MOTION : 2020-86 ADJOURNMENT
Meeting Date: December 2, 2020
MOTION: 2020-85 401(a) DEFINED CONTRIBUTION PLAN INVESTMENT POLICY STATEMENT UPDATES
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Defined Contribution Committee to accept the updates to the 401(a) Defined Contribution Plan Investment Policy Statement, which is attached hereto and labeled “Attachment A” (ATTACHMENT G).
MOTION: 2020-84 457(b) DEFERRED COMPENSATION PLAN INVESTMENT POLICY STATEMENT UPDATES
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Defined Contribution Committee to accept the updates to the 457(b) Deferred Compensation Plan Investment Policy Statement, which is attached hereto and labeled “Attachment B” (ATTACHMENT F).
MOTION: 2020-83 INSIDER AND PERSONAL TRADING POLICY
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Audit, Risk and Compliance Committee to adopt the amended Insider and Personal Trading Policy, as attached (ATTACHMENT E), with an effective date of January 1, 2021.
MOTION: 2020-82 ANNUAL PAY INCREASE BUDGET
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to approve the annual aggregate pay increase budget for 2021 to be set at 5% of salary for investment professional staff for positions below that of the Chief Financial Officer and the Chief Investment Officer, whose pay increases will be determined in accordance with the Compensation Policy for Investment Professional Staff – State Employees’ Retirement System.
MOTION: 2020-81 COMPENSATION POLICY FOR INVESTMENT PROFESSIONAL STAFF
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to approve:
MOTION: 2020-80 PPMAIRC PROGRESS UPDATE #46 (REPORT UPDATED CONTRACT TERMS)
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to direct the SERS Chief Counsel’s Office and Investment Office to report all public market investment manager contracts that had contract terms that were amended during the preceding calendar year, similar to the attached (ATTACMENT D) sample report provided to this Committee. The report will be produced on an annual basis and targeted to be presented to the Investment Committee in April of each year in public and/or executive session (given the potential confidential and proprietary nature of such information) as advised at such time by the Chief Counsel’s Office.
MOTION: 2020-79 PROXY VOTING POLICY UPDATE
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to adopt the proposed revisions to the SERS U.S. and International Proxy Voting Policy, as set forth in the Attachment (ATTACHMENT C).
MOTION: 2020-78 FIXED INCOME STRUCTURE ENHANCEMENTS TO INVESTMENT POLICY STATEMENT
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to:
(i) approve the enhanced Fixed Income Structure Section – MIX B (Section 20, Page 35) of the SERS’ Defined Benefit Plan’s Investment Policy Statement (the enhanced section is in the attached (ATTACHMENT B) meeting material entitled “IPS Fixed Income Structure Section Enhancements MIX B 12-1-2020.pdf”); and
(ii) delegate authority to the Chief Investment Officer in order to efficiently implement the enhanced Fixed Income Structure. The delegation of authority allows the Chief Investment Officer to:
1) reallocate fixed income portfolios to asset classes with similar objectives;
2) adjust fixed income portfolio amounts to achieve objectives of the enhanced Fixed Income Structure;
3) liquidate fixed income portfolios that do not fit into the enhanced Fixed Income Structure;
4) hire passively-managed fixed income investment strategies to gain exposures to fulfill the needs of the enhanced Fixed Income Structure; and
5) adjust the implementation’s time frame as required given the market conditions and/or demands of the structure implementation.
The Chief Investment Officer shall receive concurrence from the board’s general investment consultant prior to executing any action. Notification of all implementation actions shall be provided at the next regularly scheduled Investment Committee or board meeting, respectively.
MOTION: 2020-77 BALANCING DEFINED BENEFIT PLAN INVESTMENT POLICY STATEMENT
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to approve the revised Rebalancing Section (Section 10) of the SERS’ Defined Benefit Plan’s Investment Policy Statement. The revised section is in the attached (ATTACHMENT A) meeting materials entitled “IPS Rebalancing Section Revision 12-1-2020.pdf”.
MOTION: 2020-76 PRIVATE EQUITY – Providence Strategic Growth Europe L.P.
