Olivette pension board approves $1 million redemption request to Principal, rebalances $400,000 into core fixed income

The Olivette City pension board approved two portfolio moves at its meeting: increasing its redemption/top-off request with Principal US Property to $1,000,000 and rebalancing $400,000 into Principal core fixed income to replenish liquidity and move allocations closer to target. Speaker 6, an unidentified board member, made the motion to raise the Principal US Property redemption request from $500,000 to $1,000,000; Speaker 2 seconded and the motion carried by voice vote with no opposition or abstentions recorded in the transcript.

The board also approved a rebalancing motion. Speaker 6 moved, and Speaker 2 seconded, to move $300,000 from equities and $100,000 from the Fidelity cash account into Principal core fixed income (totaling $400,000). The proposal was presented by Speaker 3, an unidentified presenter, who said, “what we're proposing to do is just send some send 400,000, back into principal core fixed income” to both invest and use for benefit payments.

The actions follow a portfolio review by Speaker 3, who summarized recent trading and performance: the fund was up roughly 4% through the first quarter, fixed income produced modest positive returns for the month and quarter, and cash returned approximately 5.1% over the past year. Speaker 3 also reported that the board is paying roughly $87,611 annually in manager fees for the current lineup (about 38 basis points) and an all‑in annual estimate of about $133,611 on current asset values, figures shown to be roughly in line with industry medians.

Board members discussed the fund's cushion, current cash flows, and distribution sources. Speaker 3 said the portfolio cushion displayed in the materials was about $1.12 million and noted previous hypothetical redemptions would have reduced that cushion to uncomfortable levels. Members emphasized that Principal's core fixed income is the usual source for monthly benefit distributions and that Fidelity/Regions cash accounts are maintained to meet routine fees and liquidity needs.

Members also discussed actuarial issues and next steps. Speaker 1 said the board has not yet scheduled the actuary to present but that the actuary’s report submitted earlier had been received and turned out favorably. The group noted that actuarial assumptions — including examples cited of assumed returns such as 7% and a contested instance where an actuary raised an assumption to 7.5% — affect funded-status calculations and may drive future discussions about asset allocation and risk tolerance.

Next procedural steps recorded in the meeting: the board will submit the increased redemption/top-off request to Principal and execute the approved transfers to rebalance toward target allocations. The actuary will be asked to meet with the board for a fuller review of funding assumptions and cash‑flow scenarios; a date was not specified in the transcript. The meeting adjourned after brief closing remarks.