PMRS Board Closes Out 2011 with Marathon Meeting

November 30, 2011 - Meeting on November 17, 2011, in their regularly scheduled session, the Pennsylvania Municipal Retirement Board (Board) closed out 2011 with a full day of interviews, reports, and actions that will set the tone of the agency’s investments for the coming year.  The primary focus of the agenda was to address three money manager contracts that expire early in 2012.  All handle international equity commitments.  The Board interviewed six candidates as finalists from more than sixty applications received in response to the issued Requests For Proposals (RFPs).  Wentworth, Hauser, and Violich was retained and HGK Asset Management and Johnston Asset Management were added to the manager stable.

The Board elected to address the international broad market equity commitment in two ways.  First they decided to allocate $100 million to the existing passive manager, State Street Global Advisors (SSgA), and then sought alpha from allocating approximately $50 million to each of the three selected managers.  The Board noted that all three run concentrated portfolios with historically low turnover experience.  It was felt that this balance of passive and active management within a very dynamic asset class was one of the safest ways to reach for returns without taking on too much risk.  Contract negotiations are underway and funding for the new managers is expected to take place in early 2012.  The selected managers’ applications and required disclosure forms can be reviewed on our “Contracts” page. These are provided in accordance with Board policy and Act 44 of 2009.

The Board also formally received the “Report on Activities Pursuant to Act 44 of 2010” which requires the Pennsylvania public funds (the Pennsylvania State Treasurer, the Pubic School Employees’ Retirement System of Pennsylvania, the State Employees’ Retirement System of Pennsylvania and the Pennsylvania Municipal Retirement System) to compile and publish lists of “scrutinized companies” – companies that have been identified as having prohibited business operations in either Iran or Sudan.  Because the requirements of the law are identical for all four funds, they have elected to work together on the compliance with the state law.  The full report can be viewed on the Department of Treasury's website.  Additionally, the Board was made aware that staff would be submitting an invoice to the State Budget Office seeking reimbursement for the expenses incurred by the PMRS in bringing the agency into compliance with the legislation.

The Board heard numerous reports from the Accounting, Membership Services, Municipal Services and Operations Division representatives.  They handled the disposition of two Administrative Hearings, received an update regarding the PMRS application to the IRS for a tax qualification certification, and adopted the 2012 meeting date schedule.  The Board will be meeting on January 19, March 28 & 29, May 17, July 12, September 20, and November 15. 

Finally, the Board expressed their sincere appreciation to Anthony T. Spagnolo, the representative on the PMRB from the Pennsylvania State Association of Township Commissioners who has served since January 2000.  Tony will no longer be a township commissioner in 2012 and thus must step down as the association’s representative.  The Board and staff acknowledge Tony’s dedication to the PMRS and wish him much continued success.