OHLONE COMMUNITY COLLEGE DISTRICT RETIREMENT BOARD … · 30.04.2015 · Keenan Financial Services...

OHLONE COMMUNITY COLLEGE DISTRICT

RETIREMENT BOARD OF AUTHORITY MEETING

PRESENTED TO:

DATE:

04/30/2015

Retirement Board of Authority

SUBJECT:

ITEM #:

2014/2015-016

Public Comments Enclosure: No

Action Item No

Prepared by:

Keenan Financial Services

Requested by:


BACKGROUND: The public may address the Retirement Board of Authority on any matter pertaining to the Board that is not on the agenda.

RECOMMENDATION: The Chair reserves the right to limit the time of presentations by individual or topic.

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OHLONE COMMUNITYCOLLEGE DISTRICT


PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-017

Approval of Agenda Enclosure: Yes

Action Item Yes

Prepared by:


Requested by:


BACKGROUND: Under California Government Code Section §54950 (The Ralph M. Brown Act) the “Legislative Body” is required to post an agenda detailing each item of business to be discussed. The Authority posts the agenda in compliance with California Government Code Section §54954.2. STATUS: Unless items are added to the agenda according to G.C. §54954.2 (b) (1) (2) (3) the agenda is to be approved as posted. RECOMMENDATION: Subject to changes or corrections, the agenda is to be approved.

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Keenan & Associates Tel: 800-654-8102/Fax: 310-533-1329 License No. 0451271

AGENDA

OHLONE COMMUNITY COLLEGE DISTRICT RETIREMENT BOARD OF AUTHORITY MEETING

APRIL 30, 20159:30 A.M. – 11:30 A.M.


BUILDING 20, ROOM 20-101 43600 MISSION BOULEVARD

FREMONT, CA 94539 (510) 659-6000

I. CALL TO ORDER

II. ROLL CALL

RETIREMENT BOARD OF AUTHORITY (the “Board”) MEMBERS Vice President, Administrative Services Ron Little Associate Vice President of Human Resources Shairon Zingsheim Director, Business Services Farhad Sabit Director, Purchasing and Contracts Alex Lebedeff Senior Human Resources Specialist Kathleen Johnson Full Time Faculty Diane Cheney Classified Staff John Li

PROGRAM COORDINATOR Senior Vice President, Keenan & Associates (K&A) Bob Schoenherr Account Manager , Keenan Financial Services (KFS) Roslyn Washington CONSULTANTS Morgan Stanley Wealth Management (MS) Cary Allison GUESTS None OTHER None

__________________________________________________________________________________________ III. PUBLIC COMMENTS Information

2014/2015-016 The public may address the Retirement Board of Authority on any matter pertaining to the Retirement Board that is not on the agenda. The Chair reserves the right to limit the time of presentations by individual or topic.

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AGENDA -- Ohlone Community College District Retirement Board of Authority (RBOA) April 30, 2015 Page 2


IV. APPROVAL OF AGENDA Action

2014/2015-017 The Retirement Board of Authority retains the right to change the order in which agenda items are discussed. Subject to review by the Retirement Board of Authority, the agenda is to be approved as presented. Items may be deleted or added for discussion only according to G.C. Section 54954.2. PUBLIC COMMENTS: BOARD CONSIDERATION:

V. APPROVAL OF MINUTES Action

2014/2015-018 The Retirement Board of Authority will review the minutes from the previous meeting on October 16, 2014 for any adjustments and adoption. PUBLIC COMMENTS: BOARD CONSIDERATION:

VI. INVESTMENTS

PORTFOLIO PERFORMANCE REVIEW Action 2014/2015-019 Morgan Stanley Wealth Management (MS) will review the overall performance of the District’s Public Entity Investment Trust portfolio. PUBLIC COMMENTS: BOARD CONSIDERATION:

MARKET OVERVIEW Information 2014/2015-020 Morgan Stanley Wealth Management (MS) will provide an overview of the global capital markets conditions since the last Retirement Board of Authority meeting. PUBLIC COMMENTS: BOARD CONSIDERATION:

VII. ADMINISTRATION ELECTION OF A CHAIR FOR THE RETIREMENT BOARD OF AUTHORITY

Action 2014/2015-021 The Retirement Board of Authority (RBOA) has been duly appointed by the Ohlone Community College District Board of Trustees and will elect a Chair or reaffirm Ron Little as Chair of the Retirement Board of Authority. PUBLIC COMMENTS:

BOARD CONSIDERATION:

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ELECTION OF A VICE-CHAIR FOR THE RETIREMENT BOARD OF AUTHORITY

Action 2014/2015-022 The Retirement Board of Authority (RBOA) has been duly appointed by the Ohlone Community College District Board of Trustees and will elect a Vice-Chair to facilitate the Management/Operational duties of the Retirement Board of Authority. PUBLIC COMMENTS:

BOARD CONSIDERATION: DISBURSEMENT REPORT Action

2014/2015-023 The Retirement Board of Authority (RBOA) members shall ratify the reasonable expenses associated with GASB No 43 & 45 compliance and the Management/Operation the District’s OPEB Investment Trust. PUBLIC COMMENTS: BOARD CONSIDERATION:

UPDATES TO THE COMPREHENSIVE COMPLIANCE PLAN, INCLUDING THE “SUBSTANTIVE PLAN” Information 2014/2015-024 Updating the “Substantive Plan” is a dynamic process that requires an annual review to incorporate modifications to the District’s OPEB Program provisions or changes to cost arrangements. The Retirement Board of Authority will review updates the “Substantive Plan” and Comprehensive Compliance Plan (“e-Library”) reflecting administrative compliance with GASB protocols and Regulatory statutes for fiscal year ended June 30, 2014. PUBLIC COMMENTS: BOARD CONSIDERATION:

FUTURE TRANSFER OF ASSETS INTO THE TRUST Information 2014/2015-025 2013/2014-011 The District’s transfer of assets into the Investment Trust may require a tailored funding procedure. To meet the possibly tailored funding procedure, the Retirement Board of Authority (RBOA) will provide timing and asset transfer schedules related to the District’s Annual Required Contribution (ARC) and Pay-As-You-Go funding strategies based on current District financial considerations. PUBLIC COMMENTS: BOARD CONSIDERATION:

ACTUARIAL VALUATION STUDY UPDATE Information 2014/2015-026 The Retirement Board of Authority (RBOA) members shall provide District updates regarding the procurement of a new Actuarial Valuation Study to maintain compliance with GASB protocols. PUBLIC COMMENTS: BOARD CONSIDERATION:

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VIII. INFORMATION REPORTS

RETIREMENT BOARD OF AUTHORITY COMMENTS Information 2014/2015-027 Each member may report about various matters involving the Retirement Board of Authority. There will be no Retirement Board discussion except to ask questions or refer matters to staff, and no action will be taken unless listed on a subsequent agenda. PROGRAM COORDINATOR/CONSULTANT COMMENTS Information 2014/2015-028 The Program Coordinator and Consultants will report to the Authority about various matters involving the Authority. There will be no Authority discussion except to ask questions, and no action will be taken unless listed on a subsequent agenda.

IX. DATE, TIME AND AGENDA ITEMS FOR NEXT MEETING Information 2014/2015-029 The Agenda Items for the next meeting will be the same as for this meeting. RBOA Members and the Public may suggest additional items for consideration at the next Retirement Board of Authority meeting. PUBLIC COMMENTS: BOARD CONSIDERATION:

X. ADJOURNMENT

__________________________________________________________________________________________ Americans with Disabilities Act The Ohlone Community College District Retirement Board of Authority conforms to the protections and prohibitions contained in Section 202 of the Americans with Disabilities Act of 1990 and the federal rules and regulations adopted in implementation thereof. A request for disability-related modification or accommodation, in order to participate in a public meeting of the Ohlone Community College District Retirement Board of Authority meeting, shall be made to: Ron Little, Vice President, Administrative Services, Ohlone Community College District, 43600 Mission Boulevard, Fremont, CA 94539.

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-018

Approval of Minutes Enclosure: Yes

Action Item Yes

Prepared by:


Requested by:


BACKGROUND: As a matter of record and in accordance with the Brown Act, minutes of each meeting are kept and recorded. STATUS: The Board will review the minutes from the previous Retirement Board of Authority Meeting on October 16, 2014. RECOMMENDATION: Subject to changes or corrections, the minutes are to be approved.

