Thursday, July 30, 2020

Investment industry association to host virtual conversation with NCPER’s Hank Kim


STAFF REPORT

TEXPERS investments industry members might want to check out an upcoming webinar providing insights on the impact of COVID-19 on investment strategies and allocations as well as how diverse managers fit into it.


Industry Insights: A Virtual Conversation is hosted by the National Association of Investment Companies as part of the group’s NAIC Insights Series. Hank Kim, executive director and counsel at the National Conference on Public Employee Retirement Systems will lead the live streaming event set for 1 p.m. CDT on Tuesday, Aug. 4. 


As executive director of NCPERS, Kim oversees the operations of the largest public pension trade association in the U.S. During the live stream, Kim will discuss the association’s role in the public pension industry; its advocacy, research, and education initiatives; as well as provide insight for investors and general partners.


> REGISTRATION: RSVP for the online event

Individuals who register for the free program will receive an email in advance of the event with a link to view the YouTube live stream. The president and CEO of NAIC Robert “Bob” L. Greene, is hosting the event. The association is a professional network of diverse-owned private equity firms and hedge funds. The association’s NAIC Insights Series gathers the industry’s thought leaders through virtual programming to share their perspectives on market news and trends, its impact on diverse-owned firms, and other industry topics. 
 

Wednesday, July 29, 2020

Texas governor appoints three to state emergency services retirement system board of trustees

Photo credit: Canva.com.


STAFF REPORT

There are three new members on the board of trustees for the Texas Emergency Services Retirement System, a state agency that administers a pension system for volunteer fire and emergency departments throughout the Lone Star State.

> READ THE NEWS RELEASE: Office of the Texas Governor.

On July 29, Abbott announced his appointments of Nathan Douglas, Matthew Glaves, and Jerry Romero to the board, which oversees and governs the TESRS. The nine-member Board of Trustees for TESRS is appointed by the governor, according to the system’s website. Members serve six-year terms.

Biographies of the new members provided by Abbott’s office:

Nathan Douglas of Seabrook is Assistant Chief of the Seabrook Volunteer Fire Department and is the captain over Compliance and Inspection for the Harris County Sheriff’s Office, where he has worked for nearly 30 years. As the Captain over the Compliance and Inspection Division, he oversees a team of 10 personnel that ensure the Harris County Sheriff's Office stays in compliance with the Texas Commission on Jail Standards for the Criminal Justice Command. He is certified as a master peace officer, an emergency medical technician, and firefighter, and is a member of the FBI National Academy Association. Douglas received a Bachelor of Science in Criminal Justice from the University of Houston, and he earned a criminal justice certificate from the FBI National Academy in Quantico, Virginia.

Matthew “Matt” Glaves of Alvin is a sales manager with Blue Bell Creameries. He is a current captain and investigator with the Alvin Volunteer Fire Department, and he is a retiree of the pension system. He is the treasurer of the Brazoria County Emergency Services District #3, past president of the Kiwanis Club of Alvin, and an instructor of the municipal fire school of the Texas A&M Engineering Extension Service. Additionally, he is a member of the Knights of Columbus #6403 in Alvin/Manvel and a drive coordinator for the Gulf Coast Regional Blood Center.

Jerry Romero of El Paso is a vice president of community development for Wells Fargo Bank, N.A. He previously served as a gubernatorial appointee on the Texas State Affordable Housing Corporation Board of Directors, and on the Texas Workforce Development Council. He is a board member of United Way of El Paso, president of the El Paso Housing Finance Corporation, and is active in several other volunteer roles in his community. Romero attended The University of Texas-El Paso and studied in the field of finance. Additionally, he attended a number of certification programs including The University of Texas at Austin McCombs School of Business for a Compliance Officer certificate, University of Minnesota Minneapolis for a Community Development Officer certificate, and the University of California John E. Anderson Graduate School of Management Latino Leadership Program.

About TESRS:

TESRS is governed by a nine-member Board of Trustees. Members are appointed by the Texas governor.

According to TESRS bylaws, the board is required to include five trustees who are active members of the pension system (including one representing emergency medical services personnel when the pension system has a participating department that provides emergency medical services), one trustee who is a retiree of the pension fund, and three trustees who have experience in finance, securities investment, or pension administration.

