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Agenda Item
45.03 Discussion - Educational Employees' Supplementary Retirement System of Fairfax County (ERFC) Update
Meeting:11/09/2009 Work Session No. 42-46
Category:45. Human Resources 2:30 p.m.
Agenda Type:Discussion
Approver:Select Approver
Approval Tree:Human Resources
Agenda Item Content


Staff Contact: Alan Belstock, Executive Director, ERFC

Other Staff Present: Michael Hairston, ERFC Board Chair
Jeanne Carr, Deputy Executive Director, ERFC
Janet Kohler Dueweke, Communications Specialist, ERFC

Meeting Category: November 9, 2009 - Work Session No. 45

Subject: ERFC Update

School Board Action Required: Information

Related To: N/A

Key Points:

1. Effective September 30, 2009, ERFC is positioned in accordance with its long term targets, with the exception of the Real Estate and Absolute Return allocations. ERFC remains slightly under-allocated to Real Estate as this asset class continues to face pressure under the weak economy. ERFC also remains under-allocated to Absolute Return strategies (hedge fund of funds) pending a re-analysis of the allocation to alternatives within the portfolio.

2. ERFC’s 1-year and 3-year fiscal year performance figures lagged against the System’s benchmarks, due primarily to the managers’ poor relative performance during the final two quarters of calendar year 2008. However, the Plan measures ahead of its benchmarks for the longer term. Performance has also improved vastly during calendar year 2009 on both absolute and relative bases.

3. Market asset values have increased in the current calendar year, from slightly below $1.4 billion in January to just over $1.6 billion as of September 30, 2009, with an exceptional 20.6% year-to-date performance.

4. Employer contribution requirements are expected to increase beginning in FY 2012, due to the portfolio’s significant losses in CY 2008. However, to the extent that ERFC’s CY 2009 returns are significantly better than anticipated, the amount of the contribution increase will be mitigated.

5. Although FCPS’ current 3.20 percent contribution rate suffices to meet ERFC’s funding policy requirement, a NET Pension Obligation (NPO) will be placed on FCPS’ FY 2011 financial statements unless it contributes the Actuarial Required Contribution rate of 4.04 percent of salary.


6. The ERFC Board of Trustees has added an action item within its strategic plan, to assist the School Board in considering prudent options relative to the significant asset losses incurred during CY 2008.


Attachment(s): ERFC Update Presentation ERFCUpdatePresentation.pdf





 

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