SUBJECT/RECOMMENDATION:
Title
Annual review of the Employees’ Pension Plan investment performance for the calendar and plan year ended December 31, 2017.
Body
SUMMARY:
A presentation of the Plan’s investment performance is made to the Trustees annually, in addition to quarterly updates. For calendar 2017, the Plan realized an investment return of 15.98%, versus the plan’s assumed rate of 7.00%, and versus a customized benchmark of 15.44%, placing the plan in the 33rd percentile of public pension plans per the Wilshire Public Plan Sponsor Universe.
For the last three calendar years period, the plan had an annualized return of 7.87%, versus a benchmark of 7.48%, placing the plan in the 44th percentile of public plans. For the past five years, the plan had an annualized return of 9.89%, versus a benchmark of 9.36%, placing the plan in the 27th percentile of public plans.
The Pension Investment Committee continues to seek diversification and decreased volatility in investment returns for the Plan via investment in alternative investment categories. In recent years, new categories introduced have included timber investments, core plus real estate, and infrastructure.
During calendar 2017, the Trustees approved termination and replacement of both a small cap value manager and an international emerging markets money manager. Both replacements were completed by year-end.
The investment committee, with the assistance of the Plan’s investment consultant, CapTrust Advisors, closely monitors underperforming money managers and will continue to recommend terminations and replacements when appropriate.
APPROPRIATION CODE AND AMOUNT: N/A
USE OF RESERVE FUNDS: N/A