Dan MacDonald's report on the September 21, 2023 STRS Board meeting

From Dan MacDonald

September 21, 2023 

SUMMARY STRS SEPTEMBER BOARD MEETING

Rob Walters and Dan MacDonald attended the September STRS Board meeting, neither of us attended the Investment Department Committee meeting on Wednesday, September 20, during which firms were interviewed to be general consultant for the Investment Department.  Dale Price is now the Chair of the Board. After the August minutes were approved, the Member Benefits Department had consultant CEM Benchmarketing present on the cost and services of the department to its peers. The department earned the second highest service-level score. This past year, its service score was 93 compared to a peer median of 81 while the cost per active member and annuitant was $98 compare to a peer average of $109. There was discussion on where numbers were drawn for the study. This report was followed by an update on the STRS Defined Contribution Plan which was implemented July 1, 2001.

Following the Member Benefits Department, a parliamentarian workshop was held on meeting procedures and small board procedures. The Board will take up Roberts Rules of Order at the November planning meeting after a motion to postpone consideration passed 6 to 5. [It should be noted that November’s meeting is not a typical Board meeting so Mr. Fichtenbaum’s push to adopt Roberts Rules of Order can’t be placed in the Board Policy even in November. Currently the Chair can use Roberts as “guidelines” if the Chair desires.]

Public Participation had 12 participants. 5 spoke in support of the STRS daycare center.  Three talked on hidden investment fees and their effect on the general fund net figure. One talked on the loss of moneys to retirees because of the loss of COLA. One person talked on behalf of a disabled retiree who STRS has told to return to work.  One person spoke on behalf of STRS and misleading facts. One person spoke regarding net vs gross returns and benchmarks.

A 90-minute lunch/executive session break then occurred.

The Investment Department reported an August gross return of negative 0.95 and a net return of a negative 0.96.  Preliminary total investment assets ended August at $89.9 billion, lower by $100 million in FY 2024.  The department then went over its securities lending program.

Executive Director Neville then gave his September report with some demographic information.  There were 3,702 new retirees in FY2023, the highest number since 2015.  This number is expected to grow over the next decade. There were 17,495 new hires in FY2023. As of June 30, 209 benefit recipients aged 100 or older – 180 females and 29 males.  The oldest recipient is 108 years young.  The member retired in 1973. The retiree who has been receiving benefits the longest – for 66 years – is a disability recipient. She began receiving a benefit in 1957 at age 27.

Following Routine Matters several ideas were promoted under new business. Mr. Bishop suggested the Board adopt a Key Trending Performance Dashboard.  New Board member Davidson moved to discuss the daycare center which was promptly cut down by a motion to postpone to October.  Mr. Davidson also requested percentages under years of service be reviewed by the Board at a future meeting. 

[Overall this was a very low keyed meeting with Chair Dale Price talking the helm and moving the agenda.]

The meeting adjourned at 3:31 p.m.  The next meeting should be October 19, 2023.