Mayor and City Council from David Del Grande, Director of Finance Devan Hardin, Chief Human Resources Of

November 19, 2020

TO: Mayor and City Council

FROM David Del Grande, Director of Finance DD Devan Hardin, Chief Human Resources Officer

VIA: Thomas Coleman, City Manager TC

SUBJECT: 2020 Pension and OPEB Report as of October 31, 2020

Attached for your review is the 2020 Pension and OPEB Report as provided by Vanguard Institutional Advisory Services. Senior Investment Consultant, Joseph Wolfram, CFA will present this report to Council on December 7, 2020.

Prepared for City of Newark Delaware December 7, 2020

Presented by Joseph Wolfram, CFA Senior Investment Consultant Vanguard Institutional Advisory Services®

For institutional use only. Not for distribution to retail investors. Prepared for City of Newark Delaware

Total Portfolio Snapshot as of October 31,2020

Q1 2020 Q2 2020 Q3 2020 Oct 2020 1 Year* Since Inception (%) (%) (%) (%) (%) (Jul 2016) Pension Plan Portfolio (15.76) 14.62 5.34 (1.21) 4.49 7.24 OPEB Plan Portfolio (15.34) 14.61 5.26 (1.24) 4.84 7.21 Domestic Equity (23.01) 20.57 7.80 (1.47) 5.68 10.91 International Equity (22.54) 21.09 8.58 (1.71) 6.60 8.15 Domestic Fixed Income 0.02 4.78 1.20 (0.25) 5.98 3.62 Real Estate (REITs) (24.10) 13.44 1.37 (3.12) (15.82) (0.28) * Ending October 31, 2020 Pension Allocation OPEB Allocation (policy) (policy) Total Fees

8.0% 8.0% 0.120%

36.4% 36.4% 0.071% 35.7% 35.7%

20.0% 20.0%

US Equity Non-US Equity US Equity Non-US Equity US Fixed Income Real Estate US Fixed Income Real Estate Investment Fees Advisory Fees

Source: Vanguard. Performance is displayed net of fees based on Pension Plan performance. Past performance is not a guarantee of future results. Returns greater than one year represent annualized returns. Returns lass than one year represent cumulative returns.

For institutional use only. Not for distribution to retail investors. 2 Prepared for City of Newark Delaware

Market volatility

Source: FactSet, as of October 31, 2020.

Slide ID #: S018340 Tracking #: 1420031 Expiration date: 5/22/2023 For institutional use only. Not for distribution to retail investors. 315 Prepared for City of Newark Delaware

Index of general uncertainty World Uncertainty Index

1 U.S. recession and 4 Vietnam War 9 OPEC II 14 Financial credit crunch 18 Brexit upcoming U.S. election 5 Gold crisis 10 Black Monday 15 Sovereign debt crisis 19 U.S. presidential elections 2 Uncertainty related to the in Europe U.S. economy and the U.K. 6 International 11 Gulf War I joining the EEC monetary crisis 20 U.S.-China trade 16 U.S. fiscal cliff and tensions and Brexit 3 Assassination of President 7 OPEC I 12 U.S. recession and 9/11 sovereign debt crisis in John F. Kennedy Europe 21 Coronavirus 8 Weak prospects for the 13 Iraq War and outbreak 17 U.S. Federal Reserve global economy and exports of SARS tightening and political risk in Greece and Ukraine

Notes: The World Uncertainty Index tracks uncertainty across the globe by text mining the country reports of the Economist Intelligence Unit. Source: World Uncertainty Index, available at https://worlduncertaintyindex.com/.

Slide ID # S042881 Tracking #: 1368630 & 1404516 Expiration date: 4/24/2022 For institutional use only. Not for distribution to retail investors. 154 Prepared for City of Newark Delaware

Market Performance as of October 31, 2020

Name Oct-20 Last 3 Months YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs _ US Equity CRSP US Total Market TR USD -2.1 1.1 3.2 10.2 10.1 11.5 12.8 S&P 500 -2.7 0.4 2.8 9.7 10.4 11.7 13.0 S&P 400 MidCap 2.2 2.3 -6.6 -1.2 2.9 7.4 10.4 S&P 600 SmallCap 2.6 1.7 -13.1 -7.7 0.2 6.5 10.4 International Equity MSCI Emerging Markets 2.1 2.6 0.9 8.3 1.9 7.9 2.4 MSCI Emerging Markets NR LCL 1.5 2.0 4.2 10.8 4.0 8.8 5.5 MSCI EAFE -4.0 -1.7 -10.8 -6.9 -1.2 2.8 3.8 MSCI EAFE NR LCL -3.9 -1.0 -13.0 -10.0 -1.7 2.4 5.6 MSCI ACWI ex USA -2.1 -0.5 -7.5 -2.6 -0.2 4.3 3.4 Fixed Income Domestic BBgBarc US Aggregate TR -0.4 -1.3 6.3 6.2 5.1 4.1 3.6 BBgBarc US Corporate 1-5 Years TR 0.2 0.3 4.4 4.9 4.0 3.4 3.1 BBgBarc US Credit/Corp 5-10 Yr TR -0.1 -0.6 7.0 7.6 6.4 5.8 5.3 BBgBarc US Corporate Long TR -0.5 -4.6 7.8 8.6 8.3 8.6 7.5 BBgBarc US Govt/Credit Long TR -1.6 -5.4 12.4 11.2 9.5 8.3 7.4 BBgBarc US Treasury Strips 20-30 Yr Equal Parity TR -3.9 -9.1 23.7 18.2 14.1 10.1 10.7 BBgBarc US High Yield TR 0.5 0.4 1.1 3.5 4.2 6.3 6.3 BBgBarc US Govt TR -0.9 -1.8 7.8 6.9 5.2 3.6 3.0 BBgBarc US Credit TR -0.2 -1.8 6.2 6.7 6.0 5.6 4.9 BBgBarc US Treasury 1-5 Yr TR -0.1 -0.2 4.2 4.2 3.2 2.2 1.7 BBgBarc US Treasury 5-10 Yr TR -1.0 -1.3 8.9 7.8 5.7 4.0 3.6 BBgBarc US Treasury Long TR -3.0 -6.8 17.7 13.8 10.8 7.7 7.2 BBgBarc US Treasury TIPS 0-5 Yr TR -0.2 0.8 3.5 4.3 3.0 2.4 1.6 BBgBarc US TIPS TR -0.6 0.1 8.5 9.1 5.5 4.4 3.2 Fixed Income International BBgBarc Global Aggregate ex US Tres Hedged TR 0.3 0.3 3.3 2.7 4.8 4.3 4.1 BBgBarc Emerging Markets TR -0.1 -0.9 1.8 3.4 4.0 5.6 5.2 REIT MSCI US REIT Gross -2.6 -4.9 -19.3 -21.0 -0.2 2.3 7.1 XXXXX