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MINUTES

OHLONE COMMUNITY COLLEGE DISTRICT RETIREMENT BOARD OF AUTHORITY MEETING

OCTOBER 16, 2014 9:30 A.M. – 11:30 A.M.


STUDENT SERVICES CENTER, ROOM #7104

43600 MISSION BOULEVARD FREMONT, CA 94539

(510) 659-6000

I. CALL TO ORDER

The Retirement Board of Authority (RBOA) meeting was called to order at 9:04 AM by RBOA Chair Ron Little.

Roll call was conducted with all members of the Retirement Board of Authority (RBOA) affirming their presence except Diane Cheney who was absent from the meeting. All Service Organization representatives indicated their presence.

II. ROLL CALL

RETIREMENT BOARD OF AUTHORITY (the “Board”) MEMBERS Vice President, Administrative Services Ron Little Associate Vice President of Human Resources Shairon Zingsheim Director, Business Services Farhad Sabit Director, Purchasing and Contracts Alex Lebedeff Senior Human Resources Specialist Kathleen Johnson Classified Staff John Li

PROGRAM COORDINATOR Senior Vice President, Keenan Financial Services (KFS) Gail Beal Senior Vice President, Keenan & Associates (K&A) Bob Schoenherr Account Manager , Keenan Financial Services (KFS) Roslyn Washington CONSULTANTS Morgan Stanley Wealth Management (MS) Cary Allison Benefit Trust Company (BTC) Scott Rankin GUESTS None OTHER None ABSENT Full Time Faculty Diane Cheney

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MINUTES -- Ohlone Community College District Retirement Board of Authority (RBOA) October 16, 2014 Page 2


__________________________________________________________________________________________ III. PUBLIC COMMENTS

There were no Public Comments or inquiries. IV. APPROVAL OF AGENDA

A motion was made by RBOA member Shairon Zingsheim to accept the Agenda as presented. The motion was seconded by RBOA member Alex Lebedeff and was unanimously carried by a roll call of the RBOA membership present.

V. APPROVAL OF MINUTES

A motion was made by RBOA member Alex Lebedeff to approve the Minutes of the previous meeting on April 29, 2014 as presented. The motion was seconded by RBOA member John Li and was unanimously carried by a roll call of the RBOA membership present.

VI. INVESTMENTS

PORTFOLIO PERFORMANCE REVIEW Cary Allison of Morgan Stanley Wealth Management provided an overview of the District’s Public Entity Investment Trust Change in Portfolio, Asset Allocation, and Time Weighted Return (Gross and Net of Fees) for period ending September 30, 2014. As of September 30, 2014 the District’s Investment Trust portfolio had an allocation of 54.9% in fixed income funds and 45.1% in equity funds (equity funds comprised 26.6% in domestic equity and 18.5% in international equity). The value of the portfolio as of December 31, 2013 was $2,684,415.18 and as of September 30, 2014 the portfolio value is $2,773,295.81. The September 30, 2014 portfolio value represents an annualized inception to date net rate of return of 7.11% compared to the Barclays Aggregate of 3.55%; the Barclays Global Aggregate of 3.43%; the S&P 500 Adj for Divs of 18.99% and the MSCI EAFE of 10.85%. The investment results for the last year show a net increase of 6.68% versus the Barclays Aggregate of 3.95%; the Barclays Global Aggregate of 1.20%; the S&P 500 Adj for Divs of 19.73% and the MSCI EAFE of 4.25%.The annualized latest three (3) year results reflect a net increase of 8.72% versus the Barclays Aggregate of 2.44%: the Barclays Global Aggregate of 1.14%; the S&P 500 Adj for Divs of 22.99% and the MSCI EAFE of 13.65%. The current dividend yield on the District’s portfolio fixed income investments was 3.1% while the current dividend yield on the aggregated portfolio was 2.4%. Cary provided an overview of the Model Portfolio allocations as of June 30, 2014 explaining to the RBOA membership that no changes have been made to the Investment Trust’s portfolio balanced allocation strategy since the last RBOA meeting. Relative to the capital markets framework for the Trust’s portfolio performance, Cary advised RBOA members that a major takeaway from 2013 is that the portfolio’s equity positions more than offset the non-performance of the fixed-income positions. However, he noted that solid U.S. economic data throughout the course of this year has aided in bolstering financial markets which is reflected in the broad based performance (both Equity & Fixed-Income) record of the Trust’s portfolio in

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2014. He advised that Trust’s fixed income positions have shown significant gains that were not anticipated at the beginning of the year. He explained that fixed income yields have come back down as investors have been buoyed by ongoing monetary accommodation by central banks (QE3 weaning is anticipated to be completed in October 2014), low inflation and continued incremental global economic growth. However, he noted that recent Ebola headlines as well as uncertainty relative to downturns in established economies overseas (i.e. Germany) have caused a hiccup in the capital markets and has pushed the 10-year Treasury Notes to sub-2% yields. Cary anticipates a slight hike in interest rates as the Feds stop buying bonds but he believes interest rates will remain relatively low in the near-term. He noted that the unemployment rate continues to come down and he does not see inflation as a major worry. A motion was made by RBOA member Alex Lebedeff to accept the Portfolio Performance Review as presented. The motion was seconded by RBOA member Kathleen Johnson and was unanimously carried by a roll call of the RBOA membership present. MARKET OVERVIEW The Morgan Stanley’s Capital Markets Overview (“Market Overview”) for the second quarter of 2014 was presented in the Board materials. The Market Overview noted that in the second quarter, equity performance in the United States continued its upward climb. The Dow Jones Industrial Average rose 2.8% in the second quarter. The NASDAQ Composite advanced 5.3% for the quarter. The S&P 500 rose 5.2% for the quarter. The primary driver of the rally was ongoing monetary stimulus by major central banks throughout the world. Investor enthusiasm was also bolstered by the Federal Reserve’s (the “Fed”) indication that short-term interest rates could remain in their current low range for some time after Quantitative Ease 3 (QE3) tapering is complete. Morgan Stanley and Co. LLC economists expect that U.S. real GDP will be 2.1% in 2014 and 2.8% in 2015. Morgan Stanley economists forecast global GDP growth to be 3.2% in 2014 and 3.7% in 2015. For the quarter, the seasonally adjusted unemployment rate fell from 6.3% for both April and May to 6.1% for June. Job gains in the quarter took place in retail trade, health care, professional, business services and food services. Inflation remained low in the U.S. with the seasonally adjusted Consumer Price Index rising 0.3% in April and 0.4% in May. Morgan Stanley & Co. LLC economists forecast a 1.9% inflation rate for 2014 and 1.7% for 2015. The Census Bureau reported that private-sector housing starts in May 2014 were at a seasonally adjusted annual rate of 1,001,000.00—9.4% above May 2013 housing starts. The rise in housing starts over the past year indicates that despite some recent setbacks, the housing market is steadily rebounding. The Market Overview indicated that emerging markets (EM) and global equities advanced. The MSCI EAFE (a benchmark for developed markets) rose 4.3% for U.S.-currency investors and 3.7% for local-currency investors, as the U.S. dollar depreciated in relation to the currencies of many nations in the index. In the second quarter, the bond market extended the gains of the first quarter of 2014-the Barclays U.S. Aggregate Bond Index, a general measure of the bond market, increased 2.0% for the quarter. Interest rates declined during the second quarter, as the yield on the 10-Year U.S. Treasury note fell to a quarter-end 2.51% from 2.7% at the end of the first quarter. INVESTMENT POLICY STATEMENT REVIEW

Scott Rankin of Benefit Trust Company (BTC) advised that fiduciary best practices require periodic adjustments to certain provisions of the District’s Investment Policy Statement (IPS). In a background overview, Scott noted that the IPS is constituted of two parts – the first part details governance principles which are mandated pursuant to the California Government Code Sections 53620 through 53622 which draws extensively from the Employee Retirement Income Security Act (ERISA). He explained that this part

