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HomeMy WebLinkAbout12.3.25 Deferred Comp Meeting MinutesDEFERRED COMPENSATION PLAN COMMITTEE ST. LUCIE COUNTY, FLORIDA REGULAR MEETING Date: December 3, 2025 Convened: 9:18 AM Adjourned: 9:46 AM Committee Members Present: George Landry, County Administrator; Katherine Barbieri, Interim County Attorney; Eric Collins, St. Lucie County Clerk & Comptroller Finance Director; Kara Odom, St. Lucie County Property Appraiser Designee; Monte Kosoff, St. Lucie County Tax Collector Designee Others Present: Jennifer Gainfort, Mariner; Vera Smith, Deputy Clerk, Recording Secretary CALL TO ORDER George Landry, County Administrator, called the meeting to order at 9:18 AM. I. APPROVAL OF MINUTES FROM THE SEPTEMBER 24, 2025 QUARTERLY MEETING Kara Odom, St. Lucie County Property Appraiser Designee, motioned to approve the May 22, 2025, meeting minutes. Katherine Barbieri, Interim County Attorney, seconded the motion, which was carried unanimously. II. QUARTERLY INVESTMENT PERFORMANCE REVIEW (SEPTEMBER 30, 2025)— JENNIFER GAINFORT (MARINER) Jennifer Gainfort (Mariner Institutional) handed the committee a printed report of the Investment Performance Review quarter ending September 30, 2025. She provided a brief market overview highlighting several changes that occurred during the quarter, with a strong rebound in tech stocks, particularly those in the Al space. The Magnificent Seven has been the driver of the overall market, with technology names including Microsoft, Meta, and Nvidia. The top 10 S&P 500 stocks account for just over 40% of the index's market capitalization, contributing to a little over 71% of the index's returns for the quarter. Over the quarter, there was anticipation of interest rate cuts by the Fed in September, with a 25-basis-point reduction in rates. Inflation remained steady at about 3.1% annually, above the Fed's target of 2%. In anticipation of a weaker labor market, they cut rates by 25 basis points, leading to a favorable market reaction, especially in small caps. She advised that from a market standpoint, all indexes performed positively across the board. Ms. Gainfort reported various returns as of September 30, 2025, and highlighted the following Major Market Indexes: Quarter Performance • S&P 500 Large Caps up 8.1% • Russell 2000 up 12.4% • MSCI ACWxUS up 7% • MSCI EAFE up 4.8% • MSCI Emerg Mkts up 10.6% • Bloomberg US Agg up 2.0% 1-Year Performance • S&P 500 up 17.6% • MSCI ACWxUS up 14.6% • Bloomberg US Agg up 2.9% Ms. Gainfort provided an overview of the asset allocations by class. The overall performance of the plan's assets showed a strong increase, with the market value moving from $24,719,128 to $25,286,110 between June 30 and September 30, 2025. This reflects a $566,982 increase quarter over quarter. The quarterly asset allocation reflects that 47% of participant assets are in Equity Funds, 25.9% in Fixed Income, 26.3% in Balanced Funds, and 0.8% in Real Estate Funds (REIT). Several fund changes were made over the quarters in the last year, including shifting from Allspring Large - Cap Growth funds to Winslow Large Cap Growth and from Allspring Premier Large. The Dodge & Cox Fixed Income share class shifted from (1) to (X). The Columbia Trust Stable Value shifted to Lincoln Stable Value, and the ClearBridge Mid Cap to Harbor Mid Cap. Other changes include moving Euro Pacific to Goldman Sachs and adding the DFA International Value Fund. Ms. Gainfort advised that all changes have been positive from a compliance standpoint. The scorecard shows significant improvement, with most funds passing across the board. The Winslow Large Cap Growth still shows failing on the five-year return being below the benchmark. Large growth has been very difficult to outperform the benchmark, but they have done a strong job. The other strategy lagging is the Harbor Mid Cap on the three-year metric, which underperformed due to a focus on high -quality stocks that lagged in the recent rally. Despite the underperformance, the strategy remains on theme with the market, focusing on quality over momentum, but there are no concerns at this time. On the scorecard, the other funds are passing, ranking very highly across their peer groups (Vanguard Windsor, MassMutual Small Cap, Dodge & Cox Income X, Goldman Sachs, DFA International Value). III. FOLLOW-UP DISCUSSION Ms. Barbieri inquired about the progress of addingfunds that invest in precious metals (gold) to the plan lineup. Ms. Gainfort recommended against adding precious metal funds to the plan lineup due to their high price volatility and speculative nature, suggesting a self -directed brokerage window with Lincoln. The self -directed brokerage window would allow participants to invest in a broader range of assets, including mutual funds, ETFs, and individual stocks, outside the traditional core lineup. The window would be managed by participants themselves, with the record keeper providing the platform and additional fees applying. She explained that the process of setting up a self -directed brokerage window includes the need for participants to open accounts and sign acknowledgements/agreements. The agreement contains a significant amount of language and disclosures indicating that these investments are not monitored by the committee. Any risk or investment decisions are made independently by the participant. Therefore, the risk lies entirely with the participant. If a participant makes a poor investment choice, that responsibility falls on them, not the committee. Ms. Gainfort advised that the holdings would not be viewable on the recordkeeper's website; it would be with whatever provider the recordkeeper utilizes. Lincoln partners with Charles Schwab, which serves as the provider for the self -directed brokerage window. There are fees associated with this account, including a $50 annual fee for Lincoln's. Participants should be aware of these additional costs. Participants would choose to sign up for the self -directed brokerage by setting up their own accounts. There is no fiduciary requirement to offer the plan, and it is completely optional. If chosen not to offer this feature, it must be done non - discriminately, allowing all participants to utilize it to the same extent. Another consideration is to limit the amount (50%, etc.) that participants can invest in the self - directed brokerage window to prevent them from putting their entire account into it. Lastly, review and document all services and fees on Lincoln to ensure everything makes sense. It's an option if interested; Lincoln is happy to help set it up. However, it's not commonly used; many clients have it available, but few actually utilize it. Mr. Landry suggested the committee discuss the proposal with their respective leadership and circle back at the next meeting to formulate a plan and set any necessary limits. The committee discussed participants utilizing the option for day trading, setting limitations on the self -directed brokerage, transaction fees, and payroll deductions being routed to the brokerage (via Lincoln/Charles Schwab), versus requiring a separate bank. The committee also discussed benefits and risks, and the need for further review and potential implementation. The meeting concluded with no further discussion. IV. ADJORN There being no further business to discuss, the meeting was adjourned at 9:46 AM.