Agenda packet — Monterey City Council, March 21, 2023 (part 3 of 4)

Item 12: Brokerage Practices
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 159, Packet Page 474 On a continuing basis, HighMark seeks to determine what levels of commission rates are reasonable for specific transactions. Consideration is given to factors including historical commission rates, market commission rates (based on publicly available information), the size and complexity of the transaction, the type and level of business done with a firm over a period of time, and the extent to which the brokerdealer has capital at risk in the transaction.

For each transaction, HighMark’s trading desk determines which broker-dealer on the approved list can provide the best execution of a specific transaction. Consideration is given to various factors including consistency of quality execution, general order flow, market-making skills, ability or willingness to commit capital and provide liquidity, and sales trading and coverage skills. HighMark’s policy does allow the use of a broker-dealer not on the approved list when HighMark deems it will be able to achieve best execution. Trades with brokers not on the approved list are reported to HighMark’s Client Commissions Committee at its next meeting with an explanation as to why a broker not on the approved list was selected to provide best execution.

HighMark may effect transactions through an electronic crossing network (“ECN”) in an attempt to find liquidity per price improvement not available through traditional trading methods. In selecting among market makers, and non-market makers or ECNs, HighMark generally seeks to select those it believes to be actively and effectively trading the security being purchased or sold. HighMark may select an ECN offered by a provider of services to HighMark in addition to ECNs offered by other vendors.

In some cases, HighMark aggregates as a block transaction multiple transaction orders that are received at about the same time. HighMark’s policy is to engage in block transactions in a fair and equitable manner to all participating clients, so that the price of the securities purchased or sold of all participating clients will be the average share price for the block transaction with commissions and costs shared among the participating clients on a pro-rata basis. There can be no assurance, however, that any particular investment will be proportionally allocated among clients, or that the allocation process will achieve the same results for each client. HighMark does not receive additional compensation for aggregating orders in block transactions. HighMark believes that the use of block transactions may prevent the transaction of one client from affecting the purchase or sale price of a transaction for another client, and that the use of block transactions may enable HighMark, on average and over time, to obtain enhanced execution and lower brokerage commissions.

Client Commissions
HighMark may process securities transactions that result in a client paying an amount of commission in excess of the amount of commission another broker would have charged. In selecting such broker-dealer, HighMark will make a good faith determination that the amount of commission is reasonable in relation to the value of the brokerage services, research and investment information, viewed in terms of either the specific transaction or HighMark’s overall responsibility to the accounts for which it exercises investment discretion.

In processing client brokerage transactions through broker-dealers, HighMark may receive from such broker-dealers, at no direct cost, certain investment information and research services, including conferences, research reports, oral advice, or data regarding particular companies, industries, or general market or economic conditions. To the extent legally allowed, certain of such services include the use of or delivery of quotation or computer systems whose software components are provided to HighMark as part of the services.

In any case in which information and other services can be used for both research and non-research purposes, HighMark will make an appropriate good faith allocation of those uses and will pay directly for that portion of the services to be used for non-research purposes.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 160, Packet Page 475 HighMark uses investment information and research services that it receives from broker-dealers to evaluate securities and formulate investment recommendations for both discretionary and nondiscretionary clients. These recommendations, as well as HighMark’s analyses and the information and research services used to formulate recommendations, may be made available to HighMark’s affiliates and all of HighMark’s clients and are used by HighMark in providing services to all of its clients. A client account may pay commissions to a broker-dealer which supplies research services not utilized by the account. Non-discretionary clients for whom HighMark does not ordinarily place brokerage orders may benefit from such investment information, even though such information was generated through commission paid by other clients.

The procedure to determine the allocation amounts includes an evaluation by HighMark’s traders of the broker-dealers’ execution capability, and an evaluation by a committee of HighMark’s equity advisory personnel of the quality and usefulness of the broker-dealers’ research. The minutes of this committee are then reviewed and approved by HighMark’s IPC. No absolute dollar amounts are required to be met, and in no case will an order be placed if the broker-dealer is not believed to be able to provide best execution of a particular transaction in light of all the factors HighMark considers. HighMark does endeavor to direct sufficient orders to such broker-dealers to ensure continued receipt of research services that HighMark believes are useful to all HighMark accounts. Substantial portions of brokerage commissions are paid to broker-dealers who supply investment information and research services to HighMark.

At HighMark’s discretion, HighMark can choose to trade on an execution-only basis for a particular transaction or client account.

Initial Public Offerings
From time to time, HighMark may be offered securities in an initial public offering (“IPO”) and HighMark will determine in its sole discretion whether to accept any such offer. Generally, HighMark does not accept offers to participate in IPOs. In the event that HighMark accepts an offer of IPO securities, HighMark’s policy is to allocate the securities proportionally, based on asset value, among client portfolios for which the securities are deemed suitable. Suitability will be determined by HighMark’s portfolio managers based on a number of factors, including but not limited to, investment goals, existing securities in the portfolio available cash and purchasing power, portfolio investment restrictions, and the subjective judgments of the portfolio managers. A small IPO offering may be allocated only to one client portfolio, if HighMark determines in its sole discretion that allocation among more than one portfolio would be inefficient for client accounts. While generally based on objective criteria, HighMark does not make IPO allocations based on strict, mathematical formulas. HighMark’s allocation of any specific IPO offering may not result in proportional allocation across all its client portfolios. HighMark however, will treat all client portfolios fairly and will not give preferences to any particular client or type of clients when allocating IPOs.

HighMark may occasionally purchase securities for a client in an initial or secondary offering in which an affiliate is a syndicate member, which may create an indirect benefit to the affiliate. In such event, HighMark will purchase the security from a syndicate member that is not an affiliate and under procedures designed to minimize conflicts of interest.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 161, Packet Page 476 Account Review Process
Investment strategies, risk characteristics and performance are set and reviewed regularly by HighMark’s IPC. HighMark’s portfolio managers then review accounts on an ongoing basis to assess the appropriateness of client investments relative to the investment strategy and in accordance with the client’s specific investment objective, guidelines and restrictions for the account. HighMark Operations routinely reviews direct account custodian reconciliations.

Trade Errors
It is HighMark’s policy to ensure trading errors are handled and corrected in a timely manner in the best interests of the client affected by the error. All trade errors should be corrected within a reasonable period of time following discovery of the error. HighMark will not use commissions from client accounts to correct trade errors. It is the strict policy of HighMark that HighMark employees are not permitted to make payments to clients or to client accounts.

Reports to Clients
HighMark issues periodic reports to direct clients, which include transaction summaries, portfolio valuation, and performance data. These reports often include information compiled by others including MUFG Union Bank and U.S. Bank. MUFG Union Bank provides periodic reports to its trust and agency account clients. The information provided by MUFG Union Bank in these reports is similar to the information included in HighMark’s periodic reports described above.

HighMark or its related persons may from time to time receive some economic benefit from non-clients, such as a broker-dealer, in connection with giving advice to clients. See Item 12, Brokerage Practices.

Compensation for Client Referrals to MUFG Union Bank and Relationship Management of Clients Participating in MUFG Union Bank Services
MUFG Union Bank generally compensates certain employees and employees of its affiliates, such as UBIS and HighMark, when clients they refer to MUFG Union Bank establish an account, relationship or service. In addition, MUFG Union Bank generally pays certain MUFG Union Bank employees and employees of MUFG Union Bank’s affiliates compensation for providing relationship management services that facilitate the coordination of the review, recommendation and integration of suitable products and services of MUFG Union Bank and its affiliates, including UBIS and HighMark, that are relevant to the client’s overall financial situation. Such compensation can vary depending on the account, relationship or service.

Other Referral Arrangements
In addition, from time to time, HighMark and its related persons may also enter into cash referral arrangements with related and unrelated persons in accordance with Rule 206(4)-3 of the Investment Advisers Act of 1940, and compensate referrals with respect to such activities in accordance with Rule 206(4)-3 or other applicable regulations. The amounts of such fees are individually negotiated.

Item 14: Client Referrals and Other Compensation
Item 13: Review of Accounts
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 162, Packet Page 477 The custodian of each client account (either MUFG Union Bank or a client-directed custodian) sends a periodic statement of the account to the client on at least a quarterly basis. HighMark recommends that clients compare the security positions shown on the investment statement they receive from HighMark to those shown on the statement they receive from the applicable custodian. Differences in reported security positions may exist because investment statements are presented on a trade date basis and custodial statement are often shown on a settlement date basis. Differences in the reported security values may exist due to the timing of posting of accrued but uncollected income and/or the use of differing valuation sources and methods by HighMark and the custodian. For clients who utilize MUFG Union Bank as their custodian, HighMark may be deemed to have custody of those assets because certain of HighMark’s staff hold positions at MUFG Union Bank and HighMark shares premises with MUFG Union Bank. At no time does HighMark have physical custody of such client assets.

Clients grant discretionary authority to HighMark at the outset of an advisory relationship when they execute an investment management agreement with HighMark. At such time, the client communicates the investment parameters, including limitations, restrictions, asset allocation requirements, and/or market capitalization thresholds that apply; any desire to invest only in socially responsible companies; and any other client-defined investment specifications.

HighMark’s clients have the option to vote their proxies themselves or to authorize HighMark to vote such proxies on their behalf. Most clients authorize HighMark to vote proxies for securities held in the client’s account. HighMark has established policies for voting these proxies in the interests of the clients.

HighMark retains ISS Governance Services (“ISS”), an independent proxy voting service, as its agent.

HighMark delegates to ISS the authority to vote the proxies according to ISS’ policies, subject to monitoring and review by HighMark. HighMark reserves the right to withdraw any proxy from ISS and vote the proxy with review and approval by the IPC. HighMark will withdraw a proposed proxy vote from ISS in the event that HighMark determines that the proposed vote by ISS would not be consistent with HighMark’s fiduciary duty to one or more of its clients.

HighMark has written policies and procedures in place to address any situation where there is a conflict of interest between HighMark and a client. Before HighMark votes a proxy, the IPC will take steps to determine if HighMark has a conflict of interest in voting the proxy. If the IPC finds that a material conflict exists, either HighMark or MUFG Union Bank will retain an independent fiduciary to vote the proxy, depending on whether the client or MUFG Union Bank has engaged MUFG Union Bank for its investment advisory services.

The majority of the proxy voting records for HighMark are maintained by ISS. HighMark will make proxy voting records available to client as required by law. Clients may obtain a copy of HighMark’s proxy voting policies and procedures and/or proxy voting records for their account by calling 1-800-582- 4734.

Item 15: Custody
Item 17: Voting Client Securities
Item 16: Investment Discretion
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 163, Packet Page 478 HighMark is not aware of any financial condition that is reasonably likely to impair its ability to meet contractual commitments. HighMark has not been the subject of a bankruptcy petition.

As noted in Item 10 above, on September 21, 2021, MUFG and MUAH entered into a Purchase Agreement with USB.

Subsequent filings with the SEC, by both MUFG and USB are accessible on the SEC’s website at www.sec.gov.

Item 18: Financial Information
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 164, Packet Page 479 Summary of Material Changes
HighMark Capital Management, Inc. (“HCM”) has amended its Form ADV Part 2A (the “Brochure”). Following are summaries of material changes HCM has made to its Brochure since its last update on November 11, 2021:
• Additional non-material changes that update, enhance, or further clarify existing language have also been incorporated throughout the Brochure since its prior version.

You may also request a free copy of the Brochure by calling 1-800-582-4734 or by visiting unionbank.com/commercial-bank/investment-management/highmark-capital-management or on the SEC’s website at www.adviserinfo.sec.gov.

HighMark Capital Management, Inc.

Form ADV Part 2A
March 28, 2022
350 California Street, Suite 1600 | San Francisco, CA 94104 | 1-800-582-4734 Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 165, Packet Page 480 Public Agency Retirement Services
Appendix:

Sample Trust
Documents
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 166, Packet Page 481

AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement (“Agreement”) is made this _____ day of _____________, 2023, between Phase II Systems, a corporation organized and existing under the laws of the State of California, doing business as Public Agency Retirement Services and PARS (hereinafter “PARS”) and the [Agency Name] (“Agency”).

WHEREAS, the Agency has adopted the PARS Public Agencies Post-Employment Benefits Trust for the purpose of pre-funding pension obligations and/or Other Post-Employment Benefits (“OPEB”) obligations (“Plan”) and is desirous of retaining PARS as Trust Administrator to the Trust, to provide administrative services.

NOW THEREFORE, the parties agree:

1. Services. PARS will provide the services pertaining to the Plan as described in the exhibit attached hereto as “Exhibit 1A” (“Services”) in a timely manner, subject to the further provisions of this Agreement.

2. Fees for Services. PARS will be compensated for performance of the Services as described in the exhibit attached hereto as “Exhibit 1B”.

3. Payment Terms. Payment for the Services will be remitted directly from Plan assets unless the Agency chooses to make payment directly to PARS. In the event that the Agency chooses to make payment directly to PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS within thirty (30) days of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless PARS has previously received written communication disputing the subject invoice that is signed by a duly authorized representative of the Agency.

4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will be billed to the Agency at the rates indicated in the PARS’ standard fee schedule in effect at the time the services are provided and shall be payable as described in Section 3 of this Agreement. Before any such services are performed, PARS will provide the Agency with a detailed description of the services, terms, and applicable rates for such services. Such services, terms, and applicable rates shall be agreed upon in writing and executed by both parties.

5. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency providing PARS the information specified in the exhibit attached hereto as “Exhibit 1C” (“Data”). It shall be the responsibility of the Agency to certify the accuracy, content, and completeness of the Data so that PARS may rely on such information without further audit. It shall further be the responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a reasonable amount of time for the Services to be performed. Unless specified in Exhibit 1A, PARS shall be under no duty to question Data received from the Agency, to compute contributions made to the Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 167, Packet Page 482 Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable for nonperformance of Services to the extent such nonperformance is caused by or results from erroneous and/or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1C, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency.

6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS’ fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law.

7. Confidentiality. Without the Agency’s consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law.

8. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees, or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers’ compensation, and similar matters.

9. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless, including their respective officers, directors, and employees, from any claim, loss, demand, liability, or expense, including reasonable attorneys’ fees and costs, incurred by the other as a consequence of, to the extent, PARS’ or Agency’s, as the case may be, negligent acts, errors or omissions with respect to the performance of their respective duties hereunder.

10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan.

PARS shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 168, Packet Page 483

11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. In the event any party institutes legal proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any state court of competent jurisdiction.

12. Force Majeure. When a party’s nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that its performance is prevented by such cause. Such cause shall include, but not be limited to:
any incidence of fire, flood, acts of God or unanticipated communicable disease, acts of terrorism or war commandeering of material, products, plants or facilities by the federal, state or local government, a material act or omission by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state or local government, or any agency thereof, which becomes effective after the date of this Agreement that delays or renders impractical either party’s performance under the Agreement.

13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency.

14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS.

Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement.

15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660; Attention: President
(B) To Agency: [Agency]; [Agency Address]; Attention: [Plan Administrator Title] Notices shall be deemed given on the date received by the addressee.

16. Term of Agreement. This Agreement shall remain in effect for the period beginning _______________, 2023 and ending _____________, 2026 (“Term”). This Agreement may be terminated at any time by giving thirty (30) days written notice to the other party of the intent to terminate. Absent a thirty (30) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve-month periods following the Term.

17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by the parties hereto.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 169, Packet Page 484

18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement.

In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions, and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition.

19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to receive its reasonable attorney’s fees.

20. Counterparts. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart.

21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed.

AGENCY:

BY:

Plan Administrator Name
TITLE:

DATE:

PARS:

BY:

Tod Hammeras
TITLE: Chief Financial Officer
DATE:

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 170, Packet Page 485 EXHIBIT 1A

SERVICES
PARS will provide the following services for the [Agency Name] Public Agencies PostEmployment Benefits Trust:

1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting, and submission requirements for contributions/reimbursements/distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and approved by Agency legal counsel. Resulting final Plan documentation must be approved by the Agency prior to the commencement of PARS Plan Administration Services outlined in Exhibit 1A, paragraph 2 below.

2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Public Agencies Post-Employment Benefits Trust (“Trustee”), based upon information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and investment activity, based upon information received from the Agency and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.

3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 171, Packet Page 486 EXHIBIT 1B

FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit 1A based upon the following schedule:

An annual asset fee shall be paid from Plan assets based on the following schedule:

For Plan Assets from: Annual Rate:
$1 to $10,000,000 0.25%
$10,000,001 to $15,000,000 0.20%
$15,000,001 to $50,000,000 0.15%
$50,000,001 and above 0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 172, Packet Page 487 EXHIBIT 1C

DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the following information. Agency is solely responsible for ensuring that all information and documentation provided to PARS is true, correct, and authorized:

1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust (C) Trustee Investment Forms

2. Contribution – completed Contribution Transmittal Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)

3. Distribution – completed Payment Reimbursement/Distribution Form signed by the Plan Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator (or authorized Designee)

4. Other information pertinent to the Services as reasonably requested by PARS and Actuarial Provider.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 173, Packet Page 488 Public Agency Retirement Services
Appendix:

IRS Private letter ruling
(plr)
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 174, Packet Page 489 Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 175, Packet Page 490 Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 176, Packet Page 491 Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 177, Packet Page 492 Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 178, Packet Page 493 Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 179, Packet Page 494 Public Agency Retirement Services
Appendix:

HighMark
expense ratios
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 180, Packet Page 495 Active Portfolio as of December 2022
Ticker Fund Name
Equity <20% equity <40% equity <60% equity 50-70% equity 65-85% equity Large Cap Core 1.53% 2.84% 4.82% 5.88% 7.31% COFYX COLUMBIA CONTRARIAN CORE-I3 Large Cap Core 2.63% 5.33% 9.16% 11.17% 14.17% VGIAX VANGUARD GROWTH & INCOME-ADM Large Cap Value 1.22% 2.57% 4.42% 5.30% 6.43% DODGX DODGE & COX STOCK Large Cap Value 0.60% 1.20% 2.00% 2.40% 3.01% IVE ISHARES S&P 500 VALUE ETF Large Cap Growth 0.79% 1.65% 2.82% 3.38% 4.12% HNACX HARBOR CAPITAL APPRECIA-RTR Large Cap Growth 0.79% 1.65% 2.82% 3.38% 4.12% PRUFX T ROWE PR GROWTH STOCK-I Mid Cap Blend 1.38% 2.75% 4.52% 5.50% 6.87% IWR ISHARES RUSSELL MID-CAP ETF Real Estate 0.50% 1.05% 1.77% 2.00% 2.00% VNQ VANGUARD REAL ESTATE ETF Small Cap Value 1.23% 2.26% 3.73% 4.44% 5.18% UBVFX UNDISC MGRS BEHAV VAL-R6 Small Cap Growth 1.17% 2.14% 3.53% 4.19% 4.86% VBK VANGUARD SMALL-CAP GRWTH ETF International 0.87% 1.79% 2.78% 3.28% 4.71% DFALX DFA L/C INTERNATIONAL PORTF International 0.29% 0.69% 1.01% 1.17% 1.82% DODFX DODGE & COX INTL STCK International 0.29% 0.69% 1.02% 1.17% 1.82% MGRDX MFS INTERNATIONAL GROWTH-R6 Emerging Markets 0.94% 1.89% 3.12% 3.75% 4.83% HHHFX HRTFRD SCHR EM MRKT EQ-F

14.25% 28.50% 47.50% 57.00% 71.25%
Fixed Income
Short Term Bond 18.00% 13.50% 10.70% 7.50% 3.31% VFSUX VANGUARD S/T INVEST GRD-ADM High Yield 1.10% 1.03% 1.01% 0.88% 0.80% PHIYX PIMCO HIGH YIELD FUND-INST Interm Term Bond 20.63% 17.17% 11.59% 9.21% 5.38% PTTRX PIMCO TOTAL RETURN FUND-INST Interm Term Bond 20.63% 17.17% 11.59% 9.21% 5.38% PTRQX PGIM TOTAL RETURN BOND-R6 Interm Term Bond 20.63% 17.17% 11.59% 9.21% 5.38% DBLFX DOUBLELINE CORE FIX INC-I

81.01% 66.04% 46.50% 36.00% 20.25%
Cash 4.74% 5.46% 6.00% 7.00% 8.50% FGZXX FIRST AM GOV OBLIG-Z

0.37% 0.38% 0.39% 0.39% 0.40% Weighted embedded expense ratio*

0.33% 0.33% 0.33% 0.33% 0.32% Weighted investment management fee** *Represents the weighted embedded expense ratio for that fund (Source: Morningstar Direct) PARS
Conservative
PARS
Moderately
Conservative
PARS
Moderate
PARS
Balanced
PARS Capital
Appreciation
Actively Managed Mutual Funds
**Represents the weighted investment management fee net of any waivers in place for assets invested in funds for which US Bank serves as advisor; assuming a $5 million account
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 181, Packet Page 496 Passive Portfolio as of December 2022
PARS
Conservative
PARS
Moderately
Conservative
PARS
Moderate
PARS
Balanced
PARS Capital
Appreciation Ticker
Passively Managed Mutual Funds
Fund Name
Equity <20% equity <40% equity <60% equity 50-70% equity 65-85% equity Large Cap Blend 4.16% 8.17% 13.98% 17.04% 21.48% IVV ISHARES CORE S&P 500 ETF Large Cap Value 1.82% 3.77% 6.42% 7.70% 9.43% IVE ISHARES S&P 500 VALUE ETF Large Cap Growth 1.59% 3.30% 5.63% 6.76% 8.25% IVW ISHARES S&P 500 GROWTH ETF Mid Cap Blend 1.38% 2.75% 4.52% 5.50% 6.87% IWR ISHARES RUSSELL MID-CAP ETF Real Estate 0.50% 1.05% 1.77% 2.00% 2.00% VNQ VANGUARD REAL ESTATE ETF Small Cap Value 1.17% 2.14% 3.53% 4.19% 4.86% IWN ISHARES RUSSELL 2000 VALUE E Small Cap Growth 1.17% 2.14% 3.53% 4.19% 4.86% IWO ISHARES RUSSELL 2000 GROWTH International 1.33% 2.91% 4.39% 5.12% 7.73% IEFA ISHARES CORE MSCI EAFE ETF Emerging Markets 0.88% 1.77% 2.91% 3.50% 4.51% VWO VANGUARD FTSE EMERGING MARKE

14.00% 28.00% 46.67% 56.00% 70.00%
Fixed Income
Short Term Bond 18.00% 13.50% 10.70% 7.50% 3.31% VFSUX VANGUARD S/T INVEST GRD-ADM High Yield 1.10% 1.03% 1.01% 0.88% 0.80% VWEAX VANGUARD HI YLD CORP-ADM Intermediate Term Bond 62.40% 52.50% 36.27% 29.63% 18.60% AGG ISHARES CORE U.S. AGGREGATE

81.50% 67.03% 47.98% 38.00% 22.71%
Cash 4.49% 4.97% 5.35% 6.00% 7.29% FGZXX FIRST AM GOV OBLIG-Z

0.07% 0.08% 0.10% 0.10% 0.11% Weighted embedded expense ratio*

0.33% 0.33% 0.33% 0.33% 0.32% Weighted investment management fee** *Represents the weighted embedded expense ratio for that fund (Source: Morningstar Direct) **Represents the weighted investment management fee net of any waivers in place for assets invested in funds for which US Bank serves as advisor; assuming a $5 million account
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 182, Packet Page 497 Public Agency Retirement Services
Appendix:
investment returns
comparisons
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 183, Packet Page 498 Net Performance Fee Analysis
Over 1 Year Over 3 Years Over 5 Years Over 10 Years 1 1

P A R S / H I G H M A R K P A R S / H I G H M A R K P A R S / H I G H M A R K P A R S / H I G H M A R K Capital Appreciation Capital Appreciation Capital Appreciation Capital Appreciation (25% Fixed Income/Cash) -16.08% (25% Fixed Income/Cash) 3.37% (25% Fixed Income/Cash) 4.99% (25% Fixed Income/Cash) 7.50% minus weighted PARS
administration fee (-) 0.25% minus weighted PARS administration fee (-) 0.25% minus weighted PARS administration fee (-) 0.25% minus weighted PARS administration fee (-) 0.25% minus weighted
HighMark investment
management fee
(-) 0.35% minus weighted
HighMark investment
management fee
(-) 0.35% minus weighted
HighMark investment
management fee
(-) 0.35% minus weighted
HighMark investment
management fee
(-) 0.35%
1-Year Net Return -16.68% 3-Year Net Return 2.77% 5-Year Net Return 4.39% 10-Year Net Return 6.90%

C A L P E R S C E R B T C A L P E R S C E R B T C A L P E R S C E R B T C A L P E R S C E R B T Strategy 1
(30% Fixed Income/Cash) -17.79%
Strategy 1
(30% Fixed Income/Cash) 1.97%
Strategy 1
(30% Fixed Income/Cash) 3.74%
Strategy 1
(30% Fixed Income/Cash) 5.90%
minus fees (-) 0.07% minus fees (-) 0.09% minus fees (-) 0.09% minus fees (-) 0.10% 1-Year Net Return -17.86% 3-Year Net Return 1.88% 5-Year Net Return 3.65% 10-Year Net Return 5.80% As of December 31, 2022
* Subject to change due to rebalancing; fees are based on assets under $5 million.