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to €64 million euros to Providence Strategic Growth Europe L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as a new investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
MOTION: 2020-75 REAL ESTATE – Rubicon First Ascent, LP
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to (i) $30 million to Rubicon First Ascent, LP, and (ii) $20 million to Rubicon First Ascent Sidecar, LP, plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as new investments within the Real Estate asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
MOTION: 2020-74 AUTHORIZED SECURITIES SIGNATORIES
Meeting Date: December 2, 2020
RESOLVED : That the board accepts the recommendations of the Finance and Member Services Committee to authorize any two or more of the following representatives of the board, from at least two of the following offices within the State Employees’ Retirement System (SERS):
•Executive Office
Executive Director
•Office of Administration
Deputy Executive Director for Administration
•Office of Member and Participant Services
Deputy Executive Director for Member and Participant Services
•Investment Office
Chief Investment Officer
Deputy Chief Investment Officer
Investment Portfolio Managers
•Office of Financial Management
Chief Financial Officer
Assistant Chief Financial Officer
Investment Accountants
and such other titles as may be adopted from time to time, acting together with two representatives designated by the Pennsylvania Department of Treasury, to serve as signatories for the following purposes:
(1) to sell, transfer or request payment of any obligation of the United States of America or of any other security registered in the name of or held by the board in any capacity, including the SERS, the State Employees’ Defined Contribution Plan, the Benefits Completion Plan, or the Deferred Compensation Plan; and
(2) to appoint one or more attorneys-in-fact to affect any such sale, transfer, or request for payment.
Furthermore, each such board representative hereby is authorized:
(1) to make certifications in relation to any such sale, transfer, or request for payment to warrant propriety of same; and
(2) to agree, in any case where the Uniform Fiduciaries Act may not afford full protection for any such disposition, to reimburse the issuer of such obligation or security and its transfer agent the reasonable costs, including counsel fees, which either may bear in connection with such disposition of any obligation or security held in the name of SERS & CO. or any other name.
Further, that all prior authorized securities signature lists established by the board will no longer be effective, including, but not limited to, those established by Resolution Number 2012-03.
MOTION: 2020-73 DELEGATION OF AUTHORITY FOR PROCUREMENTS ISSUED PURSUANT TO PROCUREMENT CODE
Meeting Date: December 2, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to delegate to the Board Secretary the authority to take all actions permitted and authorized by the Commonwealth Procurement Code, 62 Pa. C.S. §§ 101-4604, and the Department of General Services Procurement Handbook, to be taken by the board as the head of a purchasing agency, and who shall have the authority to further delegate to such other employees of the board the authority granted hereby as is necessary, expedient, or appropriate for the sound administration of the board.
MOTION: 2020-72 APPROVAL OF CONSENT CALENDAR
Meeting Date: December 2, 2020
RESOLVED: That the board approves the Consent Calendar items, as listed, for the December 2, 2020, board meeting.
MOTION: 2020-71 ADOPTION OF THE AGENDA
Meeting Date: December 2, 2020
RESOLVED: That the board adopts the agenda for the December 2, 2020, board meeting.
MOTION : 2020-70 ADJOURNMENT
Meeting Date: September 30, 2020
MOTION: 2020-69 COMPREHENSIVE COMPENSATION AND CLASSIFICATION STUDY
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to authorize the procurement of a consultant to conduct a comprehensive compensation and classification study of the SERS investment professional positions and attorney positions, including the Chief Compliance Officer position.
MOTION: 2020-68 FIDUCIARY AND GOVERNANCE REVIEW/BOARD SELF-ASSESSMENT RFQ
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to include the following topics in the scope of work for the procurement of the consultant to assist the board in conducting a fiduciary review pursuant to the Fiduciary Review Policy:
1. Non-economic investment requirements (in-state managers, minority and women-owned programs, etc.);
2. Asset liability matching process;
3. Legislative positioning: reactive (awareness of and response to legislative proposals) and proactive (drafting and lobbying); and
4. Investment manager selection/due diligence/monitoring/termination.
MOTION: 2020-67 FY 2021-FY 2023 SERS STRATEGIC BUSINESS PLAN
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to approve the FY 2021 – FY 2023 SERS Strategic Business Plan, as set forth in the attachment (ATTACHMENT C).
MOTION: 2020-66 PPMAIRC #30 REPORTING FEE INFO
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to direct the SERS Investment Office and Office of Finance and Administration to:
1. Report for each investment manager/general partner, separately as well as in the aggregate for both traditional and non-traditional investments, the fees, costs, and expenses, and in the case of non-traditional investments, carried interest, similar to the report found in the executive session materials for the most recent Investment Committee meeting. This report is to be produced on an annual basis going forward and presented to the Investment Committee in July of each year; and
2. Produce an additional report suitable for public dissemination, in accordance with confidentiality terms outlined in contractual agreements between SERS and SERS’ Investment Managers/general partners, as certified by the SERS Legal Office, similar to the report provided to the Investment Committee.
MOTION: 2020-65 PPMAIRC #29 PUBLIC DISCLOSURE OF TRAVEL EXPENSES
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to direct the SERS Investment Office staff to begin publishing a report, similar to the sample provided to the Investment Committee, on a prospective basis disclosing all travel or other expenses incurred by staff and/or paid for by an external investment manager, fund or consultant, beginning with the Commonwealth’s fiscal year 2020/21, targeting the first report to be presented to the Investment Committee in December 2021, and at each December Investment Committee meeting thereafter. After presentation to the Investment Committee, the report is to be posted on SERS’ website.
