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Kahn, Smith, & Collins
Local 1563's Attorneys
Pension Update
Updated On: Aug 21, 2017

Anne Arundel County Retirement and Pension System Board of Trustees – 2nd Quarter 2017

Brothers and Sisters:

            The second quarter of this year showed  slower return growth due primarily to a volatile June. Although the markets have been trending up since the election, there will still be rough patches  throughout the year.

            The total portfolio return for the quarter was 2.6%.  YTD return is now 7.6% and the one year number is 12.7% ranking us 27th among our peers. Although the performance was relatively flat, it was bolstered by strong returns in International Equity of 6.3%. The total value of pension assets for the System is $ 1.789 B

            The Fire Plan assets increased  by approximately $ 1.9 M from the previous quarter to a total of $ 512 M including DROP distributions to six retirees, benefit payments and expenses. The total retirements for the fiscal year in addition to twenty-six DROP's were two normal, two non-service connected and three service connected disabilities. COLA increases for July were 1.6%.

            Our auditors reported on the health of the plan and the administrative activity. They reported no material weaknesses and that the System was well managed. It has been several years now since there were any audit issues, a credit to our Benefits staff.

            The assets are diversified and all asset classes were within the policy targets assuring stability with our investments. We have our managers present once a year to the Board of Trustees on their administrative activity and performance. The Investment committee meets quarterly to review our manager’s performance with our adviser, NEPC. They have been with us since 1990 and have really done a yeoman’s job of helping us be successful.

            As always, any questions, please give me a call (443-324-8708) or email, leroy1563@gmail.com.

LeRoy Wilkison  

Fire Plan Trustee

____________________________________________________________

Anne Arundel County Retirement and Pension System

Board of Trustees – 1st Quarter 2017

Brothers and Sisters:

The first quarter of this year showed a positive return in all asset classes. Both stocks and bonds performed well. The Pension Sytem had a 4.8% return for the quarter and the one year return was 11.3%. The market value of the System increased to $ 1,751, 358, 748, a $ 72 M increase from last report of 12/31/16.

The Fire Plan benefited as well from the excellent returns. After all benefit payments and administrative expenses,  the plan assets increased by $ 19 M to $ 503,301,205. Benefit payments for the quarter increased to $ 9,171,203, up from the last quarter of 2016 due to five DROP retirements.

The Actuary reported on the Fire Plan for FY 2017 which was calendar year 2016. The funded ratio of the Plan was 87.4 %, down slightly from the previous year of  87.6 %. We had 792 active participants, 45 in DROP and 591 retirees.  We had 26 retirements from DROP in 2016 which accounted for higher then normal benefit payments. The County's recommended contribution for FY 2018 increased slightly to  $ 15,001,017 which is 29.8 % of payroll and was approved by the Boad of Trustees at the March meeting. A very positive report on a well funded and healthy Pension Plan!

Some have inquired on the delay in providing this report. I do not received the finalized returns and the Statement of Plan assets until the May Board of Trustees meeting, thus the delay in reporting to you. Thank you for your patience.

As always, any questions, please give me a call (443-324-8708) or email, leroy1563@aol.com.

LeRoy Wilkison   

Fire Plan Trustee

Anne Arundel County Retirement and Pension System

Board of Trustees – 4th  Quarter 2016

Good morning Brothers and Sisters:

            The past year has shown a great deal of volatility in the markets. I am pleased to report that because of our diligence and diversification the pension fund ended the year on a very positive note. The total return for the year was 7.6% led by our investments in Emerging markets followed by US Equities, non Core Fixed Income, Global Asset allocation and our Fixed Income portfolio.

            The 12/31 allocation report showed the total assets of the Pension Fund for 2016 are $ 1,674, 515,180. The assets for our Fire plan ended the year at $ 484,238,101 which is # 17.5 M greater then 12/31/2015. While this amount appears to be les then the 7.6% ereturn for the yer, it includes COLA increases, new retirements and some pretty hefty DROP distributions. So with all of these factors and some administrative costs, we still added to the fund.

