Pension Board Minutes 10.23.18 - Laserfiche WebLink

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unattractive and we are underweight in mortgages. We have slight overweight in treasuries and bigger overweight in corporate bonds. Member McCarthy inquired about 80-20 vs 60-40 and volatility of the rising interest rates and if we should look to change now or wait another year. Shawn Hughes stated the interest rates will continue to rise and we should stay where we are for the next three-four rate increases before we start to re-evaluate. Member McCarthy inquired about philosophy of utilizing value stocks over growth stocks when growth stocks have outperformed value stocks over the last three-five years. He questioned whether we should buy some growth stocks. Shawn Hughes commented that over the long-term value stocks outperform growth stocks. For the past three-five 14% cheaper than S&P and the earnings growth is just slightly less than the S&P so over the next 12 months the earnings in the portfolio companies are expected to grow 11% and the S&P are expected to grow 13% so earnings growth is similar, valuation is cheaper, dividend yield is a little higher so he thinks the characteristics of the underlying portfolio are pretty attractive. Acceptance of the reports was unanimous. Greensfelder Legal Comment Kara Krawzik provided an update regarding voting members off the Board. She indicated the ordinances do not specify how to remove members from the Board and she would agree that the Board would need to send a letter to the Council Member who appointed Mr. Black to the Board asking for a replacement. Subsequent to this discussion, Chairman Reedy discovered via an online archived obituary that member Holston Black passed away August 4, 2018. City Manager Rose offered to reach out to Council Member Smotherson to advise him of the need for the appointment of a new member due to the passing of Member Black. The Board agreed to proceed accordingly. Ms. Krawzik also stated that Greensfelder Trustee continuing education is coming up and it will be for two hours instead of six. It will take place at the Lodge Des Peres November 14, 2018 at 6:00pm. All should have received the em register anyone who needs to be registered. The continuing education is required by state law and adds a layer of protection in the event of litigation. Pension Funds Forecasting Discussion City Manager Rose stated that he requested that this item be added to the agenda because the Mayor and City Council Members are interested in knowing the appropriate funding level for both pension funds which are both currently funded at about 80%. In order to make a recommendation, a cost analysis will need to be prepared to determine the additional contribution for every percentage increase. City Manager Rose suggested that the actuaries