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HomeMy WebLinkAbout5.22.25 Deferred Comp Meeting MinutesDEFERRED COMPENSATION PLAN COMMITTEE ST. LUCIE COUNTY, FLORIDA REGULAR MEETING Date: May 22, 2025 Convened: 9:00 AM Adjourned: 9:29 AM Committee Members Present: George Landry, County Administrator; Dan McIntyre, County Attorney; Michelle Miller, St. Lucie County Clerk & Comptroller (via video); Michelle Franklin, St. Lucie County Property Appraiser; Monte Kosoff, St. Lucie County Tax Collector Designee (via phone) Others Present: Jennifer Gainfort, Mariner; Maria Goncalves, Lincoln Financial Group; Nicole Moreno, St. Lucie County Clerk & Comptroller Accounting Manager (via video); Vera Smith, Deputy Clerk, Recording Secretary CALL TO ORDER George Landry, County Administrator, called the meeting to order at 9:00 AM. APPROVAL OF MINUTES FROM THE JANUARY 22, 2025 QUARTERLY MEETING Dan McIntyre, County Attorney, motioned to approve the January 22, 2025, meeting minutes. Michelle Franklin, St. Lucie County Property Appraiser, seconded the motion, which was carried unanimously. II. QUARTERLY INVESTMENT PERFORMANCE REVIEW (MARCH 31, 2025)— JENNIFER GAINFORT (MARINER) Jennifer Gainfort (Mariner Institutional) handed the committee a printed report of the Investment Performance Review quarter ending March 31, 2025. She provided a brief market overview highlighting volatile quarterly investment returns across various benchmarks. January started strong but later declined due to competitive threats in artificial intelligence (AI) and the implementation of tariffs, which raised concerns about potential inflation. Ms. Gainfort reported that some of the returns for the quarter were fairly negative, highlighting the various Major Market Indexes. The S&P 500 Large Caps pulled back 4.3% during the quarter, with the Magnificent Seven stocks significantly affected. The Russell Mid -Cap index was down 3.4%, and the Russell 2000 Small -Cap was hit the hardest, down 9.5%. Overseas markets performed well, with MSCI EAFE markets up 7% and MSCI Emerging Markets up 3%. Bonds performed well, with Bloomberg US AGG up 2.8%, driven by slightly lower interest rates. Domestic equities' 1-year performance had mixed results, with S&P 500 Large - Caps up 8% and Russell 2000 Small -Caps down 4%, MSCI ACWxUS up 6% and MSCI EAFE/Fixed income up 5% over the last year. During the quarter, two positive indices were observed on the Domestic Equities side: the Small -Cap 3000 Index and the Large - Cap 1000 Value. The Large Growth Index was down 10% with half of the benchmark in technology stocks. Ms. Gainfort provided an overview of the asset allocations by class, noting a small decrease quarter over quarter in assets from December 31, 2024, with over $25 million, to March 31, 2025, with $24 million, representing a decrease of $240,000 or so. The allocation remained similar across different asset classes: 46% in Equities, 28% in Fixed Income, 24% in Balanced, and 1% in REIT (Real Estate Funds). Participants showed stability, with no significant changes in their investments despite market volatility. The scorecard shows target -date funds performing well, with most funds ranking in the top third of their peer groups. Active funds were reviewed, with improvements in the Winslow Large Cap Growth fund and the Vanguard Windsor Large Cap Value fund. She discussed the recent fund changes, including the replacement of the Allspring Large Cap Growth fund with the Winslow Large Cap Growth fund. The Winslow Large Cap Growth fund is still trailing in the five-year performance but remains within the top third compared to its peer groups, which is an improvement versus the previous fund. The ClearBridge Mid Cap fund was replaced on May 5, 2025, moving to the Harbor Mid Cap Strategy. Additionally, the American Funds EuroPacific Growth was replaced with the Goldman Sachs GQG Partners International Opportunities fund. The DFA International Value Strategy was also added for further diversification for participants. The Vanguard Windsor, MassMutual Small Cap, and Dodge & Cox Income X strategies are passing across the board. She mentioned the change in the Share Classes on March 24, 2025, as a savings of 8 basis points for participants. She noted the Columbia Stable Value Strategy ended on April 1, 2025, and assets moved over to the Lincoln Stable Value Strategy. An updated investment policy statement was provided with changes made to Exhibit A -Investment options, on page six, to reflect the recent fund changes. Ms. Gainfort stated that all the changes made have positively impacted the portfolio from the investment perspective. Dan McIntyre, the County Attorney, asked if there might be a typo in the performance comparison on page 22 of the report for the Lincoln Stable Value Account, which shows a quarter performance of 0.05 (100), compared to the migrated Columbia Trust Stable Government Fund account, which shows 0.48 (100). In response, Ms. Gainfort indicated that it could be a typo unless the crediting rate has changed. She assured him that she would check the numbers and provide a follow-up. III. LINCOLN FINANCIAL GROUP — MARIA GONCLAVES Maria Goncalves, Lincoln Financial Group, provided an overview of Lincoln's services, including retirement solutions and group benefits as of March 31, 2025. In addition to retirement services, Ms. Goncalves also mentioned other services offered by Lincoln, including disability, accident, critical illness, dental, and vision insurance. In the regulatory update of employee benefits, she advised that the maximum salary deferral amount limit for 2025 is $23,500, with the catch-up contribution limit of $7,500 for participants 50 and older. She provided a review of the plan stats and demographics for St Lucie County, noting consistent quarter -over -quarter performance in participant engagement, distributions, loan balances, beneficiary rate, and investments. In the first quarter of 2025, the plan assets were at $24.8 million. The St. Lucie County participation rate is 24.5% for the first quarter of 2025, with a deferral rate of 7.7%, above benchmarking averages. She noted that as the average deferral rate age bands increase, the participation rate also increases. She reviewed the participation rates by office: St. Lucie County Clerk's Office 21.5%, St. Lucie County Property Appraiser 44.3%, St. Lucie County Tax Collector 22.3%, and the Board of County Commissioners had a rate of 24% with 209 contributors and 870 eligible participants. A beneficiary campaign was held from May 20 to 22, 2025, with reminders on the website urging participants to add a beneficiary to their accounts. Ms. Goncalves reviewed distributions within the plan, with 29 distributions (termination of employment, hardship service, withdrawals, etc.) taken in the first quarter of 2025. She discussed loan activity, with 76 participants having outstanding loans. The average loan balance was $4,200, and two loans were initiated during the quarter. The total outstanding loan balance on the plan is $319,109, representing 1.3% of assets. She provided an overview of the 2025 communication and education calendar, highlighting ongoing campaigns and planned activities. The retirement consultant conducted 41 one-on-one meetings with participants, covering topics like enrolling in the plan, beneficiary updates, and account reviews. She reviewed website utilization, showing high activity in the "my investments" and "my target" sections. She discussed the number of participants with enabled biometrics and those using the participant auto -increase feature. Ms. Goncalves reviewed call center activity, highlighting 139 calls in the first quarter, with inquiries related to the status of requests, death claims, and benefit hardship. Michelle Franklin, the St. Lucie County Property Appraiser, asked about the average percentage of participants in organizations nationwide or statewide. In response, Ms. Goncalves explained that depending on the stats in the industry benchmark, between a 25-50% participation rate across the board. IV. DISCUSSION The meeting concluded with no further discussion. V. ADJORN There being no further business to discuss, the meeting was adjourned at 9:29 AM.