Santa Clara Valley Transportation Authority Tran;it Union, Local 265 Pension BOARD OF PENSIONS Tuesday, September 11,2018 11:00 a.m. Conference Room B-1 06 Valley Transportation Authority (VTA) 3331 N01ih First Street San Jose, California AGENDA 1) CALL TO ORDER/ROLL CALL 2) ORDERS OF THE DAY 3) PUBLIC PRESENTATIONS This p01iion of the agenda is reserved for persons desiring to address the Board on any matter not on the agenda.· Speakers are limited to 2 minutes. All statements that require a response will be referred to staff for reply in writing. CONSENT AGENDA 4) Approve Minutes of August 14,2018. 5) Approve Requests for Service Pension: 6) 7) 8) a) Michael E. Floch #10285..,. Option F-2 b) Satnam S. Gill #5468 G-2 c) Theodore W. Kraynick #5782 F-1 REGULAR AGENDA Receive Changes of Representatives on the Board of Pensions. Elect Chairperson for Remainder of Calendar Year 2018. Approve ATU Representatives to Investment Committee. (Russell) 3331 Norlh Firslllreel, Bldg. 81 ·Son Jose, CA 95134·1927 ·Phone 408.321.5808 • Fox 408.955.0890
Transcript
Santa Clara Valley Transportation Authority A~algamuted Tran;it Union, Local 265 Pension P=-la~n~~
BOARD OF PENSIONS
Tuesday, September 11,2018 11:00 a.m.
Conference Room B-1 06 Valley Transportation Authority (VTA)
3331 N01ih First Street San Jose, California
AGENDA
1) CALL TO ORDER/ROLL CALL
2) ORDERS OF THE DAY
3) PUBLIC PRESENTATIONS This p01iion of the agenda is reserved for persons desiring to address the Board on any matter not on the agenda.· Speakers are limited to 2 minutes. All statements that require a response will be referred to staff for reply in writing.
CONSENT AGENDA
4) Approve Minutes of August 14,2018.
5) Approve Requests for Service Pension:
6)
7)
8)
a) Michael E. Floch #10285..,. Option F-2 b) Satnam S. Gill #5468 ~Option G-2 c) Theodore W. Kraynick #5782 ~Option F-1
REGULAR AGENDA
Receive Changes of Representatives on the Board of Pensions.
Elect Chairperson for Remainder of Calendar Year 2018.
Approve ATU Representatives to Investment Committee. (Russell)
3331 Norlh Firslllreel, Bldg. 81 ·Son Jose, CA 95134·1927 ·Phone 408.321.5808 • Fox 408.955.0890
9) Receive and File Repmt on VTA- ATU, Local265 Pension Plan Investments for Month ofJnly 2018. (Bill)
10) Receive and File Memo from Wedge Capital Management L.L.P. (Bill)
11) Receive and File Spousal Medical Fund and Retiree Vision!Dental Fund Reports for Quarter Ending June 30, 2018. (Hudda)
12). Receive Quarterly Budget Review for Period July 1, 2017 Through June 30,2018. (Chavez) ·
13) Receive Update on Pending Final Benefit Payments. (Chavez)
14) Receive Update on Separated Employees' Distribution of Contributions. (Chavez)
15) Receive Update on Retiree/Beneficiary Reimbursement Payments Related to Medical Plan Premiums Report. (Chavez)
16) Receive Correspondence from Chairperson. (Gill)
NOTE BOARD MEMBERS: In order to establish whether or not a quorum exists for this meeting, members are asked to call Maria Chavez in the Human Resources Department at (408) 321-5548 before 5:00p.m. on the day prior to the meeting. Thank you for your cooperation.
All public records relating to an open session item on this agenda, which are not exempt fi·om disclosure pursuant to the California Public Records Act, that are distributed to a majority of the Board of Pensions less than 72 hours before the meeting will be available for public inspection at 3331 North First Street, San Jose, CA at the same time that the public records are distributed or made available to the Board of Pensions.
In compliance with the Americans with Disabilities Act (ADA), those reqmrmg accommodations or accessible media for this meeting should notifY Maria Chavez in the Human Resomces Department 48 hours prior to the meeting at (408) 321-5548.
-~ ..
Santa Clara Valley Transportation Authority Amalgamated Transit Union, local 265 Pension Plan
BOARD OF PENSIONS SANTA CLARA VALLEY TRANSPORTATION AUTHORITY
Alternate Member Fadal took his seat at 11:01 a.m.
CONSENT AGENDA
4. Approve Minutes of July I 0, 2018.
Board of Pensions Summary Minutes
Page 1 of 13 Tuesday, August 14,2018
3331 North First Street, Bldg. 81 • Son Jose, (A 95134-1927 ·Phone 408.321.5808 'fox 408.955.0890
5. Approve Requests for Service Pension:
a) Jimmy M. Brionez #8012- Option F-2 b) Janice M. Broock #8744- Option A c) Martin K. De Armond #2519 - Option A d) Gerald Horner #2326- Option G-2 e) Laura E. Jimenez #2920 - Option A f) Frank M. Kuwahara #902 - Option A g) Barbara E. McAlpin #3134- Terminated Vested h) Wilfreda T. Mirafuente #3291 -Option G-2 i) Daniel 0. Sanchez #8074- Option G-2
M/S/C (Srinath/Kraynick) to approve the Consent Agenda.
6. CLOSED SESSION
7. Matters pertaining to Personnel: Disability Medical Records.
a) Pamela Mathis Employee #2110/Retiree #13432
Adjourned to Closed Session at II :02 a.m.
Reconvened from Closed Session at 11:04 a.m.
REGULAR AGENDA
8. CLOSED SESSION REPORT
9. Termination of Required Annual Medical Reevaluation Request For Pamela Mathis Employee #2110/Retiree #13432
M/S/C (Rosenquist/Russell) to approve the Termination of Required Annual Medical Reevaluation Request For Pamela Mathis Employee #211 0/Retiree #13432.
NOTE: MIS/C MEANS MOTION SECONDED AND CARRIED AND, UNLESS OTHERWISE INDICATED, MOTION PASSES UNANIMOUSLY.
Board of Pensions Summaty Minutes
Page 2 of 13 Tuesday, August 14,2018
10. Medical Premiums for Retired ATU Clerical Member- Connie Martinez
a) Medical Premium Correspondence/Issue
Maria Chavez, Senior Human Resources Analyst, summarized the memo inclnded in the agenda packet.
Cassandra Leven ton, Senior Human Resources Analyst for the VT A's Health and Welfare unit, referred the Board to the letter that was sent to the retiree notifying her of the issue.
Ms. Chavez stated that given the language in the Pension Plan document and the Collective Bargaining Agreement (CBA) between VTA and ATU, the cost of the retiree's medical coverage should have been deducted from the Spousal Medical Fund. It is her understanding that VT A is scheduled to transfer the cost from the Spousal Medical Fund. The excel spreadsheet that was distributed to the Board summarizes the various costs associated with the retiree's medical coverage. In addition, Ms. Martinez was reimbursed the Medicare Part B premium amount in error and this amount is also scheduled to be transfened fi·om the Spousal Medical Fund back to VT A.
