Retirement Board

APPROVED MINUTES OF RETIREMENT BOARD ANNUAL FIDUCIARY TRAINING MEETING Thursday, October 10, 2024 2:30 PM In-person Meeting for Trustees: City Hall, Dogwood Conference Room Virtual Attendance Option for Consultants/ Staff/ Public Public comments were invited to be submitted to cmester@fallschurchva.gov until 3:00 PM on Thursday, October 10, 2024. 1. Call to Order The meeting was called to order by Chair Connie Rydberg at 2:34 PM 2. Roll Call Present: Connie Rydberg, Marshall Jarrett, Matt Parker, Nate Dupree and Gary Fuller in person; Mathann Jackson virtual Absent: Charlie Collier, Herb Holmes Staff Present: Cindy Mester, Meaghan DeCelle, Christopher Valakos and Kiran Bawa in person; Eric Cembrook (NVCJA) and Sally Gillette (City Attorney) virtual Also Present: Tom Hall, City resident Mary Nye, Mariner Robert Burrell, Segal Consulting Meghan Horn, Segal Consulting Laura Keller, Segal Consulting 3. Virtual Trustee Approval: Marshall Jarrett moved and Matt Parker seconded to allow Mathann Jackson to attend the meeting virtually due to personal reasons that prevents her physical appearance. The motion passed 5--2 (Herb Holmes and Charlie Collier absent) 4. Welcome and Introductions: The Board welcomed a new trustee, Gary Fuller, as the elected representative of the Basic Plan. 5. Receipt of Petitions: Cindy Mester relayed two comments to the Board from City Staff: 1. The City should consider a DROP retirement payment option; and 2. Constitutional officers who currently participate in the VRS would like to benefit from the City’s Basic Pension Plan. Staff will follow up with both submitters. 6. Review and approval of draft Minutes from September 9, 2024 meeting Marshall Jarrett moved and Matt Parker seconded approval of the September 9, 2024 minutes as presented. The motion passed 4-0-2-1 (Herb Holmes and Charlie Collier absent, Gary Fuller abstained). 7. Mission Square WAPSX Funding Change update/timeline: Ms. Mester shared a media article highlighting the Retirement Board’s decision to pull investments from WAPSX following the Wells Notice that the SEC issued to the fund manager. MSQ will be sending communication to affected  participants in December 2024. WAPSX has informed the Board that our transition date out of the fund will have an effective date of January 13, 2025. 8. Legal Services RFP is moving along and is now in the cost proposal stage. 9. Annual Mandatory Fiduciary Training Meghan Horn from Segal Consulting presented Fiduciary and Governance Educational Training. The topics presented were Fiduciary standards, Litigation, ESG Investing and Secure 2.0. As an overview, a fiduciary is anyone who Exercises discretionary authority over management of the plan or disposition of plan assets, provides or has responsibility/authority to provide investment advice, and has discretionary authority/responsibility over administration of the plan. Fiduciaries can include more than just trustees, such as staff, board members and investment advisors. Retirement Board (“Board”) has fiduciary responsibilities and the individual Board members are fiduciaries. The Board’s fiduciary responsibilities stem from delegated functions as specified in the Code of the City of Falls Church, Virginia. The legal standards applied to fiduciaries (duties of prudence and loyalty) are the highest standards under the law and are often difficult to understand. Meeting the fiduciary standards requires more than just common sense or a good faith attempt. A number of key litigation cases were presented to show the gravity of fiduciary responsibility. On the topic of environmental, social and governance (ESG) factors in investing, the long and recent history of ESG executive orders and legal guidance was presented. The opinion from the Commonwealth of Virginia Attorney General states that VA law imposes fiduciary duties that preclude basing investment decisions on environmental, social and/or corporate policies rather than financial decisions. The opinion is binding to the state’s governmental plans. After the Legal RFP process is completed, we will be asking the selected law firm to provide an opinion as to whether the opinion governs Falls Church plans as well. Regarding Secure 2.0, Ms. Horn presented key changes that are awaiting final guidance from the DOL. Secure 2.0 also allows plans to adopt several provisions around emergency withdrawals and savings. Plan fiduciaries should use caution when implementing these allowances as excessive withdrawals could destabilize the plans. The administrative burden should also be considered. 10. Other business not on the agenda (none) 11. Adjournment Marshall Jarrett moved and Matt Parker seconded to adjourn the meeting at 3:53 PM The motion passed 5-0-2 (Herb Holmes and Charlie Collier absent) Next Meeting scheduled for Thursday, November 7, 2024 at 5:00 PM (Location: in-person Dogwood A&B)