Past performance does not guarantee future results.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 184, Packet Page 499 Strategy Fixed
Income/Cash (%) 1 Year 3 Years 5 Years
HighMark
Moderate 50% -15.23% 1.16% 2.95%
CalPERS CEPPT
Strategy 1 49% -15.92% 0.48% —
Net Returns Comparison
HIGHMARK CAPITAL MANAGEMENT – INDEX PORTFOLIOS
* HighMark/PARS fees of 0.60% calculated based on assets under $5 million; CalPERS CEPPT fees fixed at 0.25%.

Past performance does not guarantee future results.

As of December 31, 2022
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 185, Packet Page 500 Strategy Fixed
Income/Cash (%) 1 Year 3 Years 5 Years
HighMark Mod.

Conservative 70% -13.00% 0.19% 2.20%
CalPERS CEPPT
Strategy 2 70% -14.30% -1.27% —
Net Returns Comparison
HIGHMARK CAPITAL MANAGEMENT – INDEX PORTFOLIOS
As of December 31, 2022
* HighMark/PARS fees of 0.60% calculated based on assets under $5 million; CalPERS CEPPT fees fixed at 0.25%.

Past performance does not guarantee future results.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 186, Packet Page 501 Public Agency Retirement Services
Appendix:
vanguard investment
portfolios
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 187, Packet Page 502 Fixed Income Strategy - hypothetical illustrated portfolio performance Annual returns
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -14.0 -12.0
-10.0
-8.0
-6.0
-4.0
-2.0

0.0 2.0

4.0 6.0

8.0 10.0
-0.8

5.1 1.0

3.4 2.9

0.9 7.9

6.7 -1.5
-12.1
-1.7

6.3 0.6

3.3 3.3

0.7 8.6

6.9 -1.4
-12.6
Trailing Returns - Annualized after one year
As of Date: 12/31/2022
YTD One Year Three
Years
Five
Years Ten Years SinceInception
Inception
Date
PARS Fixed Income Strategy
Vanguard Total Bond Market Index Adm
Vanguard Total Intl Bd Idx Admiral™
Vanguard Interm-Term Investment-Grde Adm
Vanguard Short-Term Investment-Grade Adm
PARS Fixed Income Benchmark*
11/12/2001
11/12/2001
5/31/2013
2/12/2001
2/12/2001
7/31/1994
-12.11 -12.11 -2.63 0.09 1.19 3.28
-13.16 -13.16 -2.75 -0.01 1.00 3.27
-12.92 -12.92 -3.81 -0.23 1.60
-13.78 -13.78 -2.00 0.69 1.77 4.36
-5.75 -5.75 -0.38 1.10 1.45 3.01
-12.96 -12.96 -2.93 0.01 1.17 4.59
Investment growth
Time Period: 1/1/2012 to 12/31/2022
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
100.0
107.5
115.0
122.5
130.0
137.5
PARS Fixed Income Strategy PARS Fixed Income Benchmark
Data from Morningstar®.

All portfolio returns are net of expense ratio. Returns are based on a hypothetical portfolio that consists of 45% Total Bond Market Index, 25% Total Int'l Bond Market Index, 15% Intermediate-Term Investmenet Grade Fund, and 15% Short-Term Investment Grade Fund, rebalanced quarterly and net of fees. The analysis assumes no external cash flows and no cash balances outside of the cash like instruments in the specified fund allocations. Fund performance assumes reinvestment of all dividends and capital gains. Expressed in percentage terms, calculation of total return is determined each month by taking the change in monthly net asset value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using the actual reinvestment NAV, and daily payoffs are reinvested monthly.

This historical analysis incorporates a hypothetical back test designed with the benefit of hindsight and calculated by retroactively applying a model. The analysis does not represent the results of actual trading using client assets. The strategies reflected in this analysis may not have been available over the time period presented, and Vanguard advisory clients may have had outcomes materially different than for the period. Results may not reflect the impact of material market or economic factors that could have influenced the model if it had been in use for client assets during the period. Hypothetical returns should not be considered indicative of the skill of the adviser. Clients of Vanguard may experience a loss with any of the strategies or funds included in this model. Past performance is no guarantee of future results.

Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 188, Packet Page 503 Fixed Income Strategy
Fixed income credit quality
Portfolio Date: 12/31/2022
%
AAA 44.4
AA 6.9
A 21.6
BBB 25.7
Below B 1.0
Not Rated 0.3
Total 100.0
Fixed income sectors
Portfolio Date: 12/31/2022
%
Government 39.7
Municipal 0.3
Corporate 33.8
Securitized 9.9
Cash & Equivalents 1.3
Derivative 15.0
Total 100.0
Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 189, Packet Page 504 Conservative Strategy - hypothetical illustrated portfolio performance Annual returns
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -20.0 -15.0
-10.0
-5.0

0.0 5.0

10.0 15.0

20.0 7.3 7.6

0.2 6.4

10.0 -3.3

16.8 11.5

7.1 -14.7

7.1 8.0

0.1 6.3

10.1 -3.3

17.1 11.5

7.0 -15.1
Trailing Returns - Annualized after one year
As of Date: 12/31/2022
YTD One Year Three
Years
Five
Years Ten Years SinceInception
Inception
Date
PARS Conservative Strategy
Vanguard Total Bond Market Index Adm
Vanguard Total Stock Mkt Idx Adm
Vanguard Total Intl Bd Idx Admiral™
Vanguard Interm-Term Investment-Grde Adm
Vanguard Total Intl Stock Index Admiral
Vanguard Short-Term Investment-Grade Adm
Vanguard Real Estate Index Admiral
PARS Conservative Benchmark*
6/10/2005
11/12/2001
11/13/2000
5/31/2013
2/12/2001
11/29/2010
2/12/2001
11/12/2001
7/31/1994
-12.92 -12.92 -3.81 -0.23 1.60
-19.53 -19.53 6.97 8.71 12.08 7.37
-5.75 -5.75 -0.38 1.10 1.45 3.01
-26.20 -26.20 -0.41 3.68 6.42 8.86
-16.01 -16.01 0.51 1.09 4.06 4.12
-13.16 -13.16 -2.75 -0.01 1.00 3.27
-13.78 -13.78 -2.00 0.69 1.77 4.36
-14.73 -14.73 0.61 2.85 4.54 5.21
-15.13 -15.13 0.42 2.77 4.51 6.74
Investment growth
Time Period: 1/1/2012 to 12/31/2022
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
100.0
120.0
140.0
160.0
180.0
200.0
220.0
PARS Conservative Strategy PARS Conservative Benchmark
Data from Morningstar®.

All portfolio returns are net of expense ratio. Returns are based on a hypothetical portfolio that consists of 22% Total Stock Market Index, 14% Total Int'l Stock Market Index, 23% Total Bond Market Index, 15% Total Int'l Bond Market Index, 14% Intermediate-Term Investmenet Grade Fund, 8% Short-Term Investment Grade Fund, and 4% Real Estate Index, rebalanced quarterly and net of fees. The analysis assumes no external cash flows and no cash balances outside of the cash like instruments in the specified fund allocations. Fund performance assumes reinvestment of all dividends and capital gains. Expressed in percentage terms, calculation of total return is determined each month by taking the change in monthly net asset value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using the actual reinvestment NAV, and daily payoffs are reinvested monthly.

Hypothetical portfolio returns assume quarterly rebalancing to target allocations. Advisory fees are subject to change dependent on portfolio size as described in the VIAS advisory brochure. Advisory fees are calculated and assessed as set forth in each client's Investment Management Agreement. Additionally, hypothetical performance includes commissions, fees and other costs incurred in trading funds but does not include the effect of any taxes that might apply. *Benchmark
22% Spliced Total Stock Mkt Index (equal to CRSP US Total Market Index as of June 2, 2013; MSCI US Broad Market Index through April 22, 2005; prior Dow Jones U.S. Total Stock Market Index (formerly known as the Dow Jones Wilshire 5000 Index))/ 14% Spliced Total International Composite Index (Consists of the Total International Composite Index through August 31, 2006; the MSCI EAFE + Emerging Markets Index through December 15, 2010; the MSCI ACWI ex USA IMI Index through June 2, 2013; and the FTSE Global All Cap ex US Index thereafter) / 45% Spliced Barclays US Aggregate Float-Adjusted Bond Index (equal to Bloomberg US Aggregate Bond Index through December 31, 2009, Bloomberg US Aggregate Float Adjusted Index thereafter)/ 15% Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index Hedged / 4% Real Estate Spliced Index (equal to MSCI US REIT Index adjusted for a 2% cash position (Lipper Money Market Average) through April 30, 2009; MSCI US REIT Index through February 1, 2018; MSCI US Investable Market Real Estate 25/50 Transition Index through July 24, 2018; MSCI US Inveestable Market Reasl Estate 25/50 thereafter). Prior to 1/1/2021: 24.5% Spliced Total Stock Mkt Index / 10.5% Spliced Total International Composite Index / 42% Spliced Barclays US Aggregate Float-Adjusted Bond Index/ 15% Barclays US Treasury Inflation-Protected Securities Index / 8% Real Estate Spliced Index.

Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 190, Packet Page 505 Conservative Strategy
Fixed income credit quality
Portfolio Date: 12/31/2022
%
AAA 40.0
AA 7.0
A 23.3
BBB 28.1
Below B 1.3
Not Rated 0.3
Total 100.0
Fixed income sectors
Portfolio Date: 12/31/2022
%
Government 37.2
Municipal 0.3
Corporate 36.9
Securitized 8.6
Cash & Equivalents 2.1
Derivative 14.9
Total 100.0
Equity country exposure
Portfolio Date: 12/31/2022
%
Australia 1.9
Canada 2.7
China 2.8
France 2.1
Germany 1.7
India 1.6
Japan 5.3
Switzerland 2.3
United Kingdom 3.5
United States 65.2
Other 11.1
Total 100.0
Equity sectors
Portfolio Date: 12/31/2022
%
Basic Materials 4.5
Consumer Cyclical 9.6
Financial Services 14.4
Real Estate 13.2
Consumer Defensive 6.5
Healthcare 11.6
Utilities 2.7
Communication Services 5.8
Energy 4.9
Industrials 10.1
Technology 16.8
Total 100.0
Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 191, Packet Page 506 Balanced Strategy - hypothetical illustrated portfolio performance Annual returns
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -20.0 -15.0
-10.0
-5.0

0.0 5.0

10.0 15.0

20.0 25.0

12.5 8.0
-0.2

7.6 13.5
-4.7

20.3 14.0

11.6 -16.2

12.4 8.4
-0.2

7.7 13.6
-4.7

20.6 13.3 11.5
-16.3
Trailing Returns - Annualized after one year
As of Date: 12/31/2022
YTD One Year Three
Years
Five
Years Ten Years SinceInception
Inception
Date
PARS Balanced Strategy
Vanguard Total Stock Mkt Idx Adm
Vanguard Total Intl Stock Index Admiral
Vanguard Total Bond Market Index Adm
Vanguard Interm-Term Investment-Grde Adm
Vanguard Total Intl Bd Idx Admiral™
Vanguard Real Estate Index Admiral
Vanguard Short-Term Investment-Grade Adm
PARS Balanced Benchmark*
6/10/2005
11/13/2000
11/29/2010
11/12/2001
2/12/2001
5/31/2013
11/12/2001
2/12/2001
2/28/1997
-16.15 -16.15 2.18 4.11 6.13 6.15
-19.53 -19.53 6.97 8.71 12.08 7.37
-16.01 -16.01 0.51 1.09 4.06 4.12
-13.16 -13.16 -2.75 -0.01 1.00 3.27
-13.78 -13.78 -2.00 0.69 1.77 4.36
-12.92 -12.92 -3.81 -0.23 1.60
-26.20 -26.20 -0.41 3.68 6.42 8.86
-5.75 -5.75 -0.38 1.10 1.45 3.01
-16.31 -16.31 1.90 3.98 6.10 6.58
Investment growth
Time Period: 1/1/2012 to 12/31/2022
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
100.0
125.0
150.0
175.0
200.0
225.0
250.0
PARS Balanced Strategy PARS Balanced Benchmark*
Data from Morningstar®.

All portfolio returns are net of expense ratio. Returns are based on a hypothetical portfolio that consists of 33% Total Stock Market Index, 21% Total Int'l Stock Market Index, 15% Total Bond Market Index, 10% Total Int'l Bond Market Index, 10% Intermediate-Term Investmenet Grade Fund, 5% Short-Term Investment Grade Fund, and 6% Real Estate Index, rebalanced quarterly and net of fees. The analysis assumes no external cash flows and no cash balances outside of the cash like instruments in the specified fund allocations. Fund performance assumes reinvestment of all dividends and capital gains.

Expressed in percentage terms, calculation of total return is determined each month by taking the change in monthly net asset value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using the actual reinvestment NAV, and daily payoffs are reinvested monthly.

Additionally, hypothetical performance includes commissions, fees and other costs incurred in trading funds but does not include the effect of any taxes that might apply.

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. Returns are net of the fund expense ratio, gross of advisory fees. Returns represent the historical performance for a Vanguard composite based on the strategy holdings listed above. *Benchmark
Prior to 12/31/2020: 37.1% Spliced Total Stock Mkt Index (equal to CRSP US Total Market Index as of June 2, 2013, MSCI US Broad Market Index through April 22, 2005; prior Dow Jones U.S. Total Stock Market Index (formerly known as the Dow Jones Wilshire 5000 Index))/ 15.9% Spliced Total International Composite Index (Consists of the Total International Composite Index through August 31, 2006; the MSCI EAFE + Emerging Markets Index through December 15, 2010; the MSCI ACWI ex USA IMI Index through June 2, 2013; and the FTSE Global All Cap ex US Index thereafter) / 24% Spliced Barclays US Aggregate Float-Adjusted Bond Index (equal to Bloomberg US Aggregate Bond Index through December 31, 2009, Bloomberg US Aggregate Float Adjusted Index thereafter)/ 15% Barclays US Treasury Inflation-Protected Securities Index / 8% Real Estate Spliced Index (equal to MSCI US REIT Index adjusted for a 2% cash position (Lipper Money Market Average) through April 30, 2009; MSCI US REIT Index through February 1, 2018; MSCI US Investable Market Real Estate 25/50 Transition Index through July 24, 2018; MSCI US Investable Market Real Estate 25/50 thereafter).

After 12/31/2020: 33% Spliced Total Stock Mkt Index / 21% Spliced Total International Composite Index / 30% Spliced Barclays US Aggregate Float-Adjusted Bond Index / 10% Bloomberg Global Aggregate ex-USD Float Adjusted RIC Capped Index Hedged / 6% Real Estate Spliced Index.

Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 192, Packet Page 507 Balanced Strategy
Fixed income credit quality
Portfolio Date: 12/31/2022
%
AAA 39.4
AA 7.1
A 23.5
BBB 28.4
Below B 1.3
Not Rated 0.3
Total 100.0
Fixed income sectors
Portfolio Date: 12/31/2022
%
Government 36.5
Municipal 0.2
Corporate 36.9
Securitized 8.3
Cash & Equivalents 3.2
Derivative 14.8
Total 100.0
Equity country exposure
Portfolio Date: 12/31/2022
%
Australia 1.9
Canada 2.7
China 2.8
France 2.1
Germany 1.7
India 1.6
Japan 5.3
Switzerland 2.3
United Kingdom 3.5
United States 65.2
Other 11.1
Total 100.0
Equity sectors
Portfolio Date: 12/31/2022
%
Basic Materials 4.5
Consumer Cyclical 9.6
Financial Services 14.4
Real Estate 13.2
Consumer Defensive 6.5
Healthcare 11.6
Utilities 2.7
Communication Services 5.8
Energy 4.9
Industrials 10.1
Technology 16.8
Total 100.0
Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 193, Packet Page 508 Growth Strategy - hypothetical illustrated portfolio performance Annual returns
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 -20.0 -15.0
-10.0
-5.0

0.0 5.0

10.0 15.0

20.0 25.0

30.0 18.0

8.5 -0.2

8.7 16.7
-5.9

23.5 14.4 15.1
-17.2

18.0 8.8
-0.2

8.7 16.8
-5.9

23.7 14.5 15.1
-17.3 Return
Trailing Returns - Annualized after one year
As of Date: 12/31/2022
YTD One Year Three
Years
Five
Years Ten Years SinceInception
Inception
Date
PARS Growth Strategy
Vanguard Total Stock Mkt Idx Adm
Vanguard Total Intl Stock Index Admiral
Vanguard Total Bond Market Index Adm
Vanguard Real Estate Index Admiral
Vanguard Interm-Term Investment-Grde Adm
Vanguard Total Intl Bd Idx Admiral™
Vanguard Short-Term Investment-Grade Adm
PARS Growth Benchmark*
6/10/2005
11/13/2000
11/29/2010
11/12/2001
11/12/2001
2/12/2001
5/31/2013
2/12/2001
7/31/1994
-13.16 -13.16 -2.75 -0.01 1.00 3.27
-26.20 -26.20 -0.41 3.68 6.42 8.86
-13.78 -13.78 -2.00 0.69 1.77 4.36
-12.92 -12.92 -3.81 -0.23 1.60
-5.75 -5.75 -0.38 1.10 1.45 3.01
-16.01 -16.01 0.51 1.09 4.06 4.12
-19.53 -19.53 6.97 8.71 12.08 7.37
-17.15 -17.15 2.95 4.88 7.48 6.77
-17.28 -17.28 2.92 4.89 7.53 8.02
Investment growth
Time Period: 1/1/2012 to 12/31/2022
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
100.0
150.0
200.0
250.0
300.0
PARS Growth Strategy PARS Growth Benchmark
Data from Morningstar®.

All portfolio returns are net of expense ratio. Returns are based on a hypothetical portfolio that consists of 41% Total Stock Market Index, 26% Total Int'l Stock Market Index, 10% Total Bond Market Index, 5% Total Int'l Bond Market Index, 7% Intermediate-Term Investmenet Grade Fund, 3% Short-Term Investment Grade Fund, and 8% Real Estate Index, rebalanced quarterly and net of fees. The analysis assumes no external cash flows and no cash balances outside of the cash like instruments in the specified fund allocations. Fund performance assumes reinvestment of all dividends and capital gains. Expressed in percentage terms, calculation of total return is determined each month by taking the change in monthly net asset value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using the actual reinvestment NAV, and daily payoffs are reinvested monthly.

20.7% Spliced Total International Composite Index (Consists of the Total International Composite Index through August 31, 2006; the MSCI EAFE + Emerging Markets Index through December 15, 2010; the MSCI ACWI ex USA IMI Index through June 2, 2013; and the FTSE Global All Cap ex US Index thereafter) / 18% Spliced Barclays US Aggregate Float-Adjusted Bond Index (equal to Bloomberg US Aggregate Bond Index through December 31, 2009, Bloomberg US Aggregate Float Adjusted Index thereafter)/ 5% Barclays US Treasury InflationProtected Securities Index / 8% Real Estate Spliced Index (equal to MSCI US REIT Index adjusted for a 2% cash position (Lipper Money Market Average) through April 30, 2009; MSCI US REIT Index through February 1, 2018; MSCI US Investable Market Real Estate 25/50 Transition Index through July 24, 2018; MSCI US Investable Market Real Estate 25/50 thereafter). After 12/31/2020: 41% Spliced Total Stock Mkt Index / 26% Spliced Total International Composite Index / 20% Spliced Barclays US Aggregate Float-Adjusted Bond Index/ 5% Bloomberg Barclays Global Aggregate ex-USD FLoat Adjusted RIC Capped Hedged / 8% Real Estate Spliced Index.

Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 194, Packet Page 509 Growth Strategy
Fixed income credit quality
Portfolio Date: 12/31/2022
%
AAA 40.0
AA 6.3
A 23.3
BBB 28.9
Below B 1.3
Not Rated 0.3
Total 100.0
Fixed income sectors
Portfolio Date: 12/31/2022
%
Government 34.9
Municipal 0.3
Corporate 39.0
Securitized 8.6
Cash & Equivalents 5.1
Derivative 12.1
Total 100.0
Equity country exposure
Portfolio Date: 12/31/2022
%
Australia 1.8
Canada 2.7
China 2.8
France 2.1
Germany 1.6
India 1.6
Japan 5.2
Switzerland 2.3
United Kingdom 3.4
United States 65.5
Other 11.0
Total 100.0
Equity sectors
Portfolio Date: 12/31/2022
%
Basic Materials 4.4
Consumer Cyclical 9.5
Financial Services 14.3
Real Estate 13.8
Consumer Defensive 6.4
Healthcare 11.5
Utilities 2.7
Communication Services 5.8
Energy 4.8
Industrials 10.0
Technology 16.7
Total 100.0
Source: Morningstar Direct
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 195, Packet Page 510 Public Agency Retirement Services
Appendix:

HighMark investment
portfolios
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 196, Packet Page 511 HighMark Plus (Active)
Composite Inception Date 07/2004
No of Holdings in Portfolio 20
HighMark Plus Composite (Active)
Gross Net
Current Quarter* 2.60% 2.51%
Blended Benchmark*,** 2.71%
Year To Date* -12.63% -12.95%
Blended Benchmark*,** -10.58%
1 Year -12.63% -12.95%
Blended Benchmark** -10.58%
3 Year -0.89% -1.25%
Blended Benchmark** -0.48%
5 Year 1.30% 0.93%
Blended Benchmark** 1.53%
10 Year 2.51% 2.14%
Blended Benchmark** 2.49%

PARS DIVERSIFIED PORTFOLIOS

CONSERVATIVE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

Key features include: sophisticated asset allocation
and optimization techniques, four layers of
diversification (asset class, style, manager, and
security), access to rigorously screened, top tier
money managers, flexible investment options, and
experienced investment management.

Rigorous Manager Due Diligence
Our manager review committee utilizes a rigorous
screening process that searches for investment
managers and styles that have not only produced
above-average returns within acceptable risk
parameters, but have the resources and commitment
to continue to deliver these results. We have set high
standards for our investment managers and funds.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

HighMark Plus utilizes actively managed mutual
funds while Index Plus utilizes index-based
securities, including exchange-traded funds. Both
investment options leverage HighMark’s active asset
allocation approach.

