The Length of Service Award Program (LOSAP) board for St. Mary's County accepted Marquette Associates’ first-quarter investment report and approved a recommended rebalancing on June 27, moving $300,000 into bonds and real estate-focused securities.

Marquette Associates’ investment consultant said the LOSAP trust returned 1.2% in the first quarter, slightly ahead of its policy benchmark. “We did note that The US economy contracted in q 1. The initial estimate for real economic growth came in at an annualized pace of negative point 3%,” the consultant said while reviewing the report and market context. The consultant attributed quarter-to-quarter volatility to tariff-related distortions in trade data, divergent economist forecasts and shifting market expectations about Federal Reserve rate cuts.

The nut graf — why this matters: the trust’s market value and portfolio mix drive actuarial funded ratios and long-term payout assumptions for the program. Marquette reported the trust’s market value at about $19,760,000 as of June 20, 2025 (including the fiscal-year contribution), noted a Q1 net investment change of roughly $200,000, and said fiscal-year-to-date performance through the most recent quarter is about 5.6% through March plus roughly 6% in the current quarter — a geometric result that the consultant said “is probably pushing 12% from a fiscal year to date perspective.”

Most of the presentation summarized broad market performance and the trust’s asset-level results. Marquette said U.S. equities were negative for the quarter while developed and emerging non-U.S. equities outperformed — partly because of U.S. dollar weakness — and U.S. investment-grade bonds gained about 3%. Treasury Inflation-Protected Securities (TIPS) and listed infrastructure and REITs also posted positive returns, the consultant said, and that diversified exposure helped the LOSAP trust outperform many peers in the quarter.

Board discussion focused on two operational items. First, Marquette recommended delaying any major strategic allocation changes until a full board could be present, saying, “my recommendation would be to maybe pump that till August until we have a full the full board is here because this is really the foundation of subsequent decision making.” Second, Marquette proposed a specific rebalancing to bring the portfolio closer to policy targets using the recent $250,000 contribution plus a partial redemption of non-U.S. equities.

By formal motion the board approved the consultant’s recommendation to (1) add $50,000 to Principal real estate securities (REIT allocation), (2) add $100,000 to the Fidelity U.S. Bond Index fund, and (3) add $150,000 to the Baird aggregate bond fund. The motion specified funding by reducing $50,000 from the Fidelity International allocation and $250,000 from the Allspring Government Money Market Fund. The motion was moved and seconded and the board voted to approve it by voice vote.

Marquette noted that the LOSAP trust has a lower assumed long-term return (6.5%) and a lower U.S. equity allocation than many peer public funds (which the report said commonly assume 7%+). The consultant said those structural differences mean the trust can behave differently in multi-year comparisons, and that any future change to the strategic policy would materially affect long-term expected returns and should be discussed when the full board can participate.

The board also accepted Marquette’s report and approved the plan administrator’s administrative payments and the final FY25 contribution of $250,000. Marquette said it will return in August for any strategic asset-allocation discussion when more board members are present.

Less-critical details: Marquette’s report included manager-level attribution (noting small short-term tracking differences between some index funds and policy benchmarks), peer-rank data for public funds under $50 million, and a correction to a table on page 24 (a Fidelity allocation number was listed as $50,000 but should be $100,000).