Monday, July 27, 2020

NIRS webinar focuses on idiosyncratic risks that drive returns

Photo by bongkarn thanyakij from Pexels


By TEXPERS STAFF

Nuveen, an Associate Member of TEXPERS, is taking part in a webinar with our friends at the National Institute on Retirement Security at 3 p.m. ET on Tuesday, July 28.

The webinar, Factors First: A Risk-based Approach to Harnessing Alternative Sources of Income, focuses on how institutional investors such as pension funds can capitalize on the yield of alternatives by focusing on the idiosyncratic risks that drive returns.

There is no charge to register for the informational webinar.

> REGISTER: Click here to sign up for the free webinar.

NIRS' synopsis of the webinar:

During the webinar, you will hear how investors can stitch together multi-asset portfolios in an efficient and coherent fashion. The session also will cover why a risk factor-based approach works well for alternative asset classes; how to capitalize on the yield and diversification benefits of alternatives; and how institutional investors can leverage the factor-based approach for multi-asset portfolio construction.

Speakers include:

  • Dan Doonan, Executive Director, National Institute on Retirement Security

  • Nathan Shetty, Head of Multi-Asset Portfolio Management, Nuveen

The National Institute on Retirement Security is a nonprofit retirement security research and education organization. To see what other webinars NIRS has to offer, see a list of scheduled sessions and replays of past webinars on the organization's website.


Tuesday, July 14, 2020

TLFFRA cancels Educational Conference originally set for October


TEXPERS Staff Report


The Texas Local Fire Fighters Retirement Act Educational Conference that was to set to take place in Corpus Christi this October has been canceled. 

According to a TLFFRA email, the Foundation Board canceled the conference due to the ongoing "COVID-19 pandemic and guidelines and restrictions that go along with it."

> TLFFRA: Click here to visit its website.

If the health crisis passes, TLFFRA will consider hosting a Peer Review this winter, according to its email announcing the conference's cancelation. 

TLFFRA continues to plan its Fall 2021 conference in Denison, Texas.

Texas Pension Review Board staff delivers 10-point plan for legislative modifications


By JOE GIMENEZ/guest blogger


During the June 30 Texas Pension Review Board meeting, agency staff provided Board members with a 10-point list of issues that will likely be presented to the Legislature in 2021. The issues relate to existing law HB 3310 establishing funding soundness restoration plans and to SB 2224 requiring funding policies. 

The Pension Review Board is mandated by the state legislature to oversee all Texas public retirement systems in regard to actuarial soundness and compliance with state law. PRB Deputy Director Michelle Downie-Kranes walked members through areas where the laws don’t mesh with the Board’s revisions to guidelines, changed actuarial standards, or pragmatic observations by staff. 

> 10 POLICY ISSUES: Download PRB Report

Downie-Kranes noted how HB 3310 was enrolled in 2015 and required funding soundness restoration plans (FSRP), for plans exceeding 40-year amortization periods after several actuarial valuations. The Pension Review Board in 2017 changed its recommended guidelines from 40- to 30- years, with a preferred target below 25-years, and it allowed a seven-year implementation schedule. Other organizations have also recommended 30-year or lower amortizations periods. The law still triggers at a 40-year period. If changed to 30-year amortization, 35 systems could eventually become subject to FSRP requirements.

HB 3310 has also been criticized by PRB Actuarial Committee member Marcia Dush because it allows too much time between systems’ first actuarial valuations above 40 years and the requirement to develop a FSRP. Dush has said that plans get a de facto 50-year period to correct their plans because of the way the statute is written.

Downie-Kranes drew particular attention to systems which revised their FSRPs because their first plan did not appear to be working. 

“Currently 10 out of the 18 FSRP plans have required a revised FSRP because the original plan would no longer reach a 30-year amortization period within the 10-year allotted time frame," she said. "One system requires a second revised plan. For some of these systems it can almost appear as if they are in a perpetual FSRP-cycle to achieve a 40-year amortization period.” 

TEXPERS Input


During the meeting Downie-Kranes acknowledged a letter from TEXPERS Executive Director Art Alfaro offering analysis of PRB data. A TEXPERS study shows that plans have made significant progress toward achieving the PRB’s recommended guidelines. 

For example, there are now 49 plans in the PRB’s recommended zone below 25 years, compared to 34 plans in 2015. The improvements occurred even as nearly all Texas plans decreased their target rates in line with PRB suggestions. While downward revisions to target rates can cause amortization periods to increase, most systems seem to be handling it well.