For institutional use only. Not for distribution to retail investors. 5 8 Prepared for City of Newark Delaware

Economic and market overview

Expect rolling reopening of the global economy.

We expect to see the gradual reopening of the global economy to continue with temporary setbacks as governments address localized 1 outbreaks. We do not currently expect a return 3 to national lockdowns.

Will stimulus measures be Health care solution is ultimately paramount. sufficient? 2 The measures enacted have been The speed and shape of a demand unprecedented. The key question remains rebound is critically tied to the degree of if they will be enough to bind employees to confidence consumers and governments their jobs and keep solvency measures for find in future health care solutions. households and businesses high.

Source: Vanguard.

Slide ID # S049179 Tracking #: 1368630 & 1404516 Expiration date: 4/24/2022 For institutional use only. Not for distribution to retail investors. 106 Prepared for City of Newark Delaware

Health developments are the biggest risk factors defining the recovery

Upside surprises: Economic baseline: Downside risks:

• In the short run some light • Partial lockdowns that • Virus returns and requires restrictions necessary, but depend on regional spread national shutdowns these are lifted following of the virus (increased solvency risk) the vaccine distribution • Gradual, staggered return • Virus mutates into more • New therapeutic to work virulent form (Spanish Flu treatments mitigate health in Fall of 1918) outcomes • App-tracing and testing accelerates • Premature roll-back of • Unconstrained antibody social distancing testing for immunity • Consumer reticence toward measures, leading to • Closer to “herd immunity” highly social activities harsh second wave in late than thought 2020 • Effective vaccine becomes • Vaccine becomes widely available mid-2021 • Vaccine development is available by late delayed 2020/early 2021

Probability 15% Probability 50% Probability 35%

Source: Vanguard.

Slide ID # S042877 Tracking #: 1368630 & 1404516 Expiration date: 4/24/2022 For institutional use only. Not for distribution to retail investors. 117 Prepared for City of Newark Delaware

The fed and interest rates

2020 2021 2022

Change in real GDP forecast –3.7 4.0 3.0

Federal funds rate forecast 0.1 0.1 0.1

Unemployment forecast 7.6 5.5 4.6

PCE inflation forecast 1.2 1.7 1.8

Source: FactSet, as of October 31, 2020. Note: Federal Open Market Committee (FOMC) Economic Projects.

Slide ID #: S039815 Tracking #: 1420031 Expiration date: 5/22/2023 For institutional use only. Not for distribution to retail investors. 8 Prepared for City of Newark Delaware

S&P 500 Index: Forward P/E Ratio

Latest: 10/31/2020 20-Yr. Avg. P/E 20.24 15.43 CAPE 31.62 25.62 P/B* 1.83 2.08 P/CF 3.37 2.49 EY Spread** 14.39 10.60

Source: FactSet, as of October 31, 2020. * P/B is not a moving 20 year average, rather hardcoded to December 31, 2000. ** EY Spread—Reciprocal of P/E FactSet Market Aggregate 12 month forward * 100 minus Moody’s BAA Corporate Bond Yield.

Slide ID #: S039816 Tracking #: 1420031 Expiration date: 5/22/2023 For institutional use only. Not for distribution to retail investors. 9 Prepared for City of Newark Delaware

The hit to U.S. economic activity varies by sector

Notes: The figure shows the estimated maximum impact on U.S. GDP in April 2020. Size of bubbles indicates the relative weight of each sector in U.S. GDP. Initial impact on the level of GDP and the persistence of shock estimated are based on a range of high-frequency indicators (such as mobility indexes, fuel consumption, retail foot traffic, and restaurant and hotel occupancy) and traditional economic indicators. Sources: Google, Apple, Johnson Redbook Index, American Iron and Steel Institute, U.S. Department of Energy, Association of American Railroads, U.S. Bureau of Labor Statistics, Prodco Analytics, Smith Travel Research, OpenTable, Transportation Security Administration, and SimilarWeb.

Slide ID # S049189 Tracking #: 1368630 & 1404516 Expiration date: 4/24/2022 For institutional use only. Not for distribution to retail investors. 2310 Prepared for City of Newark Delaware

The effect on equity and bond prices

The shock to equities was the fastest but not longest. By the end of 3Q equities had retraced the shock.

