A meeting of the Governing Board of the Colorado Retirement Association was held on August 20, 2021, at 9:00 a.m.
The following were present at the meeting:
- Chris Felton, Board Chairman
- Paul Danley, Vice Chairman
- Darius Allen, Board Member
- Tobe Allumbaugh, Board Member – Participated by Zoom
- Jerry DiTullio, Board Member – Participated by Zoom
- Adam Ford, Board Member – Participated by Zoom
- Terri Schafer, Board Member
- Tim Mullen, Executive Director
- Ed Krisor, Legal Counsel
- Mike Whalen, Retirement Plan Services Director
- Matt Evans, Retirement Services Coordinator
- Lois Kruse, Office Administrator
Chris Felton, Board Chairman, called the meeting to order at 9:01 a.m.
Mr. Felton asked members of the Board if they reviewed the minutes from the June 18, 2021 meeting and if there were any comments. There being none, a motion was made by Tobe Allumbaugh to approve the minutes as presented. Darius Allen seconded the motion. Jerry DiTullio abstained from voting as he did not in participate in the June 18th meeting. All other Board members voted aye and the motion passed.
Tim Mullen introduced new employees and reintroduced existing employees to the Board. Introductions included employee’s professional background, CRA work history, and job duties.
Innovest Quarterly Update, ESG Overview and Analysis:
Peter Mustian and Jared Martin from Innovest Portfolio Solutions, CRA’s investment advisor, started their presentation.
Jared Martin began with an overview of the CRA and Innovest investment analysis process and investment changes for the last twenty years. Mr. Martin gave a Department of Labor (DOL) update on fiduciary responsibilities and best practices regarding “missing participants” and their retirement assets. Mr. Mullen summarized procedures CRA and Empower utilize regarding missing participants, mail holds, and uncashed checks, all of which fall within the DOL best practice guidelines.
Mr. Martin reviewed CRA’s 401(a) and 457 (b) plans fees, noting that CRA’s fees are equal to or below fees charged by plans of similar size. Jared then reviewed plan assets, noting that CRA’s 18 available funds align closely with the industry average of 19. Mr. Martin capped off his presentation discussing the economy, labor markets, inflation, and overall investment returns by industry sectors.
Peter Mustian continued Innovest’s presentation by reviewing the performance of CRA’s various funds and related manager scorecards. Mr. Mustian noted very strong performance with several of CRA’s funds. Minor concerns were noted relating to management changes within the CRA Book Value Fund and Tortoise MLP and Pipeline Fund.
The discussion moved to ESG (environmental, social, and corporate governance) and SRI (socially responsible investing) funds and the philosophical differences between the two strategies.
As required by CRA’s Investment Policy Statement (IPS), funds that have been on the watchlist for five quarters are required to be analyzed in depth. Innovest provided this analysis for the Neuberger-Berman Sustainable Equity R6 Fund noting a fairly concentrated investment base and underperformance. Innovest researched several alternatives and presented Vanguard FTSE Social Index Fund as an option to replace Neuberger-Berman Sustainable Equity. This Vanguard fund has a broader investment base, lower expense ratios, and better performance. After further analysis and discussion, Jerry DiTullio made a motion to the replace Neuberger-Berman Sustainable Equity R6 Fund with the Vanguard FTSE Social Index Fund in the CRA Fund lineup. Chris Felton seconded the motion and it passed unanimously.
IPS Review and Changes:
Jared Martin presented minor proposed changes to the IPS which had been recently approved by the Board at the May 21, 2021 meeting. Clarifying language relating to Galliard’s management of the CRA Book Value Fund was added along with deleting certain investments which CRA no longer utilizes.
Chris Felton made a motion to approve all changes to the IPS as presented. Paul Danley seconded the motion and it passed unanimously.
Chris Felton called for a short break, and the meeting resumed at 10:42 a.m.
CRA Activity Updates:
Tim Mullen introduced Doug Farmen, CRA’s new Chief Financial Officer. All open personnel positions at CRA have been filled. Tim also discussed the new hire training process, upcoming special district, municipality, and industry conferences. It was also noted that employer and CRA client service manager meetings are still primarily virtual, however several employer benefit fairs this fall are scheduled to be in person.
Entity Qualification Review:
Tim Mullen gave a brief overview of the Town of Johnstown and the Town of Severance. Mr. Mullen stated that Ed Krisor, CRA legal counsel, has reviewed the information provided for both municipalities and both qualify to participate in both CRA’s 401(a) and 457(b) plans. Additionally, pursuant to section 14.11 of the 401(a) plan, the Board would consent to and approve the participation of the Johnstown Police Department in the 401(a) plan. A motion was made by Darius Allen for acceptance of the Town of Johnstown, the Town of Severance, and the Town of Johnstown Police Department into both CRA plans. Terri Schafer seconded the motion and it passed unanimously.
Chris Felton asked the members of the Board if there were any questions or concerns regarding the expense reports. There being none, the reports were accepted as presented.
At 10:51 a.m. Chris Felton made a motion to go into executive session pursuant to 24-6-402(4)(b) C.R.S. for the purpose of discussion with and advice from legal counsel regarding Social Security. Jerry DiTullio seconded the motion and it passed unanimously.
The Executive Session ended at 11:14 a.m.
The public session of the CRA Board of Directors meeting resumed at 11:15 a.m.
The next meeting of the CRA Board of Directors will be held on Friday, September 17, 2021.
There being no further business to come before the board, a motion was made by Chris Felton and seconded by Terri Schafer to adjourn the meeting. The motion passed unanimously.