MOTION: 2020-64 REBALANCE PUBLIC MARKET ASSETS
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to implement the following transactions to rebalance public market assets (using a transition manager if necessary): Redeem $100 million from the MCM Russell 1000 Index Fund (U.S. Equity), all proceeds of which to be directed to SERS’ Cash Account; Redeem $25 million from the MCM Russell 2000 Index Fund (U.S. Small Cap Core Equity), all proceeds of which to be directed to SERS’ Cash Account;Redeem $75 million from the strategy managed by Harris Associates (International Developed Markets Small Cap Equity), all proceeds of which to be directed to SERS’ Cash Account;Redeem $130 million from the BlackRock MSCI Emerging Market Index Fund (Emerging Markets Equity), all proceeds of which to be directed to SERS’ Cash Account; Redeem $50 million from Brown Brothers TIPS, all proceeds of which to be directed to SERS’ Cash account; Contribute $450 million to the Mellon Bond Index Fund (Core Fixed Income), the funds for which to be sourced from SERS’ Cash Account; and Contribute $330 million to the PIMCO U.S. Treasuries Portfolio (Core Fixed Income), the funds for which to be sourced from SERS’ Cash Account.
MOTION: 2020-63 PRIVATE EQUITY – Thoma Bravo Discover Fund III, L.P.
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $25 million to Thoma Bravo Discover Fund III, L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as an investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
MOTION: 2020-62 PRIVATE EQUITY – Thoma Bravo Fund XIV, L.P.
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $50 million to Thoma Bravo Fund XIV, L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as a follow-on investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
MOTION: 2020-61 INSIDER AND PERSONAL TRADING POLICY
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Audit, Risk and Compliance Committee to adopt the Insider and Personal Trading Policy, as attached, with an effective date of January 1, 2021 (ATTACHMENT B).
MOTION: 2020-60 COMPLIANCE PROGRAM CHARTER
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Audit, Risk and Compliance Committee to adopt the State Employees’ Retirement Board Compliance Program Charter, as attached (ATTACHMENT A).
MOTION: 2020-59 FY 2021/2022 BUDGET
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to approve for Fiscal Year 2021-2022, the following proposed budgets: (1) SERS Administrative Budget; (2) SERS Investment Budget; and (3) State Employees’ Defined Contribution Plan Budget, each substantially in the same form as presented in the Chief Financial Officer’s September 29, 2020 Report, and each as amended and/or approved by the Office of the Budget.
MOTION: 2020-58 SERIS 2.0 MAINTENANCE AND SUPPORT (RFP)
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to: accept the determination of the SERS Contracting Officer that the proposal submitted by BI Solutions, Inc. for SERIS 2.0 Maintenance and Support, in response to SERS-RFP001707, is most advantageous to SERS and the Commonwealth; and authorize staff to proceed with contract negotiations therewith.
MOTION: 2020-57 COST AGREEMENT RELATED TO EMPLOYER PREFUNDING OF UNFUNDED ACTUARIAL LIABILITY
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to: certify the board’s costs to estimate, determine, calculate and/or administer the amount of any lump sum payment and annual setoff potentially or actually resulting from an advance payment of accrued liability contributions to be paid by the Pennsylvania State System of Higher Education (PASSHE) on whose behalf the costs were or will be incurred, pursuant to Act 2019-105, as set forth in Exhibit A of the draft Cost Agreement (SERS #20-030); certify to PASSHE its proportionate share of the General Initial Implementation Costs that PASSHE must pay to the Pennsylvania State University before the board will proceed with entering into a Funding Agreement with PASSHE, as set forth in Paragraph 4(a) and Exhibits A and B of the draft Cost Agreement; and approve entering into a Cost Agreement with PASSHE, subject to successful completion of contract negotiations and execution and delivery of closing documents, including required Commonwealth legal approvals.
MOTION: 2020-56 STRESS TESTING AND RISK ASSESSMENT REPORT
Meeting Date: September 30, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to approve the 2020 Stress Testing and Risk Assessment Report prepared by SERS’ Actuary, Korn Ferry.
MOTION: 2020-55 APPROVAL OF CONSENT CALENDAR
Meeting Date: September 30, 2020
RESOLVED: That the board approves the Consent Calendar items, as listed, for the September 30, 2020, board meeting.
MOTION: 2020-54 ADOPTION OF THE AGENDA
Meeting Date: September 30, 2020
RESOLVED: That the board adopts the agenda for the September 30, 2020, board meeting.
