MINUTES
Investment Management Subcommittee of the
Retirement Plan Advisory Committee
January 10, 2012

A meeting of the Investment Management Subcommittee of the NSHE Retirement Plan Advisory Committee was held on January 10, 2012 at the Desert Research Institute in Las Vegas.

Present:           Kent Ervin, Chair; Michelle Kelley; Henry Stone; and Pat LaPutt
Also Present:   George Dombroski (NSHE); Dan Pawlisch, Ruth Schau, and Kathleen Strukoff (Hewitt EnnisKnupp)

The meeting was called to order at 8:30 am.

Dan Pawlisch reviewed the most recent draft of an Investment Policy Statement (IPS) for NSHE and the provisional watch list for 3rd quarter 2011. There was a lengthy discussion about the proposed methodology for monitoring investment funds. It was agreed that a color coding scheme will be employed to describe varying levels of triggered fund scrutiny. Mr. Pawlisch was asked to provide definitions around the various colors and to include a scattergram showing relative fund performance graphically (possibly vs. amount invested at NSHE) for the February RPAC meeting. Some minor changes were agreed to in the Investment Objectives and Investment Monitoring sections.

MOTION: Pat LaPutt made a motion to approve the IPS as amended. Michelle Kelley seconded. The IPS was approved unanimously subject to the agreed to changes. HEK was asked to prepare the revised IPS for presentation at the February RPAC meeting.

There was discussion about a mission statement for the NSHE Retirement Program. The following statement was approved for recommendation to the RPAC:

“The mission of the NSHE Retirement Program is to provide opportunities for employees to accumulate a reasonable level of savings towards retirement income through engagement, education, guidance, and investment choices.”

Michelle Kelley brought up the need for a succinct “marketing statement” to introduce plan redesign concepts to constituent groups. She will develop a draft.  Mr. Pawlisch will distribute a copy of similar statement that was used at Purdue town halls.

There was a lengthy discussion about goals and objectives of the planned redesign of the Retirement Program.  The committee agreed to recommend to the RPAC the goals and objectives listed in Exhibit A attached.

Ruth Schau led a discussion of communication and implementation strategies for a program redesign. There was an extensive discussion regarding a proposed program redesign project plan and timeline. There was agreement that engagement of key constituencies in the planning and preparation process should occur in generally the following order:

  1. RPAC (March special meeting)
  2. Chancellor (who may confer with Board of Regents members)
  3. Institutional Presidents
  4. Institutional Business Officers (June meeting)
  5. Employees (via town hall meetings, scheduled with assistance of Faculty Senates)
  6. Retirees (via town hall meetings)
  7. RPAC (to incorporate changes based on faculty input from town halls)
  8. Faculty Senates (at regularly scheduled meetings)

There was agreement that a second round of communications and engagements should occur with the same constituencies at the point where a vendor selection is made. It was also noted that the participant survey to be conducted in Spring 2011 could provide input for the plan redesign effort.

There was discussion about the proposed investment tier structure for the redesigned program.

MOTION: Michelle Kelley made a motion to adopt the tier structure described below. Pat LaPutt seconded. The motion was approved unanimously.

                INVESTMENT TIER STRUCTURE FOR REDESIGNED PROGRAM

                TIER I                     Single-Decision Managed Investments
                                                Indexed Target Date Funds (Qualified Default Investment Alternative)

                TIER II                    Basic Asset Allocation Funds
                                                Total US Equity Index
                                                Total Non-US Equity Index
                                                Total US Bond Index
                                                Money Market

                TIER III                  Selected Investment Style Menu

Index Funds Active Funds
Short-Term Fixed Income
Real Return Fixed Income
Large Cap US Equity
Small/Mid Cap US Equity
Developed International
Emerging Markets
Stable Value
Diversified Fixed Income
High Yield Bond
Large Cap US Growth
Large Cap US Value
Small/Mid US Equity
Global Equity
Total Non-US Equity
Emerging Markets
Real Estate

                Tier IV                   Mutual Fund Market Window
                                                Brokerage account access to universe of qualified mutual funds

Dan Pawlisch led a discussion of fees and presented information on current expenses on an asset-ratio and per-participant basis. HEK was asked to correct possible omissions in the fee transparency reports for various vendors and to present fee structure options at the February subcommittee meeting.

The meeting was adjourned at 3:25 pm.

Prepared by:  George Dombroski, Retirement Plan Alternative Manager

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