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of the IPS incorporates fiduciary and governance mandates related to the “Prudent Person Standard”; the “Exclusive Benefit Standard”; the delegation to qualified experts and the duty to diversify investments “so as to minimize the risk of large losses”. In this framework, Scott explained that the District’s Trust portfolio investments are designed per a prudent decision-making process; selected by qualified expertise to provide benefits exclusively to the OPEB Plan participants and invested so as to minimize the risk of large losses. Scott also discussed the Trust’s portfolio regulatory requirement to have “a broad range of investment choices that have distinctly different risk return characteristics”. The RBOA membership advised that the District’s Trust portfolio should continue with a moderate growth investment objective reflected by the current Target Rate of Return (TRR) of 6.0% with an additional 1% allocated towards GASB 43/45 compliance and the expenses associated with the management/operation of the Trust. Scott explained that the second part of the IPS addresses permitted and non-permitted investments and strategies. He advised that additional language is required to detail the Trust’s portfolio Equity and Fixed Income investment restrictions in tracking current institutional investment practices. On the Equity side, Scott advised that the restrictions listed in the IPS shall be permitted in the context of “open-end or closed-end mutual-end mutual funds, comingled funds, or ETFs, if in the opinion of the Trustee these activities are consistent with fund objectives and prudent management, and the investments provide for daily liquidity.” He continued by explaining that “additionally, certain securities may not be held directly, but only in open-ended or closed-end mutual funds, comingled funds, or ETFs i.e. common stocks, preferred stocks, and securities convertible into common stocks and securities that carry the right to purchase common of non-U.S. companies traded on global exchanges, traded in any currency, as well as restricted securities of U.S. and non-U.S. companies, including securities issued through private offerings, and forward currency contracts or currency futures to hedge foreign currency exposure”. Benchmarks included for the measurement of the District’s Investment Trust equity performance are the S&P 500 for Domestic Equities and MSCI EAFE and ACWI ex. U.S for International Equities. On the Fixed Income side, Scott continued by advising that the restrictions listed in the IPS shall be permitted in the framework of “open-end or closed-end mutual-end mutual funds, comingled funds, or ETFs, if in the opinion of the Trustee these activities are consistent with fund objectives and prudent management, risk mitigation, and the investments provide for daily liquidity.” He further explained that “investment in non-investment grade bonds or loans by such funds shall be permitted so long as the average aggregate rating of the funds are investment grade, and in the opinion of the Trustee the proportion of non-investment grade bonds to investment grade bonds in the portfolio is prudent.” Benchmarks included for the measurement of the District’s Investment Trust fixed income performance are Barclay’s Aggregate Bond Index for Domestic Fixed Income Securities and the Barclay’s Global Bond Index for International Fixed Income Securities. A motion was made by RBOA member Shairon Zingsheim to approve the additional language to the provisions of the Investment Policy Statement (IPS). The motion was seconded by RBOA member Alex Lebedeff and was unanimously carried by a roll call of the RBOA membership present.

VII. EDUCATION

Gail Beal of Keenan Financial Services discussed the Governmental Accounting Standards Board (GASB) approval of two new draft standards that, when finalized, will impact the financial accounting and reporting

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of OPEB for state and local agencies. She advised that the proposed standards are intended to bring OPEB accounting and reporting in line with the standards GASB issued for public pensions in 2012. The Employer Draft Standard is entitled “Accounting and Financial Reporting for Postemployment Benefits Other than Pensions” and is intended to supersede GASB standard No. 45. The Plan Draft Standard is entitled “Financial Reporting for Postemployment Benefit Plans other than Pension Plans” and is intended to supersede GASB standard No.43. Gail presented a ‘Keenan Briefing’ to the RBOA membership which explains that the “Employer Draft Standard” proposes using a discount rate that applies: (a) the expected long-term rate of return on OPEB Plan investments for which plan assets are expected to be available to make projected benefit payments and (b) the use of an interest rate on a 20-year tax-exempt, high-quality general obligation municipal bond yield or index to project benefit payments for which plan assets are not expected to be available for long-term investment in a qualified trust (c) the use of a single actuarial cost allocation method – “entry age normal” – rather than the current choice among six actuarial cost methods. The “Plan Draft Standard” addresses financial reporting for defined benefit OPEB plans that are administered through a qualified trust. The proposed standards would require governmental employers and OPEB plans to present much more extensive note disclosure and Required Supplementary Information (RSI) about their OPEB liabilities. GASB has set the effective dates for the new standards as follows:

• December 15, 2016 – Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.

• December 15, 2015 – Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans.

VIII. ADMINISTRATION

ANNUAL REPORTING ON THE STATUS OF THE TRUST Pursuant to the regulatory requirements of California Government Code Section 53216.4, the Annual Report on the Status of the Trust reflects the total assets in the Trust, the market value, the book value, all contributions and distribution activity (including all fees and expenses associated with the Trust), income activity, purchase activity, sales activity, and realized gains and losses for fiscal year ending June 30, 2014. A motion was made by RBOA member Shairon Zingsheim acknowledging that the Annual Report with a District Cover Letter has been promulgated to the Trust’s beneficiaries according to established District protocols. The motion was seconded by RBOA member Alex Lebedeff and was unanimously carried by a roll call of the RBOA membership present.

DISBURSEMENT REPORT

Roslyn Washington of Keenan Financial Services presented the RBOA membership with the Disbursement Report reflecting fees for services provided for ongoing GASB compliance and the management/operation of the District’s OPEB Investment Trust for the period May 16, 2014 through September 19, 2014.

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Relative to the Investment Trust’s disbursement activity, RBOA Chair Ron Little requested that the Disbursement Report reflect activity for the same period as the District’s Trust Portfolio review. A motion was made by RBOA member Shairon Zingsheim to ratify the fees related to GASB compliance protocols and the management/operation of the District’s OPEB Investment Trust for the period of May 2014 through September 2014. The motion was seconded by RBOA member John Li and was unanimously carried by a roll call of the RBOA membership. UPDATES TO THE COMPREHENSIVE COMPLIANCE PLAN, INCLUDING THE “SUBSTANTIVE PLAN” Roslyn Washington of Keenan Financial Services (KFS) explained that the “OPEB Questionnaire & Due Diligence Form” in the RBOA meeting materials is a significant part of a dedicated process designed towards updating the “Substantive Plan” for the 2013/2014 fiscal year end. Roslyn advised that the “e-Library” will also be updated and delivered to reflect the District’s OPEB Investment Trust compliance with GASB protocols and regulatory requirements for fiscal year ending June 30, 2014. FUTURE TRANSFER OF ASSETS INTO THE TRUST RBOA member Fahad Sabit noted that the District’s has transferred approximately $460,000.00 annually to the Investment Trust over the last few years. He advised that the District’s budget anticipates annual deposits to continue for at least three more years. In this connection, Farhad noted the District will deposit $428,940.21 to its Investment Trust soon and advised that they would like to grow the Trust’s assets to $7 million. He indicated that the District does not anticipate taking any disbursements related to retiree healthcare expenses in the near-term.

ACTUARIAL VALUATION STUDY UPDATE The current Actuarial Valuation Study has an effective date of February 1, 2013 and was provided to the District by the actuarial consulting firm Total Compensation Systems, Inc. RBOA members Kathleen Johnson and Farhad Sabit advised that the District are seeking to engage an alternative consulting actuary in procuring their new Actuarial Valuation Study. To this end, RBOA members Alex Lebedeff and Farhad Sabit requested a list of actuaries familiar with GASB protocols to facilitate the District’s desire to conduct a Request for Proposal (RFP) process.

IX. INFORMATION REPORTS

RETIREMENT BOARD OF AUTHORITY COMMENTS There were no Retirement Board of Authority comments. PROGRAM COORDINATOR/CONSULTANT COMMENTS There were no Program Coordinator/Consultant comments.

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X. DATE, TIME AND AGENDA ITEMS FOR NEXT MEETING The next Retirement Board of Authority (RBOA) meeting is scheduled as follows:

• April 30, 2015: 9:30 AM-11:30 AM. XI. ADJOURNMENT There being no further business to conduct, the Retirement Board of Authority (RBOA) meeting was

adjourned at 11:00 AM by RBOA Chair Ron Little. __________________________________________________________________________________________ Americans with Disabilities Act The Ohlone Community College District Retirement Board of Authority conforms to the protections and prohibitions contained in Section 202 of the Americans with Disabilities Act of 1990 and the federal rules and regulations adopted in implementation thereof. A request for disability-related modification or accommodation, in order to participate in a public meeting of the Ohlone Community College District Retirement Board of Authority meeting, shall be made to: Ron Little, Vice President, Administrative Services, Ohlone Community College District, 43600 Mission Boulevard, Fremont, CA 94539.