Member Rosenquist sought confirmation that the retiree contribution should have been deducted from Ms. Martinez's pension check.
Ms. Chavez responded yes.
Vice-Chairperson Hudda added that she also should not have been given the Medicare Part B reimbursement. The contributions are owed to the Spousal Medical Fund not the Pension Plan. The CBA language authorizes VTA to take those monies from the Spousal Medical Fund. The language also indenmifies VTA for all associated costs and expenses.
Manuel Martinez, Ms. Connie Mattinez's attomey, introduced himself He stated that he will have a discussion with the Pension Plan's legal counsel to dete1mine what is or is not owed. He summarized his understanding that the $15,000 amount was paid by VTA and it should have been deducted from the Spousal Medical Fund. VTA is being made whole from the trust fund. The money is not coming from Ms. Martinez, it did not go to Ms. Martinez, it was never meant to go to Ms. Mattinez. Based on the information provided, it appears that there is a transaction of approximately $86,000 that includes the reimbursement back to VT A. He is not clear how that money went to Ms. Martinez.
Board of Pensions Summary Minutes
Page 3 of 13 Tuesday, August 14, 2018
Ms. Chavez responded that the money did not go to Ms. Martinez. Ms. Martinez's medical coverage shonld have been paid out of the Spousal Medical Fund. The Board oversees the Spousal Medical Fund which is why the item is before the Board. The money for Ms. Martinez's medical coverage should have been transferred from the Spousal Medical Fund to VTA; that did not happen.
Member Rosenquist clarified that the issue is that Ms. Martinez received I 00% of her pension check but she should have been deducted the retiree contribution for her medical coverage. He is speaking about the $15,000 amount. All other individuals began paying the contribution towards their medical coverage; and she too should have been contributing via a deduction from her pension check. She did not; she got I 00% of her pension amount.
Mr. Martinez stated he agreed that is what the argument is. That is what he needs to discuss with the Plan's legal team. He disputes the amount and the calculation. There are other issues he can raise with the legal counsel.
Member Rosenquist commented that the Board has the responsibility of managing the Spousal Medical Fund; therefore when we pay VTA, they are out of it. It is the Board's responsibility; and the Plan's attorney will speak with you.
Mr. Martinez stated he understands the Board's role. Ms. Martinez did not have any part of that error in terms of any misrepresentation or fraud. The question is what is going to happen as a result of the error.
Further discussion regarding the Pension Plan language relevant to Retired ATU Clerical Members followed.
Alternate Member Ragni asked ifthere is an effort to review and ensure there were no other similar errors.
Ms. Chavez stated that Ms. Martinez is the only Retired A TU Clerical Member. It is a unique situation.
Alternate Member McKeon asked how the error was discovered.
Ms. Chavez responded that when she was conducting the data collection for the OPEB valuation, Ms. Matiinez's setup appeared odd; so she reached out to Cassandra Leventon to review the information. Ms. Leventon confirmed that her record was not correctly set up.
Member Kraynick sought to clarify whether the action was to refer this item to the Plan's legal counsel.
Board of Pensions Summary Minutes
Page 4 of 13 Tuesday, August 14,2018
Vice-Chairperson Hndda responded yes. Per the CBA language, VTA is entitled to be made whole and is scheduled to transfer the money to VT A. It results in the Spousal Medical Fund being owed monies from Ms. Martinez. As fiduciaries, the Board is responsible to administer the Spousal Medical Fund; and as such, it is their duty to refer the item to the Plan's legal counsel and have him advise the Board on the best course of action. The administration of the Spousal Medical Fund is the responsibility of the Board.
Member Rosenquist asked what account was the Medicare Part B reimbursement paid out of.
Vice-Chairperson Hudda stated he believes it is the Pension Plan bnt he needs to confirm who ultimately bears the cost for the Medicare Patt B reimbursement.
He added that if the Board fails to make a refenal to the legal counsel, it is de facto making a decision that the Spousal Medical Fund will absorb the cost. He would not be comfortable with that approach.
b) Referral to Pension Plan Legal Counsel
Alternate Member McKeon sought clarification that if the referral to legal counsel is made, the legal counsel will engage with Ms. Mattinez's attorney and then he will come back to the Board to discuss, correct? There are some issues he would like to raise but not at this time.
Vice-Chairperson responded yes. Once the Plan legal counsel engages with opposing counsel, it will be a closed session item at a subsequent Board of Pensions meeting with the Plan's legal counsel present.
M/S/C (Rosenquist/McKeon) to approve the Refenal to Pension Plan Legal Counsel.
11. Spousal Medical Fund and Retiree Vision/Dental Fund Valuations as of January 1, 2018
Graham Schmidt, Consulting Actuaty from Cheiron, directed the Board to the Spousal Medical Fund valuation report to review the results.
He referred the Board to Table I-1 to discuss the increase in the liabilities, 2.80% and 14.33% for active patticipants and retiree pmticipants, respectively. He added that there are positives, the assets have done well and the retiree medical premiums were lower than previously expected. Overall, the shortfall decreased from $8.8 million to $8 million from the last time they did the analysis. That is mostly a result of the asset returns.
Board of Pensions Summmy Minutes
Page 5 of 13 Tuesday, August 14, 2018
He referred the Board to Table I-3 to compare the results from the previous analysis to the current analysis. He directed the Board to Chart I-1 and stated that these projections are based on a closed group basis. They only look at the employees who are currently working for VTA and those that have retired. They do not include any new contributions or benefits on behalf of any new entrants. For example, someone who is hired tomorrow; that person is not showing up on the projections. If they did that, it would be known as an open group projection.
They did an open group projection on the Retiree DentalNision valuation because they are considering new changes to the plan.
If they do that for the Spousal Medical Fund, the situation looks somewhat worse. The reason for that is that the contributions are flat. Employees contribute 40 cents per hour per worker. The contribution does not increase over time. They know medical costs go up over time. The premiums in 20 or 30 years will be much higher but the contribution rate is still only 40 cents per hour per worke1·· There is nothing built into it to increase that amount over time. If the premiums continue to increase there will be an imbalance between the benefits and the contributions. That is why they are only looking at the current population. They need to understand that if the plan continues without any changes, there will be a time when they will diverge because the premiums are increasing but the contributions are not. Even if they only look at the current population, they are still projected to run out of money in 2045.
He refened the Board to Table I-4 to review the results using different discount rates. He added that the higher the assumed rate of return on assets, the lower the liability. The less money they have to set aside now, if it is going to earn more in the future, it lowers the liability. The shortfalls and "Run Out" years will be different with the different assumed rates of return. They also calculated the contribution rates that would be necessary to fully fund the cunent benefits based on the current population in the plan.
Member Rosenquist asked if the projections of future benefits are based on the net cost of the insurance premiums.
Mr. Schmidt responded it is based on the amount the Spousal Medical Fund pays; so yes, it is net of the retiree contribution of $150/per month.
Member Rosenquist asked if the retiree contribution was increased, would that be another way to lower the liability.