MOTION : 2020-53 ADJOURNMENT
Meeting Date: July 29, 2020
By motion of Chair Fillman, the board unanimously agreed to adjourn the meeting at 3:45 p.m.
MOTION: 2020-52 PRIVATE CREDIT-HPS MEZZANINE PARTNERS, 2019, L.P.
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $75 million to HPS Mezzanine Partners 2019, L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as an investment within the Private Credit asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months
MOTION: 2020-51 PRIVATE EQUITY – LLR EQUITY PARTNER VI, L.P.
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $50 million to LLR Equity Partners VI, L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as a follow-on investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
MOTION: 2020-50 – EMPLOYER PARTICIPANT CHARGE OF DEFINED CONTRIBUTION PLAN
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to:
(1) Assess each employer that has one or more employees who were active participants in the State Employees’ Defined Contribution Plan as identified in the census certified to the board’s actuary as of December 31, 2019, a per-participant charge of $668.77 for each such employee to cover the administrative fees, costs and expenses associated with the State Employees’ Defined Contribution Plan for fiscal year 2020-2021, as authorized in the Act of May 29, 2020, P.L. 158, No. 23, Section 8, (Fiscal Code Section 1748-E (a)).
(2) For each fiscal year starting on or after July 1, 2021, delegate to the Secretary of the Board and administrative staff of the State Employees’ Defined Contribution Plan the authority to:
(a) determine the employer per-participant charge by dividing the budgeted needs of the State Employees’ Defined Contribution Plan for administrative fees, costs and expenses for the fiscal year not covered by other sources of funds by the total number of active participants in the State Employees’ Defined Contribution Plan contained in the census certified to the board’s actuary as of the prior December 31; and
(b) assess each employer that employed active participants as of the applicable December 31, as certified by the board to the actuary, the resulting employer per-participant charge for each such active participant.
(3) For fiscal year 2020-2021 and each fiscal year thereafter, delegate to the Secretary of the Board and administrative staff of the State Employees’ Defined Contribution Plan the authority to:
(a) invoice each employer assessed employer per-participant charges; and
(b) require payment, in the form, manner, time and amount as the Secretary and administrative staff determine, provided that no date by which payments must be received by an employer can be greater than 90 days from the date of the invoice to that employer. The Secretary and administrative staff are further authorized to develop, assess and collect a schedule of interest, fees and penalties for the late payment of employer per-participant charges.
MOTION: 2020-49 - CHANGES TO ACTUARIAL VALUATION
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee, effective with the December 31, 2020 Actuarial Valuation, to adopt the actuarial assumptions and the recommended changes to the current actuarial assumptions set forth in the attached report by Korn Ferry titled, “Summary of Recommended Changes to Actuarial Valuation Assumptions Based Upon the 19th Investigation of Actuarial Experience Covering the Period January 1, 2015 to December 31, 2019 To Be Effective With the December 31, 2020 Actuarial Valuation” and labeled “Attachment B.”
MOTION: 2020-48 – ANNUAL ASSUMED RATE OF INVESTMENT RETURN
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to:
(i) lower the current annual assumed rate of investment return; and
(ii) lower the current assumed rate of inflation; and, thus
(iii) adopt an annual assumed rate of investment return of 7.00%, compounded annually, and an annual assumed rate of inflation of 2.50%, compounded annually, with both assumptions to be effective with the December 31, 2020 Actuarial Valuation and remain in effect until further action by the board.
MOTION: 2020-47 – BOARD GOVERNANCE AND PERSONNEL COMMITTEE BYLAWS AMENDMENT
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to amend sections 3.4 and 3.5 of the Commonwealth of Pennsylvania State Employees’ Retirement System Bylaws, as set forth in the attachment (Attachment A).
MOTION: 2020-46 – LIVESTREAMING OF PUBLIC MEETINGS
Meeting Date: July 29, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to have staff implement livestreaming of each public portion of each board and committee meeting, with a goal of commencing with the December 1 and 2, 2020, board and committee meetings, with recordings of the livestream to be: (i) published on the SERS website, and (ii) archived in accordance with applicable Commonwealth records retention policies and management directives.
MOTION: 2020-45 APPROVAL OF CONSENT CALENDAR
Meeting Date: July 29, 2020
RESOLVED: That the board approves the Consent Calendar items, as listed, for the July 29, 2020, board meeting.
MOTION: 2020-44 ADOPTION OF THE AGENDA
Meeting Date: July 29, 2020
RESOLVED: That the board adopts the agenda for the July 29, 2020, board meeting.
