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Retirement Board report The big news from the Retirement Board is that the Plan is making money! In the last quarter (our first in office) the Plan posted the highest earnings in years, far higher than the low annual growth that the Plan has maintained for years. This according to a report our actuary will deliver to the Board this month. What accounts for the stupendous earnings of the past quarter? How can our earnings best be applied? Part of the increase is due to market changes that have favored the value sector in which we are heavily invested. But a significant increase has come from the changes that we have pushed in our investment strategy, changes that our professional advisors have been urging for years but that previous Boards have studiously ignored! Reviewing old minutes, we frequently see plan advisors urging diversification of our investment portfolio, and the board rejecting their advice. Another change that we made that has made us a ton of money is that we have begun reducing the cash reserves – again in keeping with expert recommendations. Previous Boards maintained approximately 20% cash reserve, while advisors recommended 5%. They had a billion dollars in the bank! We have invested nearly $400 million of it, and we intend to bring cash reserves closer to the recommended 5%. Okay, now what? What should we DO with the extra cash? That is the question the Board has been discussing. We have asked our actuaries to provide cost figures for different benefit enhancements. Obviously, before the Board makes any decisions on what to do with the surplus, we will carefully study our options and request input from expert advisors and plan members alike. But if the stupendous surplus we have been generating continues, we could be in the happy position of deciding how to best use any surplus to benefit plan members.
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