Gwinnett County, Georgia Retirement Plans Management Committee February 20, 2014 Regular Meeting 8:00 AM Gwinnett Justice and Ad
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Gwinnett County, Georgia Retirement Plans Management Committee February 20, 2014 Regular Meeting 8:00 AM Gwinnett Justice and Administrative Center, Conference Room C Agenda 1. Call to Order * Chairman 2. Adoption of Agenda * Chairman 3. Approval of Minutes * Chairman December 2, 2013 Meeting 4. Performance Reports – Fund Reports *** Great-West a. 4th Quarter DC Plans 1. Fund Performance Review – AAG 2. Stable Value Fund 3. Alerts for 401(a)/457 4. Executive Summary 5. Plan Review *** UBS b. 4th Quarter DB Plan 1. Economic Overview 2. Performance Report 3. Watch List 4. Downgraded Bonds 5. Fee Schedule 5. Past Quarter Participation and Education *** Debbi Davidson Fred Minot a. Participation Numbers b. Education Update 6. Investment Committee Reports * Mike Ludwiczak a. Emerging Markets Manager Search Recommendation Page 2 RPMC Regular Meeting, February 20, 2014 b. Fiduciary Advisor for DC Plans Recommendation c. Update on Securities Litigation d. Additional Contribution to DB Plan 7. Vendor Review – Cavanaugh Macdonald *** Chairman 8. Next Meeting – May 22, 2014 *** 9. Public Comments ** 10. Adjournment * *Action Items **Speakers wishing to address the RPMC must report to the Clerk of the Committee prior to the meeting being called to order. Speakers are limited to 3 minutes or less. ***Information items requiring no action. Gwinnett County, Georgia Retirement Plans Management Committee December 2, 2013 Regular Meeting Minutes 8:00 AM Gwinnett Justice and Administrative Center, Conference Room C Members Present: Jim Underwood, Aaron Bovos, Glenn Stephens, David Crews, Ashley Stinson, Joy Parish, Scott Fuller Chairman David Crews called the meeting to order at 8:05 AM. Adoption of Agenda Joy Parish made a motion to adopt the agenda and Glenn Stephens seconded. (Vote 7 – 0) Parish – Yes; Underwood – Yes; Bovos –Yes; Stephens – Yes; Crews – Yes; Stinson – Yes; Fuller – Yes. Approval of Meeting Date Change Glenn Stephens made a motion to approve the meeting date change from November 21, 2013 to December 2, 2013 and Jim Underwood seconded. (Vote 7 – 0) Fuller – Yes; Underwood – Yes; Bovos – Yes; Crews – Yes; Stephens – Yes; Stinson – Yes; Parish – Yes. Approval of Minutes Jim Underwood made a motion to approve the minutes for the August 22, 2013 meeting and Ashley Stinson seconded. (Vote 7 – 0) Fuller – Yes; Underwood – Yes; Bovos –Yes; Stephens – Yes; Crews – Yes; Stinson – Yes; Parish – Yes. Performance Reports/ Executive Summaries The Market Value of plan assets for the DB and OPEB Plans as of 09/30/2013 was $894,470,036. These assets are invested in the following accounts: Large Cap Growth $116,636,578 Large Cap Value $117,377,719 Mid Cap Core $36,850,687 Mid Cap Growth $31,877,867 Mid Cap Value $35,281,752 Small Cap Blend $79,485,839 REITS $41,109,103 Foreign Developed Blend $132,613,915 Fixed Income Taxable Intermediate $256,956,785 Emerging Markets $46,279,791 Total $894,470,036 Third Quarter DB Plan Investment Performance Report The report for the second quarter of 2013 was presented by Scott Olsen and Ray Vuicich of UBS. Gwinnett County’s portfolio continues to do well. Amy Heyel of Great-West presented staffing updates. Tem Miller has moved to sales and Erik Sanderson is being considered to be our new Client Relationship Director for Great-West. Third Quarter DC and 457 Plans Fund Performance The reports on the funds in these plans were presented by Amy Heyel and Fred Minot of Great- West. Fred Minot presented the Plan Review for October 1, 2012 through September 30, 2013. Plan assets were $249.28 million as of September 30, 2013. Plan assets grew by $35.84 million (16.8%) from October 1, 2012 to September 30, 2013. Contributions were $23.95 million from October 1, 2012 to September 30, 2013. The average account balance per participant was $35,179 for the 401(a) Plan and $25,692 for the 457(b) Plan. The County is doing very well compared to other governments on contributions by asset class. Investment Committee Recommendations and Reports Mike Ludwiczak, Chairman of the Investment Committee, provided an update on Securities Litigation Monitoring activity. We were asked to be lead plaintive but we were not able to commit in the timeframe and it was not a requirement. Our interests will be protected by this relationship. Jim Underwood made a motion to accept the recommendation on Emerging Markets Manager Search and Interim Strategy and Scott Fuller seconded. (Vote 7 – 0) Stinson – Yes; Fuller – Yes; Stephens – Yes; Bovos – Yes; Underwood – Yes; Crews – Yes; Parish – Yes. Mike Ludwiczak made the recommendation for an informal process to explore other investment advisors for the DC Plans. He also recommended deferring