PURSUANT TO EXECUTIVE ORDER N-29-20 ISSUED BY GOVERNOR GAVIN NEWSOM ON MARCH 17, 2020, THE SPECIAL DEFERRED COMPENSATION MEETING FOR MAY 4, 2021 AT 12:00 P.M. WILL TAKE PLACE SOLELY BY VIDEOCONFERENCE/TELECONFERENCE. TO ACCESS THE MEETING: Please click the link below to join the webinar: https://us02web.zoom.us/j/89529896694 Description: Deferred Compensation Committee Or One tap mobile : US: +16699006833,,89529896694# or +12532158782,,89529896694# Or Telephone: Dial(for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 253 215 8782 or +1 346 248 7799 or +1 301 715 8592 or +1 312 626 6799 or +1 929 205 6099 Webinar ID: 895 2989 6694 International numbers available: https://us02web.zoom.us/u/kdlIv3L5QL In order to facilitate public participation at meetings held solely by electronic means, the City will accept public comment in the following manner: 1. Members of the public may submit comments of any length up to two hours prior to the start of the meeting, at the following email address: [email protected] Please be aware that, while these comments will be provided to the members of the body and will become part of the meeting record, they will not be read aloud. Any comment submitted in this fashion will be forwarded to the legislative body prior to the start of the meeting. 2. If assistance is needed by phone, please call the Department of Finance at: (626) 744-4355. Public Comment - Limited to items on this Special Meeting Agenda and will be heard at the time the item is considered. IF YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT TO THE AMERICANS WITH DISABILITIES ACT BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET FORTH ABOVE, CONTACT THE DEPARTMENT OF FINANCE AS SOON AS POSSIBLE AT (626) 744-4355 OR [email protected] MEETING MINUTES February 2, 2021 CITY OF PASADENA DEFERRED COMPENSATION TRUST ADMINISTRATION COMMITTEE The meeting of the Deferred Compensation Committee of the City of Pasadena was held on Tuesday, February 2, 2021 solely by video conference/teleconference. The meeting was called to order at 12:03 p.m. In attendance: Committee Members Staff Other Attendees Mark Jomsky, Chair Vic Erganian Jayson Davidson, Hyas Group Raphy Timour Matthew Hawkesworth Jessica Bigueur, Empower Michael Paliwoda Judith Hernandez Keir Tilford, Empower Bob Ridley Paula Hanson Recording Secretary: Gloria Acevedo 1. Jayson Davidson, Senior Consultant, Hyas Group presented the Fourth Quarter 2020 Performance Report, which showed continued strength of global equity markets as world economies fight to recover from the effects of the COVID-19 pandemic. As the prospect of more widespread vaccine distribution and further government stimulus promoted much of the positive momentum during the quarter, those themes remain primary drivers for markets going into 2021. Mr. Davidson noted that the Fourth Quarter had a pronounced shift in the relative performance of certain asset categories with Small Cap and Value stocks outperforming their Large and Growth counterparts. Whether the shift will continue, remains to be seen as we navigate the probability of a more lasting and comprehensive economic recovery. The City’s 457 Plan had three funds on watch at the start of the quarter, the Victory Integrity Small Cap Value Fund, the American Funds EuroPacific Growth Fund, and the Vanguard International Value Fund. The Victory Fund remained in violation of policy and will thus remain on watch. It did enjoy a strong relative performance quarter. The EuroPacific Growth Fund, on the back of another strong quarter, is now comfortably in investment policy compliance. The Hyas Group recommends holding the watch status and will revisit the possibility of removing the Fund from watch at the next meeting. The Vanguard International Value Fund was placed on watch last quarter due to a significant change in the subadvisory management arrangements and the related allocations to the subadvisors. It will remain on watch until confirmation that the change does not disrupt the management of the Fund. Deferred Compensation Committee February 2, 2021 Page 2 of 3 2. Vanguard announced a change to the minimum asset requirements for the Institutional Share Class of the Vanguard Target Date Retirement Funds. The City’s 457 Plan now qualifies for a move from the current Investor Share Class, which will result in an expense reduction from a 12 to 15 bps range to a consistent 9 bps across all target-date vintages. The committee voted to approve the share class change. The Hyas Group Analytics Team will work with Empower on the transition process. 