Risk Management
The portfolio is constructed to control risk through
four layers of diversification – asset classes (cash,
fixed income, equity), investment styles (large cap,
small cap, international, value, growth), managers
and securities. Disciplined mutual fund selection and
monitoring process helps to drive return potential
while reducing portfolio risk.

WHY THE PARS DIVERSIFIED
CONSERVATIVE PORTFOLIO?
Q4 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 7.5% S&P500,

1.5% Russell Mid Cap, 2.5% Russell 2000, 1% MSCI EM (net), 2% MSCI EAFE (net), 52.25% Bloomberg US Agg, 25.75% ICE BofA 1-3 Yr US Corp/Gov’t, 2% ICE BofA US High Yield Master II, 0.5% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012, the blended benchmark was 12% S&P 500; 1% Russell 2000, 2% MSCI EAFE (net), 40% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 15% S&P 500, 40% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide a consistent level of
inflation-protected income over
the long-term. The major portion
of the assets will be fixed income
related. Equity securities are
utilized to provide inflation
protection.

Conservative
Moderately Conservative
Moderate
Balanced
Capital Appreciation
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Strategic Range Policy Tactical
Equity 5 – 20% 15% 14%
Fixed Income 60 – 95% 80% 82%
Cash 0 – 20% 5% 4%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Index Plus Composite (Passive)
Gross Net
Current Quarter* 2.52% 2.43%
Blended Benchmark*,** 2.71%
Year To Date* -12.06% -12.38%
Blended Benchmark*,** -10.58%
1 Year -12.06% -12.38%
Blended Benchmark** -10.58%
3 Year -0.89% -1.25%
Blended Benchmark** -0.48%
5 Year 1.23% 0.86%
Blended Benchmark** 1.53%
10 Year 2.30% 1.94%
Blended Benchmark** 2.49%

PORTFOLIO FACTS
Index Plus (Passive)
Composite Inception Date 07/2004
No of Holdings in Portfolio 13
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -9.04%
2009 15.59%
2010 8.68%
2011 2.19%
2012 8.45%
2013 3.69%
2014 3.88%
2015 0.29%
2016 4.18%
2017 6.73%
2018 -1.35%
2019 11.05%
2020 9.03%
2021 2.20%
2022 -12.63%
Index Plus Composite (Passive)
2008 -6.70%
2009 10.49%
2010 7.67%
2011 3.70%
2012 6.22%
2013 3.40%
2014 4.32%
2015 0.06%
2016 3.75%
2017 5.52%
2018 -1.09%
2019 10.37%
2020 8.56%
2021 1.97%
2022 -12.06%
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 197, Packet Page 512

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE ADVISER
HighMark® Capital Management, Inc. (HighMark) has
over 100 years (including predecessor organizations) of institutional money management experience with $8.7
billion in assets under management and $9.0 billion in
assets under advisement*. HighMark has a long term
disciplined approach to money management and
currently manages assets for a wide array of clients.

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA ®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 15
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria:

Accounts are managed by HighMark with full investment authority according to the PARS Conservative active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios.

US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank.

The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free floatadjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the midcap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT Index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years.

The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HighMark Capital Management, Inc. (HighMark), an SEC-registered investment adviser, is a wholly owned subsidiary of MUFG Union Bank, N.A. (MUFG Union Bank). HighMark manages institutional separate account portfolios for a wide variety of for-profit and nonprofit organizations, public agencies, and public and private retirement plans. HighMark and MUFG Union Banks’s ultimate parent company is a wholly-owned subsidiary of U.S. Bancorp (“USB”). MUFG Union Bank provides certain services to HighMark and is compensated for these services. Past performance does not guarantee future results. Individual account management and construction will vary depending on each client's investment needs and objectives. Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

2.3%
Interm-Term Bond

62.4% High Yield

1.1%
Short-Term Bond

18.0%
Large Cap Core

4.2%
Large Cap Growth

1.6%
Mid Cap

1.4%
Intl Stocks

2.2%
Cash

4.5%
Large Cap Value

1.8% Real Estate

0.5%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 198, Packet Page 513 HighMark Plus (Active)
Composite Inception Date 08/2004
No of Holdings in Portfolio 20

PARS DIVERSIFIED PORTFOLIOS

MODERATELY CONSERVATIVE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — MODERATELY CONSERVATIVE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

WHY THE PARS DIVERSIFIED
MODERATELY CONSERVATIVE PORTFOLIO?
Q4 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 - Present: 15.5% S&P500, 3% Russell Mid Cap, 4.5% Russell 2000, 2% MSCI EM (net), 4% MSCI EAFE (net), 49.25% Bloomberg US Agg, 14% ICE BofA 1- 3 Yr US Corp/Gov’t, 1.75% ICE BofA US High Yield Master II, 1% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 - 9/30/2012: the blended benchmark was 25% S&P 500; 1.5% Russell 2000, 3.5% MSCI EAFE (net), 25% ICE BofA 1-3 Year Corp./Govt, 40% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007, the blended benchmark was 30% S&P 500, 25% ICE BofA 1-3Yr Corp/Gov, 40% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide current income, with
capital appreciation as a
secondary objective. The major
portion of the assets is committed
to income-producing securities.

Market fluctuations should be
expected.

Strategic Range Policy Tactical
Equity 20 - 40% 30% 28%
Fixed Income 50 - 80% 65% 67%
Cash 0 - 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
Gross Net
Current Quarter* 3.55% 3.46%
Blended Benchmark*,** 3.91%
Year To Date* -13.46% -13.77%
Blended Benchmark*,** -12.35%
1 Year -13.46% -13.77%
Blended Benchmark** -12.35%
3 Year 0.26% -0.10%
Blended Benchmark** 0.54%
5 Year 2.23% 1.86%
Blended Benchmark** 2.52%
10 Year 3.73% 3.36%
Blended Benchmark** 3.90%
Index Plus Composite (Passive)
Gross Net
Current Quarter* 3.50% 3.41%
Blended Benchmark*,** 3.91%
Year To Date* -13.00% -13.32%
Blended Benchmark*,** -12.35%
1 Year -13.00% -13.32%
Blended Benchmark** -12.35%
3 Year 0.19% -0.17%
Blended Benchmark** 0.54%
5 Year 2.20% 1.84%
Blended Benchmark** 2.52%
10 Year 3.62% 3.25%
Blended Benchmark** 3.90%

PORTFOLIO FACTS
Index Plus (Passive)
Composite Inception Date 05/2005
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -15.37%
2009 18.71%
2010 10.46%
2011 1.75%
2012 10.88%
2013 7.30%
2014 4.41%
2015 0.32%
2016 4.94%
2017 9.56%
2018 -2.60%
2019 13.73%
2020 10.76%
2021 5.15%
2022 -13.46%
Index Plus Composite (Passive)
2008 -12.40%
2009 11.92%
2010 9.72%
2011 3.24%
2012 8.24%
2013 6.78%
2014 5.40%
2015 -0.18%
2016 5.42%
2017 8.08%
2018 -2.33%
2019 13.53%
2020 9.74%
2021 5.33%
2022 -13.00%
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 199, Packet Page 514

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 15
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderately Conservative active and passive objectives.

Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S.

Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HOLDINGS
STYLE
Small Cap 4.3%
Interm-Term Bond

52.5%
High Yield 1.0%
Short-Term Bond

13.5%
Large Cap Core

8.2%
Large Cap Growth

3.3%
Mid Cap 2.7%
Intl Stocks 4.7%
Cash 5.0%
Large Cap Value

3.8% Real Estate 1.0%
Holdings are subject to change at the
discretion of the investment manager.

PARS DIVERSIFIED PORTFOLIOS

MODERATE

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — MODERATE PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

WHY THE PARS DIVERSIFIED
MODERATE PORTFOLIO?
Q4 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 26.5% S&P500, 5% Russell Mid Cap, 7.5% Russell 2000, 3.25% MSCI EM (net), 6% MSCI EAFE (net), 33.50% Bloomberg US Agg, 10% ICE BofA 1-3 Yr US Corp/Gov’t, 1.50% ICE BofA US High Yield Master II, 1.75% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012: the blended benchmark was 43% S&P 500; 2% Russell 2000, 5% MSCI EAFE (net), 15% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 50% S&P 500, 15% ICE BofA 1- 3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide current income and
moderate capital appreciation.

It is expected that dividend and
interest income will comprise a
significant portion of total return,
although growth through capital
appreciation is equally important.

Strategic Range Policy Tactical
Equity 40 - 60% 50% 47%
Fixed Income 40 - 60% 45% 48%
Cash 0 - 20% 5% 5%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Index Plus Composite (Passive)
Gross Net
Current Quarter* 4.78% 4.68%
Blended Benchmark*,** 5.30%
Year To Date* -14.21% -14.53%
Blended Benchmark*,** -13.74%
1 Year -14.21% -14.53%
Blended Benchmark** -13.74%
3 Year 1.68% 1.32%
Blended Benchmark** 2.12%
5 Year 3.47% 3.10%
Blended Benchmark** 3.90%
10 Year 5.34% 4.97%
Blended Benchmark** 5.78%

PORTFOLIO FACTS
HighMark Plus (Active)
Composite Inception Date 10/2004
No of Holdings in Portfolio 20
Index Plus (Passive)
Composite Inception Date 05/2006
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -22.88%
2009 21.47%
2010 12.42%
2011 0.55%
2012 12.25%
2013 13.06%
2014 4.84%
2015 0.14%
2016 6.45%
2017 13.19%
2018 -4.03%
2019 17.71%
2020 12.92%
2021 9.31%
2022 -14.63%
Index Plus Composite (Passive)
2008 -18.14%
2009 16.05%
2010 11.77%
2011 2.29%
2012 10.91%
2013 12.79%
2014 5.72%
2015 -0.52%
2016 7.23%
2017 11.59%
2018 -4.03%
2019 17.52%
2020 11.23%
2021 10.18%
2022 -14.21%
HighMark Plus Composite (Active)
Gross Net
Current Quarter* 4.71% 4.62%
Blended Benchmark*,** 5.30%
Year To Date* -14.63% -14.94%
Blended Benchmark*,** -13.74%
1 Year -14.63% -14.94%
Blended Benchmark** -13.74%
3 Year 1.76% 1.40%
Blended Benchmark** 2.12%
5 Year 3.55% 3.18%
Blended Benchmark** 3.90%
10 Year 5.46% 5.09%
Blended Benchmark** 5.78%
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 201, Packet Page 516

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 15
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Moderate active and passive objectives.

The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The 0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub- advisory fee rate of 0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1- month U.S. Treasury Bill.

HOLDINGS
STYLE
Small Cap

7.0%
Interm-Term Bond

36.3%
High Yield

1.0% Short-Term Bond

10.7%
Large Cap Core

14.0%
Large Cap Growth

5.6%
Mid Cap

4.5%
Intl Stocks

7.3%
Cash

5.4%
Large Cap Value

6.4%
Real Estate

1.8%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation - Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 202, Packet Page 517 HighMark Plus (Active)
Composite Inception Date 10/2006
No of Holdings in Portfolio 20

PARS DIVERSIFIED PORTFOLIOS

BALANCED

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — BALANCED PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

WHY THE PARS DIVERSIFIED
BALANCED PORTFOLIO?
Q4 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: From 10/1/2012 – Present: 32% S&P500, 6% Russell Mid Cap, 9% Russell 2000, 4% MSCI EM (net), 7% MSCI EAFE (net), 27% Bloomberg US Agg, 6.75% ICE BofA 1-3 Yr US Corp/Gov’t, 1.25% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill. From 4/1/2007 – 9/30/2012:
the blended benchmark was 51% S&P 500; 3% Russell 2000, 6% MSCI EAFE (net), 5% ICE BofA 1-3 Year Corp./Govt, 30% Bloomberg US Agg, 5% FTSE 1 Mth US T-Bill. Prior to April 2007: the blended benchmark was 60% S&P 500, 5% ICE BofA 1-3Yr Corp/Gov, 30% Bloomberg US Agg, and 5% FTSE 1 Mth US T-Bill.

To provide growth of principal and
income. While dividend and
interest income are an important
component of the objective’s
total return, it is expected that
capital appreciation will comprise
a larger portion of the total return.

Strategic Range Policy Tactical
Equity 50 – 70% 60% 56%
Fixed Income 30 – 50% 35% 38%
Cash 0 – 20% 5% 6%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
Gross Net
Current Quarter* 5.27% 5.18%
Blended Benchmark*,** 6.00%
Year To Date* -15.28% -15.59%
Blended Benchmark*,** -14.58%
1 Year -15.28% -15.59%
Blended Benchmark** -14.58%
3 Year 2.43% 2.07%
Blended Benchmark** 2.83%
5 Year 4.15% 3.77%
Blended Benchmark** 4.53%
10 Year 6.32% 5.94%
Blended Benchmark** 6.69%
Index Plus Composite (Passive)
Gross Net
Current Quarter* 5.38% 5.29%
Blended Benchmark*,** 6.00%
Year To Date* -14.97% -15.28%
Blended Benchmark*,** -14.58%
1 Year -14.97% -15.28%
Blended Benchmark** -14.58%
3 Year 2.38% 2.02%
Blended Benchmark** 2.83%
5 Year 4.03% 3.66%
Blended Benchmark** 4.53%
10 Year 6.17% 5.79%
Blended Benchmark** 6.69%

PORTFOLIO FACTS
Index Plus (Passive)
Composite Inception Date 10/2007
No of Holdings in Portfolio 13
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation
Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
HighMark Plus Composite (Active)
2008 -25.72%
2009 21.36%
2010 14.11%
2011 -0.46%
2012 13.25%
2013 16.61%
2014 4.70%
2015 0.04%
2016 6.81%
2017 15.46%
2018 -4.88%
2019 19.85%
2020 13.85%
2021 11.44%
2022 -15.28%
Index Plus Composite (Passive)
2008 -23.22%
2009 17.62%
2010 12.76%
2011 1.60%
2012 11.93%
2013 15.63%
2014 6.08%
2015 -0.81%
2016 8.26%
2017 13.39%
2018 -5.05%
2019 19.59%
2020 12.07%
2021 12.63%
2022 -14.97%
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 203, Packet Page 518

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 15
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent size-weighted composites of tax exempt accounts that meet the following criteria:

Accounts are managed by HighMark with full investment authority according to the PARS Balanced active and passive objectives.

The composite name has been changed from PARS Balanced/Moderately Aggressive to PARS Balanced on 5/1/2013. The adviser to the PARS portfolios is US Bank, and HighMark serves as sub-adviser to US Bank to manage these portfolios. US Bank may charge clients as much as 0.60% annual management fee based on a sliding scale. US Bank pays HighMark 60% of the annual management fee for assets sub-advised by HighMark under its sub-advisory agreement with US Bank. The

0.36% paid to HighMark, as well as other expenses that may be incurred in the management of the portfolio, will reduce the portfolio’s returns. Assuming an investment for five years, a 5% annual total return, and an annual sub-advisory fee rate of

0.36% deducted from the assets at market at the end of each year, a $10 million initial value would grow to $12.53 million after fees (Net-of-Fees) and $12.76 million before fees (Gross-of-Fees). Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Additional information regarding the firm’s policies and procedures for calculating and reporting performance results is available upon request. Performance results are calculated and presented in U.S. dollars and do not reflect the deduction of investment advisory fees, custody fees, or taxes but do reflect the deduction of trading expenses. Returns are calculated based on trade-date accounting.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float- adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid- cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years.

The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

HOLDINGS
STYLE
Small Cap

8.4%
Interm-Term Bond

29.6%
High Yield

0.9%
Short-Term Bond

7.5%
Large Cap Core

17.0%
Large Cap Growth

6.8%
Mid Cap

5.5%
Intl Stocks

8.6%
Cash

6.0%
Large Cap Value

7.7%
Real Estate

2.0%
Holdings are subject to change at the
discretion of the investment manager.

PARS DIVERSIFIED PORTFOLIOS

CAPITAL APPRECIATION

INVESTMENT OBJECTIVE

ANNUAL RETURNS
ASSET ALLOCATION — CAPITAL APPRECIATION PORTFOLIO
Comprehensive Investment Solution
HighMark® Capital Management, Inc.’s (HighMark)
diversified investment portfolios are designed to
balance return expectations with risk tolerance.

This is a highly specialized, time consuming
approach dedicated to one goal: competitive and
consistent performance.

Flexible Investment Options
In order to meet the unique needs of our clients,
we offer access to flexible implementation strategies:

WHY THE PARS DIVERSIFIED
CAPITAL APPRECIATION PORTFOLIO?
Q4 2022
* Returns less than one year are not annualized. **Breakdown for Blended Benchmark: 39.5% S&P500, 7.5% Russell Mid Cap,

10.5% Russell 2000, 5.25% MSCI EM (net), 10.25% MSCI EAFE (net), 16% Bloomberg US Agg, 3% ICE BofA 1-3 Yr US Corp/Gov’t, 1% ICE BofA US High Yield Master II, 2% Wilshire REIT, and 5% FTSE 1 Mth US T-Bill.

To provide growth of principal.

The major portion of the assets
are invested in equity securities
and market fluctuations are
expected.

Strategic Range Policy Tactical
Equity 65 - 85% 75% 70%
Fixed Income 10 - 30% 20% 23%
Cash 0 - 20% 5% 7%
ANNUALIZED TOTAL RETURNS (Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Consolidated Composite
Gross Net
Current Quarter* 6.28% 6.19%
Blended Benchmark*,** 7.21%
Year To Date* -16.08% -16.38%
Blended Benchmark*,** -15.65%
1 Year -16.08% -16.38%
Blended Benchmark** -15.65%
3 Year 3.37% 3.00%
Blended Benchmark** 3.77%
5 Year 4.99% 4.61%
Blended Benchmark** 5.33%
10 Year 7.50% 7.12%
Blended Benchmark** 7.91%

PORTFOLIO FACTS
Consolidated Composite
Composite Inception Date 01/2009
No of Holdings in Portfolio 20
Efficient Frontier
Risk (Standard Deviation)
Reward (Rate of Return)
Conservative
Moderately Conservative
Moderate
Capital Appreciation Balanced
(Gross of Investment Management Fees, but Net of Embedded Fund Fees)
Consolidated Composite
2008 N/A
2009 23.77%
2010 12.95%
2011 -1.35%
2012 13.87%
2013 20.33%
2014 6.05%
2015 -0.26%
2016 8.79%
2017 16.72%
2018 -5.82%
2019 22.62%
2020 14.50%
2021 14.96%
2022 -16.08%
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 205, Packet Page 520

HIGHMARK CAPITAL MANAGEMENT
350 California Street
Suite 1600
San Francisco, CA 94104
800-582-4734

ABOUT THE PORTFOLIO MANAGEMENT TEAM
Andrew Brown, CFA®
Senior Portfolio Manager
Investment Experience: since 1994
HighMark Tenure: since 1997
Education: MBA, University of Southern California;
BA, University of Southern California
Salvatore “Tory” Milazzo III, CFA®
Senior Portfolio Manager
Investment Experience: since 2004
HighMark Tenure: since 2014
Education: BA, Colgate University
J. Keith Stribling, CFA®
Senior Portfolio Manager
Investment Experience: since 1985
HighMark Tenure: since 1995
Education: BA, Stetson University
Christiane Tsuda
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2010
Education: BA, International Christian University, Tokyo Anne Wimmer, CFA®
Senior Portfolio Manager
Investment Experience: since 1987
HighMark Tenure: since 2007
Education: BA, University of California, Santa Barbara
Asset Allocation Committee
Number of Members: 15
Average Years of Experience: 27
Average Tenure (Years): 15
Manager Review Group
Number of Members: 7
Average Years of Experience: 22
Average Tenure (Years): 10
*Assets under management (“AUM”) include assets for which HighMark provides continuous and regular supervisory and management services. Assets under advisement (“AUA”)
include assets for which HighMark provides certain investment advisory services (including, but not limited to, investment research and strategies) for client assets of its parent company, MUFG Union Bank, N.A.

The performance records shown represent a size-weighted composite of tax exempt accounts that meet the following criteria: Accounts are managed by HighMark with full investment authority according to the PARS Capital Appreciation active and passive objectives.

Blended benchmarks represent HighMark’s strategic allocations between equity, fixed income, and cash and are rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees or other expenses of investing but assumes the reinvestment of dividends and other earnings. An investor cannot invest directly in an index. The unmanaged S&P 500 Index is representative of the performance of large companies in the U.S. stock market. The MSCI EAFE Index is a free float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The ICE BofA U.S. High Yield Master II Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Wilshire REIT index measures U.S. publicly traded Real Estate Investment Trusts. The unmanaged Bloomberg U.S. Aggregate Bond Index is generally representative of the U.S. taxable bond market as a whole. The ICE BofA 1-3 Year U.S. Corporate & Government Index tracks the bond performance of the ICE BofA U.S. Corporate & Government Index, with a remaining term to final maturity less than 3 years. The unmanaged FTSE 1-Month U.S. Treasury Bill Index tracks the yield of the 1-month U.S. Treasury Bill.

Individual account management and construction will vary depending on each client's investment needs and objectives.

Investments employing HighMark strategies are NOT insured by the FDIC or by any other Federal Government Agency, are NOT Bank deposits, are NOT guaranteed by the Bank or any Bank affiliate, and MAY lose value, including possible loss of principal.
350 California Street
Suite 1600
San Francisco, CA 94104
800.582.4734
www.highmarkcapital.com

HOLDINGS
STYLE
Small Cap

9.7%
Interm-Term Bond

18.6%
High Yield

0.8%
Short-Term Bond

3.3%
Large Cap Core

21.5%
Large Cap Growth

8.3%
Mid Cap

6.9%
Intl Stocks

12.2%
Cash

7.3%
Large Cap Value

9.4%
Real Estate

2.0%
Holdings are subject to change at the
discretion of the investment manager.

HighMark Plus (Active) Index Plus (Passive)
Columbia Contrarian Core I3 iShares Core S&P 500 ETF
Vanguard Growth & Income Adm iShares S&P 500 Value ETF
Dodge & Cox Stock Fund iShares S&P 500 Growth ETF
iShares S&P 500 Value ETF iShares Russell Mid-Cap ETF
Harbor Capital Appreciation – Retirement Vanguard Real Estate ETF T. Rowe Price Growth Stock - I iShares Russell 2000 Value ETF iShares Russell Mid-Cap ETF iShares Russell 2000 Growth ETF Vanguard Real Estate ETF iShares Core MSCI EAFE ETF
Undiscovered Managers Behavioral Value-R6 Vanguard FTSE Emerging Markets ETF Vanguard Small Cap Growth ETF Vanguard Short-Term Invest-Grade Adm DFA Large Cap International Portfolio iShares Core U.S. Aggregate Dodge & Cox International Stock Vanguard High-Yield Corp Adm MFS International Growth - R6 First American Government Obligations Z Hartford Schroders Emerging Markets Eq
Vanguard Short-Term Invest-Grade Adm
PIMCO High Yield Instl
PIMCO Total Return Fund - Inst
PGIM Total Return Bond - R6
DoubleLine Core Fixed Income - I
First American Government Obligations Z
Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 206, Packet Page 521

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Conservative HighMark Plus Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 2.20 1.83 2.24 5.10 3.49 n/a 6 64.80 10.05
2020 9.03 8.64 7.81 5.21 3.70 n/a 6 65.59 9.26
2019 11.05 10.65 10.13 2.56 2.31 n/a <6 52.78 8.87
2018 -1.35 -1.71 -0.60 2.63 2.19 n/a <6 44.96 7.41
2017 6.73 6.35 5.24 2.61 2.08 n/a <6 43.27 14.00
2016 4.18 3.80 3.92 2.83 2.38 n/a <6 36.84 15.25
2015 0.29 -0.07 0.31 2.78 2.42 n/a <6 34.72 15.10
2014 3.88 3.51 4.76 2.79 2.22 n/a <6 32.97 15.27
2013 3.69 3.32 3.18 3.59 2.30 n/a <6 21.96 14.53
2012 8.45 8.06 4.93 3.81 2.22 n/a <6 19.58 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

HighMark, a wholly owned subsidiary of MUFG Union Bank, N.A., is a registered investment adviser. The firm’s list of composite descriptions is available upon request. All returns are expressed in U.S. dollars.