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-019

Portfolio Performance Review Enclosure: Yes

Action Item Yes

Prepared by:

Morgan Stanley

Wealth Management (MS)

Requested by:


BACKGROUND: As Board members of the Retirement Board of Authority you have a fiduciary responsibility as described in Government Code section 53215, et seq. As part of fulfilling your fiduciary responsibility, it is important to periodically review the District’s Public Entity Investment Trust Portfolio. STATUS: Morgan Stanley Wealth Management (MS) will provide a review of the District’s Public Entity Investment Trust Portfolio Performance Report. RECOMMENDATION:

The Retirement Board of Authority should review and accept the Investment Trust Portfolio Performance Report and file as appropriate.

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OHLONE COMMUNITY COLLEGE DISTRICT FUTURIS PUBLIC ENTITY INVESTMENT TRUST

March 31, 2015

Time Weighted Return - Net of Fees

Annualized Annualized Annualized

Month Quarter Year Latest 1 Latest 3 Latest 5 Inception

To Date To Date To Date Year Year Year To Date

Account -0.44 2.10 2.10 4.45 6.34 - 6.99

S&P 500 Adj for Divs -1.58 0.96 0.96 12.74 16.11 14.47 18.26

MSCI EAFE -1.52 4.88 4.88 -0.92 9.02 6.16 9.92

MSCI ACWI Ex US Net -1.62 3.47 3.47 -1.05 6.40 4.81 8.06

Barclays Aggregate 0.46 1.61 1.61 5.70 3.11 4.42 3.91

Barclays Global Agg Bd

Unhedged

-0.96 -1.92 -1.92 -3.66 -0.20 2.29 2.42

50% MSCI ACWI/ 50%

Barclays Agg

-0.54 2.03 2.03 5.66 7.03 6.99 8.41

Time Weighted Return - Gross of Fees

Annualized Annualized Annualized

Month Quarter Year Latest 1 Latest 3 Latest 5 Inception

To Date To Date To Date Year Year Year To Date

Account -0.36 2.36 2.36 5.49 7.38 - 8.03

S&P 500 Adj for Divs -1.58 0.96 0.96 12.74 16.11 14.47 18.26

MSCI EAFE -1.52 4.88 4.88 -0.92 9.02 6.16 9.92

MSCI ACWI Ex US Net -1.62 3.47 3.47 -1.05 6.40 4.81 8.06

Barclays Aggregate 0.46 1.61 1.61 5.70 3.11 4.42 3.91

Barclays Global Agg

Bd Unhedged

-0.96 -1.92 -1.92 -3.66 -0.20 2.29 2.42

50% MSCI ACWI/

50% Barclays Agg

-0.54 2.03 2.03 5.66 7.03 6.99 8.41

Asset Allocation

0.0%

54.2%

26.7%

19.1%

PORTFOLIO SUMMARY

March 31, 2015

CASH AND RECEIVABLES -0.02

FIXED INCOME FUNDS 1,781,970.42

DOMESTIC EQUITY FUNDS 878,372.84

INTERNATIONAL EQUITY FUNDS

627,542.25

Change In Portfolio

Portfolio Value on 12-31-14 3,220,108.93

Contributions 0.00

Withdrawals 0.00

Change in Market Value 53,736.20

Income Received 22,047.75

Portfolio Fees -8,007.39

Portfolio Value on 03-31-15 3,287,885.48

3,287,885.48

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PORTFOLIO APPRAISAL March 31, 2015

Security Unit Total Market Pct. Cur.

Quantity Security Symbol Cost Cost Price Value Assets Yield

CASH AND RECEIVABLES

CASH CASH -0.02 -0.02 0.0 0.0

FIXED INC MUTUAL FUNDS

Taxable Funds

28,640.070 DELAWARE

DIVERSIFIED INC

INSTL

DPFF.X 9.25 264,788.17 9.07 259,765.43 7.9 3.9

24,474.771 HARTFORD WORLD

BOND I

HWDI.X 10.68 261,288.72 10.57 258,698.33 7.9 3.9

11,629.107 LEGG MASON BW

GLOBAL OPPS BD IS

GOBS.X 11.12 129,327.01 10.79 125,478.06 3.8 4.5

23,723.025 METROPOLITAN

WEST TOTAL

RETURN BOND I

MWTI.X 10.66 252,987.95 11.01 261,190.51 7.9 2.2

20,287.095 PRUDENTIAL TOTAL

RETURN BOND Z

PDBZ.X 14.25 289,179.11 14.62 296,597.33 9.0 3.4

22,995.907 TEMPLETON

GLOBAL BOND ADV

TGBA.X 13.23 304,312.31 12.34 283,769.49 8.6 6.9

25,103.409 WESTERN ASSET

CORE PLUS BOND

INSTL

WACP.X 11.23 281,961.04 11.81 296,471.26 9.0 3.2

1,783,844.31 1,781,970.42 54.2 4.0

1,783,844.31 1,781,970.42 54.2 4.0

DOMESTIC EQUITY FUNDS

Large Cap Funds

5,308.937 BLACKROCK

EQUITY DIVIDEND

INSTL

MADV.X 20.17 107,068.56 24.70 131,130.74 4.0 2.0

3,950.719 HARTFORD CAPITAL

APPRECIATION Y

HCAY.X 40.02 158,092.77 43.15 170,473.52 5.2 0.7

5,065.429 JHANCOCK CLASSIC

VALUE I

JCVI.X 18.47 93,583.37 26.10 132,207.70 4.0 1.1

3,093.134 NUVEEN

TRADEWINDS

VALUE

OPPORTUNITIES I

NVOR.X 33.75 104,391.40 32.23 99,691.71 3.0 1.4

463,136.09 533,503.67 16.2 1.2

Mid Cap Funds

6,119.876 COHEN & STEERS

REALTY INCOME I

CSDI.X 15.57 95,278.37 17.65 108,015.81 3.3 2.3

2,280.067 HARTFORD MIDCAP

Y

HMDY.X 25.02 57,055.12 30.55 69,656.05 2.1 0.0

152,333.49 177,671.86 5.4 1.4

Small Cap Funds

2,916.138 ROYCE SPECIAL

EQUITY INSTL

RSEI.X 22.38 65,251.91 23.27 67,858.53 2.1 0.6

680,721.49 779,034.06 23.7 1.2

INTERNATIONAL FUNDS

Small Cap Funds

5,184.036 BRANDES

INTERNATIONAL

SMALL CAP EQUITY I

BISM.X 12.89 66,816.92 12.95 67,133.27 2.0 1.5

1

17 of 43

PORTFOLIO APPRAISAL March 31, 2015

Security Unit Total Market Pct. Cur.

Quantity Security Symbol Cost Cost Price Value Assets Yield

International

1,800.315 AMERICAN FUNDS

NEW PERSPECTIVE

F2

ANWF.X 38.25 68,863.35 37.91 68,249.94 2.1 0.9

869.771 AMERICAN FUNDS

NEW WORLD F-2

NFFF.X 58.98 51,303.06 54.98 47,820.01 1.5 1.2

5,361.329 BRANDES

EMERGING

MARKETS I

BEMI.X 9.43 50,553.10 7.62 40,853.33 1.2 1.7

8,009.371 BRANDES INSTL

INTERNATIONAL

EQUITY

BIIE.X 15.08 120,814.43 16.72 133,916.68 4.1 2.0

4,252.767 CLEARBRIDGE

INTERNATIONAL

SMALL CAP I

LCOI.X 15.78 67,119.79 15.79 67,151.19 2.0 0.8

6,781.548 HARTFORD

INTERNATIONAL

VALUE I

HILI.X 14.60 99,034.00 14.74 99,960.02 3.0 0.7

4,024.266 PRUDENTIAL

GLOBAL REAL

ESTATE Z

PURZ.X 22.25 89,522.57 25.46 102,457.81 3.1 2.1

547,210.29 560,408.98 17.0 1.4

614,027.21 627,542.25 19.1 1.4

BALANCED EQUITY FUNDS

Balanced Funds

4,609.688 THORNBURG

INVESTMENT

INCOME BUILDER I

TIBI.X 19.83 91,390.26 21.55 99,338.78 3.0 4.7

91,390.26 99,338.78 3.0 4.7

TOTAL PORTFOLIO 3,169,983.25 3,287,885.48 100.0 2.9

2

18 of 43



PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-020

Market Overview Enclosure: Yes

Action Item No

Prepared by:

Morgan Stanley

Wealth Management (MS)

Requested by:


BACKGROUND: As Members of the Retirement Board of Authority you have a fiduciary responsibility as described in Government Code section 53215, et seq. In fulfilling your fiduciary responsibility, it is important to understand the impact of global capital market conditions on the assets in the trust. STATUS: Morgan Stanley Wealth Management (MS) will provide an overview of the current global capital market conditions. RECOMMENDATION: The Retirement Board of Authority shall hear and receive the information presented and file the information accordingly.

