The meeting began with a presentation from Blake Miton of Sterling Capital. Miton reported a 12% increase in the Russell 3000 Index and a positive performance in small and mid-cap indices. The sale of Sterling Capital to Guardian Group for $70 million was announced, with reassurances that the transition should not affect the pension plans. Miton projected that interest rates would likely remain stable, with a possibility of a rate decrease later in the year or early next year.

In terms of the pension plan’s portfolio, Miton presented data showing strong absolute performance in dollar terms and percentage returns. The pension fund’s trailing returns were illustrated in a bar chart, and the report emphasized the cautious approach to risk, adhering to the investment policy targets. The quarterly report by Burgess Chambers and Associates highlighted the evolution of the portfolio, its diversification into different asset classes, and the positive cash flow for the quarter, which resulted in a total fund return of 9.1% net of fees.

The actuarial evaluation report by Doug Loen from Foster and Foster shifted the focus to the technical aspects of the pension plan’s evaluation. The actuary outlined their role, including annual pension valuation and benefit calculations, and stressed the importance of adjusting the contribution requirement annually to maintain actuarial soundness. The current funding status of the pension plan was discussed, noting it was not 100% funded due to investment losses and changes in salary increases, among other factors. The actuary also projected an increase in the city’s contribution requirement based on current trends and emphasized the significance of addressing the unfunded liability.

The impact of new hires on the pension plan was also a topic of discussion. A 6% payroll funding for new hires was projected to help stabilize the city’s contribution over time. Salary increases were compared to those in other cities, and the implications of future financial gains or losses on the pension plan’s funding were considered. The meeting addressed the federal requirement of adhering to the Government Accounting Standards Board (GASB) and the financial disclosure forms required by elected officials and board members.

The importance of maintaining the long-term sustainability of the pension plan was a recurring theme throughout the meeting. The board members discussed the historical reduction of the assumption rate from 8% to 7.25% over the years, indicating the plan’s earnings were exceeding the assumption rate, which is a positive trend. Despite the challenges faced in 2022, the board members expressed satisfaction with the plan’s performance and highlighted the need to focus on long-term performance over short-term fluctuations.