Mr. Schmidt stated yes. They have three different levers: investment earnings which is out of their hands since they cannot control the markets but they can
Board of Pensions Sununmy Minutes
Page 6 of 13 Tuesday, August 14,2018
control the investment strategy; the benefits which is what is agreed to as to what the retiree will contribute; and the contributions that the employees pay, 40 cents per hour per worker.
He referred the Board to Table I-5 to review the results under different medical trend rates. The growth of the premiums will greatly impact the stability of the plan over the long term. He directed the Board to pages 9 and I 0 to review the medical plan election and medical premium cost trend assumptions.
Vice-Chaitperson Hudda commented that the plan is an open group because they have employees who get hired; the size of the workforce does not change. The contributions are flat. As employees continue to retire and their eligible spouses continue to get the benefits, the benefit outflow continues to increase.
Mr. Schmidt stated that if they did the projection on an open group basis, the run out date is likely to change but he is not sure by how much it would change. However, Vice-Chairperson Hudda is correct, if the plan keeps going and contributions do not change and benefit levels continue to rise, then yes; most of the benefit payments for the next 20 to 30 years are for people that are already in the plan. It will not be for another 30 years that those new hire benefit payments would start to really affect the plan and they would still be collecting contributions on their behalf until that time. He is not sure if it would change the run out date ve1y much but it would increase the long term deficit of the plan.
Vice-Chai1person Hudda connnented that when these funds run out, there is no obligation on either the ATU or the VT A to continue this benefit. It is what was negotiated and is pati of the plan language.
Alternate Member McKeon asked about the closed group, it is not a stagnant group. At the end, they all die. How do they balance out the projections with a decreasing-sized group?
Mr. Schmidt responded the same way they do it for the Pension Plan. It is a snapshot of the cunent active and retired members. For each active member, they project their entire career. They assume there is a 5% chance an employee leaves this year, 3% chance they go out on disability in four years, a I 0% chance they retire when they turn age 55, etc. They do this for eve1y employee. For retirees, they are projecting a I% chance they will die this year, I% chance they die next year, etc. For each person, they project up to I 00 years out depending how old they are.
Alternate Member McKeon referred the Board to page 11 and read "Employees hired after January l, 2016 are eligible to retire at age 52 with five years of service."
Board of Pensions Summmy Minutes
Page 7 of 13 Tuesday, August 14, 2018
Mr. Schmidt responded that is the PEPRA benefits; age 52 is the minimum retirement age.
Mr. Schmidt referred the Board to the Retiree Vision/Dental Fund valuation report to review the status of the plan if they considered different options with different premium levels.
He directed the Board to Table I-1 to review the different scenarios: current dental plan, a $50 benefit level, and two different dental plans. He stated that those assumptions are based on the amounts not increasing each year even if the premiums for those plans increase.
Member Rosenquist commented that this also assumes that there is no vision plan/benefit.
Vice-Chairperson Hudda sought to clarity that the benefit amount that was approved by the Board was $30/per month per retiree so even though the current premium is $25.09, the amount approved is $30.
Mr. Schmidt replied that the second column assumes that the benefit amount is increased to $50/per month per retiree. These assumptions include those who are currently using the benefit. It does not include those who are waiving or not enrolled in the dental plan. They do not assume everyone is going to take the plan. It also assumes that there are no new entrants and the assumed rate of return is 7%.
He referred the Board to Table I-2 and stated if the Board wanted to provide a benefit that actually covered the premium of the dental plan, they assume that the premium cost will increase. Table I-2 assumes a 5% annual increase to the dental premium. They assume a shortfall even on a closed group basis. If they assumed an open group, the shortfall would be greater.
He directed the Board to Chart I-1 to review projections if the premium does not change and there is no change to the contribution rate. Charts I-2 and I-3 display the projections if the plans change and there are annual 5% premium increases.
He added that Table I-3 lists the breakeven premium which is $41 with an assumed 5% growth in the premium each year for a closed group. For an open group, the breakeven premium would be lower.
He referred the Board to Tables I-4, I-5, and I-6 to show the different results for each premium with different investment return assumptions. He reviewed Section
Board of Pensions Summary Minutes
Page 8 of 13 Tuesday, August 14,2018
II to review projections of active and retiree populations and highlighted Chart II-2 and Table II-2 to discuss the open group projections.
Vice-Chai1person Hudda stated that the ATU should consider the results of the · valuation report when they look at any benefit changes related to the dental program for A TU retirees. He added that he recommended that the A TU consider I) the shortfall of the Spousal Medical Fund, 2) will the benefits be purely dental or does ATU anticipate adding a vision benefit because that can dramatically change the dollar amounts that they consider, 3) the existing benefit is a fixed dollar amount without any trend built into it and the projections made are on a closed group basis.
Member Russell stated that retirees are complaining that the current plan does not provide sufficient benefits. There are limited providers who accept the plan.
Maria Chavez, Senior Human Resources Analyst, commented that the current plan is an HMO while the two alternate plans that ATU was looking at are PPO plans tlu·ough Delta Dental.
Vice-Chaitperson Hudda stated that the Board's position has been that the benefit is a fixed dollar amount so you get the best plan that you can and if the premiums are a little more than that amount, the retiree would pick up the remaining balance. The information is useful for the A TU to decide how they want to proceed. When they are ready, they can notifY staff to add the item to a future Board meeting.
12. Staff Recommendation of the Firm to Provide Actuarial Audit Services
Ms. Chavez summarized the staff recommendation.
1\VS/C (Rosenquist/Russell) to approve the Staff Recommendation of the Firm to Provide Actuarial Audit Services.
13. NEPC Performance Report for Quarter Ending June 30, 2018
Senior consultants from NEPC, Don Stracke and Dan Hennessy provided an overview of the 2"d qumter performance report.
Mr. Hennessy highlighted pages 6, 14-15, 22-23, and 30.
He added that the Pension Plan is managed more conservatively than the average of other public pension plans. It is less volatile than other plans. In a time of positive returns, it will slightly trail. In a time of big negative retums, you would expect a plan that is more conservative to do better and fall less.
Board of Pensions Summary Minutes
Page 9 of 13 Tuesday, August 14, 2018
Mr. Hennessy referred the Board ·to pages 39 to 41 to review the managers' performance. He commented that the plan has a value bias.
Member Srinath and Alternate Member Hammell left their seats at 11:56 a.m.
Alternate Member Ragni left her seat at 12:00 p.m.
Alternate Member Ragni returned to her seat at 12:14 p.m.
14. Small Cap Value Active Versus Passive Management
Mr. Stracke referred the Board to pages 3 to 6 of the handout titled, "Revisiting Active vs. Passive and Wedge Capital" to discuss the challenge of investment ·program management, active vs. passive management, active vs. passive analyses, and active vs. passive- intuitive hypotheses and pages 14 and 15 to review the U.S. Small Cap Value Equity- Rolling Periods and Benchmark Ranks.
He directed the Board to pages 17 and 18 to discuss Wedge Capital Management aud its historical perfotmance.
Alternate Member McKeon asked what Wedge's explanation was for their underperformance.
Mr. Stracke stated Wedge argnes that their style is out of favor. The very low quality small cap value companies that have almost no earnings or negative earnings have been doing incredibly well.
Sean Bill, VT A's Investment Program Manager, responded that companies like Tesla, no earnings, losses, record highs just last week. You are seeing a big divergence from traditional value.
Mr. Stracke added that against an index, they are underperforming; the argument that it is because they are not investing in the kind of companies that are doing very well within the value universe makes sense. If you look at how they. are doing against their peers, other value managers have different types of stocks and so they may be more willing to invest in those lower or negative earning stocks.
He refened the Board to page 20 to discuss Wedge vs. small cap value universe over a longer period oftime and pages 22 and 23 to review NEPC's recommendations for small cap value managers .. The Board has options to consider.
Board of Pensions Summary Minutes
Page !Oofl3 Tuesday, August 14,2018
Mr. Bill referred the Board to page 23 to review Wedge's returns compared to the median and average retm'ns and commented that the 1 year return is what took Wedge from being considered a good manager. In all other periods, their returns were close.
He added that they have paired active versus passive in other asset buckets so it gives them two return drivers; by combining the two streams, you might get a more stable return profile. The second item would be do you monitor Wedge more closely; swap out Wedge; look at a hybrid such as a smart beta. They would have to look at the strategic asset allocation and the passive versus active in terms of a combo. That would be the next step.
Member Rosenquist commented that they previously had Brandywine and now Wedge. He does not see them switching to another manager. It is more of a question of how much should they go passive.
Alternate Member Fadal asked Mr. Stracke for his rec01mnendation.
Mr. Stracke responded he believed they should keep Wedge and continue to monitor them. He would also recommend passive management. He stated that some of their other clients have a greater degree of passive than this plan but it is more in the large cap arena. If they decide to go passive that is fine but he would recommend going passive continuing the value tilt.
Alternate Member McKeon stated it appears there was a fundamental change that caused the 6 to 7% drop.
Mr. Hellliessy stated they did not see a fundamental change. They are sticking to their knitting but the market changed.
Alternate Member McKeon responded that their peers did not appear to have that same issue.
Mr. Bill replied that it shows up primarily in their stock selection.
Member Kraynick asked if they continue as is, at what point do they consider a change.
Mr. Stracke stated they could look at 3 to 6 months.
Mr. Hetmessy added that they could prepare what the alternative index strategy would look like and what they would save in fees.
Board of Pensions Summary Minutes
Page II of13 Tuesday, August 14, 2018
Vice-Chairperson Hudda stated that he was not opposed to waiting another 3-4 months of monitoring them. If something does not change within that timeframe, he would not be opposed to making a change.
Mr. Bill commented that Wedge is on watch and we should let them know that they will be watching them for the next 3 to 6 months.
Vice-Chairperson Hudda stated yes but he is also looking at NEPC to present alternatives. He agrees with Member Rosenquist at looking at a passive strategy for the same asset class and with the same value bias.
Mr. Stracke directed the Board to page 22 .to review the list of their manager recommendations. If they look at any period and compare Wedge to any of those managers, in some cases they are ahead or behind some of those managers. There is no guarantee that they are going to pick the one, prospectively, that will outperform. Even their recommended list has a wide variation in results.
He suggested that they have Wedge come back out in three months. He could come one month prior to Wedge to discuss options so they are laid out. After Wedge comes out, the Board can make the decision.
Vice-Chairperson Hudda agreed.
15. Report on VTA- ATU, Local265 Pension Plan Investments for Month of June 2018
The Report on VTA- ATU, Local265 Pensio.n Plan Investments for Month of June 2018 was received and filed.
16. Saltzman & Johnson Law Corporation Case Update Memo and Court Decision Regarding Hipsher v. Los Angeles Countv Employees' Retirement
Saltzman & Johnson Law Corporation Case Update Memo and Comt Decision Regarding Hipsher v. Los Angeles County Employees' Retirement was received and filed.
17. CALAPRS Update Summer 2018
The CALAPRS Update Summer 2018 was received and filed.
18. Update on Pending Final Benefit Payments
The Update on Pending Final Benefit Payments was received.
Board of Pensions Summary Minutes
Page 12 of 13 Tuesday, August 14, 2018
19. Update on Separated Employees' Distribution of Contributions Report
The Update on Separated Employees' Distribution of Contributions Report was received.
20. Investment Committee Chairperson's Report
There was no Investment Committee Chairperson's Report.
21. Board of Pensions' Work Plan
No changes were made to the Board of Pensions' Work Plan.
22. Requests for Future Agenda Items
There were no Requests for Future Agenda Items.
23. Chairperson's Report
There was no Chairperson's Report.
24. Announcements and Communications ·
Member Kraynick announced he was retiring at the end of the month.
Vice-Chairperson Hudda thanked Member Kmynick for his service to the Board.
There were no other Announcements and Communications.
25. Adjoum
On order of Vice-Chairperson Hudda, there being no objection, the meeting was adjourned at 12:52 p.m.
Board of Pensions Summary Minutes
Pagel3ofl3
Respectfully Submitted,
Lito Sonico Human Resources Assistant Human Resources Department
Tuesday, August 14, 2018
Santa Clara Valley Transportation
n''1''"''' Authority
August 14, 2018
Mr. Ali Hudda Acting Chairperson, Board of Pensions Santa Clara Valley Transpo1tation Authority-Amalgamated Transit Union, Local 265 Pension Plan 3331 North First Street San Jose, CA 95134
Dear Acting Chairperson Hudda,
AGENDA ITEM #6
I am writing to inform you that I am appointing Mr. Sylvester Fadal, Deputy Director of Business Services, as a regular member to serve as a Trustee on the Board of Pensions representing the Santa Clara Valley Transportation Authority. He will replace Ms. Suzy ChoiLee as a regular member of the Board of Pensions, due to her resignation. His appointment is effective immediately.
Should you have any questions, please feel free to contact Mr. Alberto Lara, Director of Business Services, at (408) 321-5801.
Sincerely,
~vt-~ Nuria L Fernandez General Manager/CEO
cc: Alberto Lara Sylvester Fadal Marfa Chavez HR Processing Unit
3331 North First Street San Jose, CA 95134-1927
Administration 408-321-5555 Customer Service 408-321-2300 Solutions that move you
AMAlGAMATED TRANSIT UNION
AFL·CIO
Ms. Nuria I. Fernandez General Manager
LOCAl265 1590 La Pradera Drive
CAMPBELL, CALIFORNIA 95008·1533
PHONE (408) 874·0900 rAX (408) 874-0907
August 31,2018
Santa Clara Valley Transportation Authority 3331 North First Street, Building B San Jose, CA 95134-1906
1902 Charter Seal
Subject: Change in Union Representation- SCVTA/ATU Local265 Pension Board
Dear Ms. Fernandez:
Effective August 23,2018, and until further notice, the following changes have been made in regards to Union Representation on the Santa Clara Valley Transportation Authority/Amalgamated Transit Union Local265 (SCVTA/ATU Local265) Pension Board:
Michael McKeon, #13353, Trustee Terry L. Russell, #3126, Trustee Khryshtal Hammell, #5804, Trustee John Courtney, #13345, Alternate Trustee Satnam Gill, #5468, Alternate Trustee
If you have any questions regarding the Changes in Union Representation on the SCVTAIATU Local265 Pension Board, please do not hesitate to call me at (408) 874-0900, ext 214.
TE . RUSSELL President and Business Agent
cc: SCVTA/ATU Local265 Pension Board Trustees and Alternates
AMAlGAMATED TRANSIT UNION
AFL·CIO
Ms. Nuria I. Fernandez General Manager
LOCAL265 1590 La Pradera Drive
CAMPBELL, CALIFORNIA 95008-1533
PHONE (408) 874·0900 t-AX (408) 874-0907
August31, 2018
Santa Clara Valley Transportation Authority 3331 North First Street, Building B San Jose, CA 95134-1906
Subject: Change in Union Representation - SCVT AI ATU Local 265 Pension Plan Investment Committee
Dear Ms. Fernandez:
AGENDA ITEM #8
1902 Charter Seal
Effective August 23, 2018, and until further notice, the following changes have been made in regards to Union Representation on the Santa Clara Valley Transp01iation Authority/Amalgamated Transit Union Local 265 (SCVTA/ATU Local265) Pension Plan Investment Committee:
Terry Russell, #3126, Investment Committee Member Michael McKeon, #13353, Investment Committee Member John Courtney, #13345, Alternate Member
If you have any questions regarding the Changes in Union Representation on the SCVTA/ATU Local265 Pension Plan Investment Committee, please do not hesitate to call me at (408) 874-0900, ext 214.
Sincere~
/~L.RUSSELL President and Business Agent
cc: SCVTA/ATU Local265 Pension Board Trustees and Alternates
AGENDA ITEM #9
Santa Clara Valley Transportation Authority ~-----------------~~--~--------------~~----~
Amalgamated Transit Union, Local 265 Pension Plan
August 29,2018
BOARD MEMORANDUM ACTION DISCUSSION INFO X
TO: ATU Board of Pensions
FROM: Sean P. Bill J t;M Investment Program Manager
SUBJECT: Repmi on SCVTA-ATU, Local265 Pension Plan Investments for the month of July 2018.
FOR INFORMATION ONLY BACKGROUND:
SCVTA-ATU, Local 265 Pension funds are invested in accordance with the asset allocation strategies described in the Investment Policy amended June 10,2014.
DISCUSSION:
General Economic Conditions
Real gross domestic product (GDP) increased at an annual rate of 4.2 percent in the second quatier 2018, according to the "second" estimate released by the Bureau of Economic Analysis. The increase in real GDP in the second quatier reflected positive contributions from personal consumption expenditures (PCE), nomesidential fixed investment, expmis, and federal government spending. In the first quatier 2018, real GDP increased 2.0 percent.
Headline consumer prices, as measured by the consumer price index (CPI), rose 2.9% year over year as of July 2018. Core CPI, which excludes volatile food and energy prices increased at a rate of2.4% year over year as of July2018. The Federal Reserve continues to tat·get an inflation· rate of2.00%.
The unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA was 2.8 percent in July 2018, down from a revised 3.0 percent in June 2018, and below the year-ago estimate·of3.6 percent. This compares with an unadjusted unemployment rate of 4.4 percent for Califomia and 4.1 percent for the nation during the same period.
General Market Conditions
The S&P 500 Index returned 3.72% in July 2018. Lat·ge cap stocks retumed 3.45% and small cap stocks retumed 1.74%. Within the large cap space, growth stocks nnderperformed value stocks, retmning 2.94% and 3.96%, respectively. The top-performing sectors were producer durables, healthcare, and consumer staples. The worst-performing sectors were utilities, consumer discretionary, and energy.
3331 Norlh Firs! S!reel, Bldg. 81 • Son Jose, CA 95134·1927 ·Phone 408.321.5808 • Fox 408.915.0890
The Barclays Aggregate index returned 0.02% in July 2018. Investment grade corporate debt returned 0.80% and agency MBS returned -0.10%.
In global markets, the United States 1 0-year government bond yield ended the month at 2.96%, up from 2.86% at the end of June. The European 1 0-year government bond yield ended the month at 0.44% and the Japanese 1 0-year govermnent bond yield finished June at 0.06%.
SCVTA-ATU, Local265 Pension Plan Assets
It is the policy of the SCVTA-ATU Board of Pensions to have a well-managed investment program that provides for the financial needs of the pension plan and allows the investments to be appropriately diversified and prudently invested to protect the safety of the principal while maintaining a reasonable return. Assets are invested within the following investment guidelines:
Asset Allocation Range Target Actual Domestic Large-Cap Value 10-20% 15% 15% Domestic Large-Cap Index 5-15% 10% 10% Domestic Small-Cap Value 5-15% 10% 10% Int'l Equity Developed Markets 8-18% 13% 13% Int'l Equity Emerging Markets 0-10% 5% 5% US Core Real Estate 5-15% 10% 10% Diversified Real Assets 0-10% 5% 5% Domestic Fixed Income 15-30% 22% 22% Absolute Return 4-14% 9% 8% Cash 0-05% 1% 2%
The SCVTA -ATU Pension Plan composite pmtfolio outperformed its policy benchmark in July 2018 by 0.46%. The C\UTent yield of the Dodge & Cox Fixed Income portfolio is 4.08% and the curr-ent effective duration is 4.72 years.
Market performance for each money manager is summarized in the following table:
Page 2 of5
Investment Performance as of July 2018 I Asset Class Fund Manager July 3Mo Y-T-D 1 Yr 3Yr 5 Yr 10Yr Large-Cap Value Boston Partners 4.83% 3.78% 3.13% 14.17% 10.22% 10.74% 11.06% Stocl<s !,Russell 1000 Value Index 3.96% 4.83% 2.20% 9.54% 9.49% 10.03% 8.95%
Large-Cap Index !State Street 3.71% 6.85% I 6.42% I 16.16% I 12.48% 113.08% 110.66% iS'&P 500 Index 3.72% 6.88% 1 6.47% 1 16.24% 1 12.54% 13.14% 10.67%
~mall-Cap Value redge 5 2.19% 7.60% 4.58% 10.45% 10.69% 11.10% 10.09% :Stocl<s !Jussell 2000 Value Index 1.77% 8.35% 7.32% 14.38% 12.92% 10.19% 9.52%
Int'l Equity Dev. MFS 6 2.81% 3.47% 4.51% 14.43% 10.70% 8.85% 7.04% Marl<ets Growth MSCI AC World ex-US Growth Index 1.72% -0.48% -0.60% 8.03% 7.07% 6.76% 3.62%
Emerging Marl<et !State Street EM7 I 2.30% -5.10% I -4.71% I 4.24% I I I MCSI World Emerging Market 2.20% -s.s2% I -4.60% 1 4.36% I I
US Core Real Estate tuns 8 1.77% 3.70% 7.70% 7.99% 9.40% -lfj(;:REIF NFI-ODCE 2.05% 4.28% 8.44% 9.36% ll.04% -
Diversified Real rincipal Group 0.77% 1.11% -0.25% Assets Diversified Real Assets Strategic Index 0.15% 0.47% -1.03%
Fixed Income !Dodge & Cox 0.49% 0.73% -0.75% 0.20% 3.13% 3.46% 5.11% Bm·clays US Aggregate Bond Index 0.02% 0.61% -1.60% -0.80% 1.50% 2.25% 3.74%
Absolute Return iSI<y Bridge 9 0.56% 2.09% I 6.08% I 1o.2o% I I HFRJ FoF Index 0.24% 0.45% I 0.92% I 4.32% I I
Composite Portfolio Returns 10 2.04% 2.72% I 2.62% I 8.63% I 7.83% 8.09% 8.70% I Policy Benchmark Returns I 1.58% 1 2.30% 1.62% 6.81% 7.21%
5 Funded April!, 2009. Prior manager was Brandywine with the same benchmark. 6 Funded December 14, 2007. Prior managers were Putnam and Fidelity with MSCI EAFE as their benchmark. 1 Initially funded June 30, 2016
7.38% I 6.83% I
8 Initially funded July I, 2010. UBS Realty Investors LLC with NCREIF NFK>DCE as their benchmark. Report 45 days after quarter enled. 9 Funded January 28, 2016 10 Investment perfonnances by prior managers are included in composite returns and historical policy benchmark returns.
l-T-D 9.76%
7.12%
7.38% 7.30%
10.21%
9.93%
5.42%
2.21%
15.71% 16.29%
10.60% 12.49%
-0.49%
-2.06%
5.90% 4.53%
3.75% 4.75%
6.72% 4.75%
8.28% 6.16%
BOSTON PARTNERS - The Domestic Large Cap Value Equity manager outperformed its policy benchmark in July 2018 by 0.87%. Stock selection in the energy and finance sectors both contributed to relative outperformance.
Page 3 of5
WEDGE- The Domestic Small Cap Value Equity manager outperfmmed its policy benchmark in July 2018 by 0.42%. Stock selection in the consumer staples and transportation sectors were contributors to the relative outperformance while stock selection in the consumer staples sector detracted from relative performance for the month.
MFS - The International Equity manager outperfmmed its policy benchmark in July 2018 by 1.09%. Stock selection within the basic materials, consumer staples healthcare and teclmology sectors all contributed to relative outperformance for the month.
UBS TPF- The core real-estate manager underperfonned its policy benchmark for the second quarter ending July 2018 by 0.28%. Income from rents contributed 1.18% for the quarter and price appreciation contributed 0.59% for the quarter.
PRINCIPAL GROUP- The Diversified Real Asset Manager outperformed its policy benchmark in July 2018 by 0.62%. Allocations to MLPs, natural resources and the water sectors all contributed to relative outperfmmance for the month.
DODGE & COX- The Fi<'ed Income pmifolio manager outperformed its benchmark in July 2018 by 0.47%. Contributors to relative performance included the pmifolios' shmier relative dmation, an ove1weight to corporate bonds and positive security selection within credit.
LIGHTHOUSE- The Absolute Retum manager unde1perfmmed its policy benchmark in July 2018 by 0.49%. Quantitative and relative value strategies both detracted from relative perfmmance for the month.
SKYBRIDGE - The Absolute Return manager outperfmmed its policy benchmark in July 20 I 8 by 0.32%. Relative value, event driven and structured credit all contributed to relative outperformance for the month.
A 7.00% rate of return assumption is used in the annual actuarial analysis for the ATU Pension Plan. The results of the actuarial analysis determine VTA's annual contribution rates. The annual retums for the ATU Pension Plan portfolio have been equivalent to or exceeded the 7.00% assumed rate of return 11 out of 15 years.
Historic Pmifolio Perfmmance (calendar year) for the last fifteen calendar years:
ATU Spousal Medical Trust Fund, Dental, and Vision Plan
Asset allocation for the ATU Spousal Medical Trust Fund (including funds for dental and vision plans) is provided for in the SCVTA-ATU Pension Plan Investment Policy.
Asset Allocation Domestic Fixed Income Domestic Large Cap Index Cash
Range 30-50% 50-70%
0-5%
Target 38% 60% 2%
Actual 36% 62% 2%
The ATU Spousal Medical Trust Fund composite portfolio outperfotmed its policy benchmark in the current month by 0.25%. The current yield for the fixed income pmtfolio is 4.08% and the current
. effective duration is 4.72 years.
Market performance for each money manager is summarized in the following table:
Investment Performance as of July 2018 Asset Class \Fund Manager July 3Mo Y-T-D I Yr 3 Yr 5YI' IOYr I-T-D
;Fixed Income !Dodge& Cox 0.49% 0.60% -0.71% 0.15% 2.72% 3.08% 4.99% 4.53% Barclays US Aggregate Bond Index 0.02% 0.61% -1.60% -0.80% I.50% 2.25% 3.74% 3.82%
Composite Portfolio Retums I 2.49% I 4.43% 3.65% 10.19% I 8.97% 9.45% I 9.24% I 7.96% Policy Benchmark Returns I 2.24% 4.35% 3.27% I 9.23% I 8.14% I 8.8o% 8.I3% I 7.26%
DODGE & COX- The Fixed Income portfolio manager outperformed its benchmark in July 2018 by 0.4 7%. Contributors to relative performance included the portfolios' shmier relative duration, an overweight to corporate bonds and positive security selection within credit.
Other Data
The valuation ofVTA's securities is provided by Interactive Data Corporation (IDC), Merrill Lynch Securities Pricing Service and Bloomberg Generic Pricing Service. These finns are the leading providers of global securities data. They offer the largest information databases with cunent and historical prices on securities traded in all major markets.
This repmi complies with VTA's adopted investment policies. Based on budgeted revenues and expenditures as well as actual transfers to/from reserves, there are sufficient funds available to meet expenditure requirements for the six months ending Janumy 31,2019.
Page 5 of5
ATU PENSION PLAN INVESTMENT PORTFOLIO PERFORMANCE MONEY MANAGERS' TOTAL MARKET RETURN- TRADE DATE
FOR THE MONTH OF JULY 2018
SUMMARY: July 31,2018
Description
1 - VTAIATU Pension Fund-Fixed Income 2 - VTAIATU Pension Fund-Stock Large Cap Value 3 - VTAIATU Pension Fund-State Street -Index 4 - VT AIATU Pension Fund-Stock Small Cap Value 5 - VTAIATU Pension Fund-lnt'l- Equity Growth 6 - VTAIATU Pension Fund- Emerging Markets S. Street 7 - VTAIATU Pension Fund- US Core Real Estate (2) 8 - VTAIATU Pension Fund- Pricipal Group Real Assets 9 - VTAIATU Pension Fund- Sky Bridge (2) 10- VTAIATU Pension Fund- Lighthouse (2) 11- VTAIATU Pension Fund- Cash
Total Pension Fund
Legend: (1) Total includes contributions I withdrawals made during current month.
