MINUTES OF THE MEETING OF THE
GOVERNING BOARD OF THE
COLORADO RETIREMENT ASSOCIATION
The monthly meeting of the Governing Board of the Colorado Retirement Association was held at 9:00 a.m. on the 15th day of May 2020, via teleconference.
The following were present at the meeting:
- Lucas Hale, Board Chairman
- Chris Felton, Board Chairman- pro-tem
- Paul Danley, Board Member
- Tobe Allumbaugh, Board Member
- Scott Vargo, Board Member
- Jerry DiTullio, Board Member
- Darius Allen, Board Member
- Tim Mullen, Executive Director/Chief Financial Officer
- Ed Krisor, Legal Counsel
- Dawn Small, MARCOM Director
- Katie Dirksen, Retirement Services Coordinator
- Lois Kruse, Office Administrator
Chris Felton called the meeting to order at 9:01 a.m.
A motion was made by Chris Felton to approve the minutes of April 17, 2020 as presented. Motion was seconded by Jerry DiTullio and passed unanimously.
Joan Green presented a legislative update noting that the legislature will resume on May 26, 2020.
The session will run 2-3 weeks and the speaker of the house would like bills to be fast, friendly and free. Contentious bills will go by the wayside. During the session there will be 40-50 orbital bills introduced to comply with the new budget and there will be 35 sunset bills as well. Legislators have discussed changing the committee structure so that when bills are introduced they will be assigned to the committee of reference. Some new bills regarding COVID 19 will be introduced however Joan is not certain what they are at this time. If the public comes to the legislature they will be required to wear masks.
The Innovest team presented the Quarterly update and market analysis. Wendy Dominguez began with market recovery. Most retirement plans have adopted the CARES Act provisions. She shared a graph showing historical recovery times from each Bear market. Wendy stated that the markets are forward looking and the economy and markets often do not move in tandem over the short term.
Wendy continued with the Quarterly report with considerations during a recession. Diversification, tune out the noise, a rebalancing strategy and patience are tools during an uncertain time.
Wendy next covered the annual fee review reflecting the updated pricing structures as of January 2020.
In the 1st quarter of 2020 the market was blindsided by the COVID-19 pandemic. Worldwide “shelter in place” brought the global economy to a halt. Fiscal stimulus to date includes a $2.2 trillion Coronavirus relief package.
Peter Mustian presented the manager score card information. The overall takeaway was there are a few funds with minor areas of concern including American Funds. MLPs are an area of concern partly due to continued consolidation within the industry. There are no recommended changes at this time. There was a significant market drop in the 1st quarter and a good rebound in the 2nd quarter. Long term perspective is toward performance and in aggregate CRA funds are doing well. Peter reviewed the watch list noting the Neuberger Berman Sustainable Equity fund has been on the watch list for the last five quarters.
Performance has lagged due to the nature of the fund, however Innovest still likes the strategy and does not recommend a change at this time.
Chris Felton congratulated Tim Mullen as the new Executive Director of CRA.
Proposed 2020 scholarship award recipients were presented to the Board by Tim Mullen. There were 61 applicants from 40 different employer groups. The candidates selected were: Clark Church who currently works as a paramedic and quality field training officer for Clear Creek County; Jose Garcia whose mother is employed by Rio Blanco County; Cheyenne Joslin whose father is employed by Jefferson County Sherriff’s Office; Kelli Lofing whose parents are employed by Otero County; Aubrey Richards whose mother is employed by Kit Carson County; and Candace Wolf who is currently an EMT with Pagosa Medical Center.
A motion was made by Jerry DiTuillo and seconded by Lucas Hale to approve the candidates and the motion was approved unanimously.
The CRA election update was given by Tim Mullen. There are three positions becoming available July 1st. One person has completed paperwork and has been vetted for the Elected County Member position and another person has inquired. There are no nominees for the Municipality/Special District position at this time. Tobe Allumbaugh will be running for the Chosen Member position and there is one other candidate.
The nomination period closes June 1, 2020; verification of nominee eligibility (internal process) will be on June 2, 2020. Voting opens on June 15, 2020 and closes on June 30, 2020. Announcement of the new CRA Board members will be July 15, 2020.
Plan Amendment Consideration- Tim Mullen discussed the proposal to allow employer matches/contributions pertaining to the employer’s 457(b) deferred compensation plan(s) to be remitted to CRA’s 401(a) plan with Rebecca Hudson from Holland & Hart and the estimated cost should be in the $500-$2000 range. Each employer would decide if they would like to take advantage of the proposed change. Ed Krisor suggested that the proposed amendment be in formal form before the CRA Board of Directors takes a vote. The CRA Board authorized Tim Mullen to proceed to obtain a draft amendment to the Plan.
Marcom report- Dawn Small reviewed the marketing scorecard. Performance numbers were down slightly from the April 2020 report. A small social advertising test was conducted at a cost of $168.58.
Paul Danley motioned at 10:27 a.m. 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 staff personnel matters. Motion was seconded by Darius Allen and passed unanimously. The executive session ended at 11:03 a.m.
Motion was made by Chris Felton and seconded by Lucas Hale for Lucas Hale to seek out and retain a human resources consultant on an on-call basis. Motion passed unanimously.
Chris Felton called for a break at 11:05 a.m. and to resume at 11:15 a.m. The CRA Board of Directors reconvened at 11:19 a.m.
Budget was presented by Tim Mullen. An estimated breakeven date, given the current income and expense model, is June 2021. There are still many unknowns moving forward given the COVID-19 pandemic. Tim presented a revenue analysis reflecting the new fee structure. Also reviewed was a historical budget comparison from 2012-13 through 2019-20. Tim also presented remaining budget items for FYE 2020-2021. It was the consensus of the board to see what happens in the market for the next month. Absent any significant market changes which will affect revenues, the proposed budget will be presented at the June 19, 2020 meeting for approval.
No questions from the board regarding expense reports.
The next meeting of the CRA Board of Directors will be held June 19, 2020 via teleconference.
There being no further business to come before the Board, a motion was made by Lucas Hale and seconded by Jerry DiTullio to adjourn the meeting. The motion passed unanimously and the meeting was adjourned at 11:32 a.m.