Board approves PFM fixation and adds contingent counsel amid questions over adviser contacts

At its Dec. 18 session the Bucks County Retirement Board voted to follow investment adviser PFM's recommendation to rebalance the fund's fixed-income allocations, and the board approved two outside legal/monitoring firms for contingent securities litigation work. The board voted to retain Cohen Milstein to investigate potential claims related to Supermicro on a contingency basis and to add Berger Montague to the list of securities litigation monitoring firms; the solicitor confirmed both arrangements would incur no county cost unless there is a recovery.

The vote to implement PFM's fixed-income recommendations followed discussion of a memorandum from John Spagnola of PFM, who had recommended implementing a Birch Run intermediate fixed-income strategy and a set of other rebalancing moves previously tabled for further review. The board noted two items had been approved at a prior meeting and the remaining items were again on the agenda for decision. Board members said rebalancing was routine: "...you look take a look at what your fund is every year... that is my feeling is that we should just follow that recommendation of the adviser and make the changes that were presented to us a few months ago," one member said.

A separate board member raised concerns that PFM had met privately with a single commissioner (Commissioner Bob Harvey) and that the adviser "communicated an urgency to move tens of millions of dollars" into a fund PFM manages, calling that an "appearance of impropriety." The board member said approximately $20,000,000 was being recommended for transfer to a PFM-managed fund while an RFP for financial advisers remained outstanding. Other members pushed back, noting PFM had contacted multiple board members and staff (including the deputy controller) and that roughly half of the fund's investments at issue support affordable housing projects in the region.

Solicitor and staff clarified that the Cohen Milstein engagement is contingent and that no county funds will be expended unless there is a settlement or recovery. After discussion, the motion to implement the PFM rebalancing recommendation passed on voice vote; at least one member voiced opposition during the roll call. The motions to retain Cohen Milstein and add Berger Montague were also approved.

The board did not provide a numerical roll call for the rebalancing vote in the transcript and recorded opposition only as part of the voice response. The board directed no immediate staff follow-up beyond standard implementation steps and confirmed the engagements are contingent fee arrangements.