MOTION : 2020-43 ADJOURNMENT
Meeting Date: June 26, 2020
MOTION: 2020-42 CIO APPOINTMENT
Meeting Date: June 26, 2020
RESOLVED: That the board appoints Seth A. Kelly as Chief Investment Officer for the State Employees’ Retirement System, subject to: (i) Board Chairman approval of a completed Pennsylvania Office of State Inspector General background investigation and successful salary and start date negotiations conducted by the Board Secretary; and (ii) any other necessary approvals, and, as such, confirm that he shall have the powers and duties enumerated in the State Employees’ Retirement Code, as well as those which have been or are conferred upon or delegated to such office by the board.
MOTION : 2020-41 ADJOURNMENT
Meeting Date: June 10, 2020
MOTION: 2020-40 PPMAIRC RECOMMENDATION #107 (EVALUATION/DUE DILIGENCE PROCESS FOR INVESTMENT MANAGERS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to direct SERS’ Investment Office staff to include in the due diligence questionnaire for prospective investment managers an inquiry as to whether a firm is compliant with the CFA Institute Asset Manager Code.
MOTION: 2020-39 PPMAIRC RECOMMENDATIONS #101-106 (PROCUREMENT OF INVESTMENT CONSULTANTS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to amend the Investment Policy Statement to provide that a Request for Information (RFI) process is to be used for the hiring of general and specialty investment consultants, with the following requirements:
(a) All RFIs are to be posted on SERS’ website; and
(b) Once a contract has been entered into with the selected consultant, post on SERS’ website the selected consultant’s proposal received in response to the RFI, with redactions consistent with those made for proposals received pursuant to the Procurement Code, as set forth in the Procurement Handbook - Part I Chapter 50 - Public Access to Procurement Information.
MOTION: 2020-38 PPMAIRC RECOMMENDATION #100 (PROCUREMENT OF INVESTMENT MANAGERS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to implement the following to enhance the current process for hiring public market managers:
Post an announcement in a timely manner to SERS’ website that SERS is seeking a manager with a certain mandate, e.g. large cap value manager. Post a similar announcement on the website of SERS’ general investment consultant requesting managers to enter/update such consultant’s database by a certain agreed upon date. Advertise the announcement using Twitter, LinkedIn and industry publications.
MOTION: 2020-37 2019 INDEPENDENT AUDIT
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Audit, Risk and Compliance Committee to accept the audited financial statements of the Commonwealth of Pennsylvania State Employees’ Retirement System, and the Pennsylvania State Employees’ Retirement System Deferred Compensation Plan for years ended December 31, 2019 and 2018, as presented by our independent auditors, KPMG LLP.
MOTION: 2020-36 BOARD FIDUCIARY REVIEW AND SELF-ASSESSMENT-AUTHORIZATION TO PROCURE CONSULTANT
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to:
authorize the procurement of a consultant to assist the board in conducting a fiduciary review pursuant to the Fiduciary Review Policy and to facilitate the board’s self-assessment pursuant to the Board Self-Assessment Policy; and
direct members of the Board Governance and Personnel Committee to serve on an evaluation committee to evaluate and score proposals for purposes of recommending to the board the selection of a best value consultant for the project.
MOTION: 2020-35 PPMAIRC RECOMMENDATION #113 (ADOPTING MINIMUM GOALS FOR THE UTILIZATION OF MINORITY- AND WOMEN- OWNED ASSET MANAGEMENT FIRMS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to continue to seek investment opportunities with minority- and women-owned asset management firms, through SERS’ Emerging Investment Manager Program, consistent with the board’s fiduciary duties and responsibilities.
MOTION: 2020-34 PPMAIRC RECOMMENDATION #112 (CREATING A COMMONWEALTH ONLINE DATABASE OF MINORITY- AND WOMEN- OWNED ASSET MANAGERS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to support the efforts to create a Commonwealth online database of minority- and women-owned asset managers, to be housed with and maintained by the Department of General Services.
MOTION: 2020-33 PPMAIRC RECOMMENDATION #110 (THE GENERAL ASSEMBLY SHOULD ENACT LEGISLATION TO ENCOURAGE DIVERSITY AND INCLUSION EFFORTS TO INCREASE THE USE OF MINORITY- AND WOMEN- OWNED ASSET MANAGEMENT MANAGERS AND FIRMS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to direct staff to include in the SERS staff recommendation memos to the Investment Committee the responses received from the manager to SERS’ Master Due Diligence Questionnaire pertaining to diversity and inclusion, as well as the ILPA Team Diversity Template, if completed by the manager.
