NCPERS Blog

NCPERS’ kicked off its Trustee Educational Seminar (TEDS) on Saturday, May 18^th in Honolulu, HI. Sam Austin, from FIS Group Inc, also an NCPERS Board Advisor, opened the conference with a presentation on elements for all trustees. Sam went through basic terms and concepts for pension trustees. Sam was followed by Kelly Weller from Great Lakes Advisors, another NCPERS Board Advisor. Kelly presented to trustees on the history, evolution and mechanics of pensions. Insurance advisers, Brandon Cole and Karen Graham, from Arthur J. Gallagher & Co, presented on common misconceptions and myths on fiduciary liability. Brandon and Karen discussed the importance of fiduciary insurance and the ways trustees can be sued for breach of fiduciary duty.

Vijoy Chattergy, the chief investment officer for the state of Hawaii Employees’ Retirement System and Sean Ruhmann from NEPC, LLC, discussed the role and interaction between a fund’s CIO and their investment consultant. To end the first day of TEDS, Robert Klausner from Klausner Kaufman Jensen & Levinson, discussed laws that every trustee should know.

On Sunday trustees participated in the Brandes Manager Challenge. Broken into groups, trustees competed in a global portfolio management simulations, with a certificated awarded to the term who builds the highest portfolio value. The winning team consisted of Jennifer Hanna from the Conroe Firefighters Retirement Fund, Pauline Lajoie from the Worcester Regional Retirement Fund, Tina Padilla from the Chicago Teachers’ Pension Fund, and Joseph McDonough from the Plymouth County Retirement Association. The TEDS program concluded with a presentation by Chet Waldman from Wolf Popper who presented on defending defined benefit plan by focusing on capital stewardship.

NCPERS’ kicked off our 2013 Legislative Conference today at the Capital Hilton in Washington, DC. NCPERS president, Mel Aaronson opened the conference with remarks on President Obama’s historic election and the return of Democrats as the majority party in the Senate. Mel reminded attendees that the information we learn today is vital to Hill visits tomorrow. Mara Liasson, from NPR returned to discuss her predictions on the election results from the Public Safety Conference. Mara also discussed the current political landscape; she is optimistic that there is some normalcy returning to Washington. Signs that point to this are Senate Democrats agreeing to pass a Budget for the first time since 2009 and tax reform. In addition, Paul Ryan, who is believed to be the thought leader of the House in the Republican Party, recently gave a speech that stressed prudence. Mara stressed the Republicans strong bench of people for 2016 and that if Hilary Clinton decides to run she will be the Democratic candidate. Mara believes that President Obama has a very ambitious agenda for this second term and that Republicans are regrouping and trying to decide what to do in the future. For traditions sake, Mara predicted that Hilary Clinton will run for president in 2016.

Gerri Madrid- Davis from the AARP spoke on the current U.S. pension landscape. Gerri discussed the 2009- 2012 state pension changes and the Arnold Foundation’s support of anti- pension legislation. Karen Carraher and Lai Yee Woo from OPERS discussed their approach to addressing pension spiking. Sally Wineman, from Arthur J. Gallagher & Co continued the morning with her presentation on Obamacare. Sally discussed the changes that will occur in 2013 and 2014 in order to implement Obamacare. Changes in 2013 are: W-2 Reporting on cost of healthcare coverage, summary of benefits and coverage, women’s preventive services, new health FSA limit, new PCORI(CER) fee, new tax- additional Medicare payroll tax .9%, and a new exchange notice.

George Bostick, from the U.S. Department of the Treasury kicked off the afternoon sessions discussing the administration’s pension activities for 2013. The afternoon continued with Aharon Friedman House Ways & Means staff and Tom Reeder Senate Finance staff talked about congressional pension agenda. Josh Gotbaum the Director of Pension Benefit Guaranty Corporation (PBGC) discussed what reforms are needed to bring back private- sector pension funds. NCPERS presented Senator Tom Harkin (D-IA) with the NCPERS Legislator of the Year Award. In his acceptance speech, Sen. Harkin expressed that we would not solve this pending retirement crisis by cutting Social Security and Medicaid, but that it is time to broaden the conversation.

