A meeting of the Governing Board of the Colorado Retirement Association was held on Friday, February 18, 2022, at 9:00 a.m.
The following were present at the meeting:
- Paul Danley, Vice Chairman-Participated by Zoom
- Tobe Allumbaugh, Board Member-Participated by Zoom
- Adam Ford, Board Member
- Darius Allen, Board Member
- Jerry DiTullio, Board Member-Participated by Zoom
- Terri Schafer, Board Member-Participated by Zoom
- Tim Mullen, Executive Director
- Ed Krisor, Legal Counsel-Participated by Zoom
- Mike Whalen, Retirement Plan Services Director
- Matt Evans, Retirement Services Coordinator
- Lois Kruse, Office Administrator
- Wendy Dominguez, President and Principal-Innovest
- Peter Mustian, Principal, COO – Innovest-Participated by Zoom
Chris Felton, Board Chairman was not in attendance.
Paul Danley, Vice Chairman called the meeting to order at 9:00 a.m.
Mr. Danley asked members of the Board if they reviewed the minutes from the December 17, 2021 meeting and if there were any comments. There being none, a motion was made by Paul Danley to approve the minutes as presented. Jerry DiTullio seconded the motion and it passed unanimously.
Meeting Posting Resolution:
Ed Krisor presented Resolution #1 (in the series of 2022 resolutions), 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. Darius Allen motioned to adopt Resolution #1 as presented. Adam Ford seconded the motion and it passed unanimously.
Innovest Quarterly Update (12/31/21) & Target Date Portfolio Review:
Wendy Dominguez and Peter Mustian from Innovest Portfolio Solutions, CRA’s investment advisor, started their presentation.
Wendy opened with a brief overview of the continuing relationship between CRA and Innovest. Ms. Dominguez then spoke to the topical retirement industry issue of retaining retirees in the plan. Retirees generally incur lower fees by staying with their employer plans. On the CRA/employer side, a larger asset base creates economies of scale, usually resulting in lower investment fees. CRA’s fees were discussed and compared favorably to industry benchmarks.
Assets for both the CRA 401(a) and 457(b) plans have shown significant growth over the years. The markets performed very well overall for 2021.
Peter Mustian started his presentation discussing the Manager Scorecard. Mr. Mustian shared that the scorecard is the cleanest it has been over the last several years. The Watch List also shows no areas of significant concern. Mr. Mustian noted CRA’s investment performance over the long term has been very good. It was also noted the Target Date Portfolios performed very well in 2021.
Next, Peter presented Innovest’s Long-Term Outlook and Asset Allocation Study. Innovest’s Long-Term (5-10 year) Outlook included analysis of; inflation, valuations, currently low interest rates, tight credit spreads, investment objectives, risk tolerance, and portfolio rebalancing, among others.
Mr. Mustian reviewed a periodic table of returns noting that diversification continues to be of primary importance for performance and risk. It was stated there will likely be multiple interest rate hikes from the Federal Reserve over the next year in efforts to curb inflation.
Average annual return expectations over the next 5 to 10 years have been slightly reduced. In areas that CRA hasn’t already taken advantage of, there appear to be no apparent market opportunities.
Innovest does not suggest any reallocations to the Target Date Portfolios at this time. CRA agrees with this assessment and no changes will be made this year. Wendy Dominguez and Peter Mustian exited the meeting.
It was noted that the Galliard 4th Quarter 2021 Portfolio Report is also included the board packet.
CRA Activity Updates:
Tim Mullen began his report noting that employer and employee meetings are still a mix of in-person and virtual. As the pandemic landscape is changing and restrictions are being lifted, CRA is anticipating an uptick in requests for in person meetings. The in-person meetings continue to be monitored and CRA will be adhering to pandemic protocols.
As of January 1, 2022, 401(a) contributions for the Towns of Johnstown and Frederick have begun. Assets in excess of $6.750 million have been transferred to CRA in 2022.
Financial wellness presentations have continued for Fremont County and are being utilized for other employers.
In January at the Sheriff’s conference, CRA sponsored a booth and presented at an Undersheriff’s education session. CRA also sponsored a booth at the Colorado Water Congress conference, where traffic was very light. The next slated conference will be the CCI Summer Conference on May 31, 2022.
Operations has completed the 401(a) and 457(b) contribution compliance reviews. CRA and Empower continue work on workflows and operational redesign. Participant wait times are longer than acceptable. In response to the backlog of calls, Empower has completed two rounds of hiring call center staff to assist plan participants.
Mike Whalen updated the Board on the status and data generated by the new Salesforce reporting tools. Mr. Whalen shared what data is being collected and how that data is used for management, employers, and participants.
Matt Evans was next with an update on the CRA annual scholarship program. The scholarship notice went out recently to employers and participants. Screen shots and website postings were presented to the Board with an overview of the scholarship process.
The CRA Board took a break at 10:18 a.m. and reconvened at 10:23 a.m.
Legislative Update:
Joan Green, CRA’s lobbyist stated that there have been 412 bills introduced so far in this legislative session. It is anticipated that more contentious bills will be upcoming later in the session.
Ms. Green discussed the status of several bills that she recommends monitoring. None of the bills discussed directly relate to CRA at this time.
Expense Reports:
Paul Danley 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.
The next meeting of the CRA Board of Directors will be held on Friday, March 18, 2022.
Paul Danley asked if anyone had any questions or additional items to discuss. There being no further business to come before the Board, Paul Danley adjourned the meeting at 10:43 a.m.