MOTION: 2020-32 PPMAIRC RECOMMENDATION #16 (ALL INVESTMENT MARKETING “PITCH” MATERIALS, INVESTMENT AGREEMENT TERMS, INCLUDING SIDE LETTERS, RELATED TO FEES, COSTS, EXPENSES, PERFORMANCE AND RISK BE PUBLICLY AVAILABLE)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to direct the Investment Office to include in its staff memo to the Investment Committee for any prospective GP/Manager the responses received from the GP/Manager to the request for consent to publish the metrics found in the specialty consultants’ semi-annual performance reports, as well as other information.
MOTION: 2020-31 PPMAIRC RECOMMENDATION #6 (LEAD AN EFFORT TO FORM A CONSORTIUM OF MAJOR STATE PENSION FUNDS TO RESET THE BALANCE OF POWER BETWEEN ASSET OWNERS AND INVESTMENT MANAGERS)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to have staff continue to actively participate in ILPA, PREA, CII and NASRA, in their efforts to reset the balance of power.
MOTION: 2020-30 PPMAIRC RECOMMENDATION #5 (CONTINUE THE WORK OF THE PPMAIR COMMISSION THROUGH THE ESTABLISHMENT OF A REVIEW COMMISSION)
Meeting Date: June 10, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Finance Committee to acknowledge that it is for the legislature if they choose to do so to establish a review commission to explore questions beyond the purview of the PPMAIRC.
MOTION: 2020-29 APPROVAL OF CONSENT CALENDAR
Meeting Date: June 10, 2020
RESOLVED: That the board approves the Consent Calendar items, as listed, for the June 10, 2020, board meeting.
MOTION: 2020-28 ADOPTION OF AGENDA
Meeting Date: June 10, 2020
RESOLVED: That the board adopts the agenda for the June 10, 2020, board meeting with the removal of the CIO Appointment from the New Business section.
MOTION : 2020-27 ADJOURNMENT
Meeting Date: May 1, 2020
MOTION: 2020-26 RELIEF FROM THE 95-DAY LIMIT THAT ANNUITANTS MAY RETURN TO STATE SERVICE RELATED TO THE COVID-19 DISASTER EMERGENCY
Meeting Date: May 1, 2020
RESOLVED: That the board approves the attached order of the State Employees’ Retirement Board that approves the request of the Office of Administration for relief from the 95-day limit that annuitants may return to State service with agencies, boards, or commissions under the Governor’s jurisdiction to perform service related to the COVID-19 disaster emergency proclaimed by the Governor on March 6, 2020;
And further, if the board receives any additional requests from the Office of Administration to amend the request for relief addressed in this motion or receives requests from other agencies, boards, commissions, or employers that are not under the Governor’s jurisdiction for purposes of 71 Pa. C.S. §5706(a.1) for relief similar to the relief requested by the Office of Administration, the board delegates to the Secretary the authority to approve or deny the requests of those agencies, boards, commissions, or employers for annuitants who return to State service during the period of disaster emergency proclaimed by the Governor with those agencies, board, commissions, or employers to perform service related to the COVID-19 disaster emergency under the terms and conditions set forth in the order approved by this motion (ATTACHMENT A).
MOTION : 2020-25 ADJOURNMENT
Meeting Date: April 21, 2020
MOTION: 2020-24 PSU FUNDING AGREEMENT
Meeting Date: April 21, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to:
(1) enter into the attached Funding Agreement between the State Employees’ Retirement Board and The Pennsylvania State University pursuant to section 5508.1 (a) of the State Employees’ Retirement Code, 71 Pa. C.S. §§5101 et seq., including the Annual Setoff schedule contained in Exhibit A to the Funding Agreement, subject to required Commonwealth legal approvals;
(2) accept The Pennsylvania State University’s lump sum payment in the amount of $1,061,000,000 to be applied towards its unfunded actuarial accrued liability pursuant to the Funding Agreement, provided the payment is received by May 1, 2020, and that the opinion of counsel required in paragraph 6.b. of the Funding Agreement has been provided to the board in a form acceptable to the board and to board counsel;
(3) certify that the Annual Setoff amount for The Pennsylvania State University under the Funding Agreement for fiscal year July 1, 2020 – June 30, 2021, is $93,258,976, effective upon the receipt of a lump sum payment of $1,061,000,000 pursuant to the Funding Agreement;
(4) certify that for fiscal year beginning July 1, 2020, for the first eleven Pay Periods of the monthly Payroll Cycle, the Annual Setoff credit shall be $6,697,690, and that for the first twenty-five Pay Periods of the bi-weekly Payroll Cycle, the Annual Setoff credit shall be $783,375, subject to any modification as provided for in the Funding Agreement; and
(5) delegate to the Secretary of the Board and administrative staff of the State Employees’ Retirement System to: (1) determine annually the amount of the Annual Setoff credit allocated to each Pay Period under each Payroll Cycle to The Pennsylvania State University for fiscal years beginning on or after July 1, 2021; and (2) annually certify those credits to The Pennsylvania State University.