1.1

0.9

0.8 COVID-19 0.7

0.6 Dotcom Bubble 0.5 Great Financial Crisis 0.4 1 60 119 178 237 296 355 414 473 532 591 650 709 768 827 886 945 1004 1063 1122 1181 1240 1299 1358 1417 1476 Business days since shock

Bonds acted as a diversifier. Global bonds and equities were flat on the year at the end of 3Q 38%

23%

4% 4.2% 3.7% 1.8% Global Equity Global Bonds -0.1% 60/40

-20.1%

-31.7% 1 Jan - 23 Mar 24 Mar - 30 Jun 1 Jan - 30 Sep

Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

Notes: In the upper chart, 1.0 on the y-axis signifies the start of each crisis. Returns are then indexed to this value. Returns are based on the MSCI All Country World Index in USD. Solid lines indicate the return of the index since the peak of the crisis; dotted lines indicate recovery since the trough. Data are through September 30, 2020. In the lower chart, global equity is represented by the MSCI All Country World Index, global bonds are represented by the Bloomberg Barclays Global Aggregate Bond Index Hedged to USD, and the 60/40 portfolio is made up of 60% global equity and 40% global bonds. Sources: Vanguard and Bloomberg.

Slide ID # S049192 Tracking #: 1368630 & 1404516 Expiration date: 4/24/2022 For institutional use only. Not for distribution to retail investors. 2611 Prepared for City of Newark Delaware

The crisis has shown the value of global diversification

10.0 6.7 4.7 5.0 1.8 1.6

0.0 -1.0 (%) -2.6 -2.3 -5.0 -3.2 -3.5 -3.3

-10.0 -8.4 -8.8 -9.8 -9.6 performance -10.2 -10.5 -11.6 -15.0

-17.3 -20.0

Cumulative YTDCumulative -21.7 -25.0 -24.6 -24.8 -25.7 -25.7 -27.2 -30.0 -29.9 -31.0 -32.1 -35.0 China U.S.US Global Japan EM Canada Australia EU U.K.UK

Through Q1 Through Q2 Through Q3

Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.

Notes: Country and regional stock performance is measured by the following indexes: Japan: Nikkei 225 Index; U.S.: S&P 500 Index; China: Shanghai Stock Exchange Composite Index; Global: MSCI All Country World Index; emerging markets: MSCI Emerging Markets Index; European Union: MSCI EMU Index; Australia: S&P ASX 200 Index; Canada: S&P/TSX Composite Index; U.K.: MSCI United Kingdom Index; and Global ex U.S.: MSCI World ex USA Index. Total returns are gross of dividends. Data are from January 1, 2020, through September 30, 2020, in USD. Source: Vanguard.

Slide ID # S049193 Tracking #: 1368630 & 1404516 Expiration date: 4/24/2022 For institutional use only. Not for distribution to retail investors. 2712 Prepared for City of Newark Delaware

Election year market returns are far from certain

Historical U.S. presidential election results Calendar year performance during presidential election years (1928–2019)

Election year President elected S&P 500 Index total returns 2016 Trump 12.0% 2012 Obama 16.0% 4.2% 2008 Obama –37.0% Incumbent president wins 13.4% 2004 Bush W 10.9% 2000 Bush W –9.1% 1996 Clinton 23.1% 1992 Clinton 7.7% 1988 Bush HW 16.8% 5.5% 1984 Reagan 6.3% All presidential elections 1980 Reagan 32.4% 11.3% 1976 Carter 23.8% 1972 Nixon 19.0% 1968 Nixon 11.1% 1964 Johnson 16.5% 1960 Kennedy 0.5% 6.7% 1956 Eisenhower 6.6% New president elected 9.3% 1952 Eisenhower 18.4% 1948 Truman 5.5% 1944 Roosevelt 19.8% 1940 Roosevelt –9.8%  Stocks 1936 Roosevelt 33.9%  Bonds 1932 Roosevelt –8.2% 1928 Hoover 43.6%

Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index. Source: FactSet.

Slide ID # S048320 Tracking #: 1345695 Expiration date: 3/30/2022 For institutional use only. Not for distribution to retail investors. 31334241417 Prepared for City of Newark Delaware

S&P 500 performance over the election cycle is varied and unpredictable

40%

30%

20%

10%

-10%

-20%

-30%

-40% 1992 1996 2000 2004 2008 2012 2016

 Year before election  Election year  Year after election  Two years after election

Slide ID # S048322 Tracking #: 1345695 Expiration date: 3/30/2022 For institutional use only. Not for distribution to retail investors. 144362616194 Prepared for City of Newark Delaware

Appendix

Slide ID # S040432 For institutional use only. Not for distribution to retail investors. 3115 Prepared for City of Newark Delaware

Vanguard November 2020 market and economic outlook at a glance

Key takeaways:

• In the U.S. expect a full-year 2020 GDP contraction of around –4% and 2021 GDP growth around 4%. • China is on course to have fully recovered from the COVID-19 pandemic by year’s end. • Inflation may experience some volatility in the near-to-medium term as a resumption in economic activity across sectors pushes prices higher. • We continue to see the U.S. unemployment rate in a range of 7% to 9% by year’s end.

• Asset-class return outlooks

Our ten-year, annualized, nominal return projections, as of June 30, 2020, are shown below. Please note that the figures are based on a 1.0-point range around the rounded 50th percentile of the distribution of return outcomes for equities and a 0.5-point range around the rounded 50th percentile for fixed income.

Equities Return projection Median volatility Fixed income Return projection Median volatility 0.7%–1.7% U.S. equities 3.9%–5.9% 17.9% U.S. aggregate bonds 4.0% U.S. Treasury bonds 0.3%–1.3% 4.2% U.S. value 5.0%–7.0% 19.9% U.S. credit bonds 1.4%–2.4% 5.7% U.S. growth 1.6%–3.6% 19.5% U.S. high-yield 3.2%–4.2% 10.7% U.S. large-cap 3.7%–5.7% 19.4% corporate bonds U.S. Treasuryinflation- 0.4%–1.4% U.S. small-cap 4.0%–6.0% 23.5% protected securities 6.4% U.S. real estate U.S. cash 0.5%–1.5% 0.9% 3.4%–5.4% investment trusts Global bonds 19.9% 0.5%–1.5% 2.5% Global equities ex-U.S. (hedged) 7.4%–9.4% Emerging market ex-U.S. (unhedged) 18.6% 3.1%–4.1% sovereign 11.1%

U.S. inflation 0.5%–1.5% 2.4%

These probabilistic return assumptions depend on current market conditions and, as such, may change over time. IMPORTANT: The projections or other information generated by the Vanguard Capital Markets Model® regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Distribution of return outcomes from the VCMM are derived from 10,000 simulations for each modeled asset class. Simulations are as of June 30, 2020. Results from the model may vary with each use and over time. For more information, see Important information page. Source: Vanguard Investment Strategy Group.

