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Pension board adopts May rebalancing across police, fire and O&E funds
Summary
The Allentown Pension Board voted to adopt rebalancing recommendations from Marquette that trim broad U.S. equity exposure and shift assets into equity-income and bond allocations for the police, fire and O&E (other and employees) plans.
The Allentown Pension Board on May 20 adopted rebalancing recommendations from its investment advisor, Marquette, designed to reduce exposure to the largest, most volatile U.S. stocks and to modestly increase higher-income equity and fixed-income allocations.
The boardapproved the package in a roll-call vote after Marquette presented quarterly performance data and cash-flow projections. Pat, the Marquette presenter, told trustees that the proposal was intended to trim broad-market exposure that had benefited from large-cap leadership earlier in the year and to prime the funds for a more volatile window ahead. "We're proposing a $1,000,000 redemption from the Vanguard Total Stock Index into the Vanguard Equity Income fund" for the police plan, Pat said during the presentation, and described larger but similar dollar moves for the other plans.
The actions were recommended in written materials dated 05/20/2025 and shown on pages 10, 12 and 14 of the meeting packet. Marquetterecommended similar moves for the fire and O&E plans: reducing some broad-market ETF exposure and shifting proceeds into an equity-income sleeve and into the Vanguard Total Bond Market index for a portion of the proceeds. Pat said the changes were intended to "trim winners" and allocate proceeds into higher-yielding fixed income instruments without increasing the fund's cash exposure.
Why it matters: Trustees said the rebalancing would reduce concentration risk from very large U.S. technology and consumer discretionary stocks and would modestly increase allocations to assets that historically held up better in down markets. Marquettenoted value tilts and fixed-income performance were key drivers of the funds' outperformance in the first quarter and said the rebalancing aimed to preserve those protective effects.
Roll-call outcome: The motion to adopt the rebalancing proposals "as contained on pages 10, 12 and 14 of the discussion materials dated 05/20/2025 from Marquette" passed by roll call. Recorded votes were: Bina Patel, yes; Jeff Glaser, yes; Evie (Ebi) Balag, yes; Tim Bruce, not present; Alex (Kuskravage/Scribe), yes; Rob Bush, yes; Andrew Weiss, yes; John Strobula, yes; Darrell Hendricks, yes. No nay votes were recorded.
Board discussion and next steps: Trustees asked questions about short-term cash needs and the projected ladder of maturities; Marquette responded that all three plans retain several years of coverage in bond maturities and excess cash and that the proposed moves would not extend the funds' short-term maturity ladder. After the vote, trustees directed staff to implement the trades from the managers and report back at the next quarterly meeting.
The board also voted separately, later in the meeting, to approve a related package of partial redemptions and rebalances for each plan (see separate action on rescinding remaining real-estate redemptions).