            The actuary reported that our plan is well funded and the funded ratio also increased last year. The auditor reported no problems with reporting of assets or any administative issues. The County;s contribution continues to be very stable and they have funded the required contribution each year as requested. Kudos to them!

            Our overight and diversification has provided a very stable fund that even with increasing retirements still continues to grow. We monitor our money managers closely and use best rpractice in developing our asset allocation and rebalancing the portfolio based on expected trends. We have instituted a Private Equity portfolio to address increasing retirements and added new investment classes to increase the value of the assets while keeping an eye on the risk profile of each investment.

            In August of 2017 the Board of Trustees celebrates its 20th Anniversary. I have been honored to be your Trustee for the entire time. Protecting your retirement is paramout and the Board takes this task extremely seriously.Thank you for your support!

As always, if you have any questions, please give me a call (443-324-8708) or email, leroy1563@aol.com.

LeRoy Wilkison, Fire Plan Trustee

           

Anne Arundel County Retirement and Pension System

Board of Trustees – 2nd Quarter 2016

Brothers and Sisters:

The second quarter of this year was pretty uneventful until the Brexit vote was announced in late June. That event saw a significant loss on Friday followed by a good rebound the next trading day.

Our assets returned 1.3% for the quarter bringing our YTD return to 2.7%. Our return was bolstered by our bond portfolio, both domestic and global assets in emerging markets.

The Fire Plan remained stable and was up slightly. After all DROP payments, retirements and expenses were paid we still increased the assets by $ 2.86 M for a total of assets held in trust for pension benefits of $ 470,697,359.

The Actuarial report for the Fire Plan was received and showed another increase in the Funding Percentage of the Plan to 87.6% as of 1/1/2016 , up from 86.4% in January of 2015. The County’s contribution for the year actually was less for FY2017. This year’s contributions are 29.1% of covered payroll, down from 30.6% in FY 2016.

The fund benefits from diversification and close attention to each money manager.  As DROP benefits are paid and new retirements come on board, our history of stability continues now and into the future.

As always, any questions, please give me a call (443-324-8708) or email, leroy1563@aol.com.

LeRoy Wilkison, Fire Plan Trustee

__________________________________________________________

Anne Arundel County Retirement and Pension System

Board of Trustees – 1st Quarter 2016

Brothers and Sisters:

After a poor 2015 there appears to be improving market conditions for this year. The first quarter returns were positive for the first time in over a year.  The system had an overall return of 1.3%.  While US Equities continue to struggle we had positive returns in Emerging Market Equity (8.9%), Fixed Income (2.9%), Emerging Market Fixed Income (7.3%) and our Real Estate portfolio (3.0%).

The outlook going forward is for a positive return for the year bolstered by Emerging Market activity in both Equities and Fixed Income. Southeastern Asset Management was performing poorly and we placed them on a watch. In the 1st quarter they surpassed all other US equities with a 6.6% return.  The previously paragraph showed our positive Emerging Market returns, which have lagged for 18 months. Our Core Fixed Income continues their steady performance.

Being long term investors we seek to have steady performance which means different asset classes will do well while others will lag during any given quarter. Having a well diversified portfolio accomplished this goal. We are reviewing our asset allocation with New England Pension Consultants and we will rebalance out portfolio after looking at expected returns going forward.  We will also be looking at an additional asset class with Bank Loans, which is now back in favor, as well as reviewing our Private Equity assets to determine what new investment we should be looking at.

The second quarter,  in addition to rebalancing, we will be reviewing the actuarial reports of the four plans which will include the County’s contribution for the upcoming budget year and the report of our auditor regarding the administration of the System.

The assets of the FIRE Plan remained steady for the 1st Quarter.  After benefit payments and expenses the assets are $ 467, 831,621.  This is an increase of approximately $ 1.07 M. from year end 2015. There were significant DROP retirements which accounted for the slight increase for the quarter.

