A Message From the Chairperson of the Milwaukee County Pension Board - David Robles
The Milwaukee County Pension Board, comprised of trustees elected and appointed, is entrusted with the administration of the pension trust fund from which retirement benefits are paid to retirees. This responsibility includes administering that trust in the interest of all members – this includes present vested members such as current and former employees, retirees, and other beneficiaries. The Trustees are fiduciaries – meaning that we collectively have the responsibility for administration of the trust in a prudent and responsible manner in accordance with not only Milwaukee County ordinances and rules, but Wisconsin and Federal laws. The Pension Board does not establish benefits – this is done by the Milwaukee County Board and County Executive. Rather, the Pension Board has a fiduciary responsibility to administer the trust and benefits in accord with the commitments made by Milwaukee County through its representatives, consistent with the law. Undoubtedly 2020, presented the Milwaukee County Pension system with challenges, anticipated and unanticipated. After the outbreak of the COVID-19 pandemic, the Pension Board and committees have met virtually since about March 2020. Agendas and meeting notices are posted on our website at Human Resources and Retirement Services.
Pension Chair Charters
The year began with the Pension Board adopting changes to the Milwaukee County Pension Board charters that govern the operation of the pension board. Trustees were appointed to the committees with consideration given to their interest in that area, as well as experience or expertise in that area. The implementation of those structural changes began in the middle of year 2020. The changes included creation of four standing committees addressing core areas of responsibility of the board:
Investment Committee Review of investments, asset allocation, portfolio performance by investment managers, and investment policy. The operation of this committee is fundamental to the investment performance of the pension fund. The Chairperson is Trustee Ron Nelson
Actuarial Audit and Risk Oversight of internal audit activities and services, whether by outside auditors of Milwaukee County. Responsibility includes work with audit or actuarial firms as well as providing for review and recommendations to the Pension Board. The Chairperson is Trustee Fernando Aniban
Appeals and Rules – Provides hearings for members appealing determinations by ERS. Reviews rules and proposed changes. The committee forwards recommendations for Pension Board consideration on the matters heard by the committee. The Chairperson is Trustee David Robles
Governance – Responsibility for review of Board and Committee charters, Board member training, evaluation, and education, communication with “stakeholders” – which includes policy makers, retirees, vested members, Retirement Plan Services, and those effected by Pension Board policy and operation. It also includes Pension Board and RPS strategic planning. The Chairperson is Trustee Elena LaMendola
Retirement Plan Services – Pension System Software Update and Upgrade
The Pension Board recently approved a contract with Vitech that will provide for an upgrade of the present Milwaukee County Pension system software (to V10). Expected to be fully implemented and on‐line in early 2022, the system will provide enhancements in benefit calculation, service and communication with employees and retirees – such as monthly statements and information, as well as handling tasks and operations that are presently done manually, that for example can be done via email. This is expected to enhance communications with retirees and other relevant stakeholders.
Employee Benefit Calculations
To maintain compliance as a qualified retirement plan with the Federal Internal Revenue Service, Retirement Plan Services has reviewed benefit calculations for retirees and communicated with retirees about underpayments and overpayments. The review has been completed and the corrected calculations will be carried forward as part of the software upgrade system.
The Milwaukee County Pension system contracts with an investment advisor who works with the Pension Board in the management and oversight of the pension fund. The investment advisor is involved in the recommendation and selection of the portfolio investment managers, monitoring of portfolio performance, manager performance, and balancing of investments in accord with Pension Board policy. The investment manager also provides periodic and timely reports to the Pension Board about the financial status of the pension fund. The last review of the Investment Advisor was in 2014 The Milwaukee County Pension Board issued a request for proposals at the end of 2020 for the position of Investment Advisor. At the April 2021 meeting, Marquette Associates was selected as the investment advisor after a competitive evaluation process.
Pension Fund Performance
For 2020, Marquette Associates reported that the annual rate of return for the fund was 10.7 percent. Additionally, the actuarial rate of return was 8.6 percent. The actuarial rate of return is a reflection of the fact that fund gains in 2020 are amortized over a 10‐year timeframe rather than over one year. Both rates reflect the fact that despite the impact that COVID-19 had on investments, the investments made by the pension fund performed well.
One of the Pension Board’s responsibilities is the ongoing challenge of managing and insuring the financial stability of the pension fund. The second task is ensuring the ongoing ability of the pension fund to meet the financial obligation to provide benefits to present retirees and beneficiaries, as well as future benefits to vested employees and members. The Pension Board has a fiduciary responsibility to relevant stakeholders to communicate about any proposed changes that effects the operation, management or benefits provided by the pension fund. Accountability is best achieved through transparency in proposals related to the pension funds and its beneficiaries.
Chairperson, Milwaukee County Pension Board