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Monroe pension funds report near-100% funding after strong 2025 returns; advisers recommend no major allocation changes
Summary
Advisers told the Town of Monroe pension committee the town and OPED plans outpaced actuarial assumptions in 2025, leaving the town plan roughly 99% funded and OPED above 95%; the investment team recommended no significant portfolio changes while flagging several managers for monitoring.
The Town of Monroe Pension Committee on Jan. 22 heard a quarterly investment review reporting unusually strong investment performance in 2025 and funding levels well above municipal peers.
Devon Francis, the committee's HR advisor and the meeting's presenter, said the town pension plan is over 99% funded as of the most recent valuation (July 1, 2024) and the OPED plan is above 95%, noting both plans have exceeded their actuarial return assumptions amid strong market results.
Francis explained the investment committee develops 20-year capital market assumptions to align with the actuary's horizon and supplements those with 10-year asset-class outlooks. He said forward-looking return expectations have edged down modestly from last year because 2025's outsized returns left higher starting valuations, but that the current asset-allocation profile remains well positioned. "We don't have any recommendation for change," Francis said, adding that a roughly 70/30 equity-to-fixed-income profile models to an expected return of about 7.3% under the committee's assumptions.
The presentation emphasized diversification. Francis pointed to a broadening of market leadership in 2025 — beyond a handful of large technology names — and noted that more of last year's gains were driven by earnings growth rather than multiple expansion. He said managers' active performance varied, and that exposure to international equities and small- and mid-cap stocks helps reduce concentration risk.
Committee members raised a handful of technical questions about the report's tables (rounding and spreadsheet formatting), which staff answered as rounding artifacts.
Francis identified several managers on watch or "discuss" status: one manager with significant underperformance undergoing a research-driven review and a midcap manager undergoing a corporate transaction; the principally diversified real asset fund is also changing its benchmark (removing TIPS). He said staff is monitoring those situations but is not recommending immediate changes.
The committee approved pending minutes and voting records from the Oct. 23, 2025 meetings for both the pension committee and the OPED board; both motions passed unanimously during the meeting.
Next steps: staff will continue manager monitoring, finalize memos on watch-status managers for the committee, and coordinate with the actuary as part of the annual assumption review.