The PARS Tax Exempt Conservative HighMark Plus Composite includes all institutional portfolios invested in actively managed mutual funds.

The strategy is to provide a consistent level of inflation-protected income over the long term. Under normal conditions, allocation ranges are:

Equity 5%-20%, Fixed Income 60%-95%, and Cash 0%-20%. The composite inception date is July 1, 2004. The composite was created in April 2009.

Effective 10/1/2012, the benchmark consists of: 7.5% S&P 500, 2.5% Russell 2000, 2% MSCI EAFE (net), 1.5% Russell MidCap, 1.0% MSCI EM (net), 52.25% Bloomberg US Aggregate Bond, 25.75% ICE BofA 1-3 Year US Corporate/Government, 2.0% ICE BofA US High Yield Master II, 0.5% Wilshire REIT, and 5% FTSE 1 Month T-Bill, rebalanced monthly. The benchmark was changed to reflect added strategy investments in mid cap and REITs. Prior to 10/1/2012, the benchmark consisted of: 12% S&P 500, 1% Russell 2000, 2% MSCI EAFE (net), 40% ICE BofA 1-3 Year US Corporate/Government, 40% Bloomberg US Aggregate Bond, and 5% FTSE 1 Month T-Bill, rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees, custody fees, transaction costs, or other expenses of investing. Total benchmark returns assume the reinvestment of dividends and other earnings. An investor cannot invest directly in an index.

Gross returns are presented before management and custodial fees but after all trading expenses and reflect the reinvestment of dividends and other income. Net returns are net of model investment management fees in effect for the respective time period and are derived using the maximum fixed fee rate. A client's return will be reduced by the advisory fees and other expenses it may incur as a client. Fees charged are at the discretion of HighMark and U.S. Bank, N.A.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

The internal dispersion of annual returns is measured by the equal-weighted standard deviation of portfolio gross returns included in the composite for the full year. For those years with less than or equal to 5 portfolios, the calculation of internal dispersion is not a meaningful statistical measure. The three year annualized ex-post standard deviation measures the variability of the composite (using gross returns) and the benchmark returns over the preceding 36 month period. HighMark’s policies for valuing investments, calculating performance, and preparing GIPS Reports are available upon request.

Past performance does not guarantee future results. Securities investments involve risk, including the possible loss of the principal amount invested. Investments are not deposits of the adviser’s parent or any of the adviser’s affiliates, and are NOT FDIC insured.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 207, Packet Page 522

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Conservative Index Plus Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 1.97 1.61 2.24 3.81 3.49 0.13 7 50.69 10.05
2020 8.56 8.17 7.81 3.99 3.70 0.14 7 45.47 9.26
2019 10.37 9.98 10.13 2.47 2.31 n/a 6 38.51 8.87
2018 -1.09 -1.45 -0.60 2.44 2.19 n/a 6 35.53 7.41
2017 5.52 5.14 5.24 2.31 2.08 n/a <6 26.74 14.00
2016 3.75 3.38 3.92 2.52 2.38 n/a <6 28.44 15.25
2015 0.06 -0.30 0.31 2.58 2.42 n/a <6 23.70 15.10
2014 4.32 3.95 4.76 2.46 2.22 n/a <6 17.75 15.27
2013 3.40 3.02 3.18 2.92 2.30 n/a <6 12.49 14.53
2012 6.22 5.84 4.93 2.98 2.22 n/a <6 9.39 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Conservative Index Plus Composite includes all institutional portfolios invested in index-based securities. The strategy is to provide a consistent level of inflation-protected income over the long term. Under normal conditions, allocation ranges are: Equity 5%-20%, Fixed Income 60%-95%, and Cash 0%-20%. The composite inception date is July 1, 2004. The composite was created in April 2009.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 208, Packet Page 523

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Moderately Conservative HighMark Plus Composite January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 5.15 4.77 5.49 7.23 5.80 0.07 21 265.95 10.05
2020 10.76 10.37 9.90 7.55 6.22 0.37 21 279.67 9.26
2019 13.73 13.33 13.53 3.89 3.67 0.28 18 178.57 8.87
2018 -2.60 -2.95 -1.86 3.79 3.45 0.17 17 114.88 7.41
2017 9.56 9.17 8.11 3.64 3.20 n/a 9 82.48 14.00
2016 4.94 4.56 5.42 4.00 3.62 n/a <6 57.74 15.25
2015 0.32 -0.04 0.14 3.99 3.63 n/a 6 51.73 15.10
2014 4.41 4.04 5.92 4.06 3.34 0.09 6 53.66 15.27
2013 7.30 6.91 7.13 5.55 3.88 n/a 6 44.39 14.53
2012 10.88 10.48 7.32 6.26 4.41 n/a 6 42.37 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Moderately Conservative Highmark Plus Composite includes all institutional portfolios invested in actively managed mutual funds. The strategy is to provide current income, with capital appreciation as a secondary objective. Under normal conditions, allocation ranges are: Equity 20%-40%, Fixed Income 50%-80%, and Cash 0%-20%. The composite inception date is August 1, 2004. The composite was created in April 2009.

Effective 10/1/2012, the benchmark consists of: 15.5% S&P 500, 4.5% Russell 2000, 4.0% MSCI EAFE (net), 3.0% Russell MidCap, 2.0% MSCI EM (net), 49.25% Bloomberg US Aggregate Bond, 14.0% ICE BofA 1-3 Year US Corporate/Government, 1.75% ICE BofA US High Yield Master II, 1.0% Wilshire REIT, and 5% FTSE 1 Month T-Bill, rebalanced monthly. The benchmark was changed to reflect added strategy investments in mid cap and REITs. Prior to 10/1/2012, the benchmark consisted of: 25% S&P 500, 1.5% Russell 2000, 3.5% MSCI EAFE (net), 25% ICE BofA 1-3 Year US Corporate/Government, 40% Bloomberg US Aggregate Bond, and 5% FTSE 1 Month T-Bill, rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees, custody fees, transaction costs, or other expenses of investing. Total benchmark returns assume the reinvestment of dividends and other earnings. An investor cannot invest directly in an index.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 209, Packet Page 524

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Moderately Conservative Index Plus Composite January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 5.33 4.95 5.49 5.78 5.80 0.11 14 315.38 10.05
2020 9.74 9.35 9.90 6.18 6.22 0.30 15 274.84 9.26
2019 13.53 13.13 13.53 3.66 3.67 0.22 16 228.97 8.87
2018 -2.33 -2.68 -1.86 3.46 3.45 0.14 16 226.16 7.41
2017 8.08 7.70 8.11 3.27 3.20 0.13 14 168.14 14.00
2016 5.42 5.05 5.42 3.64 3.62 0.17 10 188.96 15.25
2015 -0.18 -0.54 0.14 3.76 3.63 0.26 11 172.46 15.10
2014 5.40 5.02 5.92 3.62 3.34 1.09 11 151.84 15.27
2013 6.78 6.39 7.13 4.61 3.88 1.12 10 156.33 14.53
2012 8.24 7.85 7.32 5.33 4.41 0.25 9 113.65 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Moderately Conservative Index Plus Composite includes all institutional portfolios invested in index-based securities.

The strategy is to provide current income, with capital appreciation as a secondary objective. Under normal conditions, allocation ranges are:

Equity 20%-40%, Fixed Income 50%-80%, and Cash 0%-20%. The composite inception date is May 1, 2005. The composite was created in April 2009.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 210, Packet Page 525

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Moderate HighMark Plus Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 9.31 8.92 10.20 10.20 9.12 0.33 34 589.01 10.05
2020 12.92 12.52 12.02 10.79 9.82 0.48 29 440.53 9.26
2019 17.71 17.29 17.65 6.08 5.86 0.37 30 422.47 8.87
2018 -4.03 -4.37 -3.37 5.68 5.47 0.30 29 330.82 7.41
2017 13.19 12.79 11.65 5.25 5.02 0.57 24 302.91 14.00
2016 6.45 6.07 7.41 5.73 5.57 0.47 22 294.11 15.25
2015 0.14 -0.22 -0.12 5.55 5.43 0.23 20 261.74 15.10
2014 4.84 4.46 6.95 5.47 4.99 0.23 20 253.18 15.27
2013 13.06 12.66 13.06 7.50 6.21 0.97 20 265.51 14.53
2012 12.25 11.85 10.26 9.21 7.57 0.79 18 226.43 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Moderate Highmark Plus Composite includes all institutional portfolios invested in actively managed mutual funds. The strategy is to provide current income and moderate capital appreciation. Under normal conditions, allocation ranges are: Equity 40%-60%, Fixed Income 40%-60%, and Cash 0%-20%. The composite inception date is October 1, 2004. The composite was created in April 2009.

Effective 10/1/2012, the benchmark consists of: 26.5% S&P 500, 7.5% Russell 2000, 6% MSCI EAFE (net), 5% Russell MidCap, 3.25% MSCI EM (net), 33.5% Bloomberg US Aggregate Bond, 10% ICE BofA 1-3 Year US Corporate/Government, 1.5% ICE BofA US High Yield Master II,

1.75% Wilshire REIT, and 5% FTSE 1 Month T-Bill, rebalanced monthly. The benchmark was changed to reflect added strategy investments in mid cap and REITs. Prior to 10/1/2012, the benchmark consisted of: 43% S&P 500, 2% Russell 2000, 5% MSCI EAFE (net), 15% ICE BofA 1-3 Year US Corporate/Government, 30% Bloomberg US Aggregate Bond, and 5% FTSE 1 Month T-Bill, rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees, custody fees, transaction costs, or other expenses of investing. Total benchmark returns assume the reinvestment of dividends and other earnings. An investor cannot invest directly in an index.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 211, Packet Page 526

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Moderate Index Plus Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 10.18 9.79 10.20 8.97 9.12 0.39 33 347.50 10.05
2020 11.23 10.84 12.02 9.65 9.82 1.25 31 273.81 9.26
2019 17.52 17.11 17.65 5.81 5.86 1.07 29 218.24 8.87
2018 -4.03 -4.38 -3.37 5.38 5.47 0.27 26 171.39 7.41
2017 11.59 11.19 11.65 4.96 5.02 0.13 20 137.75 14.00
2016 7.23 6.84 7.41 5.46 5.57 0.36 17 90.74 15.25
2015 -0.52 -0.87 -0.12 5.47 5.43 0.78 14 71.47 15.10
2014 5.72 5.35 6.95 5.17 4.99 1.33 12 64.82 15.27
2013 12.79 12.39 13.06 6.89 6.21 0.52 12 37.61 14.53
2012 10.91 10.51 10.26 8.49 7.57 n/a 11 28.86 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Moderate Index Plus Composite includes all institutional portfolios invested in index-based securities. The strategy is to provide current income and moderate capital appreciation. Under normal conditions, allocation ranges are: Equity 40%-60%, Fixed Income 40%-60%, and Cash 0%-20%. The composite inception date is May 1, 2006. The composite was created in April 2009.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 212, Packet Page 527

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Balanced HighMark Plus Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 11.44 11.04 12.56 11.89 10.84 0.19 30 544.15 10.05 2020 13.85 13.44 13.08 12.64 11.69 1.22 30 470.97 9.26
2019 19.85 19.42 19.77 7.35 7.04 0.33 29 390.68 8.87
2018 -4.88 -5.22 -4.18 6.81 6.56 0.31 27 273.95 7.41
2017 15.46 15.05 13.54 6.20 6.00 0.35 25 257.43 14.00
2016 6.81 6.42 8.38 6.75 6.62 0.44 24 211.15 15.25
2015 0.04 -0.32 -0.29 6.50 6.40 0.55 24 196.62 15.10
2014 4.70 4.33 7.52 6.34 5.87 0.68 21 159.33 15.27
2013 16.61 16.20 16.05 8.88 7.42 0.64 15 121.82 14.53
2012 13.25 12.85 11.90 10.90 9.16 0.25 12 88.73 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Balanced HighMark Plus Composite includes all institutional portfolios invested in actively managed mutual funds. The strategy is to provide growth of principal and income. Under normal conditions, allocation ranges are: Equity 50%-70%, Fixed Income 30%- 50%, and Cash 0%-20%. The composite inception date is October 1, 2006. The composite was created in April 2009. The composite name was changed from PARS Tax Exempt Moderately Aggressive HighMark Plus to PARS Tax Exempt Balanced HighMark Plus in May 2013.

Effective 10/1/2012, the benchmark consists of: 32.0% S&P 500, 9.0% Russell 2000, 7.0% MSCI EAFE (net), 6.0% Russell MidCap, 4.0% MSCI EM (net), 27.0% Bloomberg US Aggregate Bond, 6.75% ICE BofA 1-3 Year US Corporate/Government, 1.25% ICE BofA US High Yield Master II, 2.0% Wilshire REIT, and 5% FTSE 1 Month T-Bill, rebalanced monthly. The benchmark was changed to reflect added strategy investments in mid cap and REITs. Prior to 10/1/2012, the benchmark consisted of: 51% S&P 500, 3% Russell 2000, 6% MSCI EAFE (net), 5% ICE BofA 1- 3 Year US Corporate/Government, 30% Bloomberg US Aggregate Bond, and 5% FTSE 1 Month T-Bill, rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees, custody fees, transaction costs, or other expenses of investing. Total benchmark returns assume the reinvestment of dividends and other earnings. An investor cannot invest directly in an index.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 213, Packet Page 528

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Balanced Index Plus Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 12.63 12.23 12.56 10.60 10.84 0.09 17 313.12 10.05 2020 12.07 11.67 13.08 11.43 11.69 0.43 17 260.67 9.26
2019 19.59 19.16 19.77 6.97 7.04 0.28 15 222.45 8.87
2018 -5.05 -5.39 -4.18 6.44 6.56 0.14 13 163.15 7.41
2017 13.39 12.98 13.54 5.88 6.00 0.09 11 149.71 14.00
2016 8.25 7.86 8.38 6.46 6.62 0.21 12 135.54 15.25
2015 -0.81 -1.17 -0.29 6.39 6.40 0.19 9 99.49 15.10
2014 6.08 5.70 7.52 6.04 5.87 0.32 10 90.62 15.27
2013 15.63 15.22 16.05 8.15 7.42 0.47 9 73.67 14.53
2012 11.93 11.53 11.90 10.12 9.16 0.85 8 57.98 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Balanced Index Plus Composite includes all institutional portfolios invested in index-based securities. The strategy is to provide growth of principal and income. Under normal conditions, allocation ranges are: Equity 50%-70%, Fixed Income 30%-50%, and Cash 0%-20%. The composite inception date is October 1, 2007. The composite was created in April 2009. The composite name was changed from PARS Tax Exempt Moderately Aggressive Index Plus to PARS Tax Exempt Balanced Index Plus in May 2013.

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 214, Packet Page 529

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Tax Exempt Capital Appreciation Consolidated Composite January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 14.96 14.55 15.83 13.72 13.39 0.84 17 273.60 10.05 2020 14.50 14.10 14.38 14.67 14.44 1.40 15 226.24 9.26
2019 22.62 22.18 22.81 8.87 8.78 0.58 15 180.05 8.87
2018 -5.82 -6.16 -5.55 8.09 8.17 0.38 14 131.18 7.41
2017 16.72 16.31 16.55 7.39 7.53 n/a 9 81.31 14.00
2016 8.81 8.42 9.57 8.08 8.23 n/a <6 4.44 15.25
2015 -0.27 -0.62 -0.62 7.80 7.90 n/a <6 2.36 15.10
2014 6.05 5.67 7.89 7.41 7.48 n/a <6 1.15 15.27
2013 20.33 19.90 20.62 10.21 10.11 n/a <6 26.76 14.53
2012 13.87 13.46 13.38 12.60 12.47 n/a <6 21.85 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Tax Exempt Capital Appreciation Consolidated Composite includes all institutional portfolios invested in either actively managed mutual funds or index based securities. The strategy is to provide growth of principal. Under normal conditions, allocation ranges are: Equity 65%-85%, Fixed Income 10%-30%, and Cash 0%-20%. The composite inception date is January 1, 2009. The composite was created in May 2013. As of March 31, 2017, the composite name was changed from PARS Tax Exempt Capital Appreciation HighMark Plus to PARS Tax Exempt Capital Appreciation Consolidated.

The benchmark consists of: 39.5% S&P 500, 10.5% Russell 2000, 10.25% MSCI EAFE (net), 7.5% Russell MidCap, 5.25% MSCI EM (net), 16% Bloomberg US Aggregate Bond, 3% ICE BofA 1-3 Year US Corporate/Government, 1% ICE BofA US High Yield Master II, 2% Wilshire REIT, 5% FTSE 1 Month T-Bill, rebalanced monthly. Benchmark returns do not reflect the deduction of advisory fees, custody fees, transaction costs, or other expenses of investing. Total benchmark returns assume the reinvestment of dividends and other earnings. An investor cannot invest directly in an index..

The standard management fee is 0.36%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 215, Packet Page 530

HighMark Capital Management, Inc.

GIPS Composite Report
PARS Short-to-Intermediate Fixed Income Composite
January 1, 2012 through December 31, 2021
As of December 31
Year
Composite
Gross
Return (%)
Composite
Net Return
(%)
Benchmark
Return
(%)
Composite
3-Yr Std Dev
(%)
Benchmark
3-Yr Std Dev
(%)
Internal
Dispersion
(%)
Number
of
Portfolios
Composite
Assets
($M)
Firm
Assets
($B)
2021 -0.27 -0.35 -0.53 0.89 1.19 n/a <6 150.03 10.05
2020 1.82 1.75 3.12 0.77 1.21 n/a <6 154.24 9.26
2019 3.30 3.23 3.55 0.34 0.94 n/a <6 153.34 8.87
2018 1.94 1.86 1.59 0.32 0.85 n/a <6 147.05 7.41
2017 1.50 1.42 0.43 0.32 0.74 n/a <6 140.62 14.00
2016 1.29 1.22 0.88 0.30 0.75 n/a <6 140.60 15.25
2015 0.47 0.40 0.53 0.23 0.56 n/a <6 141.40 15.10
2014 0.52 0.45 0.61 0.34 0.44 n/a <6 147.06 15.27
2013 0.73 0.66 0.34 0.40 0.52 n/a <6 152.10 14.53
2012 1.72 1.65 0.42 0.43 0.75 n/a <6 153.38 17.50
HighMark Capital Management, Inc. (“HighMark”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. HighMark has been independently verified for the periods January 1, 2003 through December 31, 2021. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm's policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

The PARS Short-to-Intermediate Fixed Income Composite includes all institutional portfolios that invest in U.S. short-term to intermediate-term securities that offer liquidity, stability of principal, and competitive yields. Portfolios in this composite are diversified with security maturities less than 8 years and primarily a weighted average maturity of between 1.5 and 3 years. The composite inception date is January 1, 2000. The composite was created in April 2009.

The benchmark is the ICE BofA 1-3 Year U.S. Treasury Index. Benchmark returns do not reflect the deduction of advisory fees, custody fees, transaction costs, or other expenses of investing. Total benchmark returns assume the reinvestment of dividends and other earnings. An investor cannot invest directly in an index.

The standard management fee is 0.072%. Standard management fees do not include any platform, administration, or other distribution fees that client may pay in addition to the management fees.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Attachment 2
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 216, Packet Page 531 Prepared for
Rafaela King, Finance Director
City of Monterey
Proposal for RFP - Section 115 Retirement Management Services Thursday, February 16, 2023
Prepared by:

CalPERS
Prefunding Programs
Contact Person:

Matt Goss
Customer Outreach & Support Program Manager
CalPERS Prefunding Programs
(916) 795-9071 Desk
(916) 382-6487 Cell
[email protected]
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 217, Packet Page 532 California Public Employees’ Retirement System
Prefunding Programs
400 Q Street, Sacramento, CA 95811
888 CalPERS (or 888-225-7377) | TTY: (877) 249-7442 | www.calpers.ca.gov February 16, 2023
Attention: Rafaela King
City of Monterey
735 Pacific Street, Ste. A
Finance Department
Monterey, CA 93940
Subject: RFP - Section 115 Retirement Management Services Dear Rafaela,
Thank you for inviting the California Employers' Pension Prefunding Trust (CEPPT) to submit a comprehensive proposal to provide Section 115 Section Retirement Management Services on behalf of the City of Monterey (City). We fully understand the scope of services being requested for proposal (RFP), the timeline of these services, and would be honored to serve to the City in this capacity. Hence, we have proposed a firm and irrevocable offer for the next 120 days.

The City’s primary contact is Matt Goss, CalPERS Prefunding Programs Customer Outreach and Support Program Manager. Matt is entitled to represent the firm, empowered to submit the bid, and authorized to sign a contract with the City. Matt’s contact information is:
(916) 795-9071 Desk
(916) 382-6487 Cell
[email protected]
Our Prefunding Programs team holds office at our Sacramento Headquarters located at 400 Q Street, Sacramento, CA 95811.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 218, Packet Page 533 There are responses to some questions where we have provided information on the California Employers’ Retiree Benefit Trust (CERBT) fund program. The reason for this is because while the CEPPT and the CERBT are separate programs with uniquely distinct purposes, they are both administered by CalPERS and have a shared administrative model along with extremely similar investment models. Therefore, to be as thorough as possible, we have provided CERBT program information where we thought it would be helpful.

We hope our response to this RFP and the attached documents convey our intentions and responsibilities to you. We are fully committed to serving the City in its efforts to prefund pension contributions.

Sincerely,
Matthew Goss
Customer Outreach and Support Program Manager
CalPERS Prefunding Programs
(916) 795-9071 Desk
(916) 382-6487 Cell
[email protected]
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 219, Packet Page 534 City of Monterey
RFP for Section 115 Retirement Management Services
II. Table of Contents
I. Cover Letter
II. Table of Contents
III. Executive Summary
IV. Response to Scope of Services
V. CalPERS Attachments
• Attachment 1 – CEPPT Investment Policy
• Attachment 2 – Fund Fact Sheets
• Attachment 3 - Prefunding Program Employers
• Attachment 4 – CEPPT Contracting Documents
• Attachment 5 – CERBT Private Letter Ruling
• Attachment 6 – Asset Class Fact Sheets
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 220, Packet Page 535 City of Monterey
RFP for Section 115 Retirement Management Services
www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
4 III. Executive Summary
The California Public Employees’ Retirement System (CalPERS) is an agency of the State of California (State) charged to administer defined benefit pension, employer pension contribution prefunding, health benefits, long-term care insurance, other post-employment benefit (OPEB) prefunding, and supplemental income defined contribution programs, for the benefit of State, school, and local public agency employees. CalPERS is the largest public employee retirement fund (PERF) in the United States.

CalPERS has been a retirement system administrator and has managed the PERF trust fund on behalf of California public employer defined benefit retirement plans since 1932. Presently, CalPERS manages about $490 billion in PERF assets on behalf of about 2 million members and 3,000 California public employers.

