Walworth County keeps OPEB allocation at 50/50 after motion to shift to 60/40 fails

Walworth County's Finance Committee voted May 21 to keep the pension-related OPEB trust's target asset allocation at 50% equities and 50% fixed income after a motion to shift to a 60/40 allocation failed.

Jeff Schroeder of PFM, the county's investment advisor, told the committee the 50/50 allocation has delivered about a 7% since‑inception return and that PFM's long‑term expected return for the current target is roughly 6.3%: "you've had the 50/50 asset allocation since 2013 ... expected return going forward over the long term for your 50/50 ... would hope to return on average going forward 6.3%." He described tradeoffs, noting more aggressive mixes raise potential returns but also increase short‑term volatility.

Committee member (speaker 4), who moved to adopt the 60/40 model, argued the change made sense given the fund's long horizon and overfunded status: "So I just think it's it just makes sense to me anyways." Other members pressed caution. One committee member cited the fund's overfunded position and fiduciary duty as reasons to avoid taking extra risk: "there'd be no need to take the additional risk," Schroeder said when discussing that point.

After discussion and a second to the motion, the committee held a vote and the motion failed; the committee therefore kept the OPEB target allocation at 50/50.

The committee heard multiple technical points during the debate: the OPEB trust is currently materially overfunded relative to projected liabilities, actuarial projections extend into the 2050s, and PFM emphasized that tactical deviations of about B110% are possible but that the 50/50 posture has served the fund well over a lengthy period.

Next steps: staff will maintain the existing investment policy and return to the committee as needed for future asset‑allocation or policy reviews.