19 of 43

Asset Allocation and Portfolio Updates

Cary M. Allison, CIMA®Senior Vice President, Senior Institutional ConsultantMarch 31, 2015

20 of 43

Fixed Moderate AggressiveIncome Conservative Moderate Growth Growth Growth

EQUITIESLarge Cap Growth 0% 1% 3% 5% 5% 7%Large Cap Value 0% 4% 7% 8% 11% 14%Small/Mid Growth 0% 0% 1% 2% 4% 6%Small/Mid Value 0% 2% 3% 5% 8% 10%

0% 7% 14% 20% 28% 37%

International 0% 7% 15% 19% 26% 31%

REITs 0% 2% 4% 6% 7% 8%

Total Equities 0% 16% 33% 45% 61% 76%

FIXED INCOMEDomestic Intermediate 78.5% 58.5% 45.0% 38.0% 25.5% 14.5%International Intermediate 21.5% 25.5% 22.0% 17.0% 13.5% 9.5%

Total Fixed Income 100% 84% 67% 55% 39% 24%

Grand Total 100% 100% 100% 100% 100% 100%

PORTFOLIO STATISTICSAvg Annual Return 4.98% 5.37% 6.47% 6.99% 7.69% 8.46%Standard Deviation (Risk) 3.94% 4.26% 6.09% 7.41% 9.48% 11.89%Sharpe Ratio 0.76 0.79 0.73 0.67 0.60 0.54

Nominal BenchmarksMSCI ACWI (All County World Index) 0% 15% 30% 45% 60% 75%Barclay's Aggregate Bond 100% 85% 70% 55% 40% 25%

NOTE: The Futuris portfolios listed above are sample representations only and may be altered from time to time at the discretion of the Trustee.

MODEL PORTFOLIO ALLOCATIONS

Cary M. Allison, CIMASenior Institutional Consultant 21 of 43

Fixed Moderate AggressiveEQUITIES Style Ticker Expenses Income Conservative Moderate Growth Growth GrowthDomestic EquitiesHartford Capital Appreciation Large Growth HCAYX 0.70% 0% 1% 3% 5% 5% 7%Blackrock Equity Dividend Large Value MADVX 0.72% 0% 2% 3% 4% 5% 7%John Hancock Classic Value Large Value JCVIX 0.88% 0% 2% 4% 4% 6% 7%

Subtotals 0% 5% 10% 13% 16% 21%

Hartford Midcap Mid Growth HMDYX 0.79% 0% 0% 1% 2% 4% 6%Nuveen Tradewinds Value Opportunities Mid Blend NVORX 1.17% 0% 1% 2% 3% 4% 5%Royce Special Equity Small Blend RSEIX 1.05% 0% 1% 1% 2% 4% 5%

Subtotals 0% 2% 4% 7% 12% 16%

Cohen & Steers Realty Majors Index Fund Real Estate ICF 0.35% 0% 0% 0% 0% 0% 0%Cohen & Steers Realty Shares Real Estate CSRIX 0.75% 0% 1% 2% 3% 3.5% 4%Prudential Global Real Estate Real Estate PURZX 1.07% 0% 1% 2% 3% 3.5% 4%

Subtotals 0% 2% 4% 6% 7% 8%

International/Global EquitiesBrandes International Small Cap Int'l SMID BISMX 1.15% 0% 1% 1.5% 2% 2.5% 3%ClearBridge International Small Cap Int'l SMID LCOIX 1.20% 0% 0% 1.5% 2% 2.5% 3%American Funds New Perspectives Fund Global Growth ANWFX 0.46% 0% 1% 2% 2% 3% 4%American Funds New World Fund Emerging Markets NFFFX 0.66% 0% 1% 1% 1.5% 2.0% 3%Brandes Emerging Markets Fund Emerging Markets BEMIX 1.12% 0% 0% 1% 1.5% 2.0% 3%Brandes International Equity Int'l Value BIIEX 1.00% 0% 2% 3% 4% 5% 5%Hartford International Value Int'l Value HILIX 0.85% 0% 1% 3% 3% 5% 5%Thornburg Investment Income Builder Global Blend TIBIX 0.89% 0% 1% 2% 3% 4% 5%

Subtotals 0% 7% 15% 19% 26% 31%

Total Equities 0% 16% 33% 45% 61% 76%

FIXED INCOMEMetropolitan West Total Return Bond Domestic Bond MWTIX 0.45% 18% 13% 10% 8% 6% 3%Delaware Diversified Income Domestic Bond DPFFX 0.72% 18% 13% 10% 8% 5% 3%Prudential Total Return Bond Fund Domestic Bond PDBZX 0.72% 18% 13% 10% 9% 6% 4%Western Asset Core Plus Bond Domestic Bond WACPX 0.46% 18% 13% 10% 9% 6% 3%Hartford World Bond Fund Global Bond HWDIX 0.78% 13% 13% 10% 8% 5% 3%Brandywine Global Opportunities Bond Global Bond GOBSX 0.65% 5% 6% 5% 4% 3% 2%Templeton Global Bond Inst Global Bond TGBAX 0.67% 10% 13% 12% 9% 8% 6%

Total Bonds Subtotals 100% 84% 67% 55% 39% 24%

SUMMARYTotal Equities 0% 16% 33% 45% 61% 76%Total Fixed Income 100% 84% 67% 55% 39% 24%Grand Total 100% 100% 100% 100% 100% 100%

Blended Expense Ratio 0.62% 0.67% 0.70% 0.72% 0.75% 0.78%

STATISTICSPerformance (as of 03/31/15)

Annualized ReturnsOne Year 4.92% 4.53% 5.03% 5.46% 5.74% 5.84%Two Years 2.92% 3.80% 5.34% 6.50% 7.88% 9.27%Three Years 4.57% 5.27% 6.44% 7.27% 8.28% 9.27%Four Years 5.11% 5.31% 5.87% 6.24% 6.63% 6.97%Five Years 5.64% 6.01% 6.69% 7.17% 7.71% 8.29%Six Years 10.03% 11.23% 12.91% 14.07% 15.52% 17.34%Seven Years 8.98% 8.77% 8.72% 8.59% 8.36% 7.75%

Annual Returns2008 ‐3.70% ‐8.88% ‐14.75% ‐20.09% ‐25.83% ‐32.79%2009 18.28% 20.03% 22.25% 24.18% 26.47% 29.88%2010 9.71% 10.70% 11.74% 12.48% 13.39% 14.71%2011 5.44% 3.21% 1.10% ‐0.38% ‐2.47% ‐4.71%2012 10.27% 11.05% 11.67% 11.94% 12.49% 12.93%2013 ‐0.56% 2.49% 6.25% 8.89% 12.75% 16.92%2014 5.54% 6.04% 6.13% 6.36% 6.14% 6.09%

MODEL PORTFOLIOS

NOTE: The Futuris portfolios listed above are sample representations only and may be altered from time to time at the discretion of the Trustee.

Prepared by Cary M. Allison, CIMASenior Institutional Consultant

22 of 43



PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-021

Election of a Chair for the Retirement Board of Authority (RBOA)

Enclosure:

Yes Action Item Yes

Prepared by:


Requested by:


BACKGROUND: The Board of Trustees of Ohlone Community College District approved a Board Resolution authorizing the establishment of the District’s OPEB Investment Trust and the creation of the Retirement Board of Authority (RBOA) with a mandate to manage and operate the District’s OPEB Investment Trust. STATUS: The Retirement Board of Authority (RBOA) has been duly appointed by the Governing Board of Ohlone Community College District and will elect a Chair or reaffirm Ron Little as Chair of the Retirement Board of Authority (RBOA). RECOMMENDATION: The formally designated Retirement Board of Authority shall take action to elect a Chair or reaffirm Ron Little as Chair of the Retirement Board of Authority (RBOA).

