LCEC Retirement Plan Oversight and Performance Update March 17, 2016
Retirement Plan Structure • LCEC provides two types of retirement benefits under two separate plans: Defined Benefits • Traditional Plan • Cash Balance Plan 401(k) • Retirement plan policies have been developed to ensure proper oversight is in place
Retirement Plan Oversight Investment Committee Responsibilities • Designated members of • Establish and review investment Executive Steering Committee, objectives, policies, amendments, Board counsel, Internal Audit, and guidelines Human Resources • Review performance of plans and • Meets quarterly plan components • Has engaged the services of an • Periodically report results investment consultant (w/ overview to Board of Trustees Morgan Stanley) to assist in fulfillment of responsibilities and to provide independent expertise and opinion on plan management (John Hancock Retirement Plan Services) and performance
Retirement Plan Performance Update • Following slides are excerpts from the most recent quarterly report prepared for and reviewed by the Investment Committee • Report based on 4Q 2015 results
401(k) Fund Performance 2015 LCEC Fund 2015 Benchmark LCEC Fund 1-Year Performance 1-Year Performance Benchmark JP Morgan SmartRet Income I -1.01% -1.75% Morningstar Retirement Income JP Morgan SmartRet Income 2015 I -0.91% -1.39% Morningstar Target Date 2011-2015 JP Morgan SmartRet Income 2020 I -0.76% -1.60% Morningstar Target Date 2016-2020 JP Morgan SmartRet Income 2025 I -0.94% -1.59% Morningstar Target Date 2021-2025 -1.31% -1.81% JP Morgan SmartRet Income 2030 I Morningstar Target Date 2026-2030 -1.50% -1.74% JP Morgan SmartRet Income 2035 I Morningstar Target Date 2031-2035 JP Morgan SmartRet Income 2040 I -1.65% -1.98% Morningstar Target Date 2036-2040 JP Morgan SmartRet Income 2045 I -1.55% -1.81% Morningstar Target Date 2041-2045 JP Morgan SmartRet Income 2050 I -1.56% -1.97% Morningstar Target Date 2046-2050 JP Morgan SmartRet Income 2055 I -1.61% -1.62% Morningstar Target Date 2051-2055 6.17% 5.67% MainStay Large Cap Growth I Russell 1000 Growth -3.98% -3.83% MainStay ICAP Select Equity I Russell 1000 Value Columbia Large Cap Index Z 1.23% 1.38% S&P 500 T. Rowe Price Mid Cap Growth Adv 6.28% -0.20% Russell Mid Cap Growth Vanguard Extended Market Index -3.27% -3.35% S&P Completion Index Artesan Mid Cap Value Investor -9.68% -4.78% Russell Mid Cap Value -4.50% -1.38% ClearBridge Small Cap Growth A Russell 2000 Growth -2.86% -7.47% Perkins Small Cap Value S Russell 2000 Value Oppenheimer International Growth Y 3.44% 4.47% MSCI EAFE Growth Harbor International Inv -3.82% -0.39% MSCI EAFE Lazard Emerging Markets Equity Open -20.16% -14.60% MSCI EM (Emerging Markets) Oakmark International I -3.83% -5.22% MSCI EAFE Value -4.26% -4.03% Vanguard Total International Stock I ndex FTSE Globall All Cap Ex US Index 3.48% 2.83% Nuveen Real Estate Secs I FTSE Nareit Equity-Reits BlackRock Natural Resources Inst -24.32% -24.28% S&P North America Natural Resources Sect Index PIMCO Real Return Instl -2.75% -1.44% Barclays Capital U.S. Treasury - U.S. TIPS Vangard Short Term Bond Index -0.92% -0.97% Merrill Lynch Domestic Master, 1-3 yrs. Metropolitan West Total Return I -0.29% -0.55% Barclays Capital U.S. Aggregate 0.02% 0.03% PIMCO Money Market Admin CitiGroup 3-month Treasury Bill
Noted Items for 2015 • Made contributions of $8,533,944 to Defined Benefit Plan • Distributed assets of $1,195,385 from Defined Benefit Plan • Rebalanced to Target on Defined Benefit Plan in February, May, and July • New York Life sell to John Hancock Retirement Plan Services completed in June • Distributed Employee Total Compensation and Benefits Statements • Auto enrollment in 401(k) continues to be successful
Noted Items for 2015 Defined Benefit Class New Defined Benefit Funds Removed Defined Benefit Funds International Equity Vanguard Developed Markets IDX Harbor International Investor (HIINX) Admiral (VTMGX) HEDGE/ALT/World Alloc. PIMCO All Asset All Authority (PAUIX) REITS Voya Global Real Estate A (IGLAX) Defined Contribution – 401(k) New Defined Contribution Fund Class Removed Defined Contribution Funds Funds Mid-Cap Equity Artisan Mid Cap Value (Investor Artisan Mid Cap Value Fund (Institutional Class - Shares - ARTQX) APHQX) International Equity Harbor International Fund Harbor International fund (Institutional Class - HAINX) (Investor Class - HIINX) Emerging Market Equity Lazard Emerging Markets Equity Lazard Emerging Markets Equity Portfolio Portfolio ( Open Shares - LZOEX) (Institutional Shares - LZEMX) Small Cap Equity ClearBridge Small Cap Growth ClearBridge Small Cap Growth Fund (Class I - SBPYX) Fund (Class A - SASMX) Fixed Income Vanguard Short-Term Bond Index Vanguard Short-Term Bond Index Fund (Admiral Fund (Investor Shares - VBISX) Shares - VBIRX)
Current Issues • Monitor interest rates • Continue to watch funding levels of defined benefit plan in light of distributions and MAP • Consider automatic employee contribution increase for 401(k) • Focus on employee education on saving for retirement
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