Administration, Investment & Fiscal Management Board Special Meeting – June 25, 2020

The AIFM Board held a special teleconference meeting on June 25, 2020 at 1:30 p.m., conducted in accordance with Governor's Executive Order N-29-20 due to the COVID-19 pandemic. Board members present were Jason Bader, Mr. Colville, Ms. Holm, and Mr. Leon, constituting a quorum. All agenda items were approved unanimously.

Consent Calendar

• Approved the meeting minutes for November 21, 2019 and February 13, 2020.
• Accepted the SCERS Monthly Investment Reports for January 31, February 29, March 31, April 30, and May 31, 2020.
• Adopted a resolution establishing the SCERS interest rate credited to member accounts for Fiscal Year 2021.
• Accepted the SCERS Pensioners' Cost of Living Adjustment for Fiscal Year 2021.

Public Comments & Testimony

• No public comments were received for matters not on the agenda.

Discussion Items

• Item 11: SCERS Quarterly Investment Report (March 31, 2020) – Stacy Hussey, Chief Investment Officer, reported the fund was down −9.39% through March, but as of May 31 the unaudited return was +1.77%, with an 11% rebound in the last 10 weeks. She explained proactive rebalancing, including moving funds out of large cap due to a 5% cap, and noted the fiscal year could end positive if markets hold.
• Item 12: SCERS Asset Allocation Policy for FY2021 – Staff recommended no changes, keeping the existing 70% equity / 30% fixed income allocation. Hussey noted that the Segal investment outlook is being revised post-COVID; the current long-term prospective return is 5.5–6.7%.
• Item 13: SCERS Investment Policy for FY2021 – Staff recommended no changes, citing that new hybrid equity/fixed income products were studied but deemed not prudent to include at this time.
• Item 10: Segal Marco Advisors Quarterly Investment Performance Report (March 31, 2020) – Craig Chaikin discussed market conditions: S&P down ~19.5%, international markets down ~23%, negative GDP, and substantial government stimulus. He noted the disconnect between markets and the economy, with uncertainty due to rising COVID-19 cases.

Key Outcomes

• All consent calendar items were approved by unanimous roll call vote.
• Item 11 was accepted unanimously.
• Item 12 was approved unanimously (resolution adopting asset allocation).
• Item 13 was approved unanimously (resolution adopting investment policy).
• Item 10 was accepted unanimously after the presentation by Segal Marco Advisors.

Member Comments

• Board members discussed sales tax trends and the deferral program; staff projected a 13–14% drop for the year, with final numbers expected in August.
• Stacy Hussey reported that City Treasurer staff had fully transitioned to telecommuting within 48 hours of the governor's order and continue to operate efficiently.