23 of 43

Updated 2-10-2011

OHLONE COMMUNITY COLLEGE DISTRICT FUTURIS TRUST RETIREMENT BOARD OF AUTHORITY

BYLAWS

PREAMBLE

The objectives of Ohlone Community College District (OCCD) in establishing an irrevocable Trust for the pre-funding of its Other Post Employment Benefits (OPEB) liabilities is to comply with the requirements of GASB Statements No. 43 & No. 45 and to create a retirement system that complies with the California Constitution and Government Code provisions related to such systems with a Governing Board (referred to as the “Retirement Board of Authority” (RBOA) consisting of officials of the OCCD. The Trust is to be managed in accordance with the following principles:

Trust assets are managed in accordance with all applicable laws, trust documents, and a written Investment Policy Statement (IPS).

Trust assets are diversified to a specific risk/return profile. A written IPS contains the detail to define, implement, and monitor the trust’s

investment strategy. Appropriate fiduciary standards are applied in the management of trust assets and

the supervision of persons hired to assist in the management of the Trust. Due diligence is documented. Control procedures are in place to monitor and account for trust investment and

administrative expenses. There are safeguards to avoid conflicts of interest, such as the use of funding

instruments that are non-proprietary funds of any service provider to the Trust.

1: A Retirement Board of Authority

1.1: The OCCD Board of Trustees has established by resolution, a Retirement Board of Authority (RBOA) to supervise the Trust. 1.2: The RBOA has been established to manage, direct and control the Fiduciary, Trust Settlor and Administrative functions; such as Consultants, Actuaries, Auditors and Accountants; Legal Counsel and Financial Advisors of the Trust. 1.3: The RBOA will sign such documents as are necessary to adopt and maintain an irrevocable trust which complies with the California Constitution, California Government Code, GASB No. 43 & No. 45 and Section 115 of the Internal Revenue Code. 1.4: As mandated by the California Government Code, the RBOA shall perform all its duties with the care, skill, and diligence that a Prudent Person would utilize. 1.5: The RBOA shall also act solely in the interest of plan participants and beneficiaries with the sole purpose of providing benefits to them and paying only necessary and reasonable expenses for administrating the Trust. 1.6: The RBOA shall oversee the operation of the Trust as outlined in the Trust agreement. The RBOA shall delegate investment decision-making to a Trustee with a discretionary

24 of 43

Updated 2-10-2011

mandate and thereafter monitor the performance of the Discretionary Trustee. For the management of the Trust’s assets, an appropriate Registered Investment Advisor (RIA) shall be appointed and monitored by the Discretionary Trustee. 1.7: The RBOA shall adhere to the terms of the written documents governing the Trust and ensure that they comply with all applicable laws, rules and regulations that may impact the Trust. 1.8: The RBOA shall facilitate and oversee the preparation and centralized maintenance of the OCCD’s Comprehensive Compliance Plan, including the Substantive Plan. To aid the OCCD in meeting its fiduciary requirements, the Substantive Plan, as described in GASB 43 and 45, will be set forth as an essential element in the development of a Comprehensive Compliance Plan. 1.9: The RBOA will have the exclusive authority to establish, execute and interpret the Trust’s written IPS, which profiles the long-term investment objectives of the Trust. 1.10: The RBOA shall facilitate any efforts and processes necessary to ensure the OCCD executes applicable written agreements providing any required consent to compliance with the terms of the Trust. 1.11: The RBOA will require that compensation paid to the Trust’s service providers is identifiable, transparent, reasonable, and adheres to the terms of the written documents governing the Trust. 1.12: The RBOA will report the status of the Trust to the Board of Trustees at least annually. 1.13: The RBOA will have the authority to request an audit on the performance of the vendors through an independent audit twice during the term of the contract.

2: Retirement Board of Authority (RBOA) – Member Appointments

2.1: The members of the RBOA are appointed by resolution of the Board of Trustees of the OCCD. RBOA members may be replaced or terminated by the Board of Trustees of the OCCD at any time as RBOA members serve at the pleasure of the OCCD. 2.2: RBOA members shall be appointed to the RBOA by the OCCD Board of Trustees. The RBOA will consist of three appointees of the district based solely on their titles, one recommended by UFO and one recommended by CSEA, both approved by the OCCD Board of Trustees. If the title of an existing RBOA member changes and that new title is not one of the designated titles included in the resolution of the Board of Trustees of the OC CCD, the RBOA member will no longer be an RBOA member unless there is a new resolution from the Board of Trustees of the OCCD. If deemed necessary, alternates may be appointed by the Board of Trustees. 2.3: The number of RBOA members will consist of such number of individuals that are deemed necessary by the Board of Trustees of the OCCD. 2.4: The RBOA will designate one of its members by majority vote to serve as Chairperson and a second member as Vice Chairperson.

25 of 43

Updated 2-10-2011

2.5 The Chairperson and Vice Chairperson will serve in this capacity for two years at which time the RBOA will act again to select a Chairperson and Vice Chairperson for a second term. The Chairperson and Vice Chairperson can serve multiple terms. 2.6: The Chairperson will act as the presiding officer for RBOA meetings. 2.7: RBOA meetings shall be conducted by the Chairperson. When the Chairperson is not present, the Vice Chairperson will conduct the meeting. 2.8: Based on the minimum number of signatures required therein and/or specific people required by the RBOA, authorizations for withdrawals, distributions, benefit payments and reasonable fees are restricted to individuals with specimen signatures listed on the Trust’s Signature Authorization Form. 2.9: A majority of the RBOA members must be present or attend by teleconference, per the provisions of the Ralph M. Brown Act, in order to conduct a RBOA meeting and is considered a quorum. A vote, under the protocols of the Ralph M. Brown Act, of the majority of the RBOA members, shall be sufficient to transact business. 2.10: Each RBOA member shall have one vote in accordance with the protocols of the Ralph M. Brown Act. No proxy votes shall be permitted. If a member is attending by teleconference, all votes must be by roll-call. 2.11: In recognition of the importance of the work of the RBOA, regular attendance at RBOA meetings is expected from all members. 2.12: No RBOA member shall have the authority to bind the RBOA to any contract or endeavor without the approval of the RBOA. 2.13: No member serving on the RBOA will receive a salary or compensation from the RBOA. 2.14: The RBOA may approve reimbursement for reasonable expenses incurred by RBOA members. All expenditures of funds shall be subject to RBOA approval. 2.15: The RBOA shall designate the OCCD, 43600 Mission Blvd., Fremont CA 94539 as the location at which it will receive notices, correspondence, and other communications and shall designate the Chairperson of the RBOA as the officer for the purpose of receiving service on behalf of the RBOA.

3: Retirement Board of Authority (RBOA) – Meeting Agendas

3.1: All RBOA meeting agendas shall be prepared and posted in a public location, to comply with the Ralph M. Brown Act

3.2: The RBOA shall hold their meetings at a minimum of once a year, giving advanced notice to comply with the Ralph M. Brown Act. 3.3: The RBOA shall engage, at least annually, in analysis of any applicable modifications to the IPS through meetings and consulting with the Trustee and Registered Investment Advisor (RIA), as applicable.

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Updated 2-10-2011

3.4: Full and complete minutes detailing records of deliberations and decisions from each meeting of the RBOA shall be maintained in compliance with the Ralph M. Brown Act.

4: Retirement Board of Authority (RBOA) – Actuarial, Contribution & Withdrawal Parameters

4.1: The RBOA will acknowledge the amount of any contribution from the OCCD and deliver contribution and allocation instructions to the Trustee. Such contribution and allocation instructions shall be delivered in accordance with the Trust’s written provisions and agreements. 4.2 The RBOA will establish procedures to review all expenditures and disbursements from the Trust. 4.3: In accordance with GASB Statement No. 45 schedules, the RBOA will work with the OCCD’s Board of Trustees in obtaining the necessary calculations to identify the “Actuarial Present Value of Total Projected Benefits” (APVTPB), the “Unfunded Actuarial Accrued Liability” (UAAL) and the “Annual Required Contribution”(ARC). 4.4: The RBOA will provide any necessary plan participant information to the Trustee on a timely basis. The RBOA shall provide response to all information requested by the Discretionary Trustee in a timely fashion.