MOTION: 2020-23 NOTIFICATION TO EMPLOYERS AND SECRETARY OF THE BUDGET
Meeting Date: April 21, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to authorize the Executive Director to notify all employers with employees who are active members of SERS and the Secretary of the Budget of the certified rates.
MOTION: 2020-22 BENEFITS COMPLETION PLAN
Meeting Date: April 21, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to establish an employer contribution rate of 0.03% for the fiscal year 2020/2021 to fund the Benefits Completion Plan that the board established pursuant to Section 5941 of the State Employees’ Retirement Code.
MOTION: 2020-21 ACTUARIAL VALUATION APPROVAL AND CONTRIBUTION RATES CERTIFICATION AND USE
Meeting Date: April 21, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to:
(1) approve the results of the December 31, 2019 actuarial valuation for the fiscal year 2020/2021;
(2) certify the following four contribution rates; and
(3) authorize SERS’ staff and the Korn Ferry Hay Group to use the following four contributions rates, pursuant to Section 5902(k) of the State Employees’ Retirement Code, to develop all the employer rates for the period of July 1, 2020, to June 30, 2021:
1. Shared risk contribution rate of 0.0%;
2. Employer normal cost contribution rate of 1.67%;
3. Composite employer contribution rate necessary for the funding of the system of 33.45%; and
4. Employer contribution rates by groups and classes of service as calculated by the Korn Ferry Hay Group, pursuant to Section 5508 of the State Employees’ Retirement Code, and set forth in the actuarial valuation for the fiscal year 2020/2021.
MOTION: 2020-20 TEMPORARY EXPANDED DELEGATION OF AUTHORITY
Meeting Date: April 21, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to approve a temporary expanded delegation of authority to the Chief Investment Officer until December 31, 2020 (or such earlier date that the board shall direct). The temporary expanded delegation of authority allows the Chief Investment Officer to:
(1) make strategic withdrawals of up to a total of $500 million from existing investment portfolios within the Public Markets asset classes, if in the opinion of the Chief Investment Officer it is fiduciarily prudent to do so;
(2) if The Pennsylvania State University makes a lump sum payment for the advance payment of its unfunded actuarial accrued liability, or if cash exceeds its current level, then to the extent that it is not retained as cash or needed for liquidity purposes, it may be invested in existing investment vehicles according to the ranges established in the Investment Policy Statement as is fiduciarily prudent; and
(3) amend investment manager guidelines where necessary to prevent forced selling of securities that may be outside of their current guidelines due to rating agency downgrades during this volatile market environment, or other similar amendments to mitigate adverse impacts on a portfolio.
The Chief Investment Officer shall consult with the board general investment consultant, SERS Investment Committee chair, and board chair prior to executing the above expanded authority investment action. All actions taken shall be consistent with the long-term investment guidelines established by the board. In the event such action is taken, the board and the Investment Committee will be apprised as soon as practicable, but no later than the next regularly scheduled board or Investment Committee meeting, respectively.
MOTION: 2020-19 PRIVATE EQUITY- CVC CAPITAL PARTNERS VIII(A) L.P.
Meeting Date: April 21, 2020
RESOLVED : That the board accepts the recommendation of the Investment Committee to commit up to €50 million to CVC Capital Partners VIII(A) L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as a follow-on investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
MOTION: 2020-18 APPROVAL OF CONSENT CALENDAR
Meeting Date: April 21, 2020
RESOLVED: That the board approves the Consent Calendar items, as listed, for the April 21, 2020, board meeting.
MOTION: 2020-17 ADOPTION OF THE AGENDA
Meeting Date: April 21, 2020
RESOLVED: That the board adopts the agenda for the April 21, 2020, board meeting.
MOTION 2020-16 Adjournment
Meeting Date: April 3, 2020
MOTION 2020-15
Meeting Date: April 3, 2020
RESOLVED: That the board amends the Commonwealth Deferred Compensation Plan to authorize coronavirus-related distributions for participants, pursuant to Title II, Subtitle B, Section 2202(a) of the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) (“CARES Act”), and to direct staff and Great-West Life & Annuity Insurance Company to take such necessary action in the implementation of the plan amendment in furtherance of the CARES Act, effective for calendar year 2020.
Motion 2020-14 Adjournment
Meeting Date: February 26, 2020
RESOLVED: By motion of Chair Fillman, the board unanimously agreed to adjourn the meeting at 2:50 p.m.
Motion 2020-13 Investment Committee Charter
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to adopt the amendments to the Investment Committee Charter, as set forth in the attachment (ATTACHMENT A), to be effective immediately upon adoption.