As always, any questions, please give me a call (443-324-8708) or email, leroy1563@aol.com.

LeRoy Wilkison   

Fire Plan Trustee      

        _____________________________________________________________   

Anne Arundel County Retirement and Pension System

Board of Trustees – 4th Quarter 2015

Brothers and Sisters:

            This is the final report for the 2015 “Plan Year”. As everyone who has an investment portfolio has seen, last year was one of zero to minimal growth.  The pension plan had slightly negative returns for the year in all asset classes except for our Real Estate and Private Equity investments.

            The yearly returns for the asset classes are as follows;

                        Total plan return – (1.6%)

                        Domestic Equity – (0.5%)

                        International Equity – (0.8%)

                        Emerging Market Equity ( 18.8%)

                        Core Fixed Income – 0.8%

                        Absolute Return Fixed Income – (0.3%)

                        HY Fixed Income – (1.2%)

                        Emerging Market Fixed Income – (11.1%)

                        Global Asset Allocation – (4.1%)

                        Real Estate – +14.8%Private Equity - +8-1%                                                                         

Private Equity - + 8.1%*

                        * 3rd quarter return, this category lags 1 qtr. in reporting.

            Our Private Equity portfolio was established 10 years ago to bolster our cash position for increased benefit payments. These are long term investments with return expectations of 12-20% over the life of the funds.  Many of these return cash even before we have fully funded our commitments. We continue to add to our portfolio each year.

Our Real Estate manager also returns cash every month to support benefit payments and continues to grow with great success.

            So what happened? The foreign markets were extremely volatile which lead to the volatility in the domestic markets. The Federal Reserve raised the lending rate.  Although the returns were not as expected, the diversity of the portfolio maintained our assets with little to no growth. Diversity also protect from losses such as those as experienced in 2007-2008.

            We have closely monitored the markets and brought in managers whose returns were poor during the year to explain what happened. Their explanations were reasonable but we will continue to monitor their returns.

We are now reviewing return expectation for 2016 and will rebalance our assets based upon that report. When you have a bump in the road, you stick to what has worked and don’t make changes trying to chase returns. Retirees want long term protection of their retirement funds and this approach is what keeps the plan solvent.

            The System assets as of December 31, 2015 were $ 1,658,660 397.  Our Fire Plan has net assets for pension payments of $ 466.759,171 at year end.  While we added $ 10M in investment income and contributions, plan expenses and pension payments totaled nearly $ 32M. We expect additional expenses this year for DROP payments due at retirement.

           

As always, any questions, please give me a call (443-324-8708) or email, leroy1563@aol.com.

LeRoy Wilkison   

Fire Plan Trustee

______________________________________________________

Anne Arundel County Retirement and Pension System

Board of Trustees – 3rd Quarter 2015

Brothers and Sisters:

The third quarter of 2015 was the most volatile quarter this year.  All asset classes were negative with the exception of our core fixed income portfolio which returned just 0.6%. The total equity portfolio was down -10.6% with Emerging market investments leading with -17.9% for the quarter.  With the volatility over the last 6 months our total return for the period is -3.2% for the Systems assets.

Some comments by our consultant below further shows the difficulty in the markets for the quarter.

An allocation to emerging markets undermined year-to-date performance for the period ending September 30. Emerging markets equity manager Dimensional reported year-to-date returns of -17.9 percent versus the benchmark’s -15.5 percent. In emerging market debt, PIMCO showed a negative performance of -10.9 percent year to date. The large gap between PIMCO’s numbers and the market, which was flat at 0 percent year to date.

Southeastern’s performance also contributed to negative returns for the month. The domestic equity manager had year-to-date numbers of -19.2 percent. Southeastern also opened up a 10 percentage point gap compared to the benchmark’s performance of -9 percent year to date. A large cash holding and a lot of energy stocks have hurt Southeastern’s concentrated portfolio.

