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PARS and asset manager brief Pleasant Hill committee on 115 pension trust performance
Summary
PARS and PMM Asset Management updated the Pleasant Hill Budget Committee on the city's IRS-approved 115 trust: contributions and an account balance of roughly $2.25'$2.3 million, inception-to-date annualized returns of about 7%, and a moderately conservative 30/70 target allocation. No withdrawals have been made; policy changes would be required to permit withdrawals.
Rachel Sanders of PARS told the Pleasant Hill Budget Committee on April 4 that PARS serves as the ongoing trust administrator for the city's IRS-approved 115 trust and that US Bank is trustee. "We basically manage and monitor all of the arm and administration as it relates to the trust," Sanders said, explaining the trust allows the city to move assets from its general fund into an irrevocable account for pension-related expenses.
Sanders and Ashley Byers of PARS reported that the pension side has received approximately $1.9 million in contributions with net investment earnings of about $350,000 and an account balance roughly in the $2.25'$2.3 million range as of March 31. Byers summarized the plan's current strategic posture as "moderately conservative," designed to prioritize capital preservation while earning modest growth.
Andrew Brown of PMM Asset Management, the portfolio manager for the trust, said the target allocation for the long-term portfolio is about 30% equities and 70% fixed income, and that the plan has produced a strong start since inception. "We were able to show 7% annualized since inception," Brown said, adding that the nine-month, year-to-date figure of about 4.5% is not an annualized number. Brown described the investment mix as predominantly large-cap index exposure with selective active managers and active fixed-income managers for the bond sleeve.
Committee members asked whether the city anticipates taking distributions from the trust. Staff and the presenters confirmed there have been no disbursements to date and noted the city's funding policy does not currently include a withdrawal mechanism. As staff put it, amending the policy and returning the matter to council would be required before any funds could be withdrawn.
No formal action was taken; the presentation was received as information and committee members asked staff to follow up with any further clarifications about distribution policy and how a change in timing for major withdrawals would affect asset-allocation choices.