the discussion on Perkins Mid Cap Fund until the new advisor is in place. DB and DC Plan Restatements and IRS Determination Letter Applications Ed Emerson, Morris, Manning and Martin, LLP, provided information on DB and DC Plan Restatements and IRS Determination Letter Applications. Ashley Stinson made a motion approve the restatements for the DB and DC Plans and Joy Parish seconded. (Vote 7 – 0) Stinson – Yes; Fuller – Yes; Stephens – Yes; Bovos – Yes; Underwood – Yes; Crews – Yes; Parish – Yes. Past Quarter Education and Participation Information Participation Information – Current Active Participants DB Plan 1,899 – 43% DC Plan 2,502 – 57% Deferred Comp 3,016 – 69% RMSA 556 Retirees Retirees Receiving DB Pensions 1,907 Retirees with Health Insurance 1,215 Third Quarter Education Update There were a total of 411 Group/Onsite, One on One Meetings and Seminars/Lunch and Learns. Vendor Renewals Debbi Davidson stated the contract with BNY Mellon is evergreen contract . There was no discussion or concerns so the contract will continue. 2014 Planning – The 2014 meeting schedule: 1st Qtr. – February 20, 2014 2nd Qtr. – May 22, 2014 3rd Qtr. – August 28, 2014 4th Qtr. – November 20, 2014 Glenn Stephens made a motion to change the February 27, 2014 meeting to February 20, 2014 and Jim Underwood seconded. (Vote 7 – 0) Stinson – Yes; Fuller – Yes; Stephens – Yes; Bovos – Yes; Underwood – Yes; Crews – Yes; Parish – Yes. Debbi Davidson reviewed the goals for 2013. Election of 2014 Officers Glenn Stephens made a motion to nominate David Crews for chairman and Jim Underwood for vice-chairman, Ashley Stinson seconded. (Vote 7 – 0) Stinson – Yes; Fuller – Yes; Stephens – Yes; Bovos – Yes; Underwood – Yes; Crews – Yes; Parish – Yes. Next Meeting February 20, 2014, Gwinnett Justice and Administration Center, Conference Room C at 8:00 a.m. Public Comments (Limited to 30 minutes) There were no public comments. Adjournment Jim Underwood made a motion to adjourn and Glenn Stephens seconded. (Vote 7 – 0) Fuller – Yes; Underwood – Yes; Bovos –Yes; Stephens – Yes; Crews – Yes; Stinson – Yes; Parish – Yes. The meeting adjourned at 10:50 a.m. Gwinnett County Retirement Plans Fund Performance Review December 31, 2013 RETIREMENT SERVICES Section IEI. Econom iRic Rev iew II. Investment Analysis •Efficient Frontier Map: Plan Diversification •Performance Monitoring •Manager Style and Manager Style Drift •Compliance Report Card III. Investment Policy Monitoring IV. Glossary Economic and Capital MktRiMarkets Review Fourth Quarter ― 2013 ADVISED ASSETS GROUP, LLC Current Economic Conditions GDP – Real Gross Domestic Product increased at an annual real rate of 4.1% in the third quarter of 2013.1 • Previous estimates indicated real growth at a 3.6% annual rate, but private inventory investments and state and local government sppgending came in better than exp ected. Offsetting this was a deceleration in exports. • For 2012, the economy grew at an annual real rate of 2.2% after a 1.8% real increase in 2011. Source: St. Louis Fed, http://research.stlouisfed.org/fred2/graph/?id=GDPC1 (12/31/13) Inflation – The C onsumer Pr ice In dex (CPI) i ncreased 1.2% for the 12 months ending November.2 • The 12 month change in Core CPI (CPI ex food & energy) was 1.7% over the previous 12 months. • Food index rose slightly in November and is up 1.2% over the last 12 months. • Energy Index declined 1.0% in November. The gasoline and natural gas index fell significantly, more than offsetting increases in electricity and fuel oil. • Inflation expectations remain benign over the near term. Source: St. Louis Fed, http://research.stlouisfed.org/fred2/graph/?id=CPIAUCSL# (12/31/13) FOR PLAN SPONSOR OR ADVISOR USE ONLY. Not for Use with Plan Participants. Current Economic Conditions Employment Statistics – The offi ci al unempl oyment rat e (U -3) dddecreased to 6.7% at the end of December.3 • Non-farm payrolls increased by 74,000 in December. Employment rose in retail and wholesale trade but declined in information. • In 2012, th e num ber o f unemp loye d persons fe ll 1. 9 m illion and the unemployment rate fell 1.2 percentage points. • The “U-6 Rate”, the most comprehensive measure of the nation’s employment situation, fell from 13.6% in September to 13.1% in December. • The labor force participation rate declined by 0.2% to 62.8% in December, matching the level in October and the lowest since 1978. Source: St.. Louis Fed, http://research.stlouisfed.org/fred2/graph/?id=UNRATE (12/31/13) Housing – November Housing Starts increased 25.0% from the September measure.4 • This number represents a 29.6% increase from the November 2012 measure. • Building permits increased 7. 9% from the November 2012 figures. • Housing is a key component of consumer spending and sentiment. • Home price indices continue to improve, with prices increasing across the nation. Source: