FROM: Don Pierce, Chief Investment Officer
SUBJECT: 2026 Preliminary Asset Allocation Review
RECOMMENDATION:
title
2026 Preliminary Asset Allocation Review with Liabilities.
body
BACKGROUND:
Each year, NEPC updates their expected return estimates for various asset classes. Staff then reviews their findings with the SBCERA Investment Committee and the Board as part of the annual asset allocation review and update.
This year, NEPC has reviewed the SBCERA asset-liability structure as well. This review integrates the traditional asset allocation considerations with a deeper review into the net cash flow estimates for the next ten years. While year to year changes will differ from the estimates provided, it is worth reviewing a glidepath that is foreseeable and can impact overall portfolio choices.
NEPC has also provided some preliminary asset allocation scenarios for illustrative purposes.
This first asset liability review uses December 2025 data, and while the liability data will be the same, the Board will eventually use March 2026 data for final consideration of the next fiscal year’s asset allocation. Further refinements with the March 2026 data will be brought to the Investment Committee and the Board in May/June of 2026 with final Board consideration and adoption in July 2026.
BUDGET IMPACT:
None.
STRATEGIC PLANNING GOAL/OBJECTIVE:
Prudent Fiscal Management
STAFF CONTACT:
Don Pierce
ATTACHMENTS:
Exhibit A: NEPC 2026 Asset Liability Study