Council approves pension investment policy changes; real estate allocation cut in half

The City Council on Sept. 9 approved a resolution amending the investment policy statement for the salaried employee pension plan. The pension board recommended the changes and Marquette Associates — the plan’s investment consultant — presented the amendments to council.

Tom Latsky of Marquette Associates told the council the principal change is a reduction of the target allocation to core real estate from 10% to 5%. "We're reducing that to 5%," Latsky said. Of the 5 percentage points being freed, he said 2.5 percentage points will be redirected to private equity and 2 percentage points to U.S. equity; the amendment also reduces the plan’s overweight to small- and mid-cap allocations and updates several benchmarks and manager references in the policy’s addenda.

Latsky explained the policy defines responsibilities for trustees, the consultant, managers and the custodian and sets target, minimum and maximum allocation ranges used for regular rebalancing. He emphasized the changes are adjustments to targets and benchmarks rather than a wholesale change in investment strategy. Council member Lewis asked whether the plan includes any targeted allocations such as cryptocurrency; Latsky said allocations are diversified indices and "there is no targeted crypto investments."

Council members voted to approve Resolution 2025-263 (recorded in the meeting minutes as Resolution 20 25 2 63). Roll-call votes were recorded as: Council member Lewis — yes; Council member Prashant Hellman — yes; Council member Solomanov — yes; Chairman Pro Tem Weil — yes. The resolution directs the pension trustees to implement the amended targets and updated benchmarks described in the investment policy statement.