The California Public Employers Retiree Benefit (CERBT) OPEB fund began operations in March of 2007. Presently, the CERBT manages about $16 billion in assets on behalf of 598 California public employers. The California Employers Pension Prefunding Trust (CEPPT) fund began operations in July of 2019. Presently, the CEPPT manages about $100 million in assets on behalf of 79 California public employers. CalPERS is the largest IRC Section 115 trust provider in the country as measured by participating employers and assets under management.

Currently, a total of 620 California employers (including 156 Cities and Towns) prefund their OPEB and/or Pension contributions and participate in the CalPERS Prefunding Programs. The City has participated in the CERBT since June 9, 2013.

The CalPERS Board of Administration (CalPERS Board) are the fiduciaries of the CEPPT and CERBT. In addition, some CalPERS Executive Officers have meaningful and relevant fiduciary responsibilities. The CalPERS Investment Office (INVO) staff, under policy guidance of the CalPERS Board, manages and oversees the investments of the CEPPT and CERBT. The CalPERS INVO Affiliate Investment Program (AIP) area will offer support to the City’s CEPPT and CERBT accounts. Christine Reese, AIP Investment Director, leads this team who work out of the CalPERS INVO. Christine has more than 25 years of experience in the investment management industry. The CalPERS Prefunding Programs team is responsible for the administration of the CEPPT and CERBT. Colleen Cain-Herrback is the CalPERS Prefunding Programs Administration and Reporting Program Manager and Matt Goss is the CalPERS Prefunding Programs Customer Outreach and Support Program Manager. Robert Sharp is the Assistant Division Chief for CalPERS Prefunding Programs which includes oversight of the CEPPT and CERBT.

The City’s primary contact for this RFP Response is Matt Goss.

Matt Goss
Customer Outreach and Support Program Manager
CalPERS Prefunding Programs
(916) 795-9071 Desk, (916) 382-6487 Cell
[email protected]
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 221, Packet Page 536 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
5 Each of the aforementioned CalPERS staff have been present during large segments of the City’s CERBT participation and have done their part in delivering prudent, consistent, and effective CERBT services on behalf of the City’s CERBT account. The City established their CERBT contract on June 9, 2013. The City made an initial CERBT contribution of $ 110,161.72 on June 28, 2013 into CERBT Asset Allocation Strategy 1 (S1) and have remained in S1 to this day. Since June 28, 2013 through February 14, 2023, a period of 9.64 years, the City has contributed an additional $5,546,348.06. The City has achieved investment gains of $1,497,617.71 for a total of $24,998.87 in all-inclusive fees over this 9.64-year period and had a CERBT asset balance of $7,129,128.62 as of February 14, 2023. The City’s annualized net rate of investment return for this 9.64-year period was 5.56%.

The City’s CEPPT participation would consist of similar quality, consistency, and dependability delivered by these same individuals.

The purpose of the CEPPT and CERBT is to help employers prefund pension and OPEB costs by delivering the highest investment returns consistent with a given level of investment risk for an appropriate investment time horizon at the lowest cost possible. We aim to fulfill our purpose by delivering five key advantages which are the pillars of our foundation upon which we continue to build and optimize our products and services:

1. World renowned investment management expertise with unmatched resources and economies of scale.

2. Financial reporting compliant with governmental accounting standards which eliminate, minimize, and support employer requirements.

3. Streamlined administrative processes and procedures saving you valuable time and resources. Free sub-accounting if desired. Online record keeping system.

4. Competent and dedicated customer service and support 24/7/365 from honest and loyal brokers of fair and balanced information with no monetary incentives.

5. Lowest total participation costs yesterday, today, and tomorrow. Greatest probability of saving the most money over time.

It is the concurrent delivery of all five of these advantages that differentiates the CalPERS Prefunding Programs from our competitors. No competitor can deliver all five of these advantages at the same time.

When it comes to saving money, the City will save more and pay less in fees with CalPERS. We charge all of our customers, regardless of their size and account balances, the lowest possible cost at all times. We start less expensive than any other trust fund and we stay less expensive than any other trust fund. With both the CERBT and the CEPPT, independent of one another or used together, our participation fee rate cannot be matched by any other for-profit commission-based competitor out there.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 222, Packet Page 537 City of Monterey
RFP for Section 115 Retirement Management Services
www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
6 It is our belief that the City will benefit the most by maintaining the CERBT trust account and establishing CEPPT trust account with CalPERS. The City will pay the lowest participation fees from the beginning and in perpetuity as we provide investment management expertise with unmatched resources and economies of scale.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 223, Packet Page 538 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
7 IV. Response to Proposal Requirements
A. All proposals shall include the following minimum information:

1. Management and Team Members. Provide a description of the team/consultant organization, and a work plan that identifies the personnel to be assigned to each task.

The organization description should clearly identify who will be the project manager and the day-to-day contact person for the job. Include relevant experience of the team members who will be assigned to the project.

The CEPPT & CERBT Program (Prefunding Programs) team, staffed by 13 full time employees and 1 student assistant, are collectively responsible for the administration of the CalPERS Prefunding Programs trust funds (CEPPT & CERBT). The Prefunding Programs team is led by two Program Managers, one who is responsible for administration and reporting and one who is responsible for customer outreach and support.

The City’s primary contact is Matt Goss, CalPERS Prefunding Programs Customer Outreach and Support Program Manager. Matt has been working for CalPERS since 2007 and in Prefunding Programs since 2010. Before joining CalPERS, Matt worked in the private sector as a Pharmaceutical Sales Representative for GlaxoSmithKline and Medical Device Sales Consultant for Synthes Craniomaxillofacial Orthopedics. Matt earned a BS in Kinesiology from California State University, Sacramento.

City staff will also work with Colleen Cain-Herrback, CalPERS Prefunding Programs Administration and Reporting Program Manager, on the portions of this assignment related to accounting and financial reporting. Colleen joined the Prefunding Programs team in 2016 after working for 2 years in CalPERS program areas performing budget analysis, and 5 years in our Human Resources Division. Prior to joining CalPERS in 2009, Colleen worked for 5 years with the Sacramento Kings NBA organization in their Human Resources Office. Colleen earned a BS in Business Administration from California State University, Sacramento.

When the need to escalate an issue related to this assignment beyond Matt or Colleen may arise, City staff will work with Robert Sharp, Melody Benavides, or Christine Reese depending on the issue. Robert Sharp is the Assistant Division Chief for CalPERS Prefunding Programs which includes oversight of the CEPPT, CERBT, and SIP Programs. Prior to joining CalPERS in 2005, Robert worked for 6 years in the private sector in the banking and insurance industry.

Robert earned a BA from California State University, Sacramento.

Melody Benavides is the Division Chief for CalPERS Pension Contracts and Prefunding Programs which includes oversight of CalPERS Pension Contracts, CEPPT, CERBT, and Supplemental Income Programs. Melody has over 23 years of financial management experience primarily in Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 224, Packet Page 539 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
8 state government and banking. Melody earned an MA and BA in Business Administration from California State University, Sacramento.

Christine Reese, CalPERS Affiliate Investments Program (AIP) Investment Director, has more than 25 years of experience in the investment management industry, working with leading financial institutions such as BlackRock, State Street Bank & Trust, and Union Bank of California. Christine held managerial positions in trading, operations, accounting, product development, and has most recently worked as an independent consultant focusing on strategic financial institution initiatives.

2. A list of subconsultants to be used, if any, and their expertise as called for in Item 1, above.

The CalPERS Board are the fiduciaries of the CEPPT. Under policy guidance from the CalPERS Board, CalPERS INVO AIP staff manages and oversees the investments of the CEPPT. CalPERS has chosen to utilize State Street Global Advisors (SSGA) to externally manage all of the CEPPT asset classes. The daily investment of these asset classes is performed by SSGA following the strategies and instructions of CalPERS. SSGA maintains investment portfolios which are managed passively to emulate the CalPERS performance benchmarks of those asset classes.

CalPERS also utilizes SSGA in part or whole for several other trust funds including the PERF, CERBT, Judges Retirement System (JRS), and the Legislators Retirement System (LRS).

CalPERS exercises great care and has a robust due diligence process for conducting an external investment manager search. For the CERBT, the CalPERS Board approved the issuance of an RFP for investment management services, which was written by a dedicated team of CalPERS staff with participation from an independent outside consultant. The CalPERS team was comprised of staff in the INVO, Financial, Compliance, Contracts, & Legal divisions. The team evaluated candidate responses, performed analyses (e.g. risk, credit, liquidity, performance), interviewed finalists, conducted onsite due diligence visits, and presented a recommendation to the CalPERS Board for approval. SSGA was selected at the conclusion of this RFP process.

SSGA was established in 1978 to provide investment management services to institutional investors. Currently, SSGA is the world’s third largest asset manager with a portfolio management team of more than 500 long-tenured investment professionals who provide their clients with access to a global network of investment expertise. SSGA rigorously searches for highly motivated, intelligent, and personable team players. The job qualifications required for new hires depend upon the specific position being offered; however, SSGA believes that the standards to which professionals are held are among the highest in the industry. In general, SSGA’s portfolio managers, research analysts, and traders have already earned an advanced business degree, as well as have extensive investment experience, and/or computer science/mathematics experience. Most the firm’s portfolio managers have also earned the CFA designation. Depending upon the investment area, many portfolio managers are responsible for research related to their products. SSGA’s Quantitative Research Analysts typically have Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 225, Packet Page 540 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
9 advanced degrees in Mathematics, Computer Science, and extensive quantitative experience. Traders in SSGA’s core trading group must have extensive work experience as well as understanding of derivative theory and transaction cost reduction.

State Street Bank (SSB) is contracted to provide CEPPT investment custody services. SSB is a global investment management service company. Its operating history in the USA extends back to 1792. CalPERS Prefunding Programs have used SSB custodial services since the CERBT began operation in 2007.

Northeast Retirement Services, Inc. (NRS) provides CEPPT employer account record keeping.

Daily reports of account transactions and balances are available through the Prefunding Programs online record keeping system. NRS is contracted to deliver web-based asset account record access to both CEPPT and CERBT employers. Employers may access their accounts online. CalPERS Prefunding Programs have used NRS for record keeping services since 2010.

3. Scope of Work. A description of methodology, techniques, and procedures for each of the scope of work items with an explanation of how the proposer plans to approach the tasks and the steps that will be taken to complete the task including analytical methods and tools. Proposers must demonstrate that they understand the magnitude and importance of each individual task. If appropriate, tasks should be organized into phases constituting measurable deliverables.

CalPERS provides turnkey IRC Section 115 trust administration, including governance, custody, recordkeeping, financial reporting compliant with governmental accounting standards, and trust legal compliance some examples of which include:
• Establishment and implementation of the 115 trust accounts including sub-accounts • Design, implementation and review of the CEPPT and CERBT investment policies • Receiving contributions from participating employers and establishing separate employer prefunding accounts in the prefunding plan
• Investing contributed amounts and income, if any
• Disbursing employer account amounts to pay for valid employer costs • Daily reports of account transactions and balances are available through the Prefunding Programs online record keeping system
• Monthly reports of time-weighted investment performance are published on our web pages called “Fund Fact Sheets”
• Quarterly employer account statements are posted for download from the Prefunding Programs online record keeping system
• Audited CAFR compliant with GASB 74 & 84 issued by CalPERS • Regular trust account updates, plan reviews, training and education to employer staff and stakeholders
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 226, Packet Page 541 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
10 If the City establishes a CEPPT Participation Agreement with CalPERS it will delegate the investment fiduciary responsibility of the City’s CEPPT assets to the CalPERS Board. This delegation of investment fiduciary responsibility includes the adoption of the CEPPT Investment Policy (see “Attachment 1 – CEPPT Investment Policy”). The design of the CEPPT Investment Policy ensures that investors, managers, consultants, and other participants selected by CalPERS take prudent and careful action while managing the portfolios.

Additionally, use of the CEPPT Investment Policy ensures sufficient flexibility in managing investment risks and returns associated with the CEPPT. The CEPPT Investment Policy should be read in conjunction with and is subject to applicable conditions contained within the CalPERS Total Fund Investment Policy. The CEPPT Investment Policy shall also be managed to comply with all applicable INVO policies.

The CalPERS Board directs the investment strategy and investments of the CEPPT in accordance with the CEPPT Investment Policy. CalPERS INVO staff, under policy guidance of the CalPERS Board, manages the investments of the CEPPT. CalPERS employs more than 400 INVO staff who are devoted to the management of investments, investment risk, and investment policy compliance. CalPERS has chosen to utilize SSGA to externally manage all CEPPT asset classes except liquidity which is constrained to frictional/operational cash flows managed by CalPERS AIP staff. CalPERS AIP staff oversee SSGA.

The purpose of the CEPPT is to prefund employer pension contributions by delivering the highest investment return consistent with a given level of investment risk for an appropriate investment time horizon, at the lowest cost possible. To achieve this purpose, the CEPPT program offers employers a broadly diversified investment portfolio, consisting of public market securities, authorized by an investment policy approved by the CalPERS Board. This investment portfolio is offered to employers in the form of two risk efficient, broadly diversified asset allocation strategies. These two CEPPT asset allocation strategies (CEPPT strategies) invest in the same four underlying set of asset classes. The asset allocation strategies differ from one another only in the extent to which they participate in each asset class. By altering the portion of assets allocated to each asset class in a systematic way, the long term expected rate of investment return and the investment return volatility of each asset allocation strategy are made materially different from one another.

The table below provides details regarding assumptions of 1-10 year forecasted expected rates of investment return for the CEPPT strategies. These expected rates of return are net of all fees assuming a fee rate of 25 basis points. Also illustrated is the corresponding level of expected investment return volatility as measured by the standard deviation of expected investment returns for the same 1-10-year period. This data was generated from 2019 capital market assumptions and constraints.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 227, Packet Page 542 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
11 CEPPT Strategies Strategy 1 Strategy 2
Expected 1-10 Year Net
Compound Rate of
Investment Return

4.50% 3.50%
Standard Deviation of
Expected Investment
Returns

8.8% 6.1%
The table below provides details regarding the asset class target allocations and policy ranges for each CEPPT strategy along with the investment performance benchmarks for each major asset classification utilized.

Asset Classification Benchmark Strategy 1 Strategy 2
Global Equity MSCI ACWI IMI (Net) 37%
+/- 5%
21%
+/- 5%
Fixed Income
Bloomberg
U.S. Aggregate Bond
Index
44%
+/- 5%
61%
+/- 5%
Global Real Estate
(REITs)

FTSE EPRA/NAREIT
Developed Liquid
(Net)
14%
+/- 5%
9%
+/- 5%
Treasury Inflation
Protected Securities
(TIPS)
Bloomberg US TIPS
Index
(Series L)
5%
+/- 3%
9%
+/- 3%
Liquidity 91-Day Treasury Bill 0%
+ 2%
0%
+2%
See “Attachment 2 – Fund Fact Sheets”.

CalPERS ensures compliance with the CEPPT Investment Policy by setting asset class target allocations and policy ranges for each of the asset classes being utilized which are provided in the CEPPT Investment Policy. The CalPERS Board has established procedures which are followed by CalPERS staff to ensure that CEPPT Investment Policy compliance is maintained.

The CEPPT investments are monitored and evaluated daily to ensure that their ability to provide CEPPT participating employers with optimally efficient and prudent investment options is maintained. Major asset classifications and the CEPPT strategies are determined Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 228, Packet Page 543 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
12 using a rigorous methodology that includes an exhaustive study, analysis, and review of the CEPPT Investment Policy at least once every four years with a less exhaustive review performed at least every year. CalPERS has developed and implemented an asset liability analytical framework to conduct its asset allocation work for the CEPPT Investment Policy, which may be modified periodically to reflect the changing nature of investment market and economic conditions. Using a mean variance optimization approach that incorporates forecasted capital market assumptions (asset class returns), volatilities, and liability information for each trust, an efficient frontier is constructed depicting the portfolios with the highest expected return for a range of volatilities given the assumptions. The policy portfolios on the efficient frontier provide investment options of the highest degree of diversification given varying levels of risk. A range of potential policy portfolios that best balance the investment objectives, risk tolerances, and liquidity constraints of the CEPPT trust are then presented for CalPERS Board approval. Once a policy portfolio is approved, the CEPPT Investment Policy is approved by the CalPERS Board which identifies the strategic asset allocation targets to be invested in each asset class. Policy targets are typically implemented over an appropriate transition period (depending on the degree of change) to efficiently manage transaction costs and market effect. Upon adoption of significant CEPPT Investment Policy changes, CalPERS staff will implement the changes within a reasonable time period. The CEPPT portfolio will be managed in a manner that minimizes any tracking error.

CEPPT employer assets are pooled within each CEPPT strategy for investment purposes and objectives, however, CEPPT employer assets are accounted for separately in individual CEPPT employer accounts using a unitized methodology where each CEPPT employer owns units of a CEPPT strategy. Unitization makes asset valuation simple and allows for efficient liquidity.

CEPPT employers control their individual CEPPT funding policies. Prefunding Programs staff view the decision about which CEPPT strategy(s) to utilize as a funding policy decision rather than an investment policy decision. The City is responsible for this ongoing decision which is based on investment return volatility, plan funded status, sources of future funding, and cash payments required by the benefit plan. Since the underlying asset classes are the same for each CEPPT strategy, the City’s choice of CEPPT strategy(s) is guided by what is best in terms of financial commitment, prefunding objective, and plan cash flow requirements, rather than in which particular securities should assets be invested. To help make this decision easier, City staff may choose to utilize both CEPPT strategies concurrently.

All CEPPT contributions (initial and ongoing) are treated identically with respect to their timely deployment into CEPPT strategies. CEPPT contributions can be made daily, weekly, monthly, quarterly, or annually which is something for the City to consider when moving money into the CEPPT. Many employers have mentioned their concerns to Prefunding Programs staff about market timing risk and prefer smaller, more frequent contributions to address their concerns.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 229, Packet Page 544 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
13 CalPERS has chosen to utilize and oversee SSGA to externally manage all of the CEPPT asset classes. SSB is contracted to provide CEPPT investment custody services. NRS is contracted to deliver web-based account record access which City staff can view daily. Prefunding Programs staff provide a GASB 84 compliant financial report to all participating employers through the CalPERS Comprehensive Annual Financial Report (CAFR) which is independently audited.

CalPERS retains highly skilled internal and external legal counsel who advise on all matters of CEPPT legal compliance including the legal basis for a prospective employer to participate in an IRC Section 115 trust fund.

Prefunding Programs staff are available to the City 24/7/365 and have provided the necessary contact information to facilitate this. CEPPT account updates will be proactively delivered to City staff in person, via teleconference, or email, based on City preference. It is not uncommon that CEPPT customers request meetings with greater frequency. In these instances, we will deliver upon these requests. More commonly, a simple phone call or teleconference to discuss issues that arise, options for the City to consider, or to clarify a topic, works perfectly. Email is another commonly utilized means of communication that often works well to facilitate an ongoing dialogue and to disseminate information.

4. Organization Qualifications. Provide an outline of the organization qualifications indicating relevant background experience and capabilities for this work. A list of major projects, both ongoing and planned, to which the organization is committed during the time frame of this project should also be provided. Include the staff resources devoted to those projects and the status of the projects.

Established in 1932, CalPERS is an agency of the State of California (State) charged to administer defined benefit pension, employer pension contribution prefunding, health benefits, long-term care insurance, other post-employment benefit (OPEB) prefunding, and supplemental income defined contribution programs (SIP), for the benefit of State, school, and local public agency employees. As an agency of the State, CalPERS is overseen by the Governor and State Legislature.

CalPERS is the largest public employee retirement fund (PERF) in the United States. CalPERS has been a retirement system administrator and has managed governmental retirement plans for more than 90 years. CalPERS has established international reputation for prudent investment management and system administration. Presently, CalPERS manages about $460 billion of pension assets in worldwide markets on behalf of about 2 million members. CalPERS provides pension services to about 3,000 California public employers. CalPERS employs about 2,875 workers. CalPERS is headquartered in Sacramento and has 7 regional offices located throughout California.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 230, Packet Page 545 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
14 CalPERS is the largest IRC Section 115 trust provider in the United States. Currently, a total 620 California employers (including 156 Cities or Towns) prefund their OPEB and/or Pension contributions and participate in the CalPERS Prefunding Programs. The CERBT fund program is a state trust fund formed and governed under the California State Constitution (Article XVI) and the California Government Code. The CERBT is an agent multiple employer OPEB plan dedicated to prefunding public employer OPEB liabilities as described in GASB Statement No.

74. The CERBT is administered in a manner compliant with IRC Section 115 and has a favorable PLR from the IRS that attests to its status. CERBT is operated in compliance with applicable law and regulation. The CalPERS Board are the fiduciaries of the CERBT which began operations in March of 2007 and has been providing OPEB investment management and trustee services for more than 15 years. Presently, 598 California public agencies prefund their OPEB liabilities through the CERBT. The CERBT has about $16 billion of employer OPEB assets under management.

The CEPPT fund program is described in California Public Employees’ Retirement Law, Chapter 19, Government Code Sections 21710-21716, as a special trust fund in the State Treasury for the purpose of allowing State and local public agency employers that provide a defined benefit pension plan to their employees to prefund their required pension contributions. Senate Bill 1413 (SB1413), which enacted the CEPPT, was approved by the California Governor on September 21, 2018. The CEPPT is a fiduciary fund and will be reported in compliance with applicable Governmental Accounting Standards Board (GASB) Statements including No. 84 (GASB 84). The CEPPT is administered in a manner compliant with Internal Revenue Code (IRC) Section 115 and is operated in compliance with applicable laws and regulations. The CalPERS Board of Administration (CalPERS Board) are the fiduciaries of the CEPPT which began operations in July of 2019. Presently, 79 California public agencies prefund their pension contributions through the CEPPT. The CEPPT has about $100 million of employer pension assets under management.

The CERBT and CEPPT Prefunding Programs team, staffed by 13 full time employees, 1 parttime retired annuitant, and 1 student assistant, are collectively responsible for the administration of the CERBT and CEPPT funds. The team is led by two Program Managers, one who is responsible for administration and reporting and one who is responsible for customer outreach and support. All Prefunding Program staff members work at the CalPERS Headquarters in Sacramento, CA.

Section A.1 identifies the management and team members that currently supports the 620 prefunding employers of the CERBT and CEPPT including the City of Monterey’s CERBT account. See “Attachment 3: Prefunding Program Employers” Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 231, Packet Page 546 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
15 5. Proposed Schedule. Time is of the essence for this agreement. The proposal shall include a schedule to undertake the work program. The project is anticipated to start by April 1, 2023.

We have provided an implementation schedule based on the City’s planned award date of March 7, 2023.

The contracting documents will be reviewed and approved in a few business days (not more than 10 business days, but usually 2-3 business days). The trust is fully implemented and set-up for the City as soon as the CEPPT contract has been executed and signed by CalPERS.

Contributions will be accepted as early as one day after the date of the City’s contract agreement is approved by CalPERS.

Hypothetical Implementation Schedule
RFP issued January 26, 2023
Deadline for receiving questions February 9, 2023
Proposals due February 16, 2023
Vendor selected at City Council March 7, 2023
City completes and submits CEPPT contracting documents March 14, 2023 CEPPT Participation Agreement executed March 21, 2023*
CEPPT welcome letter packet mailed to City March 21, 2023 CEPPT onboarding teleconference Week of March 26
Initial CEPPT contribution (optional) April 1, 2023*
CEPPT/CERBT account update site visit July/August 2023
CEPPT/CERBT cash flow strategy discussion for fiscal year 2023-24 July/August 2023 CEPPT/CERBT Q4 statement as of 06302023 uploaded to NRS August 15, 2023 First CEPPT/CERBT contribution for 2023-24 Employer Determined CEPPT/CERBT Q1 statement as of 09302023 uploaded to NRS October 15, 2023 CEPPT/CERBT Q2 statement as of 12312023 uploaded to NRS January 15, 2024 CEPPT/CERBT Q3 statement as of 03312024 uploaded to NRS April 15, 2024 CEPPT/CERBT account updates 1-2x/year ongoing
*With this hypothetical timeline, the City can send its initial contribution as early as March 22, 2023 which is one day after the CEPPT contract has been executed and signed by CalPERS.

