policy.
B. New commitments approved by the Board to individual managers within this asset class must be in compliance with the minimum thresholds set forth in the Asset Allocation Policy.
C. The targets are long-term and may deviate in the short-term as a result of interim market movement. Consideration will be given to market impact and costs when implementing any reallocations within the Stable Fixed Income program.
IV. Performance Measurement Standard
A. Each Stable Fixed Income Manager has a benchmark and performance objective outlined in the Manager Strategy Summary in Exhibit A of the Investment Manager Monitoring and Communications Policy and the complete evaluation measurement period will coincide with market cycles defined by the performance of the index.
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B. The long-term (3-5 years) expected performance objective of the Stable Fixed
Income investment program is the return of the Barclays Capital U.S. Aggregate Index.
IX. Policy Review
A. Staff shall review this Policy at least once every three years to ensure that it remains relevant, appropriate, and in compliance. Any revisions or amendments to this policy must be approved by the Board of Retirement in accordance with the bylaws.
X. HISTORY 02/15/2008 Adopted by Board of Retirement 02/27/2009 Revised by Board of Retirement adding commercial mortgages 04/23/2010 Revised by Board of Retirement adding Manager Strategy
Summaries 06/24/2016 Revised by Board of Retirement moving Mesa West and Stone
Harbor to the Credit class 11/03/2017 Revised by Board of Retirement establishing minimum threshold
commitments 07/05/2018 Reviewed, no changes required; Staff updated format
10/12/2018 Deleted redundant language and moved Manager Strategy Summaries to the Investment Manager and Communications Policy
04/12/2019 Policy Review section amended to at least once every three years
07/10/2020 Repealed: pertinent content moved to Strategic Asset Allocation Policy
