Regular Joint Meeting of the Retirement Boards
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City of Fresno Retirement Systems REGULAR JOINT MEETING OF THE RETIREMENT BOARDS AGENDA Tuesday, August 27, 2019 12:00 PM Retirement Office, 2828 Fresno St., 2nd Fl., Board Chamber, Room 202, Fresno, CA 93721 EMPLOYEES RETIREMENT BOARD Phillip Hardcastle-Chair, TJ Miller-Vice Chair, Marvell French, David Cain, Jane Sumpter FIRE AND POLICE RETIREMENT BOARD Jonathan Lusk-Chair, John Jensen-Vice Chair Theodore Semonious, Lynn Bennink, Donald Gross (1) If you want to speak to the Board, please complete a Request to Speak form and hand it to the Board Secretary at the beginning of the Board Meeting. (2) The meeting room is accessible to the physically disabled, and the services of a translator can be made available. Requests for additional accommodations for the disabled, signers, assistive listening devices, or translators should be made one week prior to the meeting. Please call the Retirement Board Secretary at 559-621-7085 to make arrangements. (3) When considering disability retirement applications, the Board may find it necessary to discuss matters relating to the evaluation of the work performance of an employee who has applied for disability retirement, or discuss complaints or charges made against such employee. If this occurs, the Board may adjourn to a closed session to discuss such matters pursuant to Government Code secion 54957, unless the employee requests that the discussion be in public. ROLL CALL At the commencement of the first meeting and after roll call is taken, those present will be asked to stand for the Pledge of Allegiance. APPROVE MINUTES Approve Minutes of August 14, 2019, Regular Joint Meeting of the Retirement Boards. REGULAR JOINT MEETING OF THE RETIREMENT BOARDS - 14 Aug 2019 - Minutes - Pdf APPROVE AGENDA Approve Agenda of August 27, 2019, Regular Joint Meeting of the Retirement Boards. TIMED SCHEDULED HEARINGS AND MATTERS 12:00 pm Educational Asset Class Review of US and Non-US Equity: Small Cap Growth & Value; International Developed (ACWIexUS and EAFE); and Emerging Market Total Equity Review 2019 JPM Strategic Property AAC Update 1:00 pm Northern Trust Annual Presentation and Review of Custodial Services, Securities Litigation and Brokerage Recapture Programs provided by Gerald J. Sinish, Jr. and Don Anderson Fresno Aug 27 2019 REGULAR JOINT MEETING OF THE RETIREMENT BOARDS Page 1 of 391 Agenda Tuesday, August 27, 2019 A. CONSENT CALENDAR 1. Approve date and time of the next Regular Joint Meeting of the Retirement Boards scheduled at 1:00 pm on Wednesday, September 11, 2019. 2. Review and Accept Report on Funding Payroll/Operating Trust Accounts and Authorized Custodial Account Trade Activity Review and Accept Report on Funding Payroll/Operating Trust Accounts and Authorized Custodial Account Trade Activity - Pdf 3. Approve Reports for Administrative Oversight in Accordance with Joint Retirement Boards' Administrative Oversight Policy §2-3 Approve Reports for Administrative Oversight in Accordance with Joint Retirement Boards' Administrative Oversight Policy §2-3 - Pdf 4. Review and Accept Rebalancing and Trade Activities - July 2019 Review and Accept Rebalancing and Trade Activities - July 2019 - Pdf 08 19 balancing notification B. EMPLOYEE PERSONNEL ISSUES C. STAFF INITIATED ITEMS D. BOARD INITIATED ITEMS 1. Review, Discuss and Consider Board Policy and Securities Litigation Monitoring, Class Action Proceeds Received During Fiscal Year 2019 Review, Discuss and Consider Board Policy and Securities Litigation Monitoring, Class Action Proceeds Received During Fiscal Year 2019 - Pdf 2. Review, discuss and accept the Quarterly Investment Performance Report from NEPC for the period ending June 30, 2019 2019 Q2 Net IPA Fresno - Pared Version 3. Review and Accept Trade Cost Analysis as of June 30, 2019 and direction on moving forward Review and Accept Trade Cost Analysis as of June 30, 2019 and direction on moving forward - Pdf 4. Review and Consider Principal EAFE Re-Underwriting by NEPC Principal EAFE Re-Underwriting E. GENERAL DISCUSSION F. INFORMATION ONLY ITEMS 1. Monthly Performance Report - July 2019 Monthly Performance Report - July 2019 - Pdf G. PROPOSED AGENDA ITEMS FOR NEXT BOARD MEETING REGULAR JOINT MEETING OF THE RETIREMENT BOARDS Page 2 of 391 Agenda Tuesday, August 27, 2019 H. UNSCHEDULED ORAL COMMUNICATIONS I. PUBLIC COMMENTS J. ADJOURNMENT REGULAR JOINT MEETING OF THE RETIREMENT BOARDS Page 3 of 391 Page 4 of 391 MINUTES REGULAR JOINT MEETING OF THE RETIREMENT BOARDS 1:00 PM - Wednesday, August 14, 2019 Retirement Office, 2828 Fresno St., 2nd Fl., Board Chamber, Room 202, Fresno, CA 93721 The REGULAR JOINT MEETING OF THE RETIREMENT BOARDS of the City of Fresno Retirement Systems was called to order on Wednesday, August 