Since contributions are purely voluntary, the decision when to contribute and amount of contribution rests with the City.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 232, Packet Page 547 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
16 6. References. Provide at least three (3) client references with phone numbers and email addresses for relevant work. Specify the client, location, consultant firm members and participating individuals and their roles on team (principal, project director, etc.), type of work, implementation results or status, examples of work, and other relevant information as needed. Please also include a list of all clients in California.

Reference Contact Information
City of Burbank Craig Wood, Deputy Finance Director
275 E Olive Ave, Burbank, CA 91502
(818) 238-5512
[email protected]

CERBT, CEPPT
City of Buena Park Sung Hyun, Director of Finance
6650 Beach Boulevard, Buena Park, CA 90622
(714) 562-3713
[email protected]

CERBT, CEPPT
City of Belvedere Amber Johnson, Administrative Services Manager 450 San Rafael Ave, Belvedere, CA
(415) 435-8904
[email protected]
CEPPT
City of Laguna Woods Elizabeth Torres, Administrative Services Director/City Treasurer
24264 El Toro Road, Laguna Woods, CA 92637
(949) 639-0555
[email protected]

CEPPT, CERBT
City of Torrance Sheila Poisson, Finance Director
3031 Torrance Blvd., Torrance, CA 90503
310-618-5854
[email protected]

CERBT, CEPPT
Matt Goss, Colleen Cain-Herrback, Robert Sharp, Melody Benavides, and Christine Reese have worked with more than 150 municipal agency clients in the CERBT and CEPPT as just a small example of their significant experience and capacity to deliver the entire scope of responsibilities addressed within this RFP. See “Attachment 3 – Prefunding Program Employers”, for a list of all 620 clients in California.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 233, Packet Page 548 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
17 B. Proposals should also:

1. Identify all subcontractors who may be engaged by proposer and please describe the nature of the services they will provide.

CalPERS manages CEPPT clients using a hybrid approach that includes both in-house CalPERS employees and external sources such as outside investment advisers, custodians, and record keepers. While this question is about investment management specifically, I will answer with respect to the entire scope of responsibilities addressed within this RFP.

Investment Management
The CalPERS Board are the fiduciaries of the CEPPT. Under policy guidance from the CalPERS Board, CalPERS INVO AIP staff manages and oversees the investments of the CEPPT. CalPERS has chosen to utilize State Street Global Advisors (SSGA) to externally manage all of the CEPPT asset classes. The daily investment of these asset classes is performed by SSGA following the strategies and instructions of CalPERS. SSGA maintains investment portfolios which are managed passively to emulate the CalPERS performance benchmarks of those asset classes.

CalPERS also utilizes SSGA in part or whole for several other trust funds including the PERF, CERBT, Judges Retirement System (JRS), and the Legislators Retirement System (LRS).

SSGA was established in 1978 to provide investment management services to institutional investors. Currently, SSGA is the world’s third largest asset manager with a portfolio management team of more than 500 long-tenured investment professionals who provide their clients with access to a global network of investment expertise. SSGA rigorously searches for highly motivated, intelligent, and personable team players. The job qualifications required for new hires depend upon the specific position being offered; however, SSGA believes that the standards to which professionals are held are among the highest in the industry. In general, SSGA’s portfolio managers, research analysts, and traders have already earned an advanced business degree, as well as have extensive investment experience, and/or computer science/mathematics experience. Most the firm’s portfolio managers have also earned the CFA designation. Depending upon the investment area, many portfolio managers are responsible for research related to their products. SSGA’s Quantitative Research Analysts typically have advanced degrees in Mathematics, Computer Science, and extensive quantitative Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 234, Packet Page 549 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
18 experience. Traders in SSGA’s core trading group must have extensive work experience as well as understanding of derivative theory and transaction cost reduction.

Custodial Services
State Street Bank (SSB) is contracted to provide CEPPT investment custody services. SSB is a global investment management service company. Its operating history in the USA extends back to 1792. CalPERS Prefunding Programs have used SSB custodial services since the CERBT began operation in 2007.

Recordkeeping Services
Northeast Retirement Services, Inc. (NRS) provides CEPPT employer account record keeping.

2. Specify the number of years proposer and subcontractors, if any, have been providing investment advisory services.

See Section B.1.

CalPERS has been a retirement system administrator for 91 years. It has been providing Section 115 prefunding trust services for 15 years since the CERBT was established in 2007.

For 45 years SSGA has been providing investment management services. State Street Bank has been operating since 1792 and has been providing investment custody services for the CERBT and CEPPT for 15 years since 2007. CERBT and CEPPT recordkeeping services started in 2010.

3. Please attach Part 2A of the most current Form ADV for all investment advisors registered under the Investment Advisor’s Act of 1940 who are expected to provide services as part of the proposal.

Since CalPERS and SSGA are not registered broker-dealers or investment advisors, staff are not required to hold licenses normally required by FINRA, the SEC, and others including the Investment Advisor’s Act of 1940. SSGA’s Compliance Program is evaluated frequently throughout the course of the year, and a risk assessment is performed annually. SGA Funds Management, Inc. (SSGA FM), State Street Global Advisors Trust Company, State Street Bank and Trust Company, and their ultimate parent, State Street Corporation (collectively "State Street") are subject to regulatory oversight by numerous federal agencies, including the FDIC, SEC, the U.S. Federal Reserve Bank, as well as the Massachusetts state banking and securities regulators.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 235, Packet Page 550 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
19 4. Identify each proposed trustee/custodian, trust administrator, investment manager, and any other principal advisor, and describe the background and experience relevant to Section 115 trusts for each.

As mentioned above in Section B.1, B.2 and B.3, CalPERS is the trust administrator of the CERBT and CEPPT and has chosen to use SSB for CEPPT and CERBT investment custody services and SSGA to externally manage all the CEPPT and CERBT asset classes. Northeast Retirement Services, Inc. (NRS) provides CEPPT and CERBT employer account record keeping. Daily reports of account transactions and balances are available through the Prefunding Programs online record keeping system. NRS is contracted to deliver web-based asset account record access to both CEPPT and CERBT employers who may access their accounts online.

5. Identify any agreements or contracts the City may be required to enter into in conjunction with the proposal, whether directly with the proposer or with third parties, and provide sample copies of each.

In order to participate in the CEPPT the employer provides 4 documents (see “Attachment 4 – CEPPT Contracting Documents”):

1. CEPPT Participation Agreement - This is the legally binding bilateral contract agreement between the City of Monterey and CalPERS. This same contract is used by all CEPPT employers. It is signed by the presiding officer (Mayor) of the Monterey City Council (Council) after City staff recommend and Council votes to approve participation in the CEPPT during a public meeting of the Council. The consent agenda can be used for this if desired. The City has gone through a similar experience when it joined the CERBT in 2013.

2. CEPPT Delegation of Authority to Request Disbursements - This document will identify those positions by title (usually City finance staff) who can sign for CEPPT disbursement requests. It is typical that 2-3 positions by title are delegated this authority as disbursement requests exceeding $10K require 2 signatures. It is signed by the Mayor of the Council after City staff recommend and Council votes to approve these positions by title during a public meeting of the Council. The consent agenda can be used for this if desired. The City has gone through a similar experience when it joined the CERBT in 2013.

3. CEPPT Funding Policy - This document will identify which CEPPT investment option(s) the employer will utilize at the present time. It will also ask the employer to estimate CEPPT contributions and disbursements for a period of 24 months to help Prefunding Programs staff establish probable cash flow parameters to optimally administer the CEPPT. It does not require Council approval and can be signed by City staff Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 236, Packet Page 551 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
20 determined by the City. The City has gone through a similar experience when it joined the CERBT in 2013.

4. Actuarial Valuation Report - A copy of the most recent defined benefit pension plan(s) actuarial valuation report(s) to illustrate current participation in a defined benefit pension system. For CalPERS defined benefit pension plans these reports are already in our possession.

6. Describe any SEC, FINRA, or regulatory censure or litigation involving your firm, employees, or subcontractors within the past three years.

CalPERS, CEPPT, CERBT, and SSGA have not had any regulatory censure or litigation involving our respective firms or our employees within the past three years.

C. Private Letter Ruling

1. Disclose if your pension Section 115 Trust program has received approval from the IRS in the form of a Private Letter Ruling.

The CERBT has a favorable Private Letter Ruling (PLR) from the IRS that attests to its status (see “Attachment 5 – CERBT Private Letter Ruling”). It is important to note that when the CERBT was established in 2007, it had not yet obtained a favorable PLR from the IRS and did not do so until July 25, 2014. On August 26, 2020, CalPERS received a “No Rule” letter from the Internal Revenue Service (IRS) in response to our July 1, 2020 application for a PLR on the Section 115 status of the CEPPT. This No Rule is not a negative ruling, but rather a procedural matter in which the IRS will not currently rule on the Section 115 status of a trust that has any relationship with an IRC section 401(a) plan, including a prefunding vehicle for other qualified 401(a) plans such as the CEPPT. CalPERS will continue to monitor the situation and resubmit an application for a PLR when the No Rule moratorium is lifted. Although a PLR is a valuable assurance that the language of the CEPPT accomplishes its intended purpose, it is not necessary to ensure that the contributions and investment earnings therein will maintain their tax-exempt status. In the meantime, we believe CEPPT employers will maintain the tax-exempt status of their contributions and investment earnings in the CEPPT.

2. Explain the legal basis for your Section 115 Trust and how your program meets the requirements for compliance with federal and state law, as well as any applicable requirements related to pronouncements issued by the Governmental Accounting Standards Board (GASB).

The California Employers’ Pension Prefunding Trust (CEPPT) fund program is described in California Public Employees’ Retirement Law, Chapter 19, Government Code Sections 21710- 21716, as a special trust fund in the State Treasury for the purpose of allowing State and local Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 237, Packet Page 552 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
21 public agency employers that provide a defined benefit pension plan to their employees to prefund their required pension contributions. Senate Bill 1413 (SB1413), which enacted the CEPPT, was approved by the California Governor on September 21, 2018. The CEPPT is a fiduciary fund and will be reported in compliance with applicable Governmental Accounting Standards Board (GASB) Statements including No. 84 (GASB 84). The CEPPT is administered in a manner compliant with Internal Revenue Code (IRC) Section 115 and is operated in compliance with applicable laws and regulations. The CalPERS Board of Administration (CalPERS Board) are the fiduciaries of the CEPPT which began operations in July of 2019.

The California Employers’ Retiree Benefit Trust (CERBT) fund program is a state trust fund formed and governed under the California State Constitution (Article XVI) and the California Government Code. The CERBT is an agent multiple employer OPEB plan dedicated to prefunding public employer OPEB liabilities as described in GASB Statement No. 74. The CERBT is administered in a manner compliant with IRC Section 115 and has a favorable PLR from the IRS that attests to its status. CERBT is operated in compliance with applicable law and regulation. The CalPERS Board are the fiduciaries of the CERBT which began operations in March of 2007 and has been providing OPEB investment management and trustee services for more than 15 years. Presently, 598 California public agencies (including 153 Cities/Towns) prefund their OPEB liabilities through the CERBT. The CERBT has about $16 billion of employer OPEB assets under management. The CERBT is the largest OPEB trust fund provider in California as measured by both assets under management and the number of participating employers

3. Describe safeguards built into your Section 115 Trust program to limit the City’s exposure.

CalPERS is self-insured against most liability losses. CalPERS provides adequate general liability and other self-insurances to cover claims and the obligations assumed in connection with this proposed contract. An example of this would be a situation where the City would need to be made whole in the event of an omission or error that led to a financial loss. CalPERS retains highly skilled internal and external legal counsel who advise on all matters of legal compliance.

CalPERS has a team of legislative subject matter experts who monitor existing and proposed laws and regulations that might impact our work and compliance in this area. CalPERS has an Office of Enterprise Risk Management whose mission it is to mitigate risk and enforce compliance.

D. Trustee and Trust Administration Services

1. Please provide a comprehensive list of trustee services and Section 115 trust administration services you will provide.

See our response in Section A.3 that covers the proposed scope of work and the trustee services and Section 115 trust services we provide.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 238, Packet Page 553 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
22 CalPERS provides turnkey IRC Section 115 trust administration, including governance, custody, recordkeeping, financial reporting compliant with governmental accounting standards, and trust legal compliance some examples of which include:
• Receiving contributions from participating employers and establishing separate employer prefunding accounts in the prefunding plan.
• Investing contributed amounts and income, if any.
• Disbursing employer account amounts to pay for valid employer costs. • Daily reports of account transactions and balances are available through the Prefunding Programs online record keeping system.
• Monthly reports of time-weighted investment performance are published on our web pages called “Fund Fact Sheets.”
• Quarterly employer account statements are posted for download from the Prefunding Programs online record keeping system.
• Audited CAFR compliant with GASB 74 & 84 issued by CalPERS.

2. Please note if there are any additional costs for any of the above mentioned services, and if so, what those rates are.

There are no additional charges or fees for services. The only fee charges is the CEPPT’s allinclusive participation cost which is detailed in the separate Fee Schedule we submitted.

3. Describe how City contributions to and distributions from the Section 115 Trust are how handled.

CEPPT and CERBT contributions and disbursements are always voluntary actions decided upon by the participating employer and never required by CalPERS. Contributions can be made at any time and frequency via check, wire, or ACH. Completed contribution forms accompany each contribution made which maximizes accuracy and efficiency while minimizing errors.

Disbursements can be requested at any time by submitting a disbursement request form via email. Disbursement checks will be mailed directly to the City on or around the 20th day of the month after the month during which the disbursement requests are received. For example, a disbursement request received in September will be received on or around October 20th.

Disbursement checks reimburse employers dollar for dollar for valid expenses in the current fiscal year. City staff can then use these reimbursed assets for any purpose.

4. Define any termination restrictions for the Section 115 Trust.

The City may terminate CEPPT participation at any time and at no cost by providing the CEPPT with written notice of its election to terminate. Section H of the CEPPT Participation Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 239, Packet Page 554 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
23 Agreement titled, “Termination of Employer Participation in the CEPPT,” describes this process (see “Attachment 4 – CEPPT Contracting Documents”).

E. Investment Requirements and Investment Performance.

1. Please describe the investment services your firm offers with respect to Section 115 Trusts See our response in Section A.3.

2. Does your firm offer assistance with investment strategy selection and investment policy development? Does this service typically include specific asset allocation recommendations? If so, please explain.

The CalPERS Board of Administration accepts the fiduciary responsibility for establishing and directing investment policy and asset allocations. By delegating the investment fiduciary responsibility to CalPERS, the design, development, compliance and review of the Investment Policies are part of CalPERS responsibilities as the trust plan administrator.

Prefunding Programs staff believes that the asset allocation strategies offered through the CEPPT and CERBT meet the needs of employers. The strategies offer distinctly different expected return rates and return volatilities. Employers that plan to withdraw assets from the fund in the near term, or employers that prefer a lower expected return volatility, may choose an allocation strategy that most likely to meet their need. Alternatively, a strategy is available for employers that do not expect to withdraw assets in the near term and are tolerant to return volatility associated with higher expected return rates.

For the CEPPT, the City would choose one of the two CEPPT strategies or participate in both strategies. It is a similar process back when the City joined CERBT in 2013, where it selected to invest in CERBT Asset Allocation Strategy 1.

Prefunding Programs staff will work with City staff any time to provide support and guidance during their asset allocation strategy selection and funding policy design processes. This includes providing trust plan experience servicing 620 employers, sharing insight why employers choose the way they choose. We will look at your specific plan and help identify employers in our trust that are similar to your plan. We will guide you in the benefits and consequences of available options. The final decision resides with the City and can be changed anytime without cost or restriction.

As the largest prefunding trust provider in the Unites States, we have more data, trust administration, investment management and customer experience to help guide you in your prefunding plan. Our commitment is that we will be by your side to support you in making the best decision for the City.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 240, Packet Page 555 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
24 The CEPPT’s asset allocation strategies and target allocations are in Section A.3.

3. Please provide the firm’s recommended comparative yield benchmarks for trust assets held in this type of trust. Please provide annual, five-year, ten-year, fifteen- year, and twenty-year return history and expense ratios for each fund/portfolio option available.

Would the firm be able to benchmark against yields obtained from similar 115 Trusts such as the California Employee Retirement Benefit Trust? If so, please provide this data.

See “Attachment 2 – Fund Fact Sheets”

4. Describe the investment and risk options available for the 115 Trust.

See “Attachment 2 – Fund Fact Sheets” and “Attachment 6 – Asset Class Fact Sheets”.

5. Explain your firm’s views on passive versus active management. What is your typical recommendation regarding allocation of the Section 115 Trust assets between active and passive management?
The CEPPT and CEPPT purchase asset class holdings from SSGA that are all passively managed at this time. In the past the CERBT had some asset classes that were actively managed in-house by CalPERS INVO such as fixed income, however, over time we have recognized that even broader diversification and lower costs could be achieved using SSGA and passive management for all CEPPT and CERBT asset classes. While our benchmark outperformance has always been consistent under both approaches the tracking error and costs are even lower with full passivity, so this approach is currently working well for our customers. We can always make changes in the future but for now the data does not compel us to do so.

6. What are the typical approaches made to rebalancing or reallocating asset classes, styles, and sectors for or on behalf of the fund/trust?
See Section A.3 above. Additional helpful information can be found in “Attachment 6 – Asset Class Fact Sheets”

7. Is there an initial minimum balance requirement for the 115 Trust? How would you invest the City’s current Pension Obligation Reserve balance of $2 Million to mitigate market risk while maximizing return? Are there minimums requirements for periodic contributions to the Section 115 Trust?
Contributions are never required at any point in time which includes establishing an initial balance and/or maintaining a minimum balance. When your balance is zero we charge you nothing. When investing a large lump sum of money many believe that utilizing smaller, more Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 241, Packet Page 556 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
25 frequent contributions over a period of time is an intelligent way to mitigate market timing risk while maintaining maximum flexibility and liquidity. This approach is being utilized by a significant number of our prefunding customers. There are no minimum requirements for periodic contributions. The City may opt to participate in one strategy or may use both strategies simultaneously, contribute to either one or both, reimburse from either one or both, and rebalance between them at a reasonable frequency no less than once per year.

F. Fee Schedule
Included in separate schedule.

G. Implementation Plan and Schedule
Please describe the timeline including major milestones for setting up a Section 115 Trust and transfer of City funds.

See Section A.5.

H. Exemptions
As a self-insured State agency, we don’t have an original Certificate of Insurance to provide. As an agency of the State, CalPERS:
• Is self-insured against most liability losses. In some instances, buildings and other tangible assets are insured via commercial carriers.
• Is self-insured with regard to automobile insurance.
• Is self-insured with regard to workers compensation claims but has entered into a Master Agreement with the State Compensation Fund to administer workers compensation claims on their behalf.
• Is self-insured with regard to errors and omissions, excess/umbrella liability coverage fidelity/crime coverage, directors/officers coverage.

CalPERS provides adequate general liability and other self-insurances to cover claims and the obligations assumed in the entire scope of responsibilities addressed within this RFP.

Most of the provisions of the City requires are consistent with the administrative practices of the State. In most cases, the State must comply with requirements that are essentially the same as those with which the City must comply.

We hope that the City will accept that CalPERS will seek to fulfill all federal, State and local ordinances that bear on meeting its performance obligations. These obligations are described Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 242, Packet Page 557 City of Monterey
RFP for Section 115 Retirement Management Services

www.calpers.ca.gov/ceppt
www.calpers.ca.gov/cerbt
26 in the CEPPT Participation Agreement, government codes and regulations, the State Constitution, and in our responses to this RFP.

The CEPPT Participation Agreement describes the legally binding contractual agreement between CalPERS and the City. The terms and conditions of the City’s CEPPT participation are stated entirely in the CEPPT Participation Agreement. Where conflicts exist between the CEPPT Participation Agreement and this RFP the controlling document will be the CEPPT Participation Agreement. See “Attachment 4 - CEPPT Contracting Documents”.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 243, Packet Page 558 Attachments
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 244, Packet Page 559 Attachment 1
CEPPT Investment Policy
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 245, Packet Page 560 CEPPT Investment Policy
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 246, Packet Page 561 Item 8a, Attachment 2, Page 1 of 6
California Employers’ Pension Prefunding Trust Policy
June 24, 2019 Page 1 of 6
CalPERS Investment Policy for the California
Employers’ Pension Prefunding Trust
Effective Date
This policy is effective as of June 24, 2019.

Contents
Introduction 2
Strategic Objective 2
Responsibilities 2
Investment Approach & Parameter 2
Investment Constraints/ Limitations 3
Glossary of CalPERS Specific Terms 3
Policy Document History 3
Appendices 3
Appendix 1: Reporting to the Investment Committee ............................................................... 3 Appendix 2: Investment Responsibilities.................................................................................... 4 Appendix 3: Investment Constraints/Limitations....................................................................... 5 Appendix 4: Policy Document History ........................................................................................ 6 Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 247, Packet Page 562 Item 8a, Attachment 2, Page 2 of 6
California Employers’ Pension Prefunding Trust Policy
June 24, 2019 Page 2 of 6
Introduction
The California Public Employees’ Retirement System (CalPERS) Total Fund Investment Policy, adopted by the CalPERS Investment Committee (Committee), sets forth CalPERS’ overarching investment beliefs, purposes, and objectives with respect to all its investment programs.

This document sets forth the investment policy (Policy) for the policy portfolios (Portfolios) of the California Employers’ Pension Prefunding Trust Fund (CEPPT or Fund). The design of this Policy ensures that investors, managers, consultants, and other participants selected by CalPERS take prudent and careful action while managing the Portfolios. Additionally, use of this Policy ensures sufficient flexibility in managing investment risks and returns associated with the Fund.

The Fund was established January 1, 2019 for public employers to prefund their required pension contributions. There are two separate Portfolios (Strategy 1 and Strategy 2) for the Fund, that provide employers a choice of asset allocation strategies.

This Policy should be read in conjunction with and is subject to applicable conditions contained within the CalPERS Total Fund Investment Policy. This Policy shall also be managed to comply with all applicable Investment Office policies.

Strategic Objective
The Fund seeks to offer to employers distinct investment alternatives given their specific liabilities and cash flow needs.

Responsibilities
Details regarding various levels of responsibility for this Fund are provided in Appendix 1, Reporting to the Investment Committee, and Appendix 2, Investment Responsibilities.

Investment Approach & Parameter
A. Performance Objective and Benchmark
The benchmark for the Portfolios is specified in the CalPERS Total Fund Investment Policy benchmark appendix.

B. Strategic Asset Allocation Process
A comprehensive Asset Allocation Strategy analysis shall be completed periodically that follows the schedule and process as described in the CalPERS Total Fund Investment Policy, Asset Allocation Strategy Section, and Reporting to the Investment Committee appendix. As further described in the Asset Allocation Strategy Section, the schedule may be altered to accommodate pending Board actions.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 248, Packet Page 563 Item 8a, Attachment 2, Page 3 of 6
California Employers’ Pension Prefunding Trust Policy
June 24, 2019 Page 3 of 6
C. Restrictions, Prohibitions and Authorized Securities Restrictions, Prohibitions and Authorized Securities of the Fund are governed by the CalPERS Total Fund Investment Policy for internal funds and defined in each Manager’s contract with CalPERS for external funds.

