741 Colonel Ledyard Highway

Ledyard, Connecticut 06339

TOWN OF LEDYARD

Retirement Board

Meeting Minutes

Chairman

John Rodolico

Regular Meeting

Tuesday, December 19, 2023

10:00 AM

Council Chambers - Hybrid Format

CALL TO ORDER

Chairman Rodolico called the meeting to order at 10:04 a.m.

II.

ROLL CALL

Board Member Roger Codding

Board Member Sharon Wadecki

Chairman John Rodolico

Present

Board Member Daniel Panosky

Board Member William Thorne

Excused

Also in attendance was Naomi Rodriguez, Town Council.

Staff present:

Ian Stammel, Assistant Finance Director

Matt Bonin, Finance Director

Christina Hostetler, Town Hall Assistant via zoom

III.

PRESENTATIONS

Chris Rowlins, Fiducient Advisors will be presenting the 3Q investment review and the

November performance flash report.

Chris Rowlins, Fiducient Advisors started by saying that overall plans have stepped back and

taken a pause. This is due mostly to the combination of a difficult 2022 and the restoration of

higher yields. Since 2015 the averages and medians have come down significantly,

approximately 68 basis points from FY2015 to FY2022. Now plans are in the early stages of

evaluating stances in the current overall interest rate cycle. In FY2022 36% of pension plans

exceeded the 80% funded mark which is a meaningful decrease from FY2021, when 65% of

pension plans exceeded the 80% funded mark. FY2021 was a year of outsized investment

performance which improved the average funded ratio followed by challenges in FY2022,

resulting in a return to historical averages. FY2023 performance jumped up a bit but not as

significantly as in FY2021.

Mr. Rowlins said that the first half of the calendar year 2023 resulted in good numbers. Interest

rates were still stubbornly high in the third quarter with signs that the Federal Reserve would

keep the rates high or maybe even raise the rates again during the fourth quarter. Bond yields

spiked during the quarter. The month of November held the best bond market return in over 30

years.

The equity sleeve of the Capital Market performance was negative pretty much across the board

with no place to hide. YTD growth outperformed value. Big Tech stocks tethered to AI have

emerged as market leaders and have become a bigger representation of the S&P 500 as well as a

bigger weight of the Russell 1000 growth. Large cap growth has outperformed small and

medium cap growth. The thinking is that higher borrowing costs impacted smaller companies

who can't pass off costs to their consumers. The third quarter had a very concentrated narrow

market. S&P Real Assets were down about 2.6 % for the quarter. The energy sector was a bright

spot for the quarter.

The portfolio performance for the quarter was down 3.8% net and the benchmark was down

3.4%. The YTD (January through September) was up 4.2% net vs 3.8% benchmark. One year

was up 11.1% net vs 10.8% benchmark.

There are two active Core Plus managers and Black Rock was brought in as an unconstrained

manager. Black Rock has done a great job in a volatile interest rate environment. Although the

trend may be towards a lower interest rate Mr. Rowlins still believes Black Rock has a role in

the portfolio going forward.

Met West has been placed on watch status given the announcement of some portfolio manager

changes. Although Met West has been delivering on performance there were some significant

changes announced that warrant elevation to a watch status. Neuberger Berman is on discuss

status because of the role that Judy Vale, CFA is playing at the firm on a go forward basis. Most

likely NB will be taken off a discuss status next quarter.

Chairman Rodolico asked at what point does FA do re-allocations? Mr. Rowlins answered that

there are mid and max ranges to keep the portfolio aligned and when the ranges edge close to

4-5% from the target then there will be a re-balancing recommendation/effort.

November Flash -

- After a difficult third quarter, November brought a good print on inflation and signs that the

labor market is strong although weakening a bit which is good from the lens of the Federal

Reserve because it means less wage pressure.

- The economy is fairly strong and there was lessening of student debt. Fixed income was

positive across the board and it improved the YTD numbers. Big numbers in Global equities

such as seen in the S&P. NASDAQ which is a tech heavy benchmark was up 37% YTD.

