FROM: Debby Cherney, Chief Executive Officer
SUBJECT: Annual Review of SBCERA Retiree Medical Trust
RECOMMENDATION:
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Annual Plan Compliance Report for SBCERA Retiree Medical Trust.
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BACKGROUND:
In April 2019, the SBCERA Board approved a new Investment Policy Statement ("IPS") for the Section 115 Retiree Medical Trust ("Plan"). The IPS incorporated the concept of an oversight committee ("Oversight Committee") to ensure fiduciary compliance, including oversight of the available investment fund line-up and fees. The Oversight Committee consists of myself, Chief Financial Officer Amy McInerny, and Trustee Marc Bracco. The fund line-up for the Plan was substantially overhauled at the time the IPS was adopted by the Board.
In April 2020, staff engaged the Hyas Group to review the fund line-up and fees and provide an overall report on the Trust. That report is attached as Exhibit A. The Oversight Committee met with Hyas Group via video conference on May 15, 2020 and reviewed the report.
Overall, the Plan's investment line-up is meeting the quantitative and qualitative factors established under the IPS. One fund, the DFA Large Cap Value I, is failing the quantitative benchmarks as it is underperforming the index and is in the bottom 50th percentile relative to its peers. However, no Plan participants have investments in this fund. The IPS allows discretion to the Oversight Committee regarding changes to the fund line-up, but generally looks to putting funds on "watch" if they fail the benchmarks over multiple quarters. At this time, the Oversight Committee elected to take no action with respect to putting this fund on watch, but will continue to monitor it for action in 2021.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
COMMITTEE REVIEW:
This item was reviewed by the RMT Oversight Committee. No Board action is required, other than to receive and file this annual report.
STAFF CONTACT:
Debby...
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