These returns led to the county’s composite year-to-date return of -4.1 percent. Even so, all the equity managers except Dimensional are ahead of their benchmarks since inception.

Returning to fixed income, Mr. Humphreys said all the other managers were either flat or up. PIMCO, on the other hand, continues to be a concern. The team handling the county’s portfolio seems insulated from PIMCO’s organizational turmoil, but given the performance, NEPC will continue to keep a close eye on returns. 

Also in fixed income, Bridgewater’s all-weather product had a performance of -6.6 percent year to date while the Pure Alpha and the Pure Alpha Major Markets II portfolios returned 7.6 percent and 10.5 percent respectively year to date.

The assets of the Fire Plan were negatively affected as was the entire System. The net totals of assets in the plan for the quarter ending 9/30 were $ 459 M versus the end of the second quarter which was $ 497 M for a decline of $ 38 M. The total System assets were down $ 85 M for the same period. It should be noted however that part of that was a large increase in benefit payments for the quarter from $ 8.9 M to $ 24.2 M, due to DROP retirements.

So what’s next? Projections are for a rebound during the 4th quarter but that may only return the monies that were lost in the preceding periods.  Hard to imagine we will make our assumption of 7.5%. This will mean an increase in the County’s contribution next fiscal year that may be significant. 

We continue to diversify our portfolio to moderate losses such as we have experienced this quarter. Our Private Equity portfolio returned 6.2% for the quarter which helps to mitigate some of the losses on a market value of $ 900 M. We are in the process of reviewing managers to add $ 40 M to our asset allocation for Private Equity for calendar year 2015.

While this year has not been good for our pension plans, they are still well funded and will provide benefits for all retirees and active participants moving forward.

I wish everyone a very Merry Christmas and a safe and prosperous New Year!

LeRoy Wilkison

Fire Plan Trustee

Anne Arundel County Retirement and Pension System

Board of Trustees – 2nd Quarter 2015

Brothers and Sisters:

VOLITILITY, that’s the theme of this report. This quarter has seen the stock market picture look like a roller coaster out of control. The ups and downs were frequent and no period showed stability at all. So what’s does mean? Diversity is the solution to the volatile markets we have seen recently.  The U S stock market has been propped up by investments in International Equity, Emerging Market Equity, High Yield fixed income, Opportunistic fund assets and Real Estate in our portfolio.

The total return for the plan this quarter is -0.4 % & YTD IS 2.8 %.  While this is not a great result it compared very favorable with the Public Funds Universe as we were 16th compared to our peers.  That top quartile performance shows we are getting good performance without having excessive risks!

U S stocks performed poorly this quarter at -0.3 %. With the diversification in other equity assets the total stock return was 0.8 %.  U S fixed income was down   -1.4%. and propped up by High Yield and Emerging Market fixed income for a quarterly return total of -0.7%.

The high mark for the year is our Private Equity portfolio. These assets are invested in funds with a 10-12 year horizon and are expected to exceed S&P performance during that period. Because of the difficult requirements the reporting lags by a quarter.  For the first quarter our return (IRR) was 8.29%.   We have funded $ 118 M to date and have received $ 61 M since inception in 2006.  These funds continue to increase in value and we will be looking to commit an addition $ 40 M to them in 2015. Again, well diversified to provide solid performance.

The Fire Plan has still increased since January 1 by $ 5.78 M. This is pretty respectable given the poor performance and also the fact that we have had 39 DROP retirements this year. The DROP retirement projections call for four per month for the next year. The Plan assets now stand at $ 494,051,457. The total System is now valued at $ 1,686,995,073.

If you have any questions or comments you can contact me at leroy1563@aol.com or 443-324-8708.