Slide ID # S037446 Tracking #: 1386476 Expiration date: 10/28/2023 For institutional use only. Not for distribution to retail investors. 16 Prepared for City of Newark Delaware

Vanguard November 2020 market and economic outlook at a glance

China leads the way on growth, while the U.S. will need more time

United States. Vanguard expects the first estimate of third-quarter GDP, to be released Thursday, October 29, to show a recovery well under way. We foresee reported third-quarter Region-by-region growth around 22%, and fourth-quarter growth in the neighborhood of 7%. outlook • Our outlook assumes an additional $1 trillion in COVID-related fiscal support in the fourth quarter. Should no fiscal support be forthcoming, we’d foresee revising down slightly our growth expectations for the fourth quarter and perhaps the first half of 2021.

• We continue to foresee a full-year 2020 GDP contraction of around –4% and 2021 GDP growth around 4%. We continue to anticipate a challenge in getting back to a pre-pandemic growth trajectory owing to some permanent losses of jobs and businesses and consumer reluctance in some face-to-face sectors.

• Absent a widely accessible and administered vaccine or treatments that could moderate those effects, we see at least a 24-month period to reach a pre-COVID trajectory of activity

Vanguard High Frequency Index versus U.S. GDP growth

4% %

GDP growth growth GDP (yoy) –4% High frequency growth index (HFI)

–8% GDP actual

–12% 2008 2010 2012 2014 2016 2018 2020

Sources: Vanguard and Refinitive, as of October 2, 2020. Notes: High frequency activity measure uses weekly data to estimate current activity on a more timely basis than traditional economic releases. Series included: Weekly raw steel production, weekly energy consumption (motor vehicle, jet fuel, diesel), weekly continuing unemployment claims, weekly retail sales, and bi-weekly consumer sentiment.

Slide ID # S037447 Tracking #: 1386476 Expiration date: 10/28/2023 For institutional use only. Not for distribution to retail investors. 17 Prepared for City of Newark Delaware

Vanguard November 2020 market and economic outlook at a glance

China. With a still-robust export sector and a quicker-than-expected resumption in domestic activity, the economy in China is on course to have fully recovered from the COVID-19 pandemic by year’s end, Vanguard believes. • We’ve become more optimistic about China’s third-quarter GDP growth, which we foresee around 5.5% to 6.0%, higher than the 5.2% consensus of economists surveyed by Bloomberg. Vanguard continues to foresee China’s full-year GDP growth in a range of 1.0% to 3.0%. • The coronavirus affected China first among the world’s largest economies, and China dealt with the economic fallout first. So when the worst of the outbreak was over, China’s exporters were able to take global market share. • Vanguard foresees China’s economy reaching its pre-pandemic trajectory before the end of 2020, a full year or more before other major economies reach the samemilestone. • In the longer term, Vanguard sees room for both caution and optimism about China. Challenges include an aging population, a fading catch-up effect as the country becomes wealthier, and an external environment that may look less kindly on globalization. Reasons for optimism include the vast domestic market and a growing educated workforce.

Euro area. Rising cases of COVID-19 in the euro area have led to tactical, localized restrictions on activity. We foresee only modest overall fourth-quarter growth, with contraction likely in face-to-face sectors such as leisure, hospitality, and tourism, while recovery is likely to continue in sectors such as agriculture, manufacturing, and construction. Region-by-region • We expect the pace of recovery to differ by geography as well, with Germany and Italy likely to fare better than Spain and outlook (continued) France, the latter two for which virus transmission has been higher lately and the services sector contributes more to the economies. • Vanguard continues to foresee full-year 2020 GDP contraction in a range of –8% to –10%. Emerging markets. Vanguard foresees emerging markets contracting by around –3% for 2020. • The outlook for Latin America, under assault from COVID-19, is particularly pessimistic. • Emerging markets will be watching developments in U.S.-China relations, which have implications for supply chains and trade- related growth.

Slide ID # S041234 Tracking #: 1386476 Expiration date: 10/28/2023 For institutional use only. Not for distribution to retail investors. 18 Prepared for City of Newark Delaware

Vanguard November 2020 market and economic outlook at a glance

Fed maintains current target range Federal Reserve. The Fed said it expects to maintain the current target range of 0%–0.25% until it assesses that inflation “is on track to moderately exceed 2% for some time.” • U.S. Federal Open Market Committee (FOMC) members broadly expect the Fed will keep the current federal funds target rate at today’s level through 2023, even as they expect inflation to then finally reach 2%. European Central Bank. The ECB said it would keep its main rates at their current level or take them still lower until it sees the inflation outlook “robustly converge to a level sufficiently close to, but below, 2%.” China. With China’s better-than-expected recovery to date from the pandemic, the People’s Bank of China has little reason to add fuel to the economic tank, Vanguard believes. China’s quicker recovery relative to other major economies gives policymakers an opportunity to wait and see what might be required next. • We expect any moves to be targeted, aimed at sectors where recovery has been slower than in other sectors, rather than broad stimulus measures.

Expect U.S. inflation to be below 2% by the end of 2021

Vanguard expects some volatility in U.S. inflation in the near-to-medium term as a resumption in economic activity across sectors pushes prices Inflation should higher, perhaps above 2%, momentarily, in the first half of 2021. be tame • We expect such a firming trend to be short-lived and foresee inflation below 2% by the end of 2021, though virus-related supply shocks, fiscal support and/or monetary stimulus, and willingness by the Federal Reserve to tolerate above-target inflation may serve as potential spurs to higher prices.