- Also, some good performance for Small Cap Companies at 8.9% for the month of December,

which is three times higher than the S&P 500.

- International markets were higher. The dollar weakened a bit and interest rates came down

across the board.

- There was some weakness in emerging markets particularly China. Both China and Multi

Nationals that rely on China have been struggling, on the contrary India has done very well.

- The portfolio performance was up 6.7% for the month of November which in turn improved

the YTD performance.

- Mr. Codding commented that it appears that the William Blair Small Cap underperformed the

benchmark for this year and asked Mr. Rowlins to comment. Mr. Rowlins said earlier in the year

some of the regional banking stocks hurt their portfolio which caused a lag on their performance

and affected their longer-term numbers however, since they were put in the portfolio they

outperformed the benchmark by about 170 basis points. He doesn't recommend any action on

William Blair at this time.

- International allocation had a bit of weakness particularly with Invesco and T. Rowe Price.

Invesco's allocation to China especially in the second half of the year has dragged them down.

- Real Assets was up 6.6% for the month and 4.5% for the quarter although it has normally been

lagging in the portfolio.

Recap - A good November, a solid December and a little bit of a Christmas rally. Mr. Rowlins

said that FU will look at the underlying management structure and will come back with different

scenarios for discussion. FU may conclude to remain where the portfolio is at today's allocation

and structural wise or there may be some tweaks such as adjusting the asset allocations.

Mr. Rowlins ended the meeting by saying he will provide a December Flash report for the

Board.

IV.

REVIEW AND APPROVAL OF MINUTES

Motion to APPROVE Regular Meeting Minutes from November 21, 2023, as written.

APPROVED AND SO DECLARED

John Rodolico

RESULT:

MOVER:

Sharon Wadecki

SECONDER:

Codding Wadecki Rodolico

AYE

Thorne

EXCUSED

ABSTAIN

Panosky

DIRECTOR OF HUMAN RESOURCES UPDATE

Director of Human Resources update.

No report.

VI.

FINANCE DIRECTOR'S REPORTS

Finance Director’s Report.

Matt Bonin, Finance Director said he would like to add a late invoice from USI to Any Other

New Business. Chairman Rodolico said the Board would take this up under Any Other New

Business.

DISCUSSED

RESULT:

VII. OLD BUSINESS

Discussion on a review of applicable labor contracts and retirement documents for Town of

Ledyard employee groups with applicability to retirement eligibility and benefits continued.

Chairman Rodolico said he is working on a draft document and added that Human Resources

has volunteered to help. It would be good to consolidate labor contracts into a chart to either

provide the information or to document where to find the information instead of having to search

each time. Chairman Rodolico said he would like to put off this agenda item until the New Year.

DISCUSSED

RESULT:

Any Other Old Business to come before the Board.

None.

VIII. NEW BUSINESS

Motion to APPROVE payment of USI invoice #90086413, dated September 30, 2023, in the

amount of $8,500.00 for Core Installment Fee (50%) - Actuarial Services - 2023 Plan Year

Mr. Panosky asked to confirm that the Board would only pay the core actuarial services not the

OPEB charge too, Mr. Bonin agreed.

APPROVED AND SO DECLARED

John Rodolico

RESULT:

MOVER:

Sharon Wadecki

SECONDER:

Codding Wadecki Rodolico Panosky

Thorne

AYE

EXCUSED

Any other New Business to come before the Board.

Motion to APPROVE payment of USI invoice #90089745, dated November 30, 2023, in the

amount of $400.00 for benefit calculation for Steve Masalin.

The USI invoice was received after the agenda was posted; Mr. Bonin requested that it be added

to Any Other New Business.

APPROVED AND SO DECLARED

John Rodolico

RESULT:

MOVER:

Sharon Wadecki

SECONDER:

Codding Wadecki Rodolico Panosky

Thorne

AYE

EXCUSED

IX.

ADJOURNMENT

Motion to ADJOURN the Regular Meeting at 10:53 a.m.

APPROVED AND SO DECLARED

RESULT: