Pension consultant reports strong equity gains, flags fixed-income risks

Jason, the borough’s pension consultant, told council the police and general employee plans have posted solid gains through May, driven by strong performance in emerging-market equities and chip- and memory-related firms that have benefited from increased AI capital spending. “The police plan is now well over $11 million,” he said, and added the general employees plan approaches $5.5–$6 million.

The presentation stressed the contrast between equity strength and fixed-income vulnerability. Jason said higher long-term yields have improved income opportunities but also pose refinancing and valuation risks, noting that Treasury auction participation had fallen and that “the bond market is the part of the capital markets that I’m the most worried about.”

Council members asked about allocation and liquidity rules. Jason explained why the police plan carries a larger fixed-income cushion (to protect a provision that allows some members to take lump sums) and described a rebalancing approach that aims to capture gains while protecting funding levels in downturns. He recommended continued “ruthlessly disciplined” rebalancing and careful exposure to very large new IPOs.

The consultant said staff will continue to monitor interest-rate guidance from the Federal Reserve and recommended reporting back if market conditions change materially. The council did not take formal action; members had follow-up questions about plan provisions and liquidity that staff agreed to answer at a later meeting.

The pension presentation was the most substantive financial briefing of the evening and closed without a vote. The council moved on to routine public works and planning items.