Slower pace for job gains

The unemployment rate in the United States fell to 7.9% in September, its fifth straight month of decline, but also the third straight month of a Unemploymentrate slowing in the pace of job gains, and the fewest gains since the job market’s recovery began in May. Vanguard expects a continued slowing in improves the pace of recovery in the medium term. • The potential for increases in virus transmission and any resulting targeted disruptions to economic activity could create volatility in jobs numbers in the months ahead. • We continue to see the U.S. unemployment rate in a range of 7% to 9% by year’s end.

Slide ID # S041235 Tracking #: 1386476 Expiration date: 10/28/2023 For institutional use only. Not for distribution to retail investors. 19 PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK DELAWARE

Total Portfolio Performance & Asset Allocation Performance Summary ending October 31, 2020 Market Value 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception ($) (%) (%) (%) (%) (%) (%) (%) (%) Date _ PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK 75,597,509 -1.21 0.40 0.53 4.54 5.63 -- -- 7.31 Jul-16 DELAWARE PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK -1.21 0.38 0.47 4.49 5.56 -- -- 7.24 DELAWARE (Net) Composite Benchmark -1.48 -0.35 0.88 4.40 5.83 -- -- 7.12 Jul-16 XXXXX - Composite Benchmark = 33.35% Spliced Total Stock Market Index / 3% Spliced Small-Cap Index / 20% Spliced Total International Stock Index / 32.65% Spliced Bloomberg Barclays US Aggregate Float Adjusted Index / 3% High-Yield Corporate Composite Index / 8% Real Estate Spliced Index

Current Allocation as of October 31, 2020

CurrentCurrent $ Current% % PolicyPolicy Difference* Difference* _ US Equity $27,412,317 36.3% 36.4% -0.1% Non-US Equity $15,054,841 19.9% 20.0% -0.1% US Fixed Income $27,202,044 36.0% 35.7% 0.3% Real Estate $5,928,307 7.8% 8.0% -0.2% Total $75,597,509 100.0% 100.0% XXXXX *Difference between Policy and Current Allocation

Gross of Advisory Fee returns reflect the deduction of fund expense ratios and any other security-level expenses. Net of Fee returns reflect the deduction of fund expense ratios, any purchase or redemption fees, and VIAS advisory fee applied to the client portfolio. Returns greater than one year represent annualized returns. Returns less than one year represent cumulative returns.

For institutional use only. Not for distribution to retail investors. 20 1 PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK DELAWARE

Performance Summary (Gross of Advisory Fees) ending October 31, 2020 Market Value % of 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception ($) Portfolio (%) (%) (%) (%) (%) (%) (%) (%) Date _ PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK 75,597,509 100.00 -1.21 0.40 0.53 4.54 5.63 -- -- 7.31 Jul-16 DELAWARE Composite Benchmark -1.48 -0.35 0.88 4.40 5.83 -- -- 7.12 Jul-16 Total Equity 42,467,158 56.18 -1.55 1.60 -0.87 6.00 6.03 -- -- 9.76 Jul-16 Equity Domestic 27,412,317 36.26 -1.47 1.60 -1.39 5.68 7.67 -- -- 10.91 Jul-16 Spliced Total Stock Market Index -2.15 1.15 3.23 10.19 10.06 11.49 12.81 12.07 Jul-16 Vanguard® Total Stock Market Index Fund Institutional 13,750,160 18.19 -2.15 1.15 3.24 10.20 10.05 11.49 12.80 12.07 Jul-16 Shares Spliced Total Stock Market Index -2.15 1.15 3.23 10.19 10.06 11.49 12.81 12.07 Jul-16 Multi-Cap Core Funds Average -1.83 0.75 0.04 6.21 6.93 8.60 10.07 9.31 Jul-16 Vanguard® Windsor™ Fund Admiral™ Shares 5,747,586 7.60 0.16 0.81 -12.50 -5.55 1.26 5.58 9.56 6.32 Jul-16 Russell 1000 Value -1.31 0.24 -12.74 -7.57 1.93 5.82 9.48 5.09 Jul-16 Multi-Cap Value Funds Average -0.83 0.36 -14.14 -9.03 -0.16 4.30 7.80 4.05 Jul-16 Vanguard® PRIMECAP Fund Admiral™ Shares 5,578,381 7.38 -2.82 2.78 -0.16 7.57 9.38 12.42 13.90 13.53 Jul-16 Russell 1000 Growth -3.40 1.56 20.11 29.22 18.77 17.32 16.31 19.33 Jul-16 S&P 500 -2.66 0.37 2.77 9.71 10.42 11.71 13.01 12.29 Jul-16 Multi-Cap Growth Funds Average -2.23 2.01 19.41 27.68 16.32 14.56 13.54 16.89 Jul-16 Vanguard® Small-Cap Index Admiral Shares 2,336,190 3.09 2.01 3.27 -4.40 1.74 4.55 8.17 10.72 7.09 Nov-16 Spliced Small-Cap Index 2.00 3.25 -4.44 1.69 4.53 8.15 10.70 7.07 Nov-16 Small-Cap Core Funds Average 2.49 2.78 -12.70 -7.41 -1.06 4.47 7.79 2.33 Nov-16 Equity International 15,054,841 19.91 -1.71 1.60 0.10 6.60 3.05 -- -- 8.15 Jul-16 FTSE Global All-Cap ex-US Fair Value Index -2.23 0.07 -6.85 -1.79 -0.05 4.61 -- 5.20 Jul-16 Vanguard® Total International Stock Index Fund Inst 7,480,283 9.89 -2.25 0.01 -6.94 -1.89 -0.12 4.57 3.64 5.14 Jul-16 Shares Spliced Total International Stock Index -2.18 -0.10 -7.16 -2.10 -0.06 4.47 3.65 5.11 Jul-16 International Funds Average -3.02 -0.31 -6.14 -1.00 -0.05 3.89 3.88 4.88 Jul-16 Vanguard® International Growth Fund Admiral™ Shares 3,819,914 5.05 -0.46 6.46 30.05 42.47 15.00 16.39 10.52 19.02 Jul-16 Spliced International Index -2.15 -0.47 -7.47 -2.61 -0.19 4.26 3.43 5.08 Jul-16 International Funds Average -3.02 -0.31 -6.14 -1.00 -0.05 3.89 3.88 4.88 Jul-16 Vanguard® International Value Fund 3,754,644 4.97 -1.87 -0.70 -13.46 -8.69 -2.68 2.62 2.98 3.41 Jul-16 Spliced International Index -2.15 -0.47 -7.47 -2.61 -0.19 4.26 3.43 5.08 Jul-16

