HomeMy WebLinkAbout20110155.tiff RESOLUTION
RE: APPROVE INVESTMENT POLICY STATEMENT OF THE WELD COUNTY
DEFERRED COMPENSATION PLAN AND AUTHORIZE CHAIR TO SIGN
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, the Board has been presented with an Investment Policy Statement of the
Weld County Deferred Compensation Plan for the County of Weld, Colorado, State of Colorado,
by and the through the Board of County Commissioners of Weld County, on behalf of the
Department of Finance and Administration, with terms and conditions being as stated in said
Investment Policy Statement, and
WHEREAS, after review, the Board deems it advisable to approve said Investment
Policy Statement, a copy of which is attached hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of
Weld County, Colorado, that the Investment Policy Statement of the Weld County Deferred
Compensation Plan for the County of Weld, State of Colorado, by and through the Board of
County Commissioners of Weld County, on behalf of the Department of Finance and
Administration, be, and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized
to sign said Investment Policy Statement.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 10th day of January, A.D., 2011.
BOARD OF COUNTY COMMISSIONERS
WE D COUNTY, COLO DO
ATTES �`
t7'1' arbara Kirkmeyer, hair /
Weld County Clerk to e . ;
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Sean P. �b way, Pro-Tern _BY:Deputy Clerk to the : w• aJ Ift3 f.\/ (Pi I/
Willikt F. Garcia
APP D A CKl F",
avid E. Long
oun y ttorney as,4g O-1O
Douglas'Radema her
Date of signatureI
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I- l0-II I -a5-11 PE0030
Defined Contribution Plan
INVESTMENT POLICY STATEMENT OF
Deferred Compensation Plan of the County of Weld, State of Colorado,
hereinafter referred to as "the Plan")
I. PURPOSE OF THIS STATEMENT
The Plan's Named Fiduciary and Plan Sponsor, Weld County, hereby establishes the following
policy for administering the Plan's investment program. The Investment Policy Statement sets
forth the investment objectives and guidelines that will be applied within the investment program
to insure that the Plan is managed in a manner consistent with the Plan document and applicable
statutory requirements. By establishing and communicating clear investment guidelines and
objectives, the Plan Sponsor can enhance the effectiveness of the Plan's investment program and
thereby contribute to the overall goal of retaining and recruiting employees by delivering an
attractive, low-cost retirement program.
The Named Fiduciary reserves the right to amend this Statement at any time as deemed prudent
or necessary. Should any amendment to this Statement be required due to changes in the Plan
document or a change in applicable law, the Named Fiduciary shall have due time to review such
changes and prepare and implement an appropriate amendment. Because of the dynamic nature
of the economic environment, developments in financial theories, and advances in technology,
this Statement will be examined by the Named Fiduciary from time to time on a formal or
informal basis and may, as a result of such examination, be revised by the Named Fiduciary.
II. INVESTMENT OBJECTIVES
The primary objectives of the Plan's investment program are as follows:
• Program Quality - Provide quality investment options that generate a high level of
participation and satisfaction for both current and former employees.
• Participant Control — Allow Plan members to exercise control over their retirement
accounts by providing them the ability to direct the investment of account assets. In doing
so, the Plan intends to meet the "safe harbor" requirements of ERISA §404(c) and applicable
regulations.
• Diversification — Offer members access to an appropriate range of prudent investment
options that enables them to construct a well-diversified portfolio. In selecting these
investment options, the Named Fiduciary can materially affect the potential level and
variability of returns on amounts in the members' investment accounts. The availability of
suitable investment options will allow Plan members to materially affect the potential returns
on amounts in their accounts, control the degree of risk to which such amounts are subject,
and create a portfolio with aggregate risk and return characteristics normally appropriate for
Plan members and which, though diversification, will minimize the Plan member's overall
risk, especially the risk of large losses.
2011-0155
III. INVESTMENT GUIDELINES
The Plan Sponsor has established the following guidelines for administering the Plan's
investment program:
A. Diversification
In recognition of the fact that diversification is the best tool for reducing portfolio risk,
the Named Fiduciary will make available to the Plan members at least three broadly
diversified investment options, each of which shall offer materially different risk and
return characteristics.
B. Investment Categories
All classes or categories of investments allowed by ERISA as acceptable investment
choices may be considered by the Named Fiduciary in determining the investment
options to be made available to the Plan members. The Named Fiduciary may, as it
deems appropriate, select and make available to the Plan members investment options in
the form of commingled funds, such as insurance company separate accounts, mutual
funds, and bank collective trusts, from any or all investment categories listed below, in
addition to guaranteed or stable value investments.
Provided that the Plan document allows such an option and such an option is consistent
with ERISA §407 and other applicable laws, the Named Fiduciary may select employer
stock as an investment option. To the extent that the Named Fiduciary deems it
appropriate and consistent with the Plan document and this Statement, the Named
Fiduciary may select and make available one or more customized investment portfolios
and retain an investment manager to manage the assets of each such portfolio.
The following asset classes are permitted for Plan investment options:
1. Stable Value — portfolio comprised primarily of short-term, high quality debt
securities including money market funds, stable value funds, and guaranteed
interest arrangements.
Strategic Purpose: Stable returns, income, diversification
2. Domestic Fixed Income - portfolios primarily composed of debt securities
issued by the U.S. government, U.S. government sponsored/related agencies, and
U.S. domiciled corporations. Investment options may include all quality ranges
(high, medium and low), all durations (short, intermediate and long), be broadly
diversified or concentrated (sector funds), and be either actively or passively
managed (indexed).
Strategic Purpose: Income, diversification, deflation hedge
3. International or Foreign Fixed Income — portfolio composed primarily of debt
securities issued by foreign governments, foreign government sponsored/related
agencies, and foreign corporations. Investment options may include all quality
ranges (high, medium and low), all durations (short, intermediate and long), be
broadly diversified or concentrated (sector funds), and be either actively or
passively managed (indexed).
Strategic Purpose: Income, diversification
4. Real Estate—portfolio consists primarily of owned real estate investment options
including real estate investment trusts of all types and other commingled real
estate equity investment options.
Strategic Purpose: Income, diversification, inflation hedge
5. Domestic Stock - portfolios composed primarily of the common stocks of U.S.
domiciled corporations. Investment options may include different sizes (large-cap,
mid-cap and small-cap) and styles (value, growth and blend). Such options may
be broadly diversified or concentrated (sector funds), and may be either actively
or passively managed (indexed).
Strategic Purpose: Long-term growth
6. International or Foreign Stock— portfolios composed primarily of the common
stocks of corporations domiciled outside of the U.S. Investment options may
include different regional and emerging markets funds, a variety of sizes (large-
cap, mid-cap and small-cap) and styles (value, growth and blend), be broadly
diversified or concentrated (sector funds), and be either actively or passively
managed (indexed).
Strategic Purpose: Long-term growth, diversification
7. Balanced/Asset Allocation — portfolio consists primarily of significant
proportions of both equities and fixed income investments.
Strategic Purpose: Long-term growth, risk reduction(via tactical rebalancing)
C. Selection of Investment Managers and Investment Options
The Named Fiduciary shall select investment managers and, where appropriate,
investment options based on the evaluation of qualitative and quantitative factors. The
review process will focus on the following five key aspects of an investment
management firm and investment option:
I. Organization — evaluate the key elements of an efficient and successful investment
management organization such as stable firm ownership, clear business objectives,
industry reputation, and experienced and talented investment staff.
2. Investment Philosophy and Process — evaluate the key elements of a valid and
well-defined investment approach such as unique sources of information, disciplined
buy/sell decisions, systematic portfolio construction, and adequate risk controls.
3. Resources — evaluate the state of current and proposed resources supporting the
investment process including the quality and depth research and the adequacy of
information management, compliance and trading systems.
4. Performance —evaluate historical returns and risks relative to passive indexes, peer
groups, and other competing firms.
5. Management Fees — evaluate the proposed fee structure relative to the industry and
other competing candidates.
These factors are intended to insure that manager/option selections are compatible with
the requirements of ERISA §404(c), made with a prudent degree of care, and that
excessive risk is avoided. Notwithstanding the above, the Named Fiduciary may also
include other factors that they believe are appropriate for a specific manager/option
selection exercise.
D. Monitoring of Investment Managers and Investment Options
The objective of the investment manager and investment option monitoring process is to
identify on a timely basis any adverse changes to the investment manager's organization
or investment process by periodically evaluating a number of qualitative and quantitative
factors. In addition, once adverse changes are identified, the monitoring process shall
dictate the timing and manner of response.
The Named Fiduciary shall evaluate the investment managers/options at least annually
using the framework in (C) above, in addition to using any other factors the Named
Fiduciary believes are appropriate to the inquiry. These factors are intended to insure that
the decisions to retain investment managers/options are made with a prudent degree of
care and that excessive risk is avoided.
If results from the monitoring process indicate substandard investment performance or
potentially adverse change in the investment manager's organization or investment
process, the Named Fiduciary may choose one of several courses of action including
assigning the investment manager/option a temporary probationary status known as the
Watch List, undertaking an in-depth review, or terminating the investment
manager/option.
Being placed on the Watch List is meant to convey the Named Fiduciary's increased level
of concern about a particular issue or event, which if left unresolved, could endanger the
future relationship. In these cases, the Named Fiduciary may wish to recommend that
members suspend contributions to investment managers/options on probation until the
matter has been successfully resolved. An in-depth review may be undertaken as a result
of the manager failing to rectify the issues that led to their placement on the Watch List, or
in response to major adverse changes in the investment manager's organization or
investment process, to the extent that the Named Fiduciary seriously questions the firm's
ability to manage the portfolio going forward. The purpose of the in-depth review is to
determine whether terminating the manager/option is an appropriate course of action. As
with the investment managers/options residing on the Watch List, the Named Fiduciary
may wish to recommend that members suspend contributions until the in-depth review is
completed.
E. Elimination of Investment Managers and Investment Options
The Named Fiduciary may eliminate a Plan investment manager or investment option any
time as the Named Fiduciary deems it in the best interests of the Plan and the Plan
members and their beneficiaries. The Named Fiduciary may also eliminate any existing
investment manager/option for the following reasons:
• Failing to attract sufficient Plan funds to warrant continued availability to the Plan
members;
• Changing investment manager or investment option practices such that they are
no longer materially consistent with this Statement, or this Statement changes so
that it is no longer materially consistent with the practices of an investment
manager or investment option; and,
• Final recommendation of an in-depth review.
The Named Fiduciary may also add, eliminate, or replace any Plan investment
manager/option as the needs of the Plan members change, or for any other prudent reason.
Signed this 10th day of January , 2011
(A— K,
"NI 1 0 2011
Barbara Kirkmeyer, Chair
Title
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