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INVESTMENT SUBCOMMITTEE MEETING MINUTES

Date:  5/20/2019     Time: 10:00 a.m.
 
X  Regularly Scheduled   __ __ Special
 
Attendees: Was a quorum present?      Yes
 
Retirement Commission   Other Attendees
Charlie Casella   Frank Picarelli, SegalMarco
Janet Andrews    Joel Fein, Prudential
Michael Carey    Jada Swinski, Prudential
Peter Adomeit    Mike McCann
Michael Bailey

Absent Commission Members
Sal Luciano
Sandra Browne-Brewton  

Comptroller's Office
Thomas Woodruff, Director, HPBSD  .
Margaret Haering, Asst. Director, HPBSD
John Herrington, Director, RSD
Amy Cason, Associate ARBO, HPBSD 

Matters Discussed:  

Mike McCann presented Prudential�s quarterly report, which included statistics on average account balances, utilization of investment options, variations in asset allocation among plans and status of GoalMaker utilization. Prudential highlighted distributions from the ARP, 403(b) and 457 Plans in connection with the SAG Award processing.  Approximately $151 million was transferred from the combined plans to the State Employees Retirement System during the first quarter of the year.  Scott Mann went over the statistics on new enrollments, meetings conducted by retirement counselors, GoalMaker participation, and rollover contributions into the plans.  Joel Fein reviewed performance of the GoalMaker portfolios for the first quarter.  

Frank Picarelli asked about the number of terminated participants with small balances and questioned whether the presence of small accounts might be depressing the average account balances in the plans.  Prudential will provide a report on the number of small balances so that the committee can determine whether it makes sense to provide a cash-out procedure, which does not currently exist..

John Herrington gave a report on the SAG Award.  The Retirement Division is processing a remaining group of roughly 75 participants to be offered the opportunity to purchase grandfathered retirement dates and another group of approximately the same size. He expects that the majority of the remaining transfers/transactions will be concluded during the second quarter.  

Tom Woodruff pointed out that as a result of the hold process worked out with investment managers for the Stable Value Fund in connection with the SAG award transfers, we were successful in protecting the fund�s crediting rate and reducing transaction costs in connection with these distributions. 

Frank Picarelli of Segal conducted the quarterly review of the markets and the plan investment options.  All market sectors recovered from the correction that occurred during the last quarter of 2018. The Fidelity VIP ContraFund and Fidelity VIP Mid Cap Fund will be removed from the plan effective July 1, 2019.  Frank asked the committee to consider what criteria will be used to identify funds to be placed on the watch list going forward.  

Frank will reach out to Vanguard to find out whether-- in light of the amount of assets our plans have with Vanguard--we can qualify for a reduction of investment management fees. 

Peggy Haering said that she and Amy Cason are reviewing participant loan activity and will provide a report and a recommendation for revising loan guidelines.  We will also provide a recommendation for distribution of excess expense account funds to all participants.

 

Upon motion and second, the meeting was adjourned at 11:25 a.m.

 

Materials Reviewed:

Prudential Quarterly Report
Segal Marco Analysis of Investment Performance

 

Decisions voted upon:   

None

 

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