Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pension Investments topic
No spam. Unsubscribe anytime.
Pension boards approve asset sales, set quarterly cash distribution to cover retiree payouts
Summary
Trustees voted to raise cash by selling specified equity holdings and to route investment income quarterly into a deposit-and-disbursement account to cover retiree payments after advisers said outflows now exceed inflows for the general employees plan.
The Police Employees and General Employees Pension Boards approved a plan to raise cash and redirect portfolio income to cover retiree payments after advisers said the general plan has entered distribution mode.
Presenter (S5), the investment presenter, told trustees the plan finished the fiscal year with strong returns but warned the fund faces increased volatility because market valuations are high and the plan is moving from accumulation into net-distribution. S5 said the general plan posted a fiscal-year return of about 8.96% and that actuarial smoothing will remove the large 2022 loss from future four-year figures.
Adviser (S2) recommended routing dividends and other portfolio income into a deposit-and-disbursement (D&D) account rather than reinvesting them, and selling selected equity holdings to make up the shortfall between income and retiree distributions. S2 proposed specific redemptions: $155,000 from a JPMorgan equity income position, $165,000 from Pioneer, $125,000 from Boston (main value), $75,000 from Riverbridge and $78,000 from Fortis. S2 said the board would hold roughly $300,000 in reserve in the D&D account and draw on that cash quarterly as Britney, the payroll/benefits administrator, requests funds.
"We crushed that," S5 said of this year's recovery versus actuarial assumptions, but added that trustees should expect market cycles and prepare for possible corrections. The presenters stressed the sales were intended to "sell high" where possible and to protect the portfolio by increasing fixed-income and cash allocations for short-term liquidity.
A trustee moved to accept the adviser's recommendation for the general plan, and the board voted in favor with no recorded opposition. Trustees asked that staff and the actuary provide updated cash‑flow projections next quarter so the board can revisit allocations as long-term outflow timing becomes clearer.
Next steps: advisers will execute the recommended redemptions and begin directing income to the D&D account, and the board will review updated actuarial flow projections at the next quarterly meeting.