14, 2019, at 1:00 PM, in the Retirement Office, 2828 Fresno St., 2nd Fl., Board Chamber, Room 202, Fresno, CA 93721, with the following members present: PRESENT: Jonathan Lusk, Lynn Bennink, John Jensen, Don Gross, Phillip Hardcastle, TJ Miller, Marvell French, David Cain, and Jane Sumpter ABSENT: Theodore Semonious STAFF PRESENT: Robert Theller, Kathleen Riley Brown, Chad Jacobs, Yvonne Timberlake, Andrea Ketch, Pattie Laygo, and Russ Richeda ROLL CALL 1:08 PM At the commencement of the first meeting and after roll call is taken, those present will be asked to stand for the Pledge of Allegiance. APPROVE MINUTES Approve Minutes of July 23, 2019, Regular Joint Meeting of the Retirement Boards. Moved by TJ Miller Seconded by Marvell French To approve the minutes of July 23, 2019 of the Regular Joint Meeting of the Retirement Boards Aye: Phillip Hardcastle, TJ Miller, Marvell French, and David Cain Noes: None Abstained: Jane Sumpter Absent: None CARRIED. 4-0 on a recorded vote RESO-2019141 Moved by Lynn Bennink Seconded by Don Gross To approve minutes of July 23, 2019, Regular Joint Meeting of the Retirement Boards. Page 1 of 4 Page 5 of 391 Aye: Jonathan Lusk, Lynn Bennink, and Don Gross Noes: None Abstained: John Jensen Absent: Theodore Semonious CARRIED. 3-0 on a recorded vote RESO-2019142 APPROVE AGENDA Approve Agenda of August 14, 2019, Regular Joint Meeting of the Retirement Boards. Moved by David Cain Seconded by Jane Sumpter To approve agenda of August 14, 2019, Regular Joint Meeting of the Retirement Boards. Aye: Phillip Hardcastle, TJ Miller, Marvell French, David Cain, and Jane Sumpter Noes: None Abstained: None Absent: None CARRIED. 5-0 on a recorded vote RESO-2019143 Moved by Don Gross Seconded by John Jensen To approve the agenda of August 14, 2019, Regular Joint Meeting of the Retirement Boards. Aye: Jonathan Lusk, Lynn Bennink, John Jensen, and Don Gross Noes: None Abstained: None Absent: Theodore Semonious CARRIED. 4-0 on a recorded vote RESO-2019144 TIMED SCHEDULED HEARINGS AND MATTERS None A. CONSENT CALENDAR 1. Approve date and time of the Educational Joint Meeting of the Retirement Boards beginning at 12:00 pm on Tuesday, August 27, 2019. Page 2 of 4 Page 6 of 391 Noted that Employees Member Marvell French and Fire and Police Members Jensen and Gross will not be present at the Board meeting on August 27, 2019. Moved by Jane Sumpter Seconded by Marvell French To approve consent calendar of August 14, 2019, Regular Joint Meeting of the Retirement Boards. Aye: Phillip Hardcastle, TJ Miller, Marvell French, David Cain, and Jane Sumpter Noes: None Abstained: None Absent: None CARRIED. 5-0 on a recorded vote RESO-2019145 Moved by Lynn Bennink Seconded by Don Gross To approve consent calendar of August 14, 2019, Regular Joint Meeting of the Retirement Boards. Aye: Jonathan Lusk, Lynn Bennink, John Jensen, and Don Gross Noes: None Abstained: None Absent: Theodore Semonious CARRIED. 4-0 on a recorded vote RESO-2019146 B. EMPLOYEE PERSONNEL ISSUES C. STAFF INITIATED ITEMS D. BOARD INITIATED ITEMS 1. Discussion with legal counsel for guidance regarding Board member compensation for Retirement Board business. The Boards reviewed and discussed issue with Legal Counsel. The Boards directed Legal Counsel to prepare memorandum to City of Fresno that clarifies past practice and the responsibility of the Retirement Boards for the Boards review. E. GENERAL DISCUSSION 1. Administrator's Monthly Report 8-14-2019 Page 3 of 4 Page 7 of 391 Received. 2. Report by Legal Counsel. Received. F. INFORMATION ONLY ITEMS G. PROPOSED AGENDA ITEMS FOR NEXT BOARD MEETING H. UNSCHEDULED ORAL COMMUNICATIONS I. PUBLIC COMMENTS J. ADJOURNMENT 1:50 pm Secretary / Deputy Employees Retirement System - Board Chair / Vice Chair Fire & Police Retirement System - Board Chair / Vice Chair Page 4 of 4 Page 8 of 391 2019 INTERNATIONAL EQUITY ASSET CLASS REVIEW Page 9 of 391 CITY OF FRESNO RETIREMENT SYSTEMS August 27, 2019 Don Stracke, CFA, CAIA, Senior Consultant Michael Miranda, CFA, Senior Analyst BOSTON | ATLANTA | CHARLOTTE | CHICAGO | DETROIT | LAS VEGAS | PORTLAND | SAN FRANCISCO Page 10 of 391 GLOBAL EQUITY ENVIRONMENT NEPC, LLC BEST FIRST HALF SINCE 1997 FOR US STOCKS 30% S&P 500 Cumulative Returns 20% 10% Page 11 of 391 Page 11 0% -10% -20% First Half -30% Second Half -40% 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Source: FactSet 3 EQUITY INDEX PERFORMANCE US Style Returns International Style Returns 15% 8% Monthly Return 10% Trailing 12M Return 6% 4% 5% 2% 0% 0% -5% -2% Monthly Return Trailing 12M Return Page 12 of 391 -10% -4% Russell Russell Russell Russell Russell Russell MSCI MSCI MSCI MSCI EM MSCI EM MSCI EM 1000 1000 1000 2000 2000 2000 EAFE EAFE EAFE Growth Value Growth Value Growth Value Growth Value Source: FactSet Source: FactSet Country-Specific