A meeting of the Governing Board of the Colorado Retirement Association was held on February 17, 2023 at 9:15 a.m.

The following were present at the meeting:

• Chris Felton, Board Chairperson
• Jerry DiTullio, Board Member – Participated by Zoom
• Meghan Martinez, Board Member – Participated by Zoom
• Terri Schafer, Board Member – Participated by Zoom
• Tim Mullen, Executive Director
• Ed Krisor, Legal Counsel
• Mike Whalen, Retirement Plan Services Director
• Matt Evans, Retirement Services Coordinator
• Lois Kruse, Office Administrator

The following were not in attendance:

• Darius Allen, Board Member
• Tobe Allumbaugh, Board Member
• Adam Ford, Board Member

Board Chairperson Chris Felton, called the meeting to order at 9:15 a.m.

Mr. Felton asked members of the Board if they reviewed the minutes from the December 9, 2022 meeting and if there were any comments. There being none, a motion was made by Chris Felton to approve the minutes as presented. Terri Schafer seconded the motion and it passed unanimously.

The agenda was modified to have the Legislative update at the end of the meeting.

Innovest – Quarterly Update and Target Date Portfolio Review:
Wendy Dominguez and Peter Mustian from Innovest Portfolio Solutions, LLC, CRA’s investment advisor, began their presentation with their Long-Term Outlook and the Target Date Portfolio Asset Allocation Study. The long-term outlook of the markets is a primary driver for potential changes in the Asset Allocation Study.

Mr. Mustian noted 2022 was a very difficult year in the market for both stocks and bonds. The bond market suffered its worst performance in over 100 years. The Federal Reserve and other major Central Banks raised interest rates at the fastest pace in over 40 years.

Mr. Mustian discussed the performance of the periodic table of returns for the last 10 years, emphasizing that diversification is an effective tool for patient investors in all market environments, and is especially important for the upcoming target date portfolio discussion.

Mr. Mustian discussed Innovest’s long-term (5-10 year) outlook on the markets and economy. To summarize, five key points were noted that present potential opportunities in the markets, as follows:

• While recessions are painful, they set the stage for the next period of growth.
• Consider maintaining equity exposure and remain diversified by geography, capitalization, and style.
• Significantly higher bond yields than in years past point to better future returns for the asset class.
• Reduced allocations to hedging strategies and real estate.
• Effective portfolio management includes:
  • Periodically re-examining investment objectives and risk tolerances.
  • Remaining diversified and focused on the long-term.
  • Maintaining exposure to investments that may do well in a variety of economic outcomes – growth, recessions, inflation, etc.
  • Employing ongoing portfolio rebalancing.

Inflation remains a key issue impacting the markets and there is a possibility the Federal Reserve will continue to increase interest rates in the upcoming year. The recent jobs report reflects well for employees. Money Supply, the Consumer Sentiment Index, and subsequent 12-month potential market returns were discussed as well as the outlook for fixed income.

Mr. Mustian then gave an overview of how CRA’s Target Date Fund Portfolios are constructed and explained the current considerations used in researching proposed changes to these funds. The proposed changes recommended by Innovest to the CRA Target Date Funds by vintage and percentage change are:

Jerry DiTullio motioned to approve the recommendations by Innovest as presented. Meghan Martinez seconded the motion and it passed unanimously.

Ms. Wendy Dominguez informed CRA about the upcoming one-day 2023 Rocky Mountain Benefit Plan Conference that will be held in the Denver Tech Center, sponsored by Innovest and Clifton Larson Allen.

Ms. Wendy Dominguez gave a brief update of the Secure Act 2.0 legislation which was enacted on December 29, 2022. This was a massive piece of legislation containing 92 provisions. Discussed were a few of the provisions that take effect in 2023: Increased Required Minimum Distribution Age to 73; elimination of the first of the month rule which allows the participant to change their 457(b)-deferrals at any time; and Hardship Withdrawal Self-Certification for eligibility.

Ms. Wendy Dominguez noted that total fees for CRA’s 401(a) and 457(b) plans are comparable to other similarly sized retirement plans. The fees compare very favorably against smaller plans that would tend to represent smaller employer groups. Additionally, CRA has actively managed funds and alternative investments, which are inherently slightly more expensive. The tradeoff of the minimal additional expense of these funds and investments was more than offset with their outperformance, in some cases by several hundred basis points.

Wendy also reviewed CRA funds, table of returns, and overall equity performances. The watch list was discussed. Innovest, in accordance with CRA’s Investment Policy Statement, will more than likely be giving a watch list report on American Beacon International Equity Fund in the future.