INVESTMENT OBJECTIVE OF VTA/ATU MONEY MANAGERS IS TO OUTPERFORM BROAD MARKET BENCHMARKS, NET OF FEES. STARTING JANUARY 2010 THE COMPOSITE BENCHMARK CALCULATION WILL BE BASED ON THE INVESTMENT POLICY TARGET ALLOCATION
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
-1.00%
-2.00%
-3.00%
Historical Returns
MONTHLY PERFORMANCE DATA Dodge & Cox
Barclays Capital US Aggregate
Santa Clara Valley Transportation Authority DODGE & COX Performance
ATU PENSION FIXED INCOME Money Manager vs. Benchmark
YTD Geometric May-18 Jun-18 Jul-18 2018 A.nnualized ITO
-0.38% -0.62% 4.83% 3.13% 9.76%
0.59% 0.25% 3.96% 2.20% 7.12%
INVESTMENT OBJECTIVE OF DOMESTIC LARGE CAP VALUE EQUITY MANAGER IS TO OUTPERFORM BROAD MARKET (BENCHMARK), NET OF FEES. EFFECTIVED JULY 2006, RUSSELL 1000 VALUE REPLACED Sand P 500 BARRANALUE.
Funded Equity Money Managers- Sept. 4, 1998
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
-2.00%
-4.00%
-6.00%
-8.00%
-10.00%
-12.00%
Historical Returns
Santa Clara Valley Transportation Authority STATE STREET GLOBAL ADVISORS Performance
ATU PENSION LARGE- CAP INDEX Money Managervs. Benchmark
MSCI AC World 1.00% 1.75% 2.40% 1.10% 2.16% 5.21% -4.47% -1.37% 0.75% -0.57% -1.60% 1.72% -0.60%
INVESTMENT OBJECTIVE OF INTL. EQUITY MANAGER IS TO OUTPERFORM THE BROAD MARKET PERFORMANCE OF MSCI EAFE INDEX, NET OF FEES. Funded Putnam Equity Index- May 2000 Funded Pyramis Equity Index -February 2004 Funded MFS Equity Index -December 14, 2007
5.42%
2.21%
12.00%
10.00%
8.00%
6.00% 4.00%
2.00%
0.00% ~2.00%
-4.00%
-6.00% -8.00%
-10.00%
-12.00%
-14.00%
-16.00%
-18.00%
Historical Returns
State Street EM
Emerging Market
Santa Clara Valley Transportation Authority STATE STREET EM Performance
To: SCVTA-ATU, Local265 Pension Plan Board of Pensions
From: Caldwell Calame, CFA, General Partner
Date: September 4, 2018
Re: WEDGE Capital Management: Small Cap Value
We have managed the WEDGE Small Cap value portfolio since 1990. Over those 28 years, we have experienced many different market environments and have worked hard to try to deliver strong, consistent performance. Historically, we have experienced performance headwinds in markets where valuations have not mattered. We believe buying better quality companies at discounted valuations will generate excess returns over a market cycle. Although the "Growth" market coupled with expensive stocks outperforming has recently created a substantial headwind, we are staying disciplined to our philosophy and process. We believe that these pronounced headwinds have created some interesting opportunities for investors with a long term view and that the recent underperformance can be reversed.
Macro performance backdrop {2 years):
• Junk Rally in back half of 2016:
We were one of the few Small Cap Value managers to be in-line with the benchmark at the time of the November election but ended -389 bps relative to the R2000V for the full year. We invest in higher quality (higher ROE) companies, therefore junk rallies (like the one in November and December) have always been a difficult backdrop. However, we did manage to beat peers, who trailed the benchmark by -soobps for the full year.
• Frothiest Growth Market since the Tech Bubble:
Growth > Value +20.0%
Source: FTSE Russell
• "Valuations (as measured by P/E) did NOT matter" (Steve DeSanctis, small cap strategist at Jefferies)
Source: Jefferies LLC FOR CLIENTS ONLY
Portfolio Specific Headwinds: Why we underperformed index and peers (6/30/17-6/30/18):
1) Biotech: no exposure
Risk/reward is an important component to our investment philosophy and small cap Biotech tends to produce binary situations; therefore, we typically avoid the industry. Unfortunately, with a frothy growth market rewarding expensive stocks, Biotech, as a result, has been extremely strong.
2) Energy: high quality Energy names did not perform well.
We have a strong quality tilt to our Energy holdings. The more commoditized companies in the benchmark were up sharply and we lacked exposure to those lower quality areas. For example, during the past year, Oil & Gas Drillers were up 50% and Coal companies returned 46%. Although it was a headwind during this time frame, we believe our clients will be better served over the long term by continuing to own higher value-added companies. Our Equipment & Services holdings outperformed on the strength of Oil States (DIS). Our E&P holdings lagged due to our quality bias. We continue to like our holdings and believe we will see solid long-term prospects.
3) Capital Goods: Cyclical exposure to depressed end markets.
Much of the cyclical weakness occurred in the 2"d quarter 2018. We own more cyclicals (i.e., Capital Goods) than our peers. We are staying true to our approach and find more value in this segment, but it has not performed well to date. Our Capital Goods holdings are trading at attractive valuations on depressed earnings due to their depressed end markets. This is transitory, and we believe presents a sizeable long term opportunity. The cyclicals in our portfolio are not overearning. The recent market sell-off didn't differentiate between cyclicals tied to hot end markets and those tied to depressed end markets. Our companies are trading at discounted valuations on depressed earnings power, which we feel should provide long term robust upside as those depressed end markets normalize.
Although we have found a lot of interesting long term opportunities .in cyclicals with depressed end markets, we don't want to only own cyclicals, so we try to balance the portfolio with some more defensive names. Unfortunately, many of the traditionally defensive areas like Utilities are very expensive relative to history. We have found some more defensive names in Staples but have had an issue with one name in particular; Tree House Foods (THS). TreeHouse is the largest domestic player in private label foods. Unlike other parts of food staples, private label enjoys long term secular growth characteristics as grocery stores increase the percentage of private label on their shelves which improves their own margin. THS bought an impaired asset, Con Agra's private label business, in 2016. This has been more difficult to turnaround than management originally anticipated, but has now largely stabilized. In addition smaller competitors have been more nimble and innovative. Both of the above issues caused us to seriously question management and rethink our investment thesis. We decided to stick with the name as the company embarked on a new CEO search. The good news: THS announced a major coup in landing a very experienced, respected food executive from Smucker to be its CEO, Steve Oakland. We see great long term potential for the largest player in the private label space under his leadership. They should enjoy a cost advantage and scale over much smaller peers. The market is beginning to recognize this potential as the stock is up ~30% since he was announced as CEO in early March.
Performance Update: 3Q to-date (August 2018}: Santa Clara VTA 5.31% vs 4.19% R2000V
Valuation mattered and better performance from weaker companies contributed to better portfolio performance. This quarterly reporting season was a good one and cyclicals posted solid numbers. Inflationary pressures, both labor and materials, are causing companies to raise prices. Our philosophy of buying quality companies with solid ROIC (translation: barriers to entry) generally means our companies have more pricing power.
WEDGE Small Cap Value Histmy ~--------------,
Annualized Three-Year Relative Pertonnance: WEDGE Small Cap Value vs. Russell 2000 Value
Th2 r.nJ!!«>bovr fer the SmoUCop Value Slfolegyo<e pmMI«<grossoffeue!atl'le to tile b<ndlmcrkanri "'' pru.tld~dauvpp.r,rr«~ntolmlormor!on to tl>er<lums req.,!red by /h< Gli'S A!M:Ifulng GuldermeJ..
P'<fi!<< ••• rM oppon<fo<foro tabk of rn:/and grossoffeerewl!s and performance disdowret.
Rofum< f<>< INI WI':DGE CO!>'<>' ""~11<-._,.., s-• Cop V.lue SIT•~ ._-., .... e. oo .,... $"T>.OU Cop"'""*'"~""
Death Audit Service/ Address Location Service $1,715 $130 8%
Social Security Administration b) $1,360 $1,360 100%
Printing -Pension Plan Document $5,000 $0 0%
Miscellaneous Expenses $25,000 $8,837 35%
AGENDA ITEM #12
8/30/2018
Santa Clara Valley Transportation Authority- Amalgamated Transit Union, Local 265 Pension Plan Quarterly Budget Review 7/1/17- 6/30/18
EXPENDITURES (Cont'd)
Educational Expenses
Travel
CALAPRS Membership
TOTAL EXPENDITURES
REVENUES
Employer Contribution cl
Employee Contribution - 0.95% dl
Employee Contribution - 5.5% dl
Net Investment Income •>
TOTAL REVENUES
NET INCREASE/DECREASE IN FUND
FOOTNOTES
4th Quarter FY 2018
2017-2018 Approved
$29,075
$26,500
$1,000.
$45,513,058
$28,548,645
$37,452,409
$66,001,054
$20,487,995
2017-2018 To Date
$11,220
$15,770
$1,000
$44,152,887
$28,523,868 Unavailable Unavailable
$47,988,872
$76,512,740
$32,359,853
2017-2018 To Date
39%
60%
100:J'o
97%
100%
128%
116%
158%
•J Approved amount includes $15,000 for legal advisory services related to Investment Manger contracts and $37,228.95 for Ice Miller ta)( counsel's exisitng contract.
bl Amount pre-paid to SSA for SS Earnings verifications for 10/1/2017 to 9130/2018.
cl Includes ATU contribution of $24,777 effective July 1, 2017 for ATU office staff as per actuarial analysis.
d) Due to a change in. Finance Division's employee contributions reporting information is not currently available.
•> Realized gain/(loss); total marked-to-market unrealized gain/(loss) ($5,065,411) 8/30/2018
AGENDA ITEM #13
Update on Pending Final Benefit Payments
(Chavez)
ITEM DISTRIBUTED UNDER SEPARATE COVER
AGENDA ITEM #14
Separated Employees' Distribution of Contributions Report as of August 31, 2018
Reimbursement Amount Pers.No. Last name First name Initial Hire Date Separation Date Sent Reimbursed
15557 Duhra Amrik s 3/21/2018 4/27/2018 8/10/2018 $206.81 15571 Warms ley Mark A 3/21/2018 5/10/2018 . 8/10/2018 $264.75 13479 Logan Mickael A 5/01/2012 12/16/2017 8/17/2018 $651.88 15416 Sharma Karan 11/01/2017 6/30/2018 8/17/2018 $1,727.63 15480 Barrientos Gabriel R 01/10/2018 5/5/2018 8/24/2018 $740.58 15361 Dunbar Nakita L 09/20/2017 5/24/2018 8/24/2018 $1,730.11 15556 Kakaniya Satnam s 03/21/2018 5/30/2018 8/24/2018 $366.54
Total Reimbursed $5,688.30
Page 1 Retirement Services 8/31/2018
AGENDA ITEM #15
Retiree/Beneficiary Reimbursement Payments Related to Medical Plan Premiums Report as of August 31, 2018
Total Pers.No. Last name First name Reimbursement
14796 Bekele Belete $ 388.25 12128 Mendez Richard $ 433.28
Reimbursements from 6/30/2018 to 8/31/2018' $ 821.53 Reimbursements prior to 6/30/2018 $ 7,411.87 Total Reimbursements YTD $ 8,233.40
Page 1 Retirement Services 8/31/2018
Chavez, Maria
From: Sent: To: Subject: Attachments:
Good Morning Maria
Satnam Gill <[email protected]> Tuesday, August 28, 2018 7:22AM Chavez, Maria Thank You img0S4 thank you letter to maria.pdf
Please see attachment and share with board members.
Thank you
Satnam Gill
1
AGENDA ITEM #16
Good Morning Miss Maria Chavez, Pension Board Members, and Staff
I would like to take the opportunity to thank you, Pension Board Members, and Staff for the support you all have shown during the course of business. It was great pleasure to work with you all for last 10 years as a Board Member of the Pension Board. We worked collectively to resolve the'issues on hand. With the exceptions of few, we worked diligently to serve the members of this plan.
During the monthly meetings, Maria you set the tone for the agenda on hand, by helping us run a successful meeting. I appreciated your unfailing attention to details when I needed as a chair. With all the last minute snags, I some time worried that something would fall through the cracks, but you anticipated every contingency. I commented several times on how well you had organized the discussions especially when we had several retirees and members sitting in the audience. With the help of Board Members and staff I enjoyed very much every meeting regardless of the heavy agenda. I want take to opportunity to thank our attorney for his dedication and unbiased advice. Mr. Russ was there when we needed him. Further, I want thank every board member for their unconditional support to fulfill the mission of the Pension Board. I learned a lot over the years while serving side by side with senior members of this board. My special thanks go to Mr. Ali and Mr. Jerry for their vast knowledge as senior board members. While serving as a chair, I looked at Jerry from time to time and Ali, the final convincing dialog came from Ali to convey the right message. Yes I admit, sometime we had rough dialog among ourselves during the normal session but at the end we did what was right to protect the board and its members we served as a whole.
This board is fortunate to have you as a senior analyst to steer through the difficulties some time we faced especially with medical retirement cases. I take this occasion to thank all of you from the bottom of my heart. As I am ending my career at VT A as TM I will all ways remember the good old time we had together for over a decade. Once again, I express heartfelt thanks for all of you, .may God bless us all.
Contracted Services Cheiron - Annual Actuarial Valuation (ER Rate FY 20 19) Schmidt Actuarial Audit RFP; Contract with Rae! & Letson is pendin~ Hudda Cheiron- Spousal Medical Fund and Retiree Vision/Dental Fund Valuation (As ofJanuarv I. 2018) Schmidt
Continuous Quarterly Budget Review Chavez Monthly Investment Report Bill Monthly Investment Committee Report Hudda Spousal Medical Fund Quarterly Report Hudda Retiree Vision/Dental Fund Quarterly Renort Hudda NEPC Quarterly Investment Performance Analysis!NEPC Training Bill Audited Financial Statements (FY 2018) Hudda
Miscellaneous & OnPoinl"
Final Benefit Payments Chavez Separated Employees' Distribution of Contributions Chavez Retiree/Beneficiary Reimbursement Pavments Chavez Annual Spousal Medical Fund Certification (2018) Chavez
Annual Social Security Earnings Verification (20 16) Chavez
