The Meeting Was Called to Order At s2
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Delaware College Investment Plan
Delaware Higher Education Office Conference Room Board of Trustees Meeting December 11, 2015
Board Members Attending: Others Present: José Echeverri, Chair Robert Dillard, Dep. Attorney General’s Office Dan Scholl, Tele Shana Payne, Dept of Education Valerie Watson, Finance Designee (St of DE) Michael Watson, Dept of Education Donald Shandler Keith Bernhardt, Fidelity Investments Peter Walsh, Fidelity Investments Renee Hill, Fidelity Investments Ken Simpler, State Treasurer’s Office Nohora Gonzalez, State Treasurer’s Office
The meeting was called to order at approximately 1:05 p.m.
Motion was made by Dan Scholl to approve meeting minutes from the June 11, 2015 meeting. Motion Approved. Motion approved. Minutes from the September 10, 2015 board meeting were approved by all board members.
All introductions were made.
The Performance Review was discussed by Peter Walsh, he gave a background on the two different decks. More important to go through the Executive Summary deck. Enhanced program was launched approximately a year ago. The biggest objective hasn’t changed, college achievements. One of the most common things looked at is participating behavior, college cost inflation. Annual contributions are at about $1200/year. Mr. Walsh spoke of the glide paths. Keith Bernhardt stated these are age- based portfolios, 2030-2033 portfolios. Mr. Walsh discusses page 3 of the smaller deck. A lot of enhancements are on the glide path. Want most of the return to come from the glide path. Fund management enhancements are:
1. All Fidelity 2. Multi-Management 3. Index – Active Allocation
How are the Active Allocations viewed is discussed. What is seen in global perspective? Various asset classes that work better during business cycles, rates. Look at full holdings. Emerging markets are very attractive.
Mr. Walsh discusses Fidelity funds on page 6. There is the 2030 college portfolio, static portfolios, and aggressive to moderate portfolios. On page 7 is the Index Portfolio where it’s rare to have out- performances. The next page is the Multi-Firm, just age portfolios. This is the 4th year, a work in progress. All portfolios are above benchmark.
1 Renee Hill now discusses the Business Results for the 3rd quarter, a challenging quarter. There is two things that work against Fidelity and that is that this is the largest distribution season. It’s tough to engage with parents during the summer months. On page 2, Overall Assets/New Account Growth. On page 3 is Gross Sales, contributions that are coming in. All accounts are down, gross sales have been surpassed. A little bit of a downturn in September. On page 4 is the Net Results, contributions minus distributions. In July/August were the highest and September broke even. On page 5 is the Online Gifting Summary. In 2014, this tool was launched. It’s a free service. Parents can see all gifts that have been contributed within their account. Going to page 11, the family gifting site was launched in September 2015. At this point, this is a soft launch. A summary of all is on page 6. Marketing is discussed. On page 8 talks about some of the marketing plans that are in effect. There is also new distribution ads. The Q4 Summary page was reviewed and Mrs. Hill stated this is a full strength campaign. On page 10 are Savings Points, a lot of positive feedback on these tools.
Mr. Echeverri stated there are many means of distribution plans that can be brought into this forum, specifically the ABLE Plan. Stated Mr. Simpler has had conversations with the Governor reference this. He discusses combining some of the boards, however, ABLE was the catalyst for this discussion. The demographic and IRS rules are different, a very different glide path. Will the plan be a health savings plan or a college investment plan? Will send out notification on how the discussion is ended. There are 3 memos in what was sent out from Mr. Simpler, which he outlines. The existing boards/councils were discussed. Board responsibilities are very similar. Board positions were reviewed, models are being developed. Mr. Simpler reviewed organizational plans. All would know something about functional plans. This is the most aggressive plan. All needs to be reclassified, the requests are being submitted. Mr. Simpler says they’re very excited to work with the Delaware College Investment Plan. Mr. Echeverri would like the board to make a motion to set the process, March timeframe, motion made and accepted. He asked Keith Bernhardt if he could foresee any issues with this going forward. He stated the structure would be easier to manage, and the sooner the better.
A discussion was had reference marketing. Mr. Echeverri says there are funds for this. The Delaware State University sponsorship – during summer book kids. They’re asking $5,800, motion to partner with them. Mr. Scholl motioned at $5,800, motion moved.
Meeting adjourned at 2:59 p.m.
Respectfully submitted,
Karin Gotcher
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