Lackawanna County pension board hears CS McKee report showing double‑digit returns; approves performance report

Lackawanna County pension trustees on Friday heard an investment performance presentation from CS McKee and unanimously approved the meeting minutes and the quarterly performance report.

Shane, a CS McKee representative, told trustees the portfolio began the year at about $215,000,000, incurred roughly $1,500,000 in pension‑related distributions through the first three quarters, and generated approximately $28,400,000 in investment gains — a year‑to‑date return of just over 13% that left the portfolio’s market value in the low‑to‑mid $240 millions by late November. Shane said both equities and fixed income contributed, with an international equity sleeve up nearly 30% and fixed income returning about 8% through November as the Federal Reserve normalized rates.

Zach, a new CS McKee representative introduced at the meeting, expanded on market drivers, citing heavy corporate issuance to fund artificial‑intelligence infrastructure and saying those investments are a large tailwind but carry risk. He cited outside estimates that the largest U.S. public companies may spend hundreds of billions on AI this year and referenced a Massachusetts Institute of Technology study he said indicated many AI investments have yet to show positive returns. Shane and Zach told trustees they expect AI spending and further Fed rate cuts to be important market drivers in 2026 but said they did not anticipate large job losses tied to AI in 2026, noting effects are more likely further out.

The advisers described a recent portfolio change: splitting one large‑cap core U.S. equity holding into separate large‑cap growth and large‑cap value strategies to increase diversification, plus adding a value equity team to enhance downside protection. Shane also highlighted five‑year, smoothed returns of 10.71% through the third quarter versus a benchmark up about 9.3%, noting that the five‑year period includes the down year of 2022.

During questions, a trustee asked for an additional reporting column that would show previous quarter‑to‑date alongside current quarter‑to‑date (for example June 30 vs. Sept. 30). CS McKee agreed to include side‑by‑side pages for that comparison in future reports.

Before the presentation, Donnie (the controller) introduced Kim Rose, his new deputy controller, who attended her first meeting. The board recorded no public comments.

Procedurally, the board moved and seconded approval of the meeting minutes and later moved and seconded approval of the performance report; the Chair called the question and members voted 'Aye' for both motions. The meeting was then adjourned.

The board did not take any other formal actions during this session. CS McKee said it will return with a follow‑up at the next meeting to report on the items discussed.