For institutional use only. Not for distribution to retail investors. 21 3 PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK DELAWARE

Performance Summary (Gross of Advisory Fees) ending October 31, 2020 Market Value % of 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception ($) Portfolio (%) (%) (%) (%) (%) (%) (%) (%) Date _ International Funds Average -3.02 -0.31 -6.14 -1.00 -0.05 3.89 3.88 4.88 Jul-16 Total Fixed Income 27,202,044 35.98 -0.25 -0.71 5.80 5.98 4.86 -- -- 3.62 Jul-16 Fixed Income Domestic 27,202,044 35.98 -0.25 -0.71 5.80 5.98 4.86 -- -- 3.62 Jul-16 Spliced Bloomberg Barclays US Aggregate Float -0.48 -1.39 6.48 6.31 5.14 4.15 3.59 3.58 Jul-16 Adjusted Index Vanguard® Total Bond Market Index Fund Institutional 12,165,335 16.09 -0.60 -1.52 6.37 6.17 5.06 4.08 3.50 3.49 Jul-16 Shares Spliced Bloomberg Barclays US Aggregate Float -0.48 -1.39 6.48 6.31 5.14 4.15 3.59 3.58 Jul-16 Adjusted Index Spliced Intermediate-Term Investment-Grade Debt -0.35 -0.91 6.30 6.23 4.79 3.96 3.51 3.47 Jul-16 Funds Average Vanguard® Short-Term Investment-Grade Fund 7,143,735 9.45 0.08 0.27 4.34 4.66 3.68 3.15 2.63 2.96 Jul-16 Institutional Shares BBgBarc US Credit 1-5 Yr TR 0.13 0.23 4.34 4.74 3.91 3.27 2.84 3.16 Jul-16 1-5 Year Investment-Grade Debt Funds Average 0.09 0.41 3.07 3.35 2.82 2.38 1.93 2.36 Jul-16 Vanguard® Inter-Term Investment-Grade Fund Adm ™ 5,589,387 7.39 -0.18 -0.53 8.18 8.28 5.94 5.09 4.63 4.47 Jul-16 Shares BBgBarc US Credit 5-10 Yr TR -0.14 -0.59 6.90 7.34 6.28 5.68 5.14 4.90 Jul-16 Spliced Core Bond Funds Average -0.35 -0.91 6.30 6.23 4.79 3.96 3.51 3.47 Jul-16 Vanguard® High-Yield Corporate Admiral Shares 2,303,586 3.05 0.38 0.14 1.11 3.03 4.42 5.62 6.03 5.31 Dec-16 High-Yield Corporate Composite Index 0.46 0.02 2.47 4.57 4.88 6.08 6.07 5.56 Dec-16 High-Yield Funds Average 0.30 0.46 -0.35 1.92 3.07 4.80 4.93 4.06 Dec-16 Total Real Estate 5,928,307 7.84 -3.12 -5.20 -15.45 -15.82 1.67 -- -- -0.28 Jul-16 Real Estate Domestic 5,928,307 7.84 -3.12 -5.20 -15.45 -15.82 1.67 -- -- -0.28 Jul-16 Real Estate Spliced Index -3.07 -5.17 -15.35 -15.71 1.74 3.49 7.74 -0.20 Jul-16 Vanguard® Real Estate Index Fund Institutional Shares 5,928,307 7.84 -3.12 -5.20 -15.45 -15.82 1.67 3.41 7.68 -0.28 Jul-16 Real Estate Spliced Index -3.07 -5.17 -15.35 -15.71 1.74 3.49 7.74 -0.20 Jul-16 Real Estate Funds Average -2.55 -4.41 -14.69 -15.68 1.27 2.92 7.05 -0.02 Jul-16 XXXXX

For institutional use only. Not for distribution to retail investors. 22 4 PENSION PLAN FOR EMPLOYEES OF CITY OF NEWARK DELAWARE

Total Portfolio Performance

For institutional use only. Not for distribution to retail investors. 23 5 CITY OF NEWARK DELAWARE OPEB PLAN

Total Portfolio Performance & Asset Allocation Performance Summary ending October 31, 2020 Market Value 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception ($) (%) (%) (%) (%) (%) (%) (%) (%) Date _ CITY OF NEWARK DELAWARE OPEB PLAN 13,276,385 -1.24 0.34 0.92 4.89 5.72 -- -- 7.29 Jul-16 CITY OF NEWARK DELAWARE OPEB PLAN (Net) -1.24 0.32 0.87 4.84 5.65 -- -- 7.21 Composite Benchmark -1.48 -0.35 0.88 4.40 5.83 -- -- 7.05 Jul-16 XXXXX - Composite Benchmark = 33.35% Spliced Total Stock Market Index / 3% Spliced Small-Cap Index / 20% Spliced Total International Stock Index / 32.65% Spliced Bloomberg Barclays US Aggregate Float Adjusted Index / 3% High-Yield Corporate Composite Index / 8% Real Estate Spliced Index

Current Allocation as of October 31, 2020

CurrentCurrent $ Current% % PolicyPolicy Difference* Difference* _ US Equity $5,038,636 38.0% 36.4% 1.6% Non-US Equity $2,860,048 21.5% 20.0% 1.5% US Fixed Income $4,370,911 32.9% 35.7% -2.7% Real Estate $1,006,791 7.6% 8.0% -0.4% Total $13,276,385 100.0% 100.0% XXXXX *Difference between Policy and Current Allocation

For institutional use only. Not for distribution to retail investors. 24 1 CITY OF NEWARK DELAWARE OPEB PLAN

Performance Summary (Gross of Advisory Fees) ending October 31, 2020 Market Value % of 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception ($) Portfolio (%) (%) (%) (%) (%) (%) (%) (%) Date _ CITY OF NEWARK DELAWARE OPEB PLAN 13,276,385 100.00 -1.24 0.34 0.92 4.89 5.72 -- -- 7.29 Jul-16 Composite Benchmark -1.48 -0.35 0.88 4.40 5.83 -- -- 7.05 Jul-16 Total Equity 7,898,684 59.49 -1.53 1.62 -0.90 5.96 6.06 -- -- 9.80 Jul-16 Equity Domestic 5,038,636 37.95 -1.47 1.59 -1.48 5.59 7.64 -- -- 10.89 Jul-16 Spliced Total Stock Market Index -2.15 1.15 3.23 10.19 10.06 11.49 12.81 12.07 Jul-16 Vanguard® Total Stock Market Index Fund Institutional 2,572,146 19.37 -2.15 1.15 3.24 10.20 10.05 11.49 12.80 12.07 Jul-16 Shares Spliced Total Stock Market Index -2.15 1.15 3.23 10.19 10.06 11.49 12.81 12.07 Jul-16 Multi-Cap Core Funds Average -1.83 0.75 0.04 6.21 6.93 8.60 10.07 9.31 Jul-16 Vanguard® PRIMECAP Fund Admiral™ Shares 1,007,484 7.59 -2.82 2.78 -0.16 7.57 9.38 12.42 13.90 13.53 Jul-16 Russell 1000 Growth -3.40 1.56 20.11 29.22 18.77 17.32 16.31 19.33 Jul-16 S&P 500 -2.66 0.37 2.77 9.71 10.42 11.71 13.01 12.29 Jul-16 Multi-Cap Growth Funds Average -2.23 2.01 19.41 27.68 16.32 14.56 13.54 16.89 Jul-16 Vanguard® Windsor™ Fund Admiral™ Shares 1,006,362 7.58 0.16 0.81 -12.50 -5.55 1.26 5.58 9.56 6.32 Jul-16 Russell 1000 Value -1.31 0.24 -12.74 -7.57 1.93 5.82 9.48 5.09 Jul-16 Multi-Cap Value Funds Average -0.83 0.36 -14.14 -9.03 -0.16 4.30 7.80 4.05 Jul-16 Vanguard® Small-Cap Index Admiral Shares 452,644 3.41 2.01 3.27 -4.40 1.74 4.55 8.17 10.72 7.09 Nov-16 Spliced Small-Cap Index 2.00 3.25 -4.44 1.69 4.53 8.15 10.70 7.07 Nov-16 Small-Cap Core Funds Average 2.49 2.78 -12.70 -7.41 -1.06 4.47 7.79 2.33 Nov-16 Equity International 2,860,048 21.54 -1.63 1.68 0.13 6.61 3.06 -- -- 8.17 Jul-16 FTSE Global All-Cap ex-US Fair Value Index -2.23 0.07 -6.85 -1.79 -0.05 4.61 -- 5.20 Jul-16 Vanguard® Total International Stock Index Fund Inst 1,355,510 10.21 -2.25 0.01 -6.94 -1.89 -0.12 4.57 3.64 5.14 Jul-16 Shares Spliced Total International Stock Index -2.18 -0.10 -7.16 -2.10 -0.06 4.47 3.65 5.11 Jul-16 International Funds Average -3.02 -0.31 -6.14 -1.00 -0.05 3.89 3.88 4.88 Jul-16 Vanguard® International Growth Fund Admiral™ Shares 854,561 6.44 -0.46 6.46 30.05 42.47 15.00 16.39 10.52 19.02 Jul-16 Spliced International Index -2.15 -0.47 -7.47 -2.61 -0.19 4.26 3.43 5.08 Jul-16 International Funds Average -3.02 -0.31 -6.14 -1.00 -0.05 3.89 3.88 4.88 Jul-16 Vanguard® International Value Fund 649,977 4.90 -1.87 -0.70 -13.46 -8.69 -2.68 2.62 2.98 3.41 Jul-16 Spliced International Index -2.15 -0.47 -7.47 -2.61 -0.19 4.26 3.43 5.08 Jul-16

For institutional use only. Not for distribution to retail investors. 25 3 CITY OF NEWARK DELAWARE OPEB PLAN

