LAGERS September Board Report

LAGERS September Board Report

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.

LAGERS Board of Trustees from left to right: Frank Buck, Arby Todd, Joan Jadali, Barry McCullough, Sandy Walker, Bob Ashcroft, and Claire West

The board gathered on September 23, 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.

Presentation of the Consolidated Annual Actuarial Valuation Report

LAGERS’ actuary, Mita Drazilov and Judith Kermans with GRS Consulting presented the Annual Consolidated Actuarial Report. This report is an annual evaluation of each employer’s funding progress as well as the system’s overall financial standing. Mita and Judith characterized the overall results of the report at highly positive noting LAGERS continues to be one of the top-performing public pension plans in the nation. Highlights from their presentation include:

  • An update on the system’s overall funding, which climbed to 96.5% pre-funded. The actuaries noted, that as funding continues to increase, the average amortization period has decreased to 10 years, which is a strong indicator of plan health.
  • A discussion on workforce trends and their impacts on LAGERS’ funding. LAGERS experienced the highest aggregate member salary increase in the past decade during this valuation cycle, which while beneficial to the LAGERS’ membership, is a cost to the system.
  • A note that LAGERS’ market value remains higher than its actuarial value. This means LAGERS has unrecognized gains that will help smooth out future volatility in employer contribution rates.

Mr. Drazilov concluded with a hearty congratulations to Director Wilson on his upcoming retirement and for his work in helping maintain LAGERS as one of the most financially stable public pension funds in the nation.

Investment Report

LAGERS’ investment team discussed the investment activity from the last quarter, which included $94.28 million in commitments to the following asset classes:

  • $5.5 million to Equity
  • $30.7 million to Fixed Income
  • $58.1 million to Real Assets/Real Return

LAGERS’ portfolio has $10.1 billion in assets under management as of June 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 investment team also discussed annual performance noting that while LAGERS’ one-year return was -0.6%, the portfolio outperformed its peer group and benchmarks for the period. This out-performance was due largely to LAGERS’ Real Asset exposure, which the team believes highlights the importance of a well-diversified portfolio and risk-aware investment strategy. The team concluded their report noting LAGERS continues to be focused on the long-term with both 5-year and 10-year returns well in excess of LAGERS’ 7% assumed rate of return.

Learn about LAGERS Investments

Administration Reports

The Operations and External Affairs teams reported on key activities of the quarter. Some highlights include:

LAGERS’ external affairs staff reported on their annual travel and meeting data, which included discussion about LAGERS’ commitment to maintaining in-person meetings and learning opportunities for members.

  • An update on LAGERS’ 7 legacy plans under operation. All plans are up to date with their contributions.
  • Operations staff reported they continue to work on programming to ensure a seamless transition to the new W-4P withholding forms for retirees in 2023.
  • LAGERS Executive Director reported the system has again received the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting.This marks the 44th consecutive year LAGERS’ has received this designation!

LAGERS Local Government Hero Finalists Announced

The LAGERS Board reviewed the 2022 Local Government Hero finalists and selected a winner, which will be announced on October 28th at the LAGERS Annual Meeting. The finalists are:

  • Glenn Balliew– City of Kirksville
  • Jayne White – Andrew County Health Department
  • Laranda Stanley – City of Bloomfield

Click here to meet all of LAGERS’ 2022 Local Government Hero Nominees!

Executive Director Search Update

Due to the number of highly qualified applicants for the Executive Director position, the Board selection committee has requested a few additional weeks to ensure they complete their due diligence. An announcement is expected by the end of October.