On Tuesday attendees will be heading to Capitol Hill to discuss pension issues with their legislators. Presentations from the conference will be available on the NCPERS website next week.

The last day of the conference opened with a report on the GASB Update by Greg Stump from EFI Actuaries and Michael Moran from Goldman Sachs Asset Management. Greg Kinczewski from Marco Consulting Group gave a presentation on Engaging Corporations to Reform Executive Compensation. Greg explained a new strategy for 2013- companies will need to present quantifiable performance metrics for what specific reward will be given for what specific performance. Pradeep Ramamurthy from The Abraaj Group presented on global growth markets. Pradeep explained that supply and demand balances in emerging markets create large investment opportunities, for example in Latin America, Sub- Saharan Africa, Middle East, and Asia.

Stu Kaufman from the law firm of Klausner Kaufman Jensen & Levinson gave NCPERS members a legal update on current pension litigation. Stu discussed his firm’s involvement in the victory for the retired firefighters of the city of Baltimore. The city had taken action to reduce pension benefits and lower the COLA to 2%. The court decided the reductions discarded the city’s constitutional obligations by failing to employ the lease intrusive means possible. Stu explained that the decision is an important on a national scale because of the increasingly narrowed views on the rights of public pension participants.

The afternoon sessions kicked off with David Fann from TorreyCove Capital Partners. David gave a presentation on opportunities of alternative investments. Cathie Eitelberg from Segal Company gave a presentation about public/ private retirement security. Cathie explained that there is a real need for retirement security in the private sector. She went through a range of proposals for voluntary account options: social security “add- on”, public administration (Secure Choice Pension proposal), and private financial institution (multiple employer plans, multiple small employer plans). Cathie discussed state interest in the Secure Choice Pension proposal; there is interest in Massachusetts, Connecticut, New York, Maryland and Wisconsin. The conference ended with a session on social media by James Spellos from Meeting U.

Presentations from the Public Safety Conference will be available on the NCPERS website shortly after the conference. 

IAFF General President Harold Schaitberger opened the second day of the conference after being introduced by NCPERS President Mel Aaronson. Mr. Schaitberger discussed attacks on pensions and reminded attendees that the better prepared we are, by attending educational sessions, will help us to prepare for the challenge. The first speaker of the day was Mara Liasson from National Public Radio (NPR) discussing the 2012 national & state elections. Mara discussed the biggest moments of the campaign so far: the first presidential debate in Denver, Bill Clinton vs. Clint Eastwood’s empty chair, and Mitt Romney’s 47% tape. Mara predicted that whichever party won the Senate would win by a very small margin, the Republicans would maintain the majority in the House, and that President Obama would win the national election by a hair. Martha Spano from Buck Global Investment Advisors spoke on the ROI of Governance. Martha explained that the best defense is having a good governance system and she shared the success factors of good governance as: risk management, effective committees/ decision making bodies, written policies in place, accountabilities (proactive strategy for managing conflict of interest), information flows, and supervision & monitoring.

The second round of sessions this morning began with a panel on NCPERS Fiduciary Liability Insurance, with Brandon Cole from Arthur J. Gallagher Risk Management Services, Craig Arneson and Ann Hughes from Ullico Casualty. NCPERS Executive Board Member, Rick Miller, from Ontario Municipal Employees Retirement System (OMERS) gave a presentation on infrastructure. Rick explained the lessons learned from the 2008 global crash. OMERS moved 47% of their asset mix into private markets, in addition to creating their own internal team. While OMERS can compete in trophy assets, he hopes that in 2013 OMERS will have a strategy for smaller US and Canadian pension funds to be able to participate in the same large long- term assets.

At the end of the day, Jeff Schmidt from State Street Corporation gave his presentation on Achieving Greater Control and Transparency in Hedge Fund Investments. The final presentation was How Public Safety Unions Can Negotiate Proactively from three NCPERS Executive Board members: Kathy Harrell, National FOP Pension Chairman, also NCPERS 2^nd Vice President, John Niemiec, Fairfax County Professional Firefighters & Paramedics, and Aaron Hanson, City of Omaha Police & Fire Retirement.

Stay tuned to the NCPERS blog for live conference blogging from Wednesdays sessions. Presentations from the entire conference will be available on the NCPERS website shortly after the conference.