Alfaro’s letter said that six of the first 14 systems required to produce FSRPs now have amortization periods below 40 years, three have achieved lower amortization periods but are not below 40, and five have not achieved lower amortization periods. Twelve of the first 14 systems lowered their annual target rates below eight percent.

“In sum, we agree with [the PRB] that more can be done by plan sponsors to address chronic underfunding of some systems,” Alfaro wrote. “But we also think that adjusting HB 3310 so that more systems must develop FSRPs is rushed. Pension systems need time for their investment, contribution, and workforce dynamics to show in actuarial numbers. The 3- to 4-year implementation period which has been granted by the PRB for the 10-year time frame of HB 3310 needs the opportunity to accomplish its original intent. Waving a magic wand for intermediate-term results is not realistic.” 

Additional Issues


Downie-Kranes also described situations where staff needs clarifications from lawmakers as to how to gauge certain elements contained in FSRPs. For example, to what extent should future actions be allowed in an FSRP? Her report noted where systems will indicate they will make benefit changes, but need members to vote their approval. Or the FSRPs feature contribution increases not yet approved by the sponsor.

Another potential issue to PRB staff and Board members is that SB 2224 required systems to submit a funding policy that achieves 100 percent funding. Thirteen plans with actuarial determined contributions submitted funding policies with open or rolling 10-, 30-, and 40-year amortization periods. The Board does not consider that open/rolling plans will ever achieve 100 percent funding and therefore are not compliant with SB 2224. In early June, the PRB sent letters to those systems expressing its desire “to learn how the plan’s funding policy would help achieve 100% funding while utilizing a benchmark that resets annually and therefore not designed to move towards 100% funding.”

After the meeting, Alfaro said, “It is clear that the Pension Review Board will ask the legislature for substantial changes to these laws. Our membership and their city sponsors need to participate in this process now.”


About the Author: 

Monday, July 13, 2020

Public employees go above and beyond to help communities


TEXPERS Staff Report

Each month, TEXPERS searches the internet for stories of Texas public employees going the extra mile to help their communities.


Check out what we found this month:


Police Department Gives Girl a Birthday Parade

The Austin Police Department helped make a 10-year-old girl's birthday extra special despite social distancing due to the ongoing novel coronavirus pandemic. 


After learning that the girl, Presley Rivera, couldn't have a birthday party due to social distancing requirements, the department stepped in, according to a report on law enforcement news website Policeone.com. Officers decorated their patrol cars and drove by the girl's home while singing  "Happy Birthday to You."


You can watch local news coverage of the parade by clicking the image below.  





Teacher Engages Culinary Students Online During Pandemic

Allen Independent School District culinary arts teacher Matthew Denman didn't let the novel coronavirus pandemic stop him from helping his students learn to cook. 


According to a report by the Texas Education Agency, he created instructional cooking videos that introduced students to techniques, the science behind cooking, and new vocabulary. Using video, Denman used video to take his students through each step of a new dish and to celebrate their successes. 


"Whether it was a student remembering all the steps to a dish, or a student simply cleaning and sanitizing correctly on their own, seeing that 'AHA!' moment was, and is, the most rewarding aspect of teaching," the educator said in a news release. "Also, seeing my students making great tasting food is a definite plus, too."

 

To see one of the teachers' videos, click here


Texas Education Agency Twitter post from June 30, 2020.



Librarians Become Face of Small Business Assistance Center

Back in April, Community Impact newspapers reported that City of Bee Cave librarians stepped up during pandemic closures to help manage the local Small Business Assistance Center.


According to the program's website, the Bee Cave SBAC acts as a centralized resource center for local entrepreneurs and businesses to overcome the challenges created by the current health crisis. When the city library closed, its staff became the face of the center.


The Bee Cave library is one example of how librarians throughout Texas have chipped in during the pandemic. Other reports from Community Impact newspapers include: 

  • Round Rock library staff assisted people in finding ways to help their community, and a staff member helped answer calls from residents at the Round Rock Emergency Office Center.
  • San Marcos library staff referred people to community-based resources. 
  • Georgetown Public Library staff helped those conducting job searches during the pandemic. 
  • Lake Travis Community Library developed an online version of a program to assist people with resumes, job searches, and other employment issues.

Screen shot of City of Bee Cave Small Business Assistance Center website.


Tell us About Public Employees You Know

Do you know of a public employees that has gone above and beyond their duties in contributing to their local communities? Let us know about them in the comments section below.