Motion 2020-12 Rebalance Recommendation
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to 1) approve the redemption of $1.615 billion from the BlackRock MSCI World ex-US Index Fund and allocate the proceeds to Cash;
2) approve the redemption of $535 million from the Walter Scott Global Growth Stock Portfolio and allocate the proceeds to Cash. A transition manager may be used to execute this transaction;
3) approve the redemption of $200 million from the Harris Associates International Small Cap Equity Portfolio and allocate the proceeds to Cash. A transition manager may be used to execute this transaction;
4) approve the redemption of $500 million from the BlackRock MSCI Emerging Markets Fund and allocate the proceeds to Cash;
5) approve a contribution of $2.5 billion to the Mellon U.S. Aggregate Bond Index Portfolio to be funded from Cash. A transition manager may be used to execute this transaction;
6) approve a contribution of $350 million to the Brown Brothers Harriman & CO. Treasury Inflation Protected Securities Portfolio to be funded from Cash. A transition manager may be used to execute this transaction; and
7) approve a contribution of $750 million to the Mellon U.S. Aggregate Bond Index Portfolio to be funded from Cash. A transition manager may be used to execute this transaction.
Motion 2020-11 Real Estate – Oak Street Real Estate Capital Fund V, L.P.
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $50 million to Oak Street Real Estate Capital Fund V, LP, plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as a follow-on investment within the Real Estate asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
Motion 2020-10 Private Equity – Amendment to Permira Susquehanna (Co-Investment) fund, L.P.
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to amend Board Motion 2019-27 adopted on April 24, 2019, changing the board’s capital commitment to Permira Susquehanna (Co-Investment) Fund, L.P. from €36 million Euros to $40 million U.S. Dollars. All other provisions of Board Motion 2019-27 remain unchanged.
Motion 2020-09 Private Equity – Neuberger Berman PA Co-Investment Fund, L.P.
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up $200 million to Neuberger Berman PA Co-investment Fund LP, plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as an investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
Motion 2020-08 Private Equity – Harbourvest PA Co-Investment Fund, L.P.
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $200 million to HarbourVest PA Co-investment Fund L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as an investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
Motion 2020-07 Private Equity – Altaris Health Partners V, L.P.
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Investment Committee to commit up to $50 million to Altaris Health Partners V, L.P., plus investment expenses and pro rata share of partnership operating expenses, consistent with executed partnership documents, as an investment within the Private Equity asset class, subject to successful completion of contract negotiations and execution and delivery of closing documents by all parties, including required Commonwealth legal approvals, within 12 months.
Motion 2020-06 PSU Cost Agreement
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Finance and Member Services Committee to certify the board’s costs to estimate, determine, calculate or administer the amount of any lump sum payment and annual setoff potentially or actually resulting from an advance payment of accrued liability contributions to be paid by The Pennsylvania State University on whose behalf the costs were or will be incurred, pursuant to Act 2019-105, as set forth in Exhibit A of the draft Cost Agreement (SERS #20-004) and further to approve entering into a Cost Agreement between The Pennsylvania State University and the State Employees’ Retirement Board subject to successful completion of contract negotiations and execution and delivery of closing documents, including required Commonwealth legal approvals.
Motion 2020-05 Acting CIO Salary Adjustment
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to approve 1) a salary adjustment for James G. Nolan’s Deputy Chief Investment Officer hourly rate to $129.27 effective the first full pay period of March 2020 and 2) that the board apply the temporary 4.5% hourly pay increase on the new Deputy Chief Investment Officer rate as authorized through Motion 2019-65 for his role as Acting Chief Investment Officer, until such time as a permanent Chief Investment Officer begins employment.
Motion 2020-04 Executive Director Salary Adjustment
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to request the Commonwealth’s Executive Board authorize a 12% increase to $115.61 an hour for Terrill J. Sanchez, Executive Director, with an effective date of February 26, 2020.
Motion 2020-03 Investment Committee Charter
Meeting Date: February 26, 2020
RESOLVED: That the board accepts the recommendation of the Board Governance and Personnel Committee to concur with the recommendation of the Investment Committee to adopt the amendments to the Investment Committee Charter, as set forth in the attachment (ATTACHMENT A), to be effective immediately upon adoption.
Motion 2020-02 Approval Consent Calendar
Meeting Date: February 26, 2020
RESOLVED: That the board approves the Consent Calendar items, as listed, for the February 26, 2020, board meeting.
Motion 2020-01 Adoption of the Agenda
Meeting Date: February 26, 2020
RESOLVED: That the board adopts the agenda for the February 26, 2020, board meeting agenda.