Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Investment Policy Statement topic
No spam. Unsubscribe anytime.
Board delays final vote on revised investment policy statement, seeks more review
Summary
Trustees discussed proposed redline revisions to the Federated plan’s investment policy statement (IPS), agreed the document should be shortened and clarified, and deferred action until the June meeting so trustees can review the redlines.
SAN JOSE — Trustees of the San Jose Federated City Employees Retirement System discussed a proposed rewrite of the pension fund’s investment policy statement (IPS) at length on Thursday but agreed to defer a final vote to allow trustees more time to review the redlined draft.
Chair Horowitz said the proposed redline was voluminous and that several trustees had not had time to review it fully. “I think it is my judgment that we defer action on this item until the June meeting,” he said. Counsel qualified remote participation under the Brown Act and confirmed the board could consider the late‑posted redlines today but that it would be reasonable to treat the meeting as a first reading.
Staff and consultants described the proposal as a modernization and simplification: moving implementation‑level procedures into a separate staff implementation document, shortening the IPS to make it a higher‑level strategic roadmap, and removing prescriptive modeling instructions the board no longer follows. Eileen (staff) summarized the intent: to parse strategic board decisions from staff implementation steps and to align language with industry norms.
Trustees debated the cadence for asset‑allocation review and whether the IPS should say the board will conduct a full asset‑allocation review “at least every three years” or instead retain language that the review may be initiated by staff or trustees. Trustee Horowitz urged keeping an annual review expectation (or at least preserving trustee flexibility to review annually) so newly seated trustees could participate in the process during their typical three‑year tenure.
Other discussion points included (1) retaining a commonly used reference benchmark (a 60/40 portfolio) alongside a custom reference that matches the fund’s growth/non‑growth split, and (2) clarifying language so the IPS remains a strategic document that does not unintentionally constrain tactical responses to rare market dislocations — a reference to the March 2020 re‑risking the plan that several trustees cited in support of retaining flexibility.
Counsel noted there has been limited litigation in California alleging a pension fund violated its IPS and cautioned that overly prescriptive operational language in a public IPS can invite scrutiny; staff said the proposed approach purposely moves operational detail to a staff implementation manual (presented as a separate document) while keeping the IPS higher level.
Trustees agreed to continue the discussion and asked staff to produce a one‑page memo summarizing the principal changes (additions, deletions, and rationale) and to circulate a revised redline before the June meeting. The board did not vote on the IPS at Thursday’s meeting.
