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Investment officer reports rebalancing, $536M market value and ongoing federal cover-over advocacy
Summary
GERS' investment officer reported a month-end market value near $536 million, a strategic rebalancing that reduced equity targets from about 45% to 35% and moved 10 percentage points to fixed income. Trustees discussed continuing efforts to secure higher federal cover-over revenues in Washington.
The board’s investment officer reported portfolio performance for December 2024 and fiscal-year-to-date figures at the Jan. 23 meeting. The officer said total plan performance was down 1.7% for December, and the fund finished the month at an approximate market value of $535–$536 million. The report noted a net cash flow of about $20 million during the month to pay benefits and expenses and an unrealized depreciation of roughly $9.8 million for December.
The investment officer said the board had approved a strategic rebalancing in November 2024 that reduced the target allocation to equities from about 45% to about 35% and shifted the roughly 10 percentage points into fixed income. The officer also gave asset-class performance figures for domestic and international equities and fixed income and reported alternatives/private equity valued at about $67.5 million and cash of about 0.4% at month end.
Trustees discussed long-standing efforts in Washington to secure a higher "cover-over" amount for the territory. The administrator and counsel summarized outreach: Delegate Plaskett’s office and the governor have engaged lobbying firms (Winston & Strawn was named) and participated in federal studies (GAO and CBO) to press for a permanent change; the board discussed whether a trustee delegation should travel to Washington for advocacy. An investment officer said prior consultant and trustee retreat advice supported continued engagement; trustees expressed openness to coordinating with the delegate’s office before committing to a travel/lobbying delegation.
The board moved to accept the investment officer's report. The motion passed on recorded affirmative votes.
Why it matters: Asset allocation changes and portfolio liquidity affect the system’s ability to meet benefit payments and the fund’s long-term return profile. Federal cover-over revenue policy could materially affect GERS’ long-term funding if changed.