Mr. Mullen thanked the Innovest team for the presentation and their work on the Asset Allocation project. Innovest exited the Board meeting.

Mr. Mullen noted that Galliard 4^th quarter 2022 Portfolio information is included in the board packet.

2023 Schedule of Board Meetings:
For 2024 and forward, it is the intention to approve the CRA Board of Director Meeting schedule at the December Board meeting for the upcoming year.

In discussing the 2023 Board schedule, the meeting for the month of April will be eliminated due to minimal agenda items.

Chris Felton motioned to accept the Board meeting schedule for 2023 as presented. Jerry DiTullio seconded the motion and it passed unanimously.

Meeting Posting Resolution:
Tim Mullen presented RESOLUTION NO. 1, SERIES OF 2023 (Designation of Public Place for Posting of Meeting Notices). This posting resolution is required for governmental agencies and is to be adopted at the first Board of Directors meeting of the respective calendar year. Chris Felton motioned to adopt Resolution #1, as presented. Meghan Martinez seconded the motion and it passed unanimously.

Entity Qualification Reviews:

• Town of Crestone
• South Durango Sanitation District
• Loma Linda Sanitation District

Tim Mullen noted that all three entities will be offering the 401(a) and 457(b) plans to employees. Ed Krisor has reviewed the supplied information for all three entities. They all qualify to participate in CRA’s plans.

The CRA Board of Directors had previously authorized entering into these Participation Agreements on or prior to January 6, 2023.

Chris Felton motioned to allow the Town of Crestone, South Durango Sanitation District, and Loma Linda Sanitation District to join CRA with an approval date of January 6, 2023. Terri Schafer seconded the motion and it passed unanimously.

Membership Withdrawal:
The Town of Mt. Crested Butte contacted CRA last fall stating their intent to leave CRA and join PERA.

The Town has complied with applicable Colorado State Statutes and CRA’s requirements for withdrawal. Exact timing of the withdrawal will be determined by CRA management after administrative procedures are completed.

A motion was made by Chris Felton to allow the Town of Mt. Crested Butte to discontinue their association with CRA. Meghan Martinez seconded the motion and it passed unanimously.

CRA Activity Updates:
Tim Mullen noted only a few of the many provisions of Secure Act 2.0 will affect CRA and participants immediately. Many of the other provision will be effective in future years.

In January, CRA attended both the County Sheriffs of Colorado conference in Loveland, and the Colorado Water Congress conference in Aurora. Based on discussions with employer groups, they are looking to enhance their benefit packages being offered to promote recruitment and retention. The top three enhancements are salary, health benefits and retirement. CRA’s plan flexibility is a plus in helping employers redesigning a more robust retirement plan.

Mr. Mullen noted CRA will be attending the Colorado City & County Management Association annual conference at the end of April. This is a new conference for CRA.

America Saves Week is February 27, 2023 through March 3, 2023. CRA will be sending emails out each day of the week with various messages and themes.

Mr. Mullen noted CRA will be changing phone system vendor to achieve more synergy with other technologies currently being utilized.

Innovest and CRA will be meeting with Voya and Empower at the end of the month as the next step in the RFP process for selecting a record keeping vendor.

Mr. Mullen stated he was notified that CRA is still under consideration by Evergreen Fire Protection District, dba Evergreen Fire/Rescue, for providing retirement plan services via their RFP.

Expense Reports:
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.

Chris Felton called for a break at 10:24 a.m. The meeting resumed at 10:32 a.m.

Legislative Update:
Joan Green gave an overview of fourteen bills during her presentation.

HB23-1016: Temp Tax Credit for Public Service Retirees.

• This bill was intended for retirees with Colorado Public Pensions plans, effective at age 55.
• This bill was rolled back to include only PERA and to raise the age to 65 for all but state troopers.
• Mullen testified to keep CRA in the bill, citing help is needed for all retirees.
• The roll back to only include PERA and raise the age was successful.
• The bill has a large fiscal note and its passage is uncertain.

Several House and Senate bills were discussed dealing with PERA and FPPA.

Several other bills were discussed that could potentially affect employers (labor and employment), including proposes changes to the Colorado FAMLI program.

Ms. Green concluded her presentation.

The next meeting of the CRA Board of Directors will be held on March 17, 2023.

Chris Felton asked if anyone had anything additional for the good of the order. There being no further business to come before the Board, Chris Felton adjourned the meeting at 11:17 a.m.