3. The committee engaged in the annual review of the plan’s investment policy statement. The document was approved with an adjustment to the language related to the watch status initiation and evaluation process for the target date investment options. This change is to accommodate the fact that the target date options are offered as a series in the plans and the watch process should be assessed at the series level when warranted. 4. Empower representatives presented the quarterly plan review, discussed participant transaction activity and service activity in general. The plan finished the year with a total of 127 Corona Related Distributions and these distributions weighed on cash flow, which came in negative for the year. Empower’s participant service representative continues to conduct one-on-one meetings virtually and this has allowed for more flexibility in scheduling time for City employees. A total of 66 virtual meetings were conducted during the fourth quarter. As with many public sector retirement plans, the City of Pasadena’s plan has a large portion of the assets tied to participants that are over the age of 50. Empower has been focused on targeting this cohort with communications and completed a “Stay In The Plan” campaign, with an email distribution to 435 active participants and a 64% open rate. 5. The committee was informed that the plan amendment application for the in-service, age 59 ½ distribution option was submitted and the provision is now available in the Plan. The Qualified Birth or Adoption distribution option has not been implemented as Empower is waiting on guidance from the IRS, which is expected in April of this year. Both of these provisions will require an amendment to the plan document and Empower is working on migrating the City to a new version of its model document. Once complete, the City’s plan document should be up-to-date and in compliance. 6. The committee was briefed on the filing of a claim against the City by a participant, related to the processing of a Corona Related Distribution request, submitted before the end of 2020. The CARES Act enabled option ended on December 31, 2020 and the participant’s request was not processed prior to the ending of this provision. It is unknown whether the committee will be involved further in the matter. An update will be provided at the next meeting. Deferred Compensation Committee February 2, 2021 Page 3 of 3 Adjournment With no further business to come before the committee, the meeting adjourned at 1:37 p.m. Attest: ______________________________ ______________________________ Mark Jomsky, Chair Date Gloria Acevedo Date Recording Secretary March 31, 2021 Performance Flash Report CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021 Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Putnam Stable Value (0.20%) 0.56 0.56 2.44 2.44 2.24 2.17 2.51 2.51 2.30 2.00 1.79 1.78 3 Yr Constant Maturity US Treasury Yield 0.06 0.06 0.21 1.49 1.48 1.10 0.43 1.94 2.63 1.58 1.05 1.02 US 90 Day T-Bill 0.01 0.01 0.10 1.32 1.11 0.58 0.36 2.06 1.94 0.93 0.32 0.05 +/- Index 0.50 0.50 2.23 0.95 0.76 1.07 2.08 0.57 (0.32) 0.42 0.75 0.76 US Stable Value 3 3 2 8 9 24 3 14 10 12 18 18 QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 BlackRock US Debt Index F -3.39 -3.39 0.83 4.73 3.18 3.53 7.64 8.78 0.03 3.63 2.69 0.57 BBgBarc Capital US Aggregate Bond Index -3.37 -3.37 0.71 4.65 3.10 3.44 7.51 8.72 0.01 3.54 2.65 0.55 +/- Index (0.02) (0.02) 0.12 0.08 0.08 0.09 0.13 0.06 0.02 0.09 0.04 0.02 US Fund Intermediate Core Bond 69 69 82 43 51 40 57 29 26 27 38 27 QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Metropolitan West Total Return Bond Plan -2.91 -2.91 3.65 5.56 3.76 4.28 9.17 9.23 0.29 3.49 2.56 0.25 BBgBarc Capital US Aggregate Bond Index -3.37 -3.37 0.71 4.65 3.10 3.44 7.51 8.72 0.01 3.54 2.65 0.55 +/- Index 0.46 0.46 2.94 0.91 0.66 0.84 1.66 0.51 0.27 (0.05) (0.09) (0.30) US Fund Intermediate Core-Plus Bond 58 58 82 21 51 22 27 53 17 78 83 31 QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 DFA Inflation Protection Securities I -1.69 -1.69 7.97 5.92 3.88 3.56 11.65 8.46 -1.29 3.28 4.67 -1.22 BBgBarc Capital US TIPS Index -1.47 -1.47 7.54 5.68 3.86 3.44 10.99 8.43 -1.26 3.01 4.68 -1.44 +/- Index (0.22) (0.22) 0.43 0.24 0.02 0.12 0.66 0.03 (0.03) 0.27 (0.02) 0.22 US Fund Inflation-Protected Bond 76 76 53 13 27 9 17 25 37 24 38 19 QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 MFS Value R6 8.69 8.69 48.27 11.04 11.84 11.40 4.03 30.18 -9.78 17.86 14.25 -0.42 Russell 1000 Value Index 11.26 11.26 56.09 10.96 11.74 10.99 2.80 26.54 -8.27 13.66 17.34 -3.83 +/- Index (2.57) (2.57) (7.82) 0.08 0.10 0.41 1.23 3.64 (1.51) 4.20 (3.09) 3.40 US Fund Large Value 79 79 75 41 43 23 38 9 67 29 51 11 1 CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021 Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020