AgdaPkt 2010-03-08 - Laserfiche WebLink

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6.3C Investment Return Comparison Page 3 PARS - High Mark Funds 2005 2006 2007 2008 Bal'd/Mod. Aggressive HM Plus n/a n/a 5.410/0 -25.800/0 Bal'd/Mod. Aggressive Index Plus nla nla nla -23.220/0 Moderate HM Plus nla nla 5.880/0 -22.880/0 Moderate Index Plus nla n/a 5.78% -22.88Ok Mod. Conserv. HM Plus nla nla 6.59Ok -15.37% Mod. Conserv. I ndex Plus nla 9.490/0 6.32Ok -12.400/0 Conserv. HM Plus 4.24% 6.440/0 6.44% -9.04Ok Index Plus 3.17Ok 6.890/0 6.49% -6.70% PERS FY 2007-08 FY 2008-09 FY 2009-10 (YTD) -4.80/0 -23.530/0 21.240/0 Trustee Comparisons PERS is clearly the least expensive solution and the least labor intensive. It is also a very safe choice due to the higher number of public agencies that have elected to go with PERS. Selecting PERS, however, gives the City no control over the investment portfolio as all investment decisions will be made by PERS. Should the City desire more control over the investment decisions then PARS would be the preferred option as the City would have a high level of control over the investment choices. If the Council wants to pursue this option, then we would need to decide the individual or group of individuals that would be responsible for regularly reviewing the investment portfolio and meeting with the investment manager from High Mark funds to determine how the City's investment portfolio should be structured. Finance Committee Recommendation This matter was presented to the Finance Committee on February 8, 2010. After a thorough discussion of 1) the policy considerations of establishing an irrevocable trust and 2) the relative advantages of the PERS trust and the PARS trust the Finance Committee felt most comfortable placing the funds into the PERS trust primarily because of the investment expertise provided by PERS and the lack of need for City staff and policy makers to involve themselves in investment decisions. ALTERNATIVES The Council may elect to disregard the Finance Committee's recommendation and either direct staff not to place these funds into an irrevocable trust or to proceed with the establishment of an irrevocable trust but to select PARS as the trustee and not PERS. FISCAL IMPACT Accepting the Finance Committee's recommendation will allow the City to fully fund its ARC for retiree medical benefits without increasing the amount needed to be budgeted for such. Selecting PERS as the trustee is the lowest cost option.