Essential Roles in Our Communities


Public employees fill an essential role in our Texas communities. Law enforcement and firefighters protect lives and property. Municipal workers repair our streets, maintain parks, assist library patrons, and ensure that our water is safe to drink. Educators help our children grow into adulthood.

Those are just a few examples of the critical jobs public employees do for us. Some jobs are dangerous. Others receive little thanks. Many involve backbreaking work. But most are done with a dedication to the greater good that's often unmatched in the private sector.

Public employees, like the ones we've highlighted this month, often go the extra mile to contribute to their communities. TEXPERS urges you to go the extra mile in return and ask your local and state governments to ensure they receive their promised benefits.

To learn more about public pensions, visit our website, www.texpers.org.


TEXPERS pension system members are invited to register for this free educational online event

Photo by Anna Shvets from Pexels

TEXPERS Staff Report


TEXPERS Associate member Federated Hermes, Inc. (formerly Federated Investors, Inc.) is hosting a free virtual event from 3-6 p.m. ET on Thursday, July 16. 


The firm's Real Impact Tracker Summer Soiree features ideas and insights from top environmental, social, and governance investing experts worldwide. This is the first year the virtual event is to take place on ESG investing, an investment topic that continues to see demand grow. 



ESG Investing:

ESG refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. These criteria help to determine the future financial performance of companies return and risk. 


Educational Session Subjects:

  • 3 p.m. ET: Clearing up Nuance -- Understanding ESG, SRI, and Impact 
  • 3:20 p.m. ET: Getting Started with Your Portfolio
  • 3:30 p.m. ET: How to Communicate Impact "to Win Customers and Influence Clients"
  • 4 p.m. ET: Optimizing Your ESG/SRI/Impact Portfolio


Expert Session Subjects:

Click here to see speakers for a current list of topics.

Keynote by Saker Nusseibeh, CBE, of Federated Hermes 


The online educational event will include a prize drawing.


Institutional investors and ESG thought leaders are to gather for the Real Impact Tracker Summer Soiree. Planners hope to make it an annual event. 


Registration:

Public pension system trustees and administrators may register for the virtual event here.


5 songs to play when you want someone to hear the importance of pensions



By ALLEN JONES/TEXPERS Communications Manager

Retirement. We are either looking forward to achieving it after decades of hard work or worry we might not have enough money to live on when our working days are over. The subject is debated on by politicians, researched by data crunchers, and planned for by public pension fund administrators and trustees on behalf of police officers, firefighters, municipal employees, and other dedicated civil servants.

Retirement has been the basis of novels and film scripts, pondered by philosophers, and poets have romanticized it. Retirement also is the subject of songs. Some songwriters even specifically mention pension benefits in their music. 

Typically, these songs are not catchy pop ballads broadcast on repeat from radio stations. Instead, many of these songs express messages of hard work, dedication, achievement, and loss. Some of them, you may not have ever heard.

“Lots of topical songs are often forgettable, either because the events recounted or cause championed quickly fades from public interest or because they’re just not particularly well-written, well-sung or well-played,” says John Weingart in an email interview with TEXPERS.

He knows a thing or two about music and politics. Since 2000, he has been the associate director of the Eagleton Institute of Politics, where he directs the institute’s Center on the American Governor. On Sunday evenings, Weingart hosts Music You Can’t Hear on the Radio, a program featuring folk music, bluegrass, and other American roots music on New Jersey’s WPRB-FM.

Last year, TEXPERS began searching for songs specifically about pensions – public or private – and asked Weingart for his thoughts on a few of our selections. If you are looking to hear what pension benefits mean to those who have them, or how benefits lost impacted those who once had them, we have cobbled together a few of the most notable pension songs we could find. 

Here are five songs about pensions to add to your favorite music cue.


White House Blues” by Charlie Poole & The North Carolina Ramblers


Album: Anthology of American Folk Music Vol. 1: Ballads

Year: 1952

Although the anthology album featuring “White House Blues” was released in the early 1950s, the song was written in 1926. About the death of President William McKinley, the song has become a staple for many bluegrass bands that play it to this day, says Weingart. “Occasionally, bands have added a verse or two such as a version by Bob Hoban recorded on the day Jimmy Carter was elected president,” he says.

