HomeMy WebLinkAbout2020-06-25-RB-min Recap of the June 25, 2020 Retirement Board meeting:
The Lexington Retirement Board met remotely through Zoom tele-conferencing during the ongoing
Covid-19 pandemic. The Town Clerk's Office meeting posting included the information for any
interested party to join the call. All Board members were present. Chairman Robert Cunha called the
meeting to order at 8:30 a.m.
The Board accepted the 063020 Warrant and the June Payroll. The May 2020 minutes and April 2020
financials were reviewed and approved via email.
Bob Cunha reviewed the June agenda with all Board members and staff in attendance. It was noted we
had no new information regarding Joseph O'Leary and Ryan Bugler. Until the MA Courts reopen, it
could be a few months before any information is released.
Election Officer,Jim Condon, notified the Board only one candidate submitted nomination paperwork to
the Board for a three year term of July 1, 2020 through June 30, 2023, and therefore an "Election by
Declaration"will be voted on by the Board.
On a motion by Joseph Foley, seconded by Alan Fields, and passing unanimously(4-0). Voting "yes"
were Joseph Foley,Alan Fields, Fred Weiss, and Carolyn Kosnoff, the Board unanimously voted in favor
of an "Election by Declaration". Robert Cunha abstained from this vote.
A motion by Joseph Foley, seconded by Alan Fields, and passing unanimously(4-0). The Board voted
Robert Cunha, running unopposed,to serve a three year term commencing on July 1, 2020 through June
30, 2023. It was noted this will be Mr. Cunha's twelfth term on the Lexington Retirement Board. Alan
Fields,Joseph Foley, Fred Weiss, and Carolyn Kosnoff were all "yes"votes. Robert Cunha abstained
from this vote.
Bob Cunha made a motion to approve the buyback request for Kathleen Kim,which was seconded by
Joe Foley, and unanimously approved by Carolyn Kosnoff and Fred Weiss.
It was noted the FMI account was liquidated and the funds were transferred and received by
RhumbLine. We also received a distribution from White Oak for$48,807.00
Steve MacLellan from Meketa presented the portfolio update at 8:40 a.m. He mentioned May was a
very good month, up 3.6%. The QTD is up 10.5%. Very solid numbers in a time of recovery from the
pandemic market crash.
The portfolio balance as of May 31, 2020 was $173,411,183.00,which is$4.8m higher than April 31,
2020 balance. Returns continue to come in higher each month as the country begins to reopen from the
pandemic. Domestic equities continue to drive the fund, up 21%this quarter. Kayne Anderson is up
25.6%for the quarter. International equities are slowly returning, up 11%QTD. Still lagging behind
others, but remain positive. Our Real Estate exposure is down to$8.5m. There is too much uncertainty
in RE with Covid-19. Our cash balance remains high, and we were advised to leave it as is for another
month or two. There is no need to jump into another fund at this time. We need to be patient.
Steve explained two investment options the Board was seeking at the May Board meeting. EB TIF,
which the system currently uses, and Gov STIF. It was noted the Gov STIF fund only yields 0.27%and
you must hold US government backed securities. The EB TIF yields 0.38%and is able to hold
government backed issues and other instruments such as time deposits and commercial paper as long as
the backer has a "AAA" rating.
Meketa recommends continued use of EB TIF as this time. No need to find a new fund. We are in a
good position at this time.
Sean Duff and Chris Lund from Monroe Capitol presented the fund review at 9:00 a.m. Sean briefly
summarized the staffing levels and work model for the company during the Covid-19 pandemic. There
have been no changes with the business and all staff are working remotely from home. Monroe
currently manages$9.3b in assets and is raising another$1.5b for a new fund. The fund has been
marked down 12.9%quarter over quarter,which was slightly less than the sell-off in the syndicated loan
market. Companies with greater exposure to Covid-19 did experience larger mark-downs. Chris went
through the presentation explaining certain companies Monroe has taken over and others they are in
talks with to help them recover from the pandemic. A few companies in hard hit NYC are struggling and
in need of funding. They concluded that our portfolio is in solid shape for the next three quarters.
Dan Sherman presented an overview of the most recent actuarial study at 9:35 a.m. Invited to attend
the presentation to the Board were Town Manager,Jim Malloy and Jennifer Hewitt, Budget Officer.
Carolyn Kosnoff had requested Dan to give an overview of his study to all in attendance. Dan explained
the 6.6% increase over the next two years. It included discussions on new hires, retirements,
distributions to former employees, and salaries. He spoke of our 7.5% return assumption and should we
consider lowing it. Most systems are lower than our rate. This is not a good time to lower it because of
market volatility over Covid-19. Dan and Carolyn spoke of the report showing 2030 as the year the
system would be fully funded. With the town budget being tight, and future capital projects in the
works, Carolyn felt we need to form a strategy to become fully funded before 2030. Dan has agreed to
revise his report once he receives new accounting figures. He will be able to create a new mortality
schedule to help the Board. Dan wrapped up his analysis at 10:20 a.m.
Bob Cunha motioned to adjourn the meeting at 10:25 a.m.,which was seconded by Joe Foley, and
approved by Carolyn Kosnoff and Alan Fields.
The next Retirement Board meeting will be held on Thursday,July 30, 2020 at 8:30 a.m. The meeting
will be held remotely via Zoom tele-conference.
Landy Pheloung from White Oak&William Cullinan from Angelo Gordon will both be in attendance to
present an update.