Fraternally,

LeRoy Wilkison                                                                                                                

Fire Plan Trustee

____________________________________

           

Anne Arundel County Retirement and Pension System

Board of Trustees – 1st Quarter 2015

Brothers and Sisters:

The 1st quarter of 2015 showed modest returns in a pretty volatile period. The System recorded a 2.8 % increase which ranked in the 10th percentile of all public plans.

US Equities returned 3.1%, International Equities scored 4.5 % while Emerging markets lagged the index at -0.2 %.Our Core fixed income returned 1.7% while our Absolute Return investment rose 1.6%. High Yield bonds 2.5% for the quarter. Emerging markets Fixed Income lagged as did the equities at -1.3%. There are signs that the emerging markets are rebounding and we expect increasing returns next quarter.

Our Global Asset allocation increased 6.8% with Bridgewater, a combined increase of all three of their funds. Opportunistic composite rose 0.2% and our Real Estate portfolio showed n increase of 3.3%

The Retirement Systems assets had a net increase of $ 59.2 M bringing the total value of the fund to $ 1,696,945,958. The Fire Plan had a net increase of $ 9.3 M after all expenses and benefit payments were made. The Fire Plan total now stands at $ 497,576,212.  This includes DROP distributions.

As always, if you have any question I can be contacted at 443-324-8708 or leroy1563@aol.com.

LeRoy Wilkison

____________________________

Anne Arundel County Retirement and Pension System

Board of Trustees – 4th Quarter 2014

Brothers and Sisters:

                This is the year end report on the Pension System. 2014 was the most volatile in the past five years. The fluctuations in the market showed the importance of diversification.  The strong equity returns will likely be suppressed going forward.  Gains in the Equity market were offset with lower returns in the Fixed Income assets and the negative performance in most foreign markets.

            The Pension System finished the year with $ 1,609,068,487 in assets held in trust for pension benefits. This represents an increase of $ 124,781,167 for the year. This is the net increase for the fund after all administrative fees and expenses were paid.

            The Fire Plan finished the year with $ 488,267,055 in asset held in trust for pension benefits. This is an increase of $12,181,685 for the year. This may seem like a smaller amount then the general trust but this also includes benefit payments and DROP distributions. The Fire Plan is now the second largest Plan in the Retirement System.

            Employer contributions for the year were $ 15,893,986 and employee contributions were $ 2,755,952.  Investment gains were $ 22,687,926, net of expenses for total additions to the fund of $41,427,864.

            Benefits payments for the year, including pensions and DROP, were               $ 29,246,170 thus the net increase to the plan of $ 12,181,685.  The pension benefits, however, now exceed the employer/employee contributions which normally would raise some red flags. However, the basic reason is the DROP distributions.

While our members enjoy the DROP, some things needed to be done to compensate for this. Looking forward approximately 10 years ago, we recognized this phenomenon and with the advice of our Investment Advisors, New England Pension Consultants, we began development of a Private Equity portfolio. This is a long term investment into funds that seek additional returns over a time period of 10-12 years. The projected returns for these investments are normally 2-4% higher than the S&P 500. We agree to fund a certain amount over time and as investments are made we fund our commitments.

We have committed $ 205,000,000 to this portfolio and funded                      $ 105,755,060 to date. Of that amount we have already received distributions of $ 52,255,642.

The results as of the end of September showed an IRR (internal rate of return) of 9.79% for the year. The reporting lags by a quarter because of the nature of the investments and having multiple funds to report. This is one reason why we still had a net increase into the Fire Plan.

My trustees’ position is for a three year term and expires in May 2015. I am currently the longest standing employee representative on the Board of Trustees sitting since its inception in 1997. I will again be running for the position and appreciate your support.

As always, if there are any questions, please give me a call at 443-324-8708 or e-mail, leroy1563@aol.com.

Fraternally,

LeRoy Wilkison

Fire Plan Trustee

             

           

Anne Arundel County Retirement and Pension System

Board of Trustees – 3rd Quarter 2014

Brothers and Sisters:

            The third quarter of 2014 was a very volatile time in the investment arena. All asset classes were negative while only real estate (+3.6%) and special opportunities (+1.3%) showed small gains. The net loss in total for the quarter was -1.9%. Diversification proved to be beneficial in mitigating the losses.