Essential Lyrics:

Hush up, little children, now don’t your fret 

You’ll draw a pension at your papa’s death




Casey Jones” by Mississippi John Hurt 


Album: Shake That Thing

Year: 1986

This song tells the true story of how railroad engineer Casey Jones died on April 30, 1900, when his train collided with a stalled freight train. After the wreck, a man who knew Jones composed the folk song. Casey Jones’ ballad was song among railway laborers. The first recorded version of the song is thought to have occurred in 1910 by singer Billy Murray, who reportedly sold over 1 million copies. Musician Mississippi John Hurt recorded the song in 1928, but it was never released. The musician performed multiple live versions in the 1960s, one of which is featured below. Weingart says folk singer Dave Van Ronk, the Grateful Dead's Jerry Garcia, and other musicians heard Hurt’s recording and included the song in their own concerts and on their own albums. 

Essential Lyrics:

Mama, mama, oh, how can it be?

My daddy got killed on the old I.C.

Hush your mouth I said and hold your breath

You’re going to draw a pension after daddy’s dead




Christ for President” by Billy Bragg


Album: Mermaid Avenue

Year: 1998

Though Stephen “Billy” Bragg set the lyrics to music, Woody Guthrie wrote the song, Weingart says. Bragg’s music often blends folk music, punk rock, and protest songs with political messages. This song suggests replacing America’s president with Jesus Christ would result in prosperity for everyone, including at retirement.

Essential Lyrics:

Oh it’s Jesus Christ our president

God above our king

With a job and pension for young and old

We will make hallelujah ring




Work for the Working Man” by Bon Jovi


Album: Circle

Year: 2009

In rock band Bon Jovi’s 11th studio album, singer Jon Bon Jovi asks, Who is going to work for those who have lost their pension-benefit jobs and have trouble finding suitable work. Before the band released the album, David Axelrod, U.S. President Barack Obama’s chief adviser, had the lyrics to the song framed and hung in his White House office


Essential Lyrics:

I lost my pension, they took my ID

These were my friends, these were my dreams

These were my hopes, these are my dreams

Can you hear me?




What a Way to Go” by Seasick Steve


Album: You Can’t Teach an Old Dog New Tricks

Year: 2011

In “What a Way to Go,” singer-songwriter Steven Gene Wold, also known as Seasick Steve, discusses the decades of hard work put into earning a government pension only to end up dying shortly after retirement and passing it on to family.

Essential Lyrics:

Twenty five years working for the state

Saved all your money, got a good rate

Always thinking ‘bout that pension plan

The day of retirement, the promised land, well …




If anything, these songs are examples of how important pension benefits are to workers. Those who wrote and performed them understood the hard work that people put into earning retirement benefits, how pensions can benefit families when a worker dies, the political ramifications of supporting secure retirements, and the devastation that occurs when benefits are lost.

Next time you want someone to know how important defined-benefit pensions are to your fund’s active and retired members, consider playing them a song.

Do you know of a pension benefit song that we didn’t feature in this post? Share it with us by providing a link to the song in the comments section below.


About the Author: 


Wednesday, July 8, 2020

WEBINAR REPLAY | Controlled Acceleration: Using Derivatives to Manage Pension Plan Risk, Return & Liquidity



TEXPERS Staff Report

The COVID-19 pandemic is introducing market forces and volatility that will inevitably affect the long-term health of your pension fund.

Now is the time to consider tools to manage the crisis that do not require a wholesale change to your asset allocation and manager line-up.


> WATCH THE REPLAY: Controlled Acceleration Webinar.


Key Points from the Presentation:

  • Pandemic will most likely increase challenge pension sponsors will need to manage in future
    • Increasing negative cash flow 

    • Volatile market returns

  • This will put more pressure on need for investment returns
  • Traditional asset allocation approaches haven’t kept up by and large
  • Different approach needed to manage risk, liquidity needs and return needs
  • A structured equity approach can help manage those three needs
  • Provides ability to customize to the plan’s needs and risk tolerances
    • Can manage at the portfolio level vs. a portion of the plan
    • Custom designed
    • Can allow for increased liquidity

During the webinar, you'll hear from:
Ross Clary [Moderator]
Senior Advisor
River & Mercantile
Thomas J. Cassara [Panelist]
Managing Director
River & Mercantile
Masroor Ahmad [Panelist]
Managing Director
River & Mercantile



Presenting Sponsor:


Live Webinars and On-demand Replays


TEXPERS is committed to supporting our community of public pension system trustees and administrators by making online learning available through webinars such as this. Subscribe to our email list to be notified of future live webinars and on-demand videos.