5: Retirement Board of Authority (RBOA) - Disclosure & Conflict of Interest

5.1: No RBOA member shall vote or participate in a determination of any matter in which the RBOA member shall receive a special compensation or gain. 5.2: RBOA members have a duty of loyalty precluding them from being influenced by motives other than the accomplishment of the Trust’s objectives. 5.3: RBOA members, in the performance of their duties, must act pursuant to the documents & instruments establishing and governing the Trust.

6: Retirement Board of Authority (RBOA) - Rules of Order/Bylaws

6.1: Amendment of these Bylaws may be proposed by any member of the RBOA. 6.2: All amendments to the Bylaws must be approved by a majority vote of the RBOA members present, before the amendment shall become effective. 6.3: Such amendments shall be binding upon all members of the RBOA. 6.4: The effective date of any amendment shall be on the first day of the month following adoption, unless otherwise stated.

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Updated 2-10-2011

7: Retirement Board of Authority (RBOA) - Appearance before the RBOA

7.1: All persons who wish to make appearances before the RBOA shall be scheduled in compliance with the provisions of the Ralph M. Brown Act. 7.2: Appearances before the RBOA may be in person or through a representative. 7.3: Communications with the RBOA may be in any form that complies with the provisions of the Ralph M. Brown Act.

8: Retirement Board of Authority (RBOA) – Fiduciary & Governance Parameters

8.1: The Trust will be structured so that the RBOA shall reduce its legal liability for investment risk by appropriately delegating investment decision-making. 8.2: The RBOA shall delegate investment decision-making to a Trustee with a discretionary mandate and thereafter monitor the performance of the Discretionary Trustee. For the management of the Trust’s assets, an appropriate RIA shall be appointed and monitored by the Discretionary Trustee.

8.3: The RBOA will monitor the performance and acts of the Discretionary Trustee in accordance with the limits and constraints of applicable laws, trust documents and the written IPS as well as the Trust’s investment goals, objectives, fees and expenses. 8.4: The RBOA shall monitor the Discretionary Trustee to determine that Trust assets are diversified as directed by the IPS and applicable laws. 8.5: The RBOA through periodic reports will compare investment performance against appropriate indices, peer groups and IPS objectives. 8.6: The RBOA will require that all service agreements and contracts are in writing, and do not contain provisions that conflict with fiduciary standards. Fees paid to each service provider shall be consistent with agreements, contracts and with all applicable laws.

9: Discretionary Trustee & Investment Management 9.1: The agreement appointing the Discretionary Trustee shall require the Discretionary Trustee to invest Trust assets in compliance with applicable laws, trust documents, and the written IPS. 9.2: The agreement appointing the Discretionary Trustee shall require that the Discretionary Trustee document the specific duties and requirements of the parties involved in the investment process. 9.3: The RBOA shall require the Discretionary Trustee to acknowledge, in writing, that it is a fiduciary to the Trust and to the OCCD. 9.4: The RBOA shall prohibit the Discretionary Trustee from investing trust assets in its own proprietary investment products or those of its RIA so as to avoid any potential conflicts of interest.

28 of 43

Updated 2-10-2011

9.5: The RBOA shall require the Discretionary Trustee to manage Trust assets with the care, skill and diligence of a Prudent Person under California law.

10: Registered Investment Advisor (RIA): 10.1: The RIA engaged by the Discretionary Trustee must have the following qualifications and responsibilities:

(a) It shall work with the Discretionary Trustee to establish a long-term, target net rate of return objective for the Trust, constructing an investment portfolio which gives due consideration to the OCCD’s time horizon of investment, as well as its attitudes and capacity for risk.

(b) It shall recommend the appropriate combination of asset classes that optimizes the Trust’s return objectives, while minimizing risk consistent with the Trust’s constraints. (c) It shall provide investment recommendations derived from a disciplined approach to investment selection; considering risk-adjusted performance comparable to managers with similar style; a long-term superior performance profile; an analysis of investment expenses with a preference for investments with no-load, no redemption charges, and no transaction fees or revenue-sharing schedules. (d) It shall have access to appropriate databases and external research, and shall be supported with adequate technology and report production tools.

11: Program Coordinator 11.1: The RBOA has appointed a Program Coordinator with responsibility to assist the RBOA with the processes, procedures and protocols of the Trust’s fiduciary decision making. 11.2: The RBOA shall require the Program Coordinator to facilitate all aspects of the RBOA’s Fiduciary and Administrative mandates and work to assist the RBOA in ensuring that trust assets are managed in accordance with all applicable laws, trust documents and the written IPS. 11.3: The RBOA shall require the Program Coordinator to provide comprehensive assistance in conducting Board meetings and agendas in compliance with the provisions of the Ralph M. Brown Act. 11.4: The Program Coordinator will provide support to the RBOA in the preparation and centralized maintenance of the OCCD’s Comprehensive Compliance Plan, including the Substantive Plan.

12: Program Definitions: 12.1: “Actuarial Present Value of Total Projected Benefits” (APVTPB) shall mean the total projected costs to finance benefits payable in the future based on members’ service through the valuation date and their future service, discounted to reflect the expected effects of the time value of money. It is the amount that would have to be invested on the valuation date so

29 of 43

Updated 2-10-2011

that the amount invested plus investment earnings will provide sufficient assets to pay the total projected benefits when due. 12.2: “Annual Required Contribution” (ARC) is the actuarially-determined level of employer contribution that would be required on a sustained, ongoing basis to systematically fund the normal cost and to amortize the Unfunded Actuarial Accrued Liability (UAAL) attributed to past service over a period not to exceed thirty years. It is the amount needed to pay benefits as they come due plus amortize the UAAL. The ARC has two components: Normal cost and amortization of the UAAL for both active employees and retirees. 12.3: “Comprehensive Compliance Plan” shall mean a broad compliance and fiduciary process incorporating the OCCD’s substantive plan obligations; the actuarial cost of those obligations; the plan for meeting those costs; the fiduciary strategies and steps in meeting plan requirements. 12.4: “Discretionary Trustee” shall mean a trust structure whereby the Trustee will accept the delegation of investment duties and work as the sole authority in the selection, monitoring and disposition of Trust’s assets. 12.5: “Investment Policy Statement”(IPS) shall mean a written statement that establishes the Futuris OCCD Investment Trust’s investment related policies, goals, objectives and criteria for evaluating investment performance that are critical for the successful management of the Trust’s investments. 12.6: “Quorum” shall mean the majority of the Board members as are required to conduct a Board meeting or to transact business on behalf of the Board. 12.7: “Registered Investment Advisor” (RIA) shall mean the investment entity charged with the responsibility for recommending comprehensive and continuous investment advice for the Futuris OCCD Investment Trust. 12.8: “Retirement Board of Authority” is established by the governing body of the OCCD and shall mean the entity charged with the discretion, responsibility and authority to oversee the management of the OCCD Investment Trust. Specifically, the Board shall determine the investment policy and strategy for the Trust and is empowered to inquire and resolve any matter it considers appropriate to carry out its responsibilities. 12.9: “Substantive Plan” shall mean the plan through which assets are accumulated and benefits are paid as they come due in accordance with the commitments or understandings between the employer, eligible employees and their beneficiaries. 12.10: “The Trust” shall mean the OCCD’s Investment Trust established for the pre-funding of its OPEB liabilities and maintained in compliance with GASB Statement No. 43 & No 45, the California Constitution and the California Government Code with a governing Board consisting of officials of the OCCD. 12.11: “Unfunded Actuarial Accrued Liability” (UAAL) shall mean the excess of the Actuarial Accrued Liability (AAL) over the Actuarial Value of Assets (AVA). The UAAL can derive from three sources: unfunded past Normal costs, actuarial gains and losses (differences between actuarial assumptions and actual experience), and changes to the level of benefits promised.

30 of 43



PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-022

Election of a Vice-Chair for the Retirement Board of Authority (RBOA)

Enclosure:

No

Action Item Yes

Prepared by:


Requested by:


BACKGROUND: The Board of Trustees of Ohlone Community College District approved a Board Resolution authorizing the establishment of the District’s OPEB Investment Trust and the creation of the Retirement Board of Authority (RBOA) with a mandate to manage and operate the District’s OPEB Investment Trust. STATUS: The Retirement Board of Authority (RBOA) has been duly appointed by the Governing Board of Ohlone Community College District and will elect a Vice-Chair to facilitate the Management/Operational duties of the Retirement Board of Authority (RBOA). RECOMMENDATION: The formally designated Retirement Board of Authority shall take action to elect a Vice-Chair of the Retirement Board of Authority (RBOA).

