HomeMy WebLinkAboutMinutes - Pension Advisory Committee - 10/26/2018Pension Advisory Commi ee (PAC)
Minutes
23 October 2018
The South Burlington Pension Advisory Commi ee held its regular quarterly mee ng on Tuesday, October 23, 2018, 2:10
pm at City Hall.
Members present: T. Hubbard, Deputy City Manager; T. Gregory, DPW; B. Da lio, Fire Department; D. Boyer, Police
Department; D. Kinville, City Clerk; T. Barri , City Council; S. Baker, Appointed Ci zen; A. Denton, School District; G.
Marcus, School District Business Manager; From SEI; Pat Blizzard, John Waite.
Minutes and Agenda
Minutes from July 24 mee ng were reviewed. Gregory moved to accept; seconded by Barri ; accepted unanimously.
There were no changes to the agenda.
Spencer Baker was appointed to record minutes.
SEI Review of October 23, 2018, Net Performance Report
PB reviewed the 3rd quarter of 2018. Por olio value 9/30/2018 was $34,696,045. Net return for fiscal YTD (3 months)
was 2.74%. Index was 2.88%, but “net” includes fees we pay. SEI is not recommending any changes in our current
investment strategy.
Investment Notes
SEI had $331 billion under management worldwide: $91 billion ins tu onal at the end of Q2.
U. S. large and small cap performed well.
Emerging markets are in correc on territory.
Top 10, primarily technology, stocks drove the S & P 500; otherwise it would have been flat. See page 7 of 10/23/18
report.
Interna onal equi es were down because of rising dollar and trade war concerns.
China and U. S. together account for 47% of worldwide GDP.
Fixed income: Short and long term returns are very close; raising possibility of an inverted yield curve, which is o en a
precursor to a recession.
SEI rebalances our account quarterly.
When comparing returns, remember ours is net a er fees, versus index.
Dynamic Asset Alloca on is an infla on hedge.
John Waite, SEI
John reviewed strategic advice process. See page 19 of 10/23/18 report. John reviews our performance annually with
the PAC, but works with Pat throughout the year.
The median valua on rate that SEI municipal pension funds use is approximately 7 ½ %, versus our rate of 7 ¼ %. Our rate
is more realis c.
John reviewed our current alloca on versus 3 alterna ve por olios (A, B, C). See page 23 of 10/23/18 report. He
recommends reducing short term fixed income, as SEI expects long term rates to increase slowly. John recommends
Por olio A. Por olio B is too aggressive. Por olio C is acceptable, but he s ll prefers A.
Review of con nuing our rela onship with SEI
Pat has 17 clients, all in the northeast. He is 1 of 25 SEI rela onship managers. There are 16 advisors as part of his team.
A er Pat and John departed, the PAC agreed to recommend con nuing our rela onship for another 5 years with no
dissent. It was noted that, as a prac cal ma er, the rela onship can be terminated by either party with rela vely short
no ce.
Our next mee ng will be Tuesday, January 22, 2019, at 2:00pm. SEI will present to the City Council that evening as well.
Mee ng adjourned 3:52 pm.
Respec ully submi ed,
Spencer Baker