Allentown pension trustees approve market rebalancing and rescind remaining real‑estate redemptions

Allentown City Pension Board trustees voted May 20 to approve a set of rebalancing moves proposed by Marquette Associates and to rescind outstanding requests to redeem remaining holdings in a Morgan Stanley real‑estate fund.

The rebalancing motion, moved by John Strobula and seconded by Bina Patel, passed by roll call with eight yes votes and one absence. Trustees cited recent market volatility, a value tilt in the funds' equity sleeve, and attractive short‑term yields on cash and short maturities as reasons to shift allocations within the police, fire and O&E (Other and Exempt) plans.

Marquette presenter Pat said the board's recommended moves were intended to reduce exposure to the largest, most volatile U.S. stocks and to slightly increase higher‑quality fixed‑income exposure without extending the short‑term ladder. For the Police Plan the proposal included a $1,000,000 redemption from the Vanguard Total Stock Market Index into the Vanguard Equity Income fund; for the Fire Plan the proposal included about $1,500,000 moved from the Vanguard Total Stock Market Index into Vanguard Equity Income; and a smaller rebalancing was recommended for the O&E plan (discussed by staff and presented in the materials as roughly a $100,000 change). Pat described the rationale as “not necessarily getting more conservative from a dollar's perspective, but the mix of the assets perspective,” and said value‑oriented and higher‑quality fixed‑income holdings were expected to provide downside protection if equities fall.

Trustees also voted to rescind remaining redemption requests the board had previously submitted to Morgan Stanley's real‑estate vehicle. Board materials showed that, of the original partial‑redemption requests submitted in 2022, roughly 70% of the requested proceeds (about $5.015 million for Police and about $3.25 million for Fire) had already been returned as market liquidity improved; trustees voted to cancel the balance to leave the real‑estate allocation under target while income continues to be paid back to the plans. The rescission motion passed on a roll call with the same affirmative trustees.

Board members asked for periodic updates. Marquette and staff said the rebalancing would be applied across the three plans as described in the May meeting materials (pages 10, 12 and 14 of the Marquette packet). Trustees emphasized the decision did not extend the fixed‑income ladder — in other words, the board placed proceeds into cash or short‑dated instruments rather than locking in longer yields — because short‑term yields were at attractive levels compared with projections for the remainder of 2025.

Votes at a glance: - Rebalancing proposals (pages 10, 12, 14, Marquette materials dated 05/20/2025). Motion: “Adopt the rebalancing proposals as contained on pages 10, 12, and 14 of the discussion materials dated 05/20/2025 from Marquette.” Mover: John Strobula. Second: Bina Patel. Roll call: Bina Patel — yes; Jeff Glaser — yes; Ebi Balag — yes; Tim Bruce — absent; Alex Kuskravage — yes; Rob Bush — yes; Andrew Weiss — yes; John Strobula — yes; Daryl Hendricks — yes. Tally: yes 8, no 0, abstain 0, absent 1. Outcome: approved. - Rescind remaining Morgan Stanley real‑estate redemptions (Marquette packet, page 16 discussion). Motion: rescind outstanding redemption requests and continue to accept quarterly income distributions to cash. Mover: John Strobula. Second: (recorded) Bina Patel. Roll call: same as above. Tally: yes 8, no 0, abstain 0, absent 1. Outcome: approved.

The board also approved routine items earlier in the meeting — including minutes and individual pension revisions — but the investment rebalancing and the rescission of the remaining real‑estate redemptions were the substantive investment decisions taken on May 20.

Looking ahead, staff and Marquette said they would bring cash‑flow projections and updates on real‑estate redemptions back to the board in future quarterly materials.