31 of 43



PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-023

Disbursement Report Enclosure: Yes

Action Item Yes

Prepared by:


Requested by:


BACKGROUND: The District’s Investment Trust is able to pay for all expenses relating to the reimbursement of retiree benefits for eligible participants and reasonable expenses associated with the Management and Operation of the Investment Trust. STATUS: There have been withdrawals from the District’s Investment Trust for the payment of reasonable expenses associated with GASB No. 43 & 45/Regulatory statutes compliance and the Management/Operational duties of the Investment Trust. RECOMMENDATION: The Retirement Board of Authority will hear the information and take appropriate action as deemed necessary.

32 of 43

33 of 43



PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-024

Updates to the Comprehensive Compliance, including the “Substantive Plan” Enclosure: Yes

Action Item No

Prepared by:


Requested by:


BACKGROUND: Under the District’s Public Entity Investment program, Keenan Financial Services prepares a written summary of the “Substantive Plan”, as part of an overall Comprehensive Compliance Plan, which acts as both a road map and a record of the Retirement Board of Authority’s compliance with its fiduciary duties. STATUS: The Retirement Board of Authority will discuss updates the “Substantive Plan” and the Comprehensive Compliance Plan (“e-Library”) reflecting administrative compliance with GASB 43 & 45 protocols and Regulatory statutes for Fiscal Year ended June 30, 2014. RECOMMENDATION: The Retirement Board of Authority shall hear the presentation and file the information accordingly.

34 of 43

'aFuturis~ A Keenan Solution

Ongoing OPEB Questionnaire & Due Diligence

PUBLIC ENTITY EMPLOYER NAME: Ohlone Community College District

PLAN YEAR: -------- July 1, 2013- June 30, 2014--------

To help us understand & determine ongoing Other Post Employment Benefits (OPEB) provided for retirees of the Public Entity Employer, please complete the following questionnaire.

1 To determine OPEB ongoing liabilities, has a current Actuarial 0 Yes 0 No Valuation Report been produced & updated per GASB mandates? Date of most current Actuarial Valuation Report ~~\r\L 9 1 '"LV IJ

2 Who is the Actuary that completed the Valuation Report?

I o +-a.J2_ Cc~ ~ S'a._,f. \/ Y\ s '\) ~~ \'"W"'> I :c h c

3

4

Have there been any changes/ modifications to Bargaining Agreements recently (widun tlus past year) that affect Retirees OPEB?

• Certificated D ate of most current Bargaining Agreement v ~ ?v 1t-D \ "l

\ • Classified

D ate of most current Bargaining Agreement v I ?;,0 ~ L 0 \ '+ • Management

D ate of most current Bargaining Agreement NjA-• Other

tJj~ D ate of most current Bargaining Agreement

Have there been modifications of program provisions or changes in insurance carriers of tl1e Health Benefits Program provided to Retirees of the Employer in the past year?

If the answer to No. 4 is Yes, please list any changes below or on a separate page.

0 Yes f;ll No

D Yes ~ No

D Yes ~ No

D Yes ~ No

D Yes D No

D Yes ~ No

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5

6

7


Are Spouses, Domestic Partners or Dependents covered under the D Yes Health Benefits provided to Retirees of the Employer?

Have there been modifications of program provisions or changes in D Yes insurance carriers of d1e Dental Benefits provided to Retirees of the Employer?

If d1e answer to No.6 is Yes, please list the changes below:

~No

;\No

Are Spouses, Domestic Partners or Dependents covered under Dental Benefits provided to Retirees of the Employer?

0 Yes ~No

8 Have there been any modifications of any separate Prescription Drug 0 Yes \f7i No Plan provided for Retirees of d1e Employer (including benefits for ~

9

dependents)?

If d1e answer to No.8 is Yes, please indicate all changes below or on a separate page.

Are Long Term Care Benefits provided for Retirees of the Employer?

2

0 Yes p No

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1 0 Are there any changes to other insurance coverage provided for Retirees of the Employer, including their dependents? (i.e., Life Insurance, change of carriers, changes regarding how much of the premium is paid by the Employer versus the Retiree, etc.)

If the answer to No.1 0 is Yes, please list additional insurance coverage and any changes below or on a separate page:

0 Yes ;R No

11 \X!ithin the past year, have there been changes to any other D Yes F:7f No arrangements or commitments for the Employer to pay for the cost 7'\ of any post retirement benefits (other than pension benefits). This would be applicable to any employee or employee contract or bargaining agreement that may be in place between the employee(s), the bargaining unit and the Employer.

12 Within the past year, have there been changes to any other D Yes ¢__No arrangements or commitments for the Employer to pay for the costs, of any dependent of a retired Employee of the Employer?

If the answer to No. 12 is Yes, please list additional costs, benefits, etc. below or on a separate page

13 There are NO updates required at this time.

QUESTIONNAIRE COMPLETED BY:

PUBLIC ENTITY EMPLOYER ACKNOWLEDGEMEN T: _ _n~~~~~----

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-025

Future Transfer of Assets into the Trust Enclosure: Yes

Action Item No

Prepared by:


Requested by:


BACKGROUND: The District’s transfer of assets into the Investment Trust may require a tailored funding procedure. To meet the possibly tailored funding procedure, the Retirement Board of Authority (RBOA) will provide timing and asset transfer schedules related to the District’s Actuarial Determined Contribution (ADC) and Pay-As-You-Go funding strategies based on current District financial considerations. STATUS: The Retirement Board of Authority (RBOA) shall acknowledge a recent District transfer for $428,940.21 to the Investment Trust and discuss future anticipated transfers to the Trust for fiscal year 2014/2015. RECOMMENDATION:

The Retirement Board of Authority will review the information presented and file the information accordingly.

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OHLONE CCD FUTURIS TRUST DEPOSIT FISCAL YEAR 2014/2015

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-026

Actuarial Valuation Study Update Enclosure: No

Action Item No

Prepared by:


Requested by:


BACKGROUND: Paragraph 12, of GASB Statement 45, states that an Actuarial Study should be performed at least biannually. On June 25, 2012 the GASB voted to approve two new standards that will substantially improve the accounting and financial reporting of public employee pensions by state and local governments. Statement No.67 (Financial Reporting for Pension Plans) revised existing guidance for financial reports. Statement No.68 (Accounting and Financial Reporting for Pensions) revised and establishes new financial reporting requirements. GASB has mirrored the provisions set forth in Statements No. 67/68 in its recent Exposure Drafts revising the OPEB standards provided in Statements No 43/45. STATUS: The District’s current Actuarial Valuation Study has an effective date of January 1, 2013. The Retirement Board of Authority will discuss the status of updates regarding the procurement of a new Actuarial Valuation Study to maintain compliance with GASB protocols. RECOMMENDATION: The Retirement Board of Authority shall hear and receive the information.

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-027

Retirement Board of Authority Comments Enclosure: No

Action Item No

Prepared by:


Requested by:


BACKGROUND: Each member may report about various matters involving the Retirement Board of Authority. RECOMMENDATION: There will be no Retirement Board of Authority discussion except to ask questions or refer matters to staff, and no action will be taken unless listed on a subsequent agenda.

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-028

Program Coordinator/Consultant Comments Enclosure: No

Action Item No

Prepared by:


Requested by:


BACKGROUND: The Program Coordinator may address the Board of Authority on any matter pertaining to the Retirement Board of Authority that is not on the agenda. RECOMMENDATION: There will be no Retirement Board of Authority discussion except to ask questions or refer matters to staff, and no action will be taken unless listed on a subsequent agenda.

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PRESENTED TO:

DATE:

04/30/2015


SUBJECT:

ITEM #:

2014/2015-029

Date, Time and Agenda Items for Next Meeting Enclosure: No

Action Item No

Prepared by:


Requested by:


BACKGROUND: Board members and visitors may suggest items for consideration at the next Retirement Board of Authority meeting.

RECOMMENDATION: The Board will determine Agenda Items for the next meeting.

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OHLONE COMMUNITY COLLEGE DISTRICT RETIREMENT BOARD … · 30.04.2015 · Keenan Financial Services...

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