The value of the total Retirement System as of 9/30/2014 was $ 1.656 B versus $ 1.698 B as of June 30, 2104, a net loss of approximately $ 42 M.

The Fire Plan also was lower in value due to the volatility.  The value for our plan as of 9/30/2014 was $ 490 M versus the June 30 value of $ 503 M. for a loss of approximately of $ 13 M.  Since January 1, 2014, the Fire Plan has increased in value, after all benefit and expenses were paid, by $ 14 M. So, although we have had a bad quarter, our Plan is still rock solid and has sufficient monies to pay benefits well into the future.

Now for some good news, our long term actuarial return since inception is 8.1%.  All of our investment managers, with one exception (Lazard International Equity) have exceeded their benchmark since exception. Lazard was just hired in August of 2013 so give the quarterly performance and the lag in investing the monies the performance is slightly under reported.

Our Private Equity portfolio continues to be a bright spot of the portfolio. These investments are in funds that have a life cycle of 10-12 years. Since inception in October of 2005 the investments have returned 9.1% as of 6/30/2014. We have invested $ 101M since inception and have received a return of $ 46 M to date. The expected return for this asset class over the duration of the funds is expected to exceed 12-14%.

The expectation going forward for the rest of the year is good. The brief look at October and the market’s performance should prove to be positive for the rest of the year.

I would like to wish everyone a very Merry Christmas and a safe and prosperous New Year!

As always please send any questions my way via e-mail, leroy1563@aol.com or by cell 443-324-8708

Fraternally

LeRoy Wilkison

Fire Plan Trustee

           

Anne Arundel County Retirement and Pension System

Board of Trustees – 2nd Quarter 2014

Brothers and Sisters:

I am pleased to report that the pension system has experienced another positive return for this period. We remain highly diversified and within the ranges for every class in our asset allocation profile.

The total return for the portfolio this quarter was 4.2%. Our Year to Date returns are 6.3% and for the last year the return is 17.3% as of 6/30/2014. All three return profiles placed the System in the top quartile of the Public Funds Universe.

The quarterly returns were 4.9% for domestic equity, 2.9% for our International equity portfolio and 7.6% for our Emerging Market investments.

Our fixed income portfolio returned 2.9% for this period with Core Bonds returning 2.4%, High Yield funds at 2.1% and Emerging Market Debt leading this asset class at 5.2%.

Our Global Asset Allocation led by Bridgewater returned 6.3% versus a benchmark of 3.7%. Opportunistic opportunities returned 3.2% and our real estate assets increased by 2.7%. 

Our Private Equity investments, which lag in reporting by a quarter, had an IRR of 8.84%. We have committed $175 to a number of managers but have only funded $ 98M to date. More importantly we have already had $43M distributed to the system. Our Private Equity portfolio is invested in funds that have a life of 10-12 years before they reach full value. The monies already distributed show the diversification that allows for some immediate return while the longer duration funds seek investments with long term performance profiles. As they mature we expect returns in the 20% range. This investment class assures good returns over a defined period which helps to sure up the monies utilized for benefit payments.

The Fire Service Retirement Plan now has net assets of $ 503M after expenses and benefit payments. The assets increased by $ 39M after investment expenses and $ 11.9M for benefit payments for a net increase of $ 27M this quarter. Ours is now the second largest plan in the system.  

Our funded ratio after necessary changes in the assumptions is in the mid 80’s.   This is a well funded public plan as recognized by investment professionals.

As always please send any questions my way via e-mail, leroy1563@aol.com or by cell 443-324-8708

Fraternally

LeRoy Wilkison

Fire Plan Trustee

____________________________________________

Anne Arundel County Retirement and Pension System

Board of Trustees – 1st Quarter 2014

 

Brothers and Sisters:

The first quarter was very different from last year. Stocks have oscillated back and forth and gained 1.8% for the S&P 500 and a modest 1.1% for the Russell 2000 indexes. Bond markets started strong led by US credit up 2.9%, long duration credit up 6.3% and high yield bonds up 3.0%. Private markets show strong commitments which equaled 2013 levels.

Our portfolio returned 2.0% for the quarter which placed in the 12th percentile of all public plans. Our annualized return was reported at 10.2%. All of our US Equity managers exceeded their benchmark for the quarter. Our total equity return was 1.4% while our fixed income performance was 2.5%. Our global asset class also increased by 3.9%. Our Special Opportunities placement increased by 2.2% with and annual return of 29.6%. Our Private Equity Composite lags reporting by one quarter but for the year was 12.0%.

The FIRE Plan, after expenses and benefit payments, increased an additional $ 8.6M. The total plan assets now held in trust for pension benefits is $ 484,692,910. There will be some changes as we expect a number of DROP retirements during the next two quarters.

The Investment committee continues to monitor our portfolio and is considering some minor changes in the asset allocation for the next year. We continue to diversify the assets to help protect against a downturn in the economy.

The reported COLA increases for July 1 are 1.4% for accrued service prior to 2/1/1997 and .9% for time accrued after 2/1/1997.

As always, any questions can be directed to me at leroy1563@aol.com or my cell, 443-324-8708.

Fraternally,

LeRoy Wilkison

Fire Plan Trustee

 

 ______________________________________

Anne Arundel County Retirement and Pension System

Board of Trustees – Final report 2013

Brothers and Sisters:

            This year was very stable and profitable for the Pension System. The total System return for the year was 10.9% and the return since inception (Sept. 1990) with New England Pension Consultants (NEPC) is 8.9%.   Investment returns for the year were $124 M and the total of System assets now stand at $1,609,068,487.

            While there may be some concern regarding the return for the year, it should be noted that the asset allocation model was changed at the beginning of the year to further de-risk the portfolio. To do that some profits were taken from domestic equities and reallocated to other asset classes. By doing that we didn’t participate fully in the equity run up in 2013 but we managed the portfolio to maximize return while reducing risk to the portfolio. I believe we accomplished that goal in a managed and sensible manner.

The following asset classes accounted for the increase in system value;

  • Domestic Equities - 33.2%

  • International Equities - 27.9%

  • Emerging Market Equities – (3.2%)

  • Core Fixed income – (0.1)

  • High Yield Fixed Income – 6.5%

  • Emerging Markets Fixed Income – (5.8%)

  • Global Asset Allocation – (0.1)

  • Opportunistic Investments – 31.4%

  • Real Estate – 12.8%

  • Private Equity Investments – 13.5%

While you see some very good returns for equities the poor fixed income returns reduce the overall results. You may remember several years back when just the opposite was true with the bonds holding up the stock portfolio. That’s why we attempt to have a good balance and a diversified portfolio. The idea is to protect the assets for the long term to pay benefits long into the future. 

The following is a synopsis of the Fire Plan activity for 2013;

  • Plan contributions by the County were $16.2 M and employees contributed $2.4 M.

  • The Fire Plan investment income increased in value by $42.9 M after expenses.

  • Total net addition to the Plan with contributions and investment gains equaled $61.4 M.

  • Benefit payments for the year totaled $26.9 M with administrative expenses of$583 K.

  • The net increase in Plan assets after benefit payments and expensesin 2013 is $39 M. for a total Plan asset value of $ 476,085,379.

The Investment Committee continues to monitor the portfolio and in the past year we have fired several managers for under performance and hired replacements. We will review our asset allocations shortly to determine if we have the best mix going forward to attain our 8% actuarial return profile while, as previously stated, reducing the risk to the System.   

As always, if there are any questions, please give me a call.

Fraternally,

LeRoy Wilkison

                      


 
 
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