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Adopt a resolution to approve the proposed County PARS 115 CalPERS Reserve Trust Investment Policy
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Published Notice Required? Yes ____ No __X_
Public Hearing Required? Yes ____ No __X_
DEPARTMENTAL RECOMMENDATION:
The Treasurer recommends the Board of Supervisors adopt a resolution to approve the proposed County PARS 115 CalPERS Reserve Trust Investment Policy.
SUMMARY/DISCUSSION:
On February 10, 2015, this Board adopted Resolution 2015-21 establishing the PARS 115 CalPERS Reserve Trust (the Trust). The Trust is used exclusively to fund contractual obligations to provide pension benefits.
Retirement trust funds have different objectives and statutory prohibitions than the County Treasurer’s Pool and therefore require a separate investment policy that reflects those differences. The purpose of these funds requires staff manage the funds in a risk profile unique from the investment pool. These differences include the ability to purchase and hold equities, private placement securities, and fixed income investments with risk profiles greater than those in a cash management pool, such as the Treasurer’s Pool. Since these funds will be held longer and have more predictable cash flow needs, they can be invested in securities that provide the potential for a greater return on investment than might otherwise be achievable.
Under the direction of the Pension Investment Oversight Committee, a strategic move was made to diversify pension assets by shifting a portion of the portfolio into an externally managed PARS 115 CalPERS Reserve long-term pension trust account. This account adheres to a distinct investment policy, as outlined in Attachment C, which is guided by a different risk-return framework tailored for long-term obligations. In late June of this year, the Treasurer transferred $6 million to this account to be externally managed by PARS, prompting a revised investment policy for funds managed by the Treasurer. At the current time, the County Treasurer manages approximately $30 million and PARS manages approximately $6 million. The proposed PARS 115 Policy - Internally Managed is included as Attachment A, with a redline version included as Attachment B. The resolution to approve the proposed policy is included as Attachment D.
FINANCIAL IMPACT:
The cost to prepare this agenda item is nominal and is included in the Treasurer’s FY2025/26 Working Budget.
ALTERNATIVES:
The Board could elect to make changes to the proposed policy.
OTHER AGENCY INVOLVEMENT:
None.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION