Tuesday, May 15, 2018

Island conference sent attendees home with tips to

 become better trustees and administrators

By Max Patterson, TEXPERS Executive Director

Nearly 520 people attended TEXPERS' Annual Conference on South Padre Island April 15-18. I hope each person returned home with at least one new piece of knowledge to help them better serve their public pension systems.

The exact total of attendees was 519 and consisted of 241 system members and 278 investment members. Some people were hoping to top 600 attendees at this year’s conference, but I think anything close to 500 is outstanding.

South Padre Island, located on Texas’ coastal tip, presented a challenge, and we took some risk going there as some members wondered if the convention spot was too far for them to travel. Conference attendees flew into Harlingen or Brownsville airports, and TEXPERS provided a shuttle to the island.

Overall I think most everyone had a good time. The weather was good, and we were able to give our members a little free time in the late afternoon to enjoy the island. There are always a few members who like working until the lights are out, but effective learning stops working after a limited number of hours.

Evaluations collected after the conference were very positive regarding the quality of the conference speakers and topics. Barbara Zlatnik, TEXPERS’ associate director of programs and training, works hard to get the best speakers we can while working within our membership and budget limitations. Please keep your suggestions coming. We may not be able to address them at the next conference, but we don’t throw them out. We maintain a list and try to work them in when there is a fit.

One challenge we continue to have is putting on topics that address the concerns of both small and large plans. The majority of our 75-plus member systems are small plans, but the managers focus on the large plans because that’s where the bulk of the assets are. Our presentations are often geared to that larger group – funds that have more than $1 billion in assets. Small plans are different from large plans in asset allocation size and often have few to no staff. The small plans often struggle with attracting managers. The plans operate considerably different from large plans. We continue to work toward a solution to balance out the topics.

Photo by Allen Jones, TEXPERS Communications Manager
TEXPERS Executive Director Max Patterson, left, serves as moderator during a conference breakout session. The session focused on minimizing the cost of DROPs. With Patterson are Jim Smith, middle, of the San Antonio Fire & Police Pension Fund, and Eric Atwater, of Aon Hewitt.
I applaud our membership for staying at the conference venues to hear presentations. You don’t always see that at other conferences, such as those put on by private for-profit groups. Our members want to stick around for our sessions partially because TEXPERS does not allow its conference presenters to use our session times to sell their professional services. We push our speakers to educate our conference attendees, only. There is plenty of time for presenters to market their investment services during breaks and after conference hours. I think our investment professionals have learned to respect that rule, and yes it’s a rule provided to our presenters before each conference.

We also try to strictly enforce a rule that prohibits investment professionals from taking trustees out of sessions for non-conference events or activities. If violated, the investment firm can be thrown out of TEXPERS.

TEXPERS provides basic and advanced training in addition to continuing education credits during our conferences. This year’s conference included advanced training sessions held the day before the conference began. During the training, attendees received expert advice to guide them in making ethical decisions as fiduciaries of the retirement funds belonging to police officers, firefighters and other public workers. Workshop presenters also took attendees beyond investment basics and introduced them to equity and debt securities.

The issues of appropriate training of trustees, quality of conferences and level of competency of trustees often come up during legislative testimony in Austin. So far TEXPERS has received good marks and has a great relationship with legislators based on our conference and quality of education.

Photo by Allen Jones, TEXPERS Communications Manager
Attendees fill the conference room of the South Padre Island Convention Center for the opening ceremony of TEXPERS' 2018 Annual Conference on April 16.
We always end the last day of the conference covering legislative issues. The final day of the conference usually is a half-day and is geared toward our trustee members. This year’s crowd dwindled for the legislative session. More of TEXPERS’ member trustees should extend their conference stay for the session so they can find out what is going on in Texas’ capital building and prepare for any attacks on defined-benefit plans that may be in the works. The legislative session helps prepare trustees to serve as advocates of defined-benefit pensions for their active and retired system members. I encourage those who do stay for future legislative sessions held during our annual conferences to put peer pressure on those who tend to skip the sessions.

Some TEXPERS members would like us to move this session to an earlier time during the conference. But the legislative part is primarily for our trustees, not the pension fund managers who also attend the first days of the conference. Because money managers pay to make presentations during our conferences, we have to be mindful of their time as legislative happenings in Texas do not impact most of the money managers. I hope our trustee members schedule their travel time to stay a half-day later to hear what’s going on in Austin instead of asking us to move the legislative session to the first day of the conference when half our audience has no interest in the subject. It’s all about balance.

We in Texas are doing pretty good when it comes to pensions as compared to other states, and it’s not an accident. It’s you doing your job as trustees and administrators that help set the state apart from the others. Gaining insight and training during TEXPERS conferences and educational forums are vital to ensure you continue to do your fiduciary duties the right way. We are not all perfect, but we try to be.

We have a good relationship with our legislature, considering its make-up. We’ve worked to achieve the legislature's respect. Let’s keep up the excellent work. Keep focused on what’s right. Being average is not good enough.

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