The LAGERS Board of Trustees has a fiduciary duty to its membership to ensure the system is administered in a fiscally sound manner. The board meets at least quarterly to make sure LAGERS continues to deliver on its commitments of strength and security.
The board gathered on June 17, 2022 for their quarterly meeting. Below is a summary of the meeting. For more information on LAGERS Board of Trustees or official meeting minutes, please visit our Board of Trustees page.
The legislative team presented their end-of-session report for the 2022 legislative session. Of note, they shared SB 655, sponsored by Senator Crawford was Truly Agreed To & Finally Passed. The governor signed SB 655 on June 16th, meaning the new law will take effect on August 28th. They also reported that LAGERS’ public safety language was also passed in House Bill 1606.
The team concluded by discussing other bills that would have impacted the system that did not pass, including a number of investment mandate bills that would have been detrimental to the system. The team emphasized the ongoing work LAGERS will be continuing to do to safeguard the system. For more information on LAGERS’ legislative efforts, visit our Issues and Advocacy Page.
LAGERS’ investment team discussed the investment activity from the last quarter, which included $316.8 million in commitments to the following asset classes:
· $130.8 million to Equity
· $166.0 million to Fixed Income
· $20.0 million to Real Assets/Real Return
LAGERS’ portfolio has $10.7 billion in assets under management as of March 2022.
LAGERS’ Chief Investment Officer, Brian Collett, also provided some additional commentary to the board regarding inflation, noting that the LAGERS portfolio is built to be inflation-neutral. He reminded the board that LAGERS is a long-term investor and generally looks at CPI on a longer-term basis, also sharing that the LAGERS investment team is confident in their strategy, even throughout a period of high inflation, and believes the portfolio will continue to perform well for the membership.Learn about LAGERS Investments
Preliminary Actuarial Valuation Report
LAGERS actuary, Mita Drazilov, with GRS Consulting presented the board with a preliminary actuarial report as of February 28, 2022. LAGERS’ actuary annually evaluates each employer’s contribution rate(s) as well as the system’s overall funding progress. A few highlights from their report include:
· The system’s overall funding is expected to climb to 96.5% pre-funded.
· 701 out of 1,245 employer rates are either decreasing or remaining stable.
· Higher than expected salary increases were a driving factor for employers who experienced rate increases during this valuation cycle.
· LAGERS has sufficient reserves to withstand long periods of adverse experience due to high inflation.
· LAGERS remains one of the top-performing plans nationwide. Mr. Drazilov concluded by saying it continues to be a pleasure to work with one of the best public pension funds in the nation.
The operations team reported on key activities of the quarter. Some highlights include:
· LAGERS currently has 7 legacy plans under operation. All plans are up to date with their contributions.
· LAGERS continues to work on programming to ensure a seamless transition to the new W-4P withholding forms for retirees in 2023.
· LAGERS performed a cyber security test, which included testing backup servers and conducting a third-party penetration test. LAGERS received a 4 out of 4 rating indicating LAGERS is meeting or exceeding best practices in cyber security for our members. The team also presented the results of the 2nd biannual stakeholder perception survey. This survey measures how LAGERS’ stakeholders view the LAGERS organization and helps staff fine-tune behaviors and services to better serve our members. The primary takeaway from this year’s survey was that overall positive perception has increased across all stakeholder groups since 2019. In response to a question from the board about why the scores increased, staff discussed several of the outreach and education initiatives that were launched following the 2019 survey.