Performance Summary (Gross of Advisory Fees) ending October 31, 2020 Market Value % of 1 Mo 3 Mo YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Inception Inception ($) Portfolio (%) (%) (%) (%) (%) (%) (%) (%) Date _ International Funds Average -3.02 -0.31 -6.14 -1.00 -0.05 3.89 3.88 4.88 Jul-16 Total Fixed Income 4,370,911 32.92 -0.25 -0.71 5.83 6.01 4.86 -- -- 3.62 Jul-16 Fixed Income Domestic 4,370,911 32.92 -0.25 -0.71 5.83 6.01 4.86 -- -- 3.62 Jul-16 Spliced Bloomberg Barclays US Aggregate Float -0.48 -1.39 6.48 6.31 5.14 4.15 3.59 3.58 Jul-16 Adjusted Index Vanguard® Total Bond Market Index Fund Institutional 1,956,586 14.74 -0.60 -1.52 6.37 6.17 5.06 4.08 3.50 3.49 Jul-16 Shares Spliced Bloomberg Barclays US Aggregate Float -0.48 -1.39 6.48 6.31 5.14 4.15 3.59 3.58 Jul-16 Adjusted Index Spliced Intermediate-Term Investment-Grade Debt -0.35 -0.91 6.30 6.23 4.79 3.96 3.51 3.47 Jul-16 Funds Average Vanguard® Short-Term Investment-Grade Fund 1,148,694 8.65 0.08 0.27 4.34 4.66 3.68 3.15 2.63 2.96 Jul-16 Institutional Shares BBgBarc US Credit 1-5 Yr TR 0.13 0.23 4.34 4.74 3.91 3.27 2.84 3.16 Jul-16 1-5 Year Investment-Grade Debt Funds Average 0.09 0.41 3.07 3.35 2.82 2.38 1.93 2.36 Jul-16 Vanguard® Inter-Term Investment-Grade Fund Adm ™ 898,896 6.77 -0.18 -0.53 8.18 8.28 5.94 5.09 4.63 4.47 Jul-16 Shares BBgBarc US Credit 5-10 Yr TR -0.14 -0.59 6.90 7.34 6.28 5.68 5.14 4.90 Jul-16 Spliced Core Bond Funds Average -0.35 -0.91 6.30 6.23 4.79 3.96 3.51 3.47 Jul-16 Vanguard® High-Yield Corporate Admiral Shares 366,734 2.76 0.38 0.14 1.11 3.03 4.42 5.62 6.03 5.31 Dec-16 High-Yield Corporate Composite Index 0.46 0.02 2.47 4.57 4.88 6.08 6.07 5.56 Dec-16 High-Yield Funds Average 0.30 0.46 -0.35 1.92 3.07 4.80 4.93 4.06 Dec-16 Total Real Estate 1,006,791 7.58 -3.12 -5.20 -15.45 -15.82 1.67 -- -- -0.28 Jul-16 Real Estate Domestic 1,006,791 7.58 -3.12 -5.20 -15.45 -15.82 1.67 -- -- -0.28 Jul-16 Real Estate Spliced Index -3.07 -5.17 -15.35 -15.71 1.74 3.49 7.74 -0.20 Jul-16 Vanguard® Real Estate Index Fund Institutional Shares 1,006,791 7.58 -3.12 -5.20 -15.45 -15.82 1.67 3.41 7.68 -0.28 Jul-16 Real Estate Spliced Index -3.07 -5.17 -15.35 -15.71 1.74 3.49 7.74 -0.20 Jul-16 Real Estate Funds Average -2.55 -4.41 -14.69 -15.68 1.27 2.92 7.05 -0.02 Jul-16 XXXXX

For institutional use only. Not for distribution to retail investors. 26 4 CITY OF NEWARK DELAWARE OPEB PLAN

Total Portfolio Performance

For institutional use only. Not for distribution to retail investors. 27 5 Prepared for City of Newark Delaware

Important information

For more information about any fund, visit institutional.vanguard.com or call 866-499-8473 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing. Vanguard ETF® Shares are not redeemable with the issuing fund other than in very large aggregations worth millions of dollars. Instead, investors must buy or sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling. Mutual funds and all investments are subject to risk, including the possible loss of the money you invest. Prices of mid- and small-cap stocks often fluctuate more than those of large-company stocks. 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The fund or trust will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in the Target Retirement Fund or Trust is not guaranteed at any time, including on or after the target date. Vanguard collective trusts are not mutual funds. They are collective trusts available only to tax-qualified plans and their eligible participants. Investment objectives, risks, charges, expenses, and other important information should be considered carefully before investing. The collective trust mandates are managed by Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc. A stable value investment is neither insured nor guaranteed by the U.S. government. There is no assurance that the investment will be able to maintain a stable net asset value, and it is possible to lose money in such an investment. Factor funds are subject to investment style risk, which is the chance that returns from the types of stocks in which the fund invests will trail returns from U.S. stock markets. Factor funds are subject to manager risk, which is the chance that poor security selection will cause the fund to underperform relevant benchmarks or other funds with a similar investment objective. The information contained herein does not constitute tax advice and cannot be used by any person to avoid tax penalties that may be imposed under the Internal Revenue Code. We recommend that you consult a tax or financial advisor about your individual situation. Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor. Brokerage services are plan-specific and may be provided by TD Ameritrade, Inc., member FINRA/SIPC or Vanguard Brokerage Services®, a division of Vanguard Marketing Corporation, member FINRA/SIPC. Refer to Vanguard’s plan documents for information on the applicable brokerage services provider. TD Ameritrade and Vanguard are separate and unaffiliated firms, and are not responsible for each other’s services or policies. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc., and the Toronto-Dominion Bank. Used with permission. CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute. Financial Engines is a trademark of Financial Engines, Inc. All rights reserved. Used with permission. The Vanguard Group has partnered with Financial Engines Advisors, L.L.C., to provide subadvisory services to the Vanguard Managed Account Program and Personal Online Advisor. Financial Engines Advisors, L.L.C., is an independent, federally registered investment advisor that does not sell investments or receive commission for the investments it recommends. Advice is provided by Vanguard Advisers, Inc. (VAI), a federally registered investment advisor and an affiliate of The Vanguard Group, Inc. (Vanguard). Eligibility restrictions may apply. Vanguard is owned by the Vanguard funds, which are distributed by Vanguard Marketing Corporation, a registered broker- dealer affiliated with VAI and Vanguard. Neither Vanguard, Financial Engines, nor their respective affiliates guarantee future results. Vanguard Marketing Corporation, Distributor of the Vanguard Funds. U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; 8,417,623; and 8,626,636.

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Important information

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For institutional use only. Not for distribution to retail investors. 29