All transactions involving derivatives are governed by the CalPERS Total Fund Investment Policy, Global Derivatives and Counterparty Risk Section.

Investment Constraints/ Limitations
See Appendix 3 for Fund investment constraints/limitations.

Glossary of CalPERS Specific Terms
Bold italicized terms appearing in the Policy are CalPERS specific in nature and are defined in the CalPERS Specific Glossary of Terms.

Policy Document History
See Appendix 4 for historical details of Investment Committee adoption and revisions of this Policy.

Appendices
Appendix 1: Reporting to the Investment Committee
The following tables provide details regarding reporting to the Investment Committee:

1. Investment Office Staff

2. General Pension Consultant
Table 1: Investment Office Staff Reporting Responsibilities Ref # Report Content Frequency

1. Staff shall provide a review that will include, but is not limited to, asset class allocations compared to Policy targets and ranges (as applicable), current market value,
performance, and risk metrics.

No less than annually

2. Staff shall report concerns, problems, material changes, and all violations of the Policy. These reports shall include explanations of any violations and appropriate
recommendations for corrective action
At the next
Committee meeting,
or sooner if deemed
necessary
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 249, Packet Page 564 Item 8a, Attachment 2, Page 4 of 6
California Employers’ Pension Prefunding Trust Policy
June 24, 2019 Page 4 of 6
Table 2: General Pension Consultant Reporting Responsibilities Ref # Report Content Frequency

1. The Consultant shall monitor, evaluate, and report on the performance of the Fund relative to the benchmarks and this Policy and other applicable CalPERS Policies.

No less than annually
Appendix 2: Investment Responsibilities
The following sections provide details regarding investment related responsibilities for the:
• Investment Committee
• Investment Office Staff
• General Pension Consultant
• External Manager
Investment Committee Responsibilities

1. Approve asset classes for investment and set a policy target allocation, permissible range, and benchmark for each asset class.

Investment Office Staff Responsibilities

1. All aspects of portfolio management, including monitoring, trading, analyzing, evaluating performance relative to the appropriate benchmark, and selecting and contracting with managers.

2. Provide individualized asset allocation strategy recommendations to the Committee, including selection of asset class benchmarks, and Policy targets and ranges.

3. Manage the asset class allocations of the Fund within Policy ranges approved by the Committee, in accordance with Policy guidelines.

4. Monitor internal and external managers in the implementation of, and compliance with, the Policy.

5. Develop and maintain investment procedures, program guidelines, and sub-program guidelines.

General Pension Consultant Responsibilities

1. Provide independent perspective and counsel to the Committee, to include routine communication with the Investment Office Staff and periodic reviews of processes and procedures.

External Manager Responsibilities

1. Manage the Fund in accordance with each manager’s contract with CalPERS and the Policy.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 250, Packet Page 565 Item 8a, Attachment 2, Page 5 of 6
California Employers’ Pension Prefunding Trust Policy
June 24, 2019 Page 5 of 6

2. Communicate and cooperate with Investment Office Staff and authorized third parties regarding the management of the Fund.

Appendix 3: Investment Constraints/Limitations
Portfolio Asset Class Allocation Targets & Ranges
The following tables provide details regarding the asset allocation targets and ranges for each CEPPT strategy. Upon adoption of significant policy changes, Staff will implement the changes within a reasonable time period.

Table 3.1: Allocation Targets and Ranges – Strategy 1, Effective June 24, 2019 Asset Class Policy Target Policy Range
Relative to Target
Global Equity 40% +/- 5%
Fixed Income 47% +/- 5%
Treasury Inflation-Protected Securities
(TIPS) 5% +/- 3%
Real Estate Investment Trusts (REITs) 8% +/- 5%
Liquidity* 0% + 2%
Total 100%
*The Liquidity asset class is constrained to frictional/operational cash flows Table 3.2: Allocation Targets and Ranges – Strategy 2, Effective June 24, 2019 Asset Class Policy Target Policy Range
Relative to Target
Global Equity 14% +/- 5%
Fixed Income 73% +/- 5%
Treasury Inflation-Protected Securities
(TIPS) 5% +/- 3%
Real Estate Investment Trusts (REITs) 8% +/- 5%
Liquidity* 0% + 2%
Total 100%
*The Liquidity asset class is constrained to frictional/operational cash flows.

Target Tracking Error
The Portfolios will be managed in a manner that minimizes any tracking error.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 251, Packet Page 566 Item 8a, Attachment 2, Page 6 of 6
California Employers’ Pension Prefunding Trust Policy
June 24, 2019 Page 6 of 6
Appendix 4: Policy Document History
Table 4: CEPPT Fund Policy History
Date Detail
YYYY-MMDDApproved by the Investment Committee.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 252, Packet Page 567 CERBT Investment Policy
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 253, Packet Page 568 CalPERS Investment Policy for the California
Employers’ Retiree Benefit Trust Fund
Effective Date
This policy is effective as of October 1, 2018 and supersedes all previous California Employers’ Retiree Benefit Trust (CERBT) Fund policies.

Contents
Introduction 2
Strategic Objective 2
Responsibilities 2
Investment Approach & Parameter 2
Investment Constraints/ Limitations 3
Glossary of CalPERS Specific Terms 3
Policy Document History 3
Appendices 3
Appendix 1: Reporting to the Investment Committee 3
Appendix 2: Investment Responsibilities 4
Appendix 3: Investment Constraints/Limitations 5
Appendix 4: Policy Document History 6
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 254, Packet Page 569 California Employers’ Retiree Benefit Trust Fund Policy Rev. October 1, 2018 Page 2 of 7
Introduction
The California Public Employees’ Retirement System (CalPERS) Total Fund Investment Policy, adopted by the CalPERS Investment Committee (Committee), sets forth CalPERS’ overarching investment beliefs, purposes, and objectives with respect to all its investment programs.

This document sets forth the investment policy (Policy) for the policy portfolios (Portfolios) of the California Employers’ Retiree Benefit Trust Fund (Fund). The design of this Policy ensures that investors, managers, consultants, and other participants selected by CalPERS take prudent and careful action while managing the Portfolios. Additionally, use of this Policy ensures sufficient flexibility in managing investment risks and returns associated with the Fund.

The Fund was established March 1, 2007 for public employers to prefund their retiree health and other post-employment benefit obligations. The Fund is currently known in statute as the Annuitants’ Healthcare Coverage Fund. There are three separate Portfolios (Strategy 1, Strategy 2, and Strategy 3) for the Fund, that provide employers a choice of asset allocation strategies.

Strategic Objective
The Fund seeks to offer to employers distinct investment alternatives given their specific liabilities and cash flow needs.

Responsibilities
Details regarding various levels of responsibility for this Fund are provided in Appendix 1, Reporting to the Investment Committee, and Appendix 2, Investment Responsibilities.

Investment Approach & Parameter
A. Performance Objective and Benchmark
The benchmark for the Portfolios is specified in the CalPERS Total Fund Investment Policy benchmark appendix.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 255, Packet Page 570 California Employers’ Retiree Benefit Trust Fund Policy Rev. October 1, 2018 Page 3 of 7
C. Restrictions, Prohibitions and Authorized Securities Restrictions, Prohibitions and Authorized Securities of the Fund are governed by the CalPERS Total Fund Investment Policy for internal funds and defined in each Manager’s contract with CalPERS for external funds.

All transactions involving derivatives are governed by the CalPERS Total Fund Investment Policy, Global Derivatives and Counterparty Risk Section.

Investment Constraints/ Limitations
See Appendix 3 for Fund investment constraints/limitations.

Glossary of CalPERS Specific Terms
Bold italicized terms appearing in the Policy are CalPERS specific in nature and are defined in the CalPERS Specific Glossary of Terms.

Policy Document History
See Appendix 4 for historical details of Investment Committee adoption and revisions of this Policy.

Appendices
Appendix 1: Reporting to the Investment Committee
The following tables provide details regarding reporting to the Investment Committee:

1. Investment Office Staff

2. General Pension Consultant
Table 1: Investment Office Staff Reporting Responsibilities Ref # Report Content Frequency

No less than annually

2. Staff shall report concerns, problems, material changes, and all violations of the Policy. These reports shall include explanations of any violations and appropriate
recommendations for corrective action
At the next
Committee meeting,
or sooner if deemed
necessary
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 256, Packet Page 571 California Employers’ Retiree Benefit Trust Fund Policy Rev. October 1, 2018 Page 4 of 7
Table 2: General Pension Consultant Reporting Responsibilities Ref # Report Content Frequency

1. The Consultant shall monitor, evaluate, and report on the performance of the Fund relative to the benchmarks and this Policy and other applicable CalPERS Policies.

1. Approve asset classes for investment and set a policy target allocation, permissible range, and benchmark for each asset class.

Investment Office Staff Responsibilities

1. All aspects of portfolio management, including monitoring, trading, analyzing, evaluating performance relative to the appropriate benchmark, and selecting and contracting with managers.

2. Provide individualized asset allocation strategy recommendations to the Committee, including selection of asset class benchmarks, and Policy targets and ranges.

3. Manage the asset class allocations of the Fund within Policy ranges approved by the Committee, in accordance with Policy guidelines.

4. Monitor internal and external managers in the implementation of, and compliance with, the Policy.

5. Develop and maintain investment procedures, program guidelines, and sub-program guidelines.

General Pension Consultant Responsibilities

1. Provide independent perspective and counsel to the Committee, to include routine communication with the Investment Office Staff and periodic reviews of processes and procedures.

External Manager Responsibilities

1. Manage the Fund in accordance with each manager’s contract with CalPERS and the Policy.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 257, Packet Page 572 California Employers’ Retiree Benefit Trust Fund Policy Rev. October 1, 2018 Page 5 of 7

2. Communicate and cooperate with Investment Office Staff and authorized third parties regarding the management of the Fund.

Appendix 3: Investment Constraints/Limitations
Portfolio Asset Class Allocation Targets & Ranges
The following tables provide details regarding the asset allocation targets and ranges for each CERBT strategy. Upon adoption of significant policy changes, Staff will implement the changes within a reasonable time period.

Table 3: Allocation Targets and Ranges – Strategy 1, Effective October 1, 2018 Asset Class Policy Target Policy Range
Relative to Target
Global Equity 59% +/- 5%
Fixed Income 25% +/- 5%
Treasury Inflation-Protected Securities
(TIPS) 5% +/- 3%
Commodities 3% +/- 3%
Real Estate Investment Trusts (REITs) 8% +/- 5%
Liquidity* 0% + 2%
Total 100%
*The Liquidity asset class is constrained to frictional/operational cash flows Table 4: Allocation Targets and Ranges – Strategy 2, Effective October 1, 2018 Asset Class Policy Target Policy Range
Relative to Target
Global Equity 40% +/- 5%
Fixed Income 43% +/- 5%
Treasury Inflation-Protected Securities
(TIPS) 5% +/- 3%
Commodities 4% +/- 3%
Real Estate Investment Trusts (REITs) 8% +/- 5%
Liquidity* 0% + 2%
Total 100%
*The Liquidity asset class is constrained to frictional/operational cash flows.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 258, Packet Page 573 California Employers’ Retiree Benefit Trust Fund Policy Rev. October 1, 2018 Page 6 of 7
Table 5: Allocation Targets and Ranges – Strategy 3, Effective October 1, 2018 Asset Class Policy Target Policy Range
Relative to Target
Global Equity 22% +/- 5%
Fixed Income 49% +/- 5%
Treasury Inflation-Protected Securities
(TIPS) 16% +/- 3%
Commodities 5% +/- 3%
Real Estate Investment Trusts (REITs) 8% +/- 5%
Liquidity* 0% + 2%
Total 100%
*The Liquidity asset class is constrained to frictional/operational cash flows.

Target Tracking Error
The Portfolios will be managed in a manner that minimizes any tracking error.

Appendix 4: Policy Document History
Table 6: CERBT Fund Policy History
Date Detail
2011-06-15 Approved by the Policy Subcommittee
2011-08-15 Adopted by the Investment Committee
2013-12-03 Administrative changes to update template format and to align this policy with the Global Derivatives and Counterparty Risk Policy 2014-05-15 Administrative changes to standardize reporting frequencies to the Investment Committee to “no less than annually”
2014-05-15 Administrative changes to reflect the Policy Glossary of Terms Update Project 2014-10-13 Approved by the Investment Committee
2016-03-14 Approved by the Investment Committee. Previous versions of the California Employers’ Retiree Benefit Trust Fund Policy were reformatted to align with investment policy updates incorporated during the Investment Policy Revision Project
2018-10-01 Administrative changes to the strategic asset allocation targets and ranges as approved by the Committee on May 14, 2018 (agenda item 5a). 2019-01-04 Administrative changes made to migrate policy into an accessible template.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 259, Packet Page 574 California Employers’ Retiree Benefit Trust Fund Policy Rev. October 1, 2018 Page 7 of 7
The CERBT Fund Policy was previously the Annuitants’ Healthcare Coverage Fund Policy and Attachment A of the Affiliate Fund Policy. Tables 7 and 8 below reflect the revision history of those documents.

Table 7: Affiliate Fund Policy History
Date Detail
2008-08-18 Approved by the Policy Subcommittee
2008-09-15 Adopted by the Investment Committee
2008-12-15 Revised by the Investment Committee
2009-06-16 Administrative changes made due to Policy Review Project 2009-09-28 Administrative changes due to adoption of Benchmark Policy Table 8: Annuitants’ Healthcare Coverage Fund (Policy consolidated into the Affiliate Fund Policy) History
Date Detail
2006-12-15 Approved by the Policy Subcommittee
2006-12-18 Adopted by the Investment Committee
2008-08-18 Repealed by the Policy Subcommittee
2008-09-15 Administrative changes made due to Policy Review Project Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 260, Packet Page 575 Attachment 2
Fund Fact Sheets
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 261, Packet Page 576 Asset Class Target
Allocation
Target
Range Benchmark
Global Equity 49% ± 5% MSCI All Country World
Index IMI (Net)
Fixed Income 23% ± 5% Bloomberg Long Liability
Index
Treasury Inflation-Protected
Securities ("TIPS") 5% ± 3% Bloomberg US TIPS
Index, Series L
Real Estate Investment
Trusts ("REITs") 20% ± 5% FTSE EPRA/NAREIT
Developed Index (Net)
Commodities 3% ± 3% S&P GSCI Total Return
Index
Cash - + 2% 91-Day Treasury Bill
Assets Under Management
As of the specified reporting month-end:

SKB0
CERBT Strategy 1 Annual Operating Ratio
$13,213,490,217 0.10%
CERBT Strategy 1 Performance as of December 31, 2022
1 Month 3 Months Fiscal YTD 1 Year 3 Years* 5 Years* 10 Years* Since Inception*
(June 1, 2007)
1,3 Gross Return -2.85% 6.85% -0.90% -17.79% 1.97% 3.74% 5.90% 4.64% 2,3 Net Return -2.85% 6.83% -0.94% -17.86% 1.88% 3.65% 5.80% 4.56% Benchmark Returns -2.81% 6.88% -0.87% -17.90% 1.75% 3.50% 5.55% 4.25% 4 Standard Deviation - - - - 15.65% 13.33% 10.66% 13.03% * Returns for periods greater than one year are annualized. 1 Gross returns are net of SSGA operating expenses.
2 Net returns are net of SSGA operating expenses, investment management, administrative and recordkeeping fees. 3 Expenses are described in more detail on page 2 of this document. 4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.

California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 1
December 31, 2022
Objective
The CERBT Strategy 1 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.

Strategy
The CERBT Strategy 1 portfolio is invested in various asset classes. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer’s portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies investe in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.

Compared with CERBT Strategy 2 and Strategy 3, this portfolio has a higher allocation to equities than bonds and other assets.

Historically, equities have displayed greater price volatility and, therefore, this portfolio may experience greater fluctuation of value. Employers that seek higher investment returns, and are able to accept greater risk and tolerate more fluctuation in returns, may wish to consider this portfolio.

CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.
d
Composition
Asset Class Allocations and Benchmarks
The CERBT Strategy 1 portfolio consists of the following asset classes and corresponding benchmarks:

Portfolio Benchmark
The CERBT Strategy 1 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.

Target vs. Actual Asset Class Allocations
The following chart shows policy target allocations compared with actual asset allocations as of the specified reporting month-end. CalPERS may temporarily deviate from the target allocation to a particular asset class based on market, economic, or other considerations.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 262, Packet Page 577 CERBT Strategy Risk Levels
CalPERS offers employers the choice of one of three investment strategies. Projected risk levels among strategies vary, depending upon the target asset class allocations. Generally, equities carry more risk than fixed income securities.

Asset Class Target Allocations Strategy 1 Strategy 2 Strategy 3 Global Equity 49% 34% 23%
Fixed Income 23% 41% 51%
Treasury Inflation-Protected Securites 5% 5% 9%
Real Estate Investment Trusts 20% 17% 14%
Commodities 3% 3% 3%
1 Since June 2018, SSGA has passively managed all CERBT asset classes. Previously, Fixed Income, TIPS and Commodity asset classes were managed internally by CalPERS.

California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 1
December 31, 2022
General Information
Information Accessibility
The CERBT Strategy 1 portfolio consists of assets managed internally by CalPERS and/or by external advisors. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer’s account and other information about the CERBT. For total market value, detailed asset allocation, investment policy and current performance information, please visit our website at: www.calpers.ca.gov.

Portfolio Manager Information
The CalPERS Board, through its Investment Committee, directs the CERBT investment strategy based on policies approved by the Board of Administration. State Street Global Advisors (SSGA) manages all underlying investments for CERBT, which include: Global Equity, Fixed Income, Real Estate Investment Trusts, Treasury Inflation-Protected Securities, and Commodities.1
Custodian and Record Keeper
State Street Bank serves as custodian for the CERBT. Northeast Retirement Services serves as recordkeeper.

Expenses
CERBT is a self-funded trust in which participating employers pay for all administrative and investment expenses. Expenses reduce the gross investment return by the fee amount. The larger the expenses, the greater the reduction of investment return. Currently, CERBT expenses are 0.10% which consist of administrative expenses borne by CalPERS to administer and oversee the Trust assets, investment management and administrative fees paid to SSGA to manage all asset classes, and recordkeeping fees paid to Northeast Retirement Services to administer individual employer accounts. The expenses described herein are reflected in the net asset value per unit. The expense ratio is subject to change at any time and without prior notification due to factors such as changes to average fund assets or market conditions. CalPERS reviews the operating expenses annually and changes may be made as appropriate. Even if the portfolio loses money during a period, the expenses will still be charged.

What Employers Own
Each employer invested in CERBT Strategy 1 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.

Price
The value of the portfolio changes daily based upon the market value of the underlying securities. Just as prices of individual securities fluctuate, the portfolio’s value also changes with market conditions.

Principal Risks of the Portfolio
The CalPERS CERBT Fund provides California government employers with a trust through which they may prefund retiree medical costs and other postemployment benefits (OPEB). CERBT is not, however, a defined benefit plan. There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations. Further, CalPERS will not make up the difference between an employer's CERBT assets and the actual cost of OPEB provided to an employer's plan members.

An investment in the portfolio is not a bank deposit, nor is it insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC), CalPERS, the State of California or any other government agency.

There are risks associated with investing, including possible loss of principal.

The portfolio’s risk depends in part on the portfolio’s asset class allocations and the selection, weighting and risks of the underlying investments. For more information about investment risks, please see the document entitled “CERBT Principal Investment Risks” located at www.calpers.ca.gov.

Fund Performance
Performance data shown on page 1 represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an employer’s units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than historical performance data shown. For current performance information, please visit www.calpers.ca.gov and follow the links to California Employers' Retiree Benefit Trust.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 263, Packet Page 578 Asset Class Target
Allocation
Target
Range Benchmark
Global Equity 34% ± 5% MSCI All Country World
Index IMI (Net)
Fixed Income 41% ± 5% Bloomberg Long Liability
Index
Treasury Inflation-Protected
Securities ("TIPS") 5% ± 3% Bloomberg US TIPS
Index, Series L
Real Estate Investment
Trusts ("REITs") 17% ± 5% FTSE EPRA/NAREIT
Developed Index (Net)
Commodities 3% ± 3% S&P GSCI Total Return
Index
Cash - + 2% 91-Day Treasury Bill
Assets Under Management
As of the specified reporting month-end:

SKB7
CERBT Strategy 2 Annual Operating Ratio
$1,682,570,626 0.10%
CERBT Strategy 2 Performance as of December 31, 2022
Since Inception*
1 Month 3 Months Fiscal YTD 1 Year 3 Years* 5 Years* 10 Years* (October 1, 2011) 1,3 Gross Return -2.42% 5.48% -2.26% -17.62% 0.63% 2.83% 4.66% 5.79% 2,3 Net Return -2.43% 5.46% -2.30% -17.69% 0.54% 2.74% 4.56% 5.68% Benchmark Returns -2.33% 5.57% -2.17% -17.62% 0.49% 2.65% 4.36% 5.53% 4 Standard Deviation - - - - 13.05% 10.97% 8.80% 8.84%
* Returns for periods greater than one year are annualized. 1 Gross returns are net of SSGA operating expenses.
2 Net returns are net of SSGA operating expenses, investment management, administrative and recordkeeping fees. 3 Expenses are described in more detail on page 2 of this document. 4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.

California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 2
December 31, 2022
Objective
The CERBT Strategy 2 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.

Strategy
The CERBT Strategy 2 portfolio is invested in various asset classes. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer’s portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.

Compared with CERBT Strategy 1 and Strategy 3, this portfolio has a moderate allocation to equities, bonds and other assets.

Historically, equities have displayed greater price volatility and, therefore, this portfolio may experience comparatively less fluctuation of value compared to CERBT Strategy 1 but more fluctuation of value compared to CERBT Strategy 3. Employers that seek a moderate approach to investing may wish to consider this portfolio.

CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.

Composition
Asset Class Allocations and Benchmarks
The CERBT Strategy 2 portfolio consists of the following asset classes and corresponding benchmarks:

Portfolio Benchmark
The CERBT Strategy 2 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 264, Packet Page 579 Target Allocation The value of the portfolio changes daily based upon the market value of the underlying securities. Just as prices of individual securities fluctuate, the portfolio’s value also changes with market conditions.

CERBT Strategy Risk Levels
CalPERS offers employers the choice of one of three investment strategies. Projected risk levels among strategies vary, depending upon the target asset class allocations. Generally, equities carry more risk than fixed income securities. 1 Asset Class Target Allocations Strategy 1 Strategy 2 Strategy 3 Global Equity 49% 34% 23%
Fixed Income 23% 41% 51%
Treasury Inflation-Protected Securites 5% 5% 9%
Real Estate Investment Trusts 20% 17% 14%
Commodities 3% 3% 3%
1 Since June 2018, SSGA has passively managed all CERBT asset classes. Previously, Fixed Income, TIPS and Commodity asset classes were managed internally by CalPERS.

California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 2
December 31, 2022
General Information
Information Accessibility
The CERBT Strategy 2 portfolio consists of assets managed internally by CalPERS and/or by external advisors. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer’s account and other information about the CERBT. For total market value, detailed asset allocation, investment policy and current performance information, please visit our website at: www.calpers.ca.gov.

What Employers Own
Each employer invested in CERBT Strategy 2 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.

Price
Principal Risks of the Portfolio
The CalPERS CERBT Fund provides California government employers with a trust through which they may prefund retiree medical costs and other post-employment benefits (OPEB). CERBT is not, however, a defined benefit plan. There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations. Further, CalPERS will not make up the difference between an employer's CERBT assets and the actual cost of OPEB provided to an employer's plan members.

There are risks associated with investing, including possible loss of principal. The portfolio’s risk depends in part on the portfolio’s asset class allocations and the selection, weighting and risks of the underlying investments. For more information about investment risks, please see the document entitled “CERBT Principal Investment Risks” located at www.calpers.ca.gov.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 265, Packet Page 580 Asset Class Target
Allocation
Target
Range Benchmark
Global Equity 23% ± 5% MSCI All Country World
Index IMI (Net)
Fixed Income 51% ± 5% Bloomberg Long Liability
Index
Treasury InflationProtected Securities 9% ± 3% Bloomberg US TIPS Index, Series L
Real Estate Investment
Trusts ("REITs") 14% ± 5% FTSE EPRA/NAREIT
Developed Index (Net)
Commodities 3% ± 3% S&P GSCI Total Return
Index
Cash - + 2% 91-Day Treasury Bill
Assets Under Management
As of the specified reporting month-end:

SKB8
CERBT Strategy 3 Annual Operating Ratio
$743,132,343 0.10%
CERBT Strategy 3 Performance as of December 31, 2022
Since Inception*
1 Month 3 Months Fiscal YTD 1 Year 3 Years* 5 Years* 10 Years* (January 1, 2012) 1,3 Gross Return -2.09% 4.44% -3.12% -16.38% -0.07% 2.19% 3.57% 4.29% 2,3 Net Return -2.10% 4.42% -3.17% -16.45% -0.16% 2.10% 3.47% 4.18% Benchmark Returns -1.96% 4.57% -3.03% -16.34% -0.16% 2.07% 3.28% 4.03% 4 Standard Deviation - - - - 10.85% 9.02% 7.28% 7.12%
* Returns for periods greater than one year are annualized. 1 Gross returns are net of SSGA operating expenses.
2 Net returns are net of SSGA operating expenses, investment management, administrative and recordkeeping fees. 3 Expenses are described in more detail on page 2 of this document. 4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.

California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 3
December 31, 2022
Objective
The CERBT Strategy 3 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.

Strategy
The CERBT Strategy 3 portfolio is invested in various asset classes.

CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer’s portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.

Compared with CERBT Strategy 1 and Strategy 2, this portfolio has a lower allocation to equities than bonds and other assets.

Historically, funds with a lower percentage of equities have displayed less price volatility and, therefore, this portfolio may experience comparatively less fluctuation of value. Employers that seek greater stability of value, in exchange for possible lower investment returns, may wish to consider this portfolio.

CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.

Composition
Asset Class Allocations and Benchmarks
The CERBT Strategy 3 portfolio consists of the following asset classes and corresponding benchmarks:

Portfolio Benchmark
The CERBT Strategy 3 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 266, Packet Page 581 CERBT Strategy Risk Levels
CalPERS offers employers the choice of one of three investment strategies. Projected risk levels among strategies vary, depending upon the target asset class allocations. Generally, equities carry more risk than fixed income securities. 1 Asset Class Target Allocations Strategy 1 Strategy 2 Strategy 3 Global Equity 49% 34% 23%
Fixed Income 23% 41% 51%
Treasury Inflation-Protected Securites 5% 5% 9%
Real Estate Investment Trusts 20% 17% 14%
Commodities 3% 3% 3%
1 Since June 2018 SSGA has passively managed all CERBT asset classes. Previously Fixed Income, TIPS and Commodity asset classes were managed internally by CalPERS.

California Employers' Retiree Benefit Trust (CERBT)
CERBT Strategy 3
December 31, 2022
General Information
Information Accessibility
The CERBT Strategy 3 portfolio consists of assets managed internally by CalPERS and/or by external advisors. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer’s account and other information about the CERBT. For total market value, detailed asset allocation, investment policy and current performance information, please visit our website at: www.calpers.ca.gov.

What Employers Own
Each employer invested in CERBT Strategy 3 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.

There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations. Further, CalPERS will not make up the difference between an employer's CERBT assets and the actual cost of OPEB provided to an employer's plan members.

There are risks associated with investing, including possible loss of principal.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 267, Packet Page 582 California Employers' Pension Prefunding Trust (CEPPT)
CEPPT Strategy 1
December 31, 2022
Asset Class Target
Allocation
Target
Range Benchmark
Global Equity 37% ± 5% MSCI All Country World
Index IMI (Net)
Fixed Income 44% ± 5% Bloomberg US Aggregate
Bond Index
Treasury Inflation-Protected
Securities ("TIPS") 5% ± 3% Bloomberg US TIPS Index,
Series L
Real Estate Investment
Trusts ("REITs") 14% ± 5% FTSE EPRA/NAREIT
Developed Index (Net)
Cash - + 2% 91-Day Treasury Bill
Assets Under Management
As of the specified reporting month-end:

CEPPT Strategy 1 Annual Expense Ratio
$71,423,792 0.25%
CEPPT Strategy 1 Performance as of December 31, 2022
SKHD Since Inception*
1 Month 3 Months Fiscal YTD 1 Year 3 Years* 5 Years* 10 Years* (October 1, 2019) 1,3 Gross Return -2.18% 5.50% -0.90% -15.73% 0.71% - - 1.82% 2,3 Net Return -2.20% 5.44% -1.01% -15.92% 0.48% - - 1.58% Benchmark Return -2.14% 5.53% -0.88% -15.87% 0.63% - - 1.76% 4 Standard Deviation - - - - 11.82% - - 11.40%
* Returns for periods greater than one year are annualized. 1 Gross returns are net of SSGA operating expenses.
2 Net returns are net of SSGA operaing expenses, investment management, administrative and recordkeeping fees. 3 Expenses are described in more detail on page 2 of this document. 4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.

Objective
The CEPPT Strategy 1 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.

Strategy
The CEPPT Strategy 1 portfolio is invested in various asset classes that are passively managed to an index. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer's portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.

Compared with CEPPT Strategy 2, this portfolio has a higher allocation to equities than bonds. Historically, equities have displayed greater price volatility and, therefore, this portfolio may experience greater fluctuation of value. Employers that seek higher investment returns, and are able to accept greater risk and tolerate more fluctuation in returns, may wish to consider this portfolio.

CalPERS Board may change the list of approved asset
classes in composition as well as targeted allocation
percentages and ranges at any time.

Composition
Asset Class Allocations and Benchmarks
The CEPPT Strategy 1 portfolio consists of the following asset classes and corresponding benchmarks:

Portfolio Benchmark
The CEPPT Strategy 1 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.

Target vs. Actual Asset Class Allocations
The following chart shows policy target allocations compared with actual asset allocations as of the specified reporting month-end. CalPERS may temporarily deviate from the target allocation for a particular asset class based on market, economic, or other considerations.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 268, Packet Page 583 California Employers' Pension Prefunding Trust (CEPPT)
CEPPT Strategy 1
December 31, 2022
Asset Class Target Allocations Strategy 1 Strategy 2
Global Equity 37% 21%
Fixed Income 44% 61%
Treasury-Inflation Protected Securities 5% 9%
Real Estate Investment Trusts 14% 9%
General Information
Information Acessibility
The CEPPT Strategy 1 portfolio consists of assets managed internally by CalPERS and/or by external managers. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published. CalPERS provides a quarterly statement of the employer's account and other information about the CEPPT. For total market value, detailed asset allocation, investment policy and performance information, please visit our website at www.calpers.ca.gov.

Porfolio Manager Information
The CalPERS Board, through its Investment Committee, directs the CEPPT investment strategy based on policies approved by the Board of Administration. State Street Global Advisors (SSGA) manages all underlying investments for CEPPT, which include: Global Equity, Fixed Income, Real Estate Investment Trusts, and Treasury Inflation-Protected Securities.

Custodian and Record Keeper
State Street Bank serves as custodian for the CEPPT. Northeast Retirement Services serves as recordkeeper.

This equates to $2.50 per $1,000 invested. The expenses consist of administrative expenses borne by CalPERS to administer and oversee the Trust assets, investment management and administrative fees paid to SSGA to manage all asset classes, and recordkeeping fees paid to Northeast Retirement Services to administer individual employer accounts.

The expenses described herein are reflected in the net asset value per unit.

The expense ratio is subject to change at any time and without prior notification due to factors such as changes to average fund assets or market conditions. CalPERS reviews the operating expenses annually and changes may be made as appropriate. Even if the portfolio loses money during a period, the expenses will still be charged.

What Employers Own
Each employer invested in CEPPT Strategy 1 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.

Price
The value of the portfolio changes daily based upon the market value of the underlying securities. Just as prices of individual securities fluctuate, the portfolio's value also changes with market conditions.

Principal Risks of the Portfolio
The CEPPT fund is a trust fund dedicated to prefunding employer contributions to defined benefit pension plans for eligible state and local agencies. CEPPT is not, however, a defined benefit plan. There is no guarantee that the portfolio will achieve its investment objectives or provide sufficient funding to meet employer obligations.

There are risks associated with investing, including possible loss of principal. The portfolio's risk depends in part on the portfolio's asset class allocations and the selection, weighting and risks of the underlying investments. For more information about investment risks, please see the document entitled "CEPPT Principal Investment Risks" located at www.calpers.ca.gov.

Fund Performance
Performance data shown on page 1 represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an employer's units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than historical performance data shown. For current performance information, please visit www.calpers.ca.gov and follow the links to California Employers' Pension Prefunding Trust.

CEPPT Strategy Risk Levels
CalPERS offers employers the choice of one of two investment strategies. Projected risk levels among risk strategies vary, depending upon the target asset class allocations. Generally, equities carry more risk than fixed income securities.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 269, Packet Page 584 California Employers' Pension Prefunding Trust (CEPPT)
CEPPT Strategy 2
December 31, 2022
Asset Class Target
Allocation
Target
Range Benchmark
Global Equity 21% ± 5% MSCI All Country World
Index IMI (Net)
Fixed Income 61% ± 5% Bloomberg US Aggregate
Bond Index
Treasury Inflation-Protected
Securities ("TIPS") 9% ± 3% Bloomberg US TIPS Index,
Series L
Real Estate Investment
Trusts ("REITs") 9% ± 5% FTSE EPRA/NAREIT
Developed Index (Net)
Cash - + 2% 91-Day Treasury Bill
Assets Under Management
As of the specified reporting month-end:

CEPPT Strategy 2 Annual Expense Ratio
$33,225,936 0.25%
CEPPT Strategy 2 Performance as of December 31, 2022
SKHE Since Inception*
1 Month 3 Months Fiscal YTD 1 Year 3 Years* 5 Years* 10 Years* (January 1, 2020) Gross Return 1,3 -1.68% 3.81% -1.93% -14.11% -1.05% - - -1.05% Net Return 2,3 -1.69% 3.76% -2.04% -14.30% -1.27% - - -1.27% Benchmark Return -1.49% 4.01% -1.80% -14.07% -1.11% - - -1.11% Standard Deviation 4 - - - - 8.06% - - 8.06%
* Returns for periods greater than one year are annualized. 1 Gross returns are net of SSGA operating expenses.
2 Net returns are net of SSGA operaing expenses, investment management, administrative and recordkeeping fees. 3 Expenses are described in more detail on page 2 of this document. 4 Standard deviation is based on gross returns and is reported for periods greater than 3 years.

Objective
The CEPPT Strategy 2 portfolio seeks to provide capital appreciation and income consistent with its strategic asset allocation. There is no guarantee that the portfolio will achieve its investment objective.

Strategy
The CEPPT Strategy 2 portfolio is invested in various asset classes that are passively managed to an index. CalPERS periodically adjusts the composition of the portfolio in order to match the target allocations. Generally, equities are intended to help build the value of the employer's portfolio over the long term while bonds are intended to help provide income and stability of principal. Also, strategies invested in a higher percentage of equities seek higher investment returns (but assume more risk) compared with strategies invested in a higher percentage of bonds.

Compared with CEPPT Strategy 1, this portfolio has a lower allocation to equities and a higher allocation to bonds. Historically, funds with a lower percentage of equities have displayed less price volatility and, therefore, this portfolo may experience comparatively less fluctuation of value. Employers that seek greater stability of value, in exchange for possible lower investment returns, may wish to consider this portfolio.

CalPERS Board may change the list of approved asset classes in composition as well as targeted allocation percentages and ranges at any time.

Composition
Asset Class Allocations and Benchmarks
The CEPPT Strategy 2 portfolio consists of the following asset classes and corresponding benchmarks:

Portfolio Benchmark
The CEPPT Strategy 2 benchmark is a composite of underlying asset class market indices, each assigned the target weight for the asset class it represents.

Target vs. Actual Asset Class Allocations
The following chart shows policy target allocations compared with actual asset allocations as of the specified reporting month-end. CalPERS may temporarily deviate from the target allocation for a particular asset class based on market, economic, or other considerations.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 270, Packet Page 585 California Employers' Pension Prefunding Trust (CEPPT
CEPPT Strategy 2
December 31, 2022
Asset Class Target Allocations Strategy 1 Strategy 2
Global Equity 37% 21%
Fixed Income 44% 61%
Treasury-Inflation Protected Securities 5% 9%
Real Estate Investment Trusts 14% 9%
General Information
Information Acessibility
The CEPPT Strategy 2 portfolio consists of assets managed internally by CalPERS and/or by external managers. Since it is not a mutual fund, a prospectus is not available and daily holdings are not published.

CalPERS provides a quarterly statement of the employer's account and other information about the CEPPT. For total market value, detailed asset allocation, investment policy and performance information, please visit our website at www.calpers.ca.gov.

Custodian and Record Keeper
State Street Bank serves as custodian for the CEPPT. Northeast Retirement Services serves as recordkeeper.

Expenses
CEPPT is a self-funded trust in which participating employers pay for all administrative and investment expenses. Expenses reduce the gross investment return by the fee amount. The larger the expenses, the greater reduction of investment return. Currently, CEPPT expense ratios are 0.25%. This equates to $2.50 per $1,000 invested. The expenses consist of administrative expenses borne by CalPERS to administer and oversee the Trust assets, investment management and administrative fees paid to SSGA to manage all asset classes, and recordkeeping fees paid to Northeast Retirement Services to administer individual employer accounts. The expenses described herein are reflected in the net asset value per unit. The expense ratio is subject to change at any time and without prior notification due to factors such as changes to average fund assets or market conditions. CalPERS reviews the operating expenses annually and changes may be made as appropriate. Even if the portfolio loses money during a period, the expenses will still be charged.

What Employers Own
Each employer invested in CEPPT Strategy 2 owns units of this portfolio, which invests in pooled asset classes managed by CalPERS and/or external advisors. Employers do not have direct ownership of the securities in the portfolio.

Fund Performance
Performance data shown on page 1 represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an employer's units, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than historical performance data shown. For current performance information, please visit www.calpers.ca.gov and follow the links to California Employers' Pension Prefunding Trust.

Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 271, Packet Page 586 Attachment 3
Prefunding Program Employers
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 272, Packet Page 587 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
1 Associations/Councils of Governments
Association of Bay Area Governments
Association of Monterey Bay Area Governments
Butte County Association of Governments
City/County Association of Governments of San Mateo
County
Sacramento Area Council of Governments (Dual)
San Diego Association of Governments
San Gabriel Valley Council of Governments (CEPPT)
San Luis Obispo Council of Governments
Santa Barbara County Association of Governments
Southern California Association of Governments
San Benito County Council of Governments
Cemetery Districts
Auburn Public Cemetery District
Placer County Cemetery District #1
Roseville Public Cemetery District
Cities & Towns
City of Agoura Hills (Dual)
City of American Canyon
City of Anaheim
City of Antioch
City of Arcadia
City of Arcata
City of Avalon
City of Baldwin Park
City of Barstow
City of Bellflower
City of Belmont
City of Belvedere (CEPPT)
City of Brentwood
City of Buena Park (Dual)
City of Burbank (Dual)
City of Burlingame
City of Campbell
City of Capitola
City of Carlsbad
City of Carson
City of Cathedral City
City of Cerritos
City of Citrus Heights
City of Colusa
City of Concord
City of Corona
City of Cotati (CEPPT)
City of Daly City
City of Davis
City of Diamond Bar
City of Downey
City of Dublin
City of Eastvale
City of El Cajon
City of El Centro
City of El Segundo
City of Encinitas
City of Fairfield
City of Fort Bragg
City of Fountain Valley
City of Fremont
City of Gardena
City of Hawaiian Gardens
City of Hayward (Dual)
City of Huntington Beach
City of Huntington Park
City of Indian Wells
City of Indio
City of Industry
City of Irwindale (Dual)
City of La Habra
City of La Mesa
City of La Mirada
City of La Palma
City of La Puente
City of La Quinta
City of Lafayette
City of Laguna Woods (Dual)
City of Lancaster
City of Larkspur
City of Lathrop
City of Lindsay (Dual)
City of Live Oak
City of Livingston
City of Lodi
City of Loma Linda
City of Lompoc
City of Los Altos
City of Los Banos
City of Lynwood
City of Malibu
City of Manhattan Beach
City of Martinez
City of Maywood (Dual)
City of Menlo Park
City of Merced
City of Mill Valley
City of Milpitas
City of Mission Viejo
City of Monterey
City of Monterey Park
City of Moorpark
City of Moreno Valley
City of Morgan Hill
City of Mountain View
City of Murrieta
City of Napa
City of Newark
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 273, Packet Page 588 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
2 City of Newport Beach
City of Norco
City of Oakland
City of Ojai
City of Ontario
City of Palm Desert
City of Palo Alto
City of Paramount
City of Perris
City of Pico Rivera
City of Pismo Beach
City of Pittsburg
City of Pleasanton
City of Rancho Cordova
City of Rancho Mirage
City of Redondo Beach
City of Redwood City
City of Reedley
City of Richmond
City of Ridgecrest
City of Rocklin
City of Rohnert Park
City of Rolling Hills
City of Sacramento
City of Salinas
City of Sand City
City of San Carlos
City of San Clemente
City of San Diego
City of San Gabriel
City of San Luis Obispo
City of San Marino (Dual)
City of San Mateo
City of San Rafael
City of San Ramon
City of Santa Fe Springs (Dual)
City of Santa Monica
City of Santee
City of Scotts Valley
City of Seal Beach
City of Shasta Lake (Dual)
City of Sierra Madre (Dual)
City of Solvang
City of Sonora (CEPPT)
City of South Pasadena
City of South San Francisco
City of Stanton
City of Temecula
City of Thousand Oaks
City of Torrance (Dual)
City of Vacaville
City of Vallejo
City of Vernon
City of West Hollywood
City of West Sacramento
City of Westlake Village
City of Westminster
City of Yorba Linda
City of Yreka (Dual)
Town of Corte Madera
Town of Fairfax
Town of Hillsborough
Town of Los Altos Hills
Town of Los Gatos (Dual)
Town of Portola Valley
Town of Ross
Town of San Anselmo
Town of Truckee
Community Services Districts
Big Bear City Community Services District
Brooktrails Township Community Services District
Castroville Community Services District
Clear Creek Community Services District
Cosumnes Community Services District
Denair Community Services District
Dublin San Ramon Services District
El Dorado Hills Community Services District
Groveland Community Services District
Heritage Ranch Community Services District
Hidden Valley Lake Community Services District
Jurupa Community Services District
Kensington Police Protection & Community Services
District
Marinwood Community Services District
McCloud Community Services District
Nipomo Community Services District
Northstar Community Services District (CEPPT)
Olympic Valley Public Service District (Dual)
Tamalpais Community Services District
Templeton Community Services District
Counties
County of Butte
County of Del Norte
County of Marin
County of Monterey
County of Nevada
County of Placer
County of Riverside
County of San Luis Obispo
County of San Mateo
County of Santa Clara
Fairs & Expositions
California Authority of Racing Fairs
California Fair Services Authority
California Fairs Financing Authority
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 274, Packet Page 589 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
3 Fire Districts
Alameda County Fire Department
American Canyon Fire Protection District
Aptos/La Selva Fire Protection Agency (Dual)
Arcata Fire Protection District
Barstow Fire Protection District
Belmont Fire Protection District
Belmont-San Carlos Fire Department
Bonita-Sunnyside Fire Protection District
Central County Fire Department
Central FPD of Santa Cruz County (Dual)
Chino Valley Independent Fire District
Diamond Springs/El Dorado Fire Protection District
Felton Fire Protection District (CEPPT)
Georgetown Fire Protection District
Kensington Fire Protection District
Kentfield Fire Protection District (Dual)
Kenwood Fire Protection District
Lake County Fire Protection District
Lakeside Fire Protection District
Livermore-Pleasanton Fire Department
Meeks Bay Fire Protection District
North Tahoe Fire Protection District
Novato Fire Protection District
Rancho Cucamonga Fire Protection District
Rodeo-Hercules Fire District
Ross Valley Fire Service
Sacramento Metropolitan Fire District
San Ramon Valley Fire Protection District
Santa Clara County Central Fire Protection District
Scotts Valley Fire Protection District (Dual)
Shasta Lake Fire Protection District
Sonoma County Fire District
Tiburon Fire Protection District (Dual)
Amador County Superior Court (Dual)
Woodside Fire Protection District (Dual)
First 5
First 5 Contra Costa
First 5 Del Norte
First 5 San Benito
Hospital/Medical Agencies
Camarillo Health Care District
Grossmont Healthcare District
Inland Empire Health Plan (CEPPT)
Santa Clara County Health Authority
Sierra-Sacramento Valley EMS Agency (Dual)
Housing Authorities/Redevelopment Agencies
Capitol Area Development Authority
Housing Authority of the City of Alameda
Housing Authority of the City of Los Angeles
Housing Authority of the County of Butte
Housing Authority of the County of San Mateo
Housing Authority of the County of Santa Cruz
Kern County Housing Authority
Los Angeles City Community Redevelopment Agency
Los Angeles County Development Authority (Dual)
Oakland City Housing Authority
Paso Robles City Housing Authority
Plumas County Community Development Commission
Regional Housing Authority
Sacramento City Housing Authority
San Francisco City & County Redevelopment Agency
Santa Clara County Housing Authority (Dual)
Stanislaus County Housing Authority
Yolo County Housing Authority
Libraries/Library Districts
Alameda County Law Library
Altadena Library District
Buena Park Library District
Contra Costa County Public Law Library
Fresno County Law Library
Kern County Law Library
Los Angeles County Law Library
Sacramento County Public Law Library (Dual)
San Diego County Law Library (Dual)
San Mateo County Law Library (CEPPT)
Sonoma County Library
Southern California Library Cooperative (CEPPT)
Ventura County Law Library
Mosquito Abatement & Vector Control Districts
Antelope Valley Mosquito & Vector Control District
Butte County Mosquito & Vector Control Dist. (CEPPT)
Coachella Valley Mosquito & Vector Control District
Compton Creek Mosquito Abatement District
Delta Mosquito and Vector Control District (Dual)
Greater Los Angeles County Vector Control District
Los Angeles County West Vector Control District
Marin/Sonoma Mosquito Vector & Control District
Mosquito & Vector Management District of Santa
Barbara County
Napa County Mosquito Abatement District
Northwest Mosquito & Vector Control District
Placer Mosquito & Vector Control District
Sacramento-Yolo Mosquito & Vector Control District
San Gabriel Valley Mosquito & Vector Control District
San Joaquin County Mosquito & Vector Control District
Shasta Mosquito & Vector Control District
Solano County Mosquito Abatement District
Turlock Mosquito Abatement District (Dual)
Parks & Recreation Districts
Auburn Area Recreation & Park District (CEPPT)
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 275, Packet Page 590 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
4 Beaumont-Cherry Valley RPD (Dual)
East Bay Regional Park District
Fair Oaks Recreation & Park District
Midpeninsula Regional Open Space District
Monterey Peninsula Regional Park District (Dual)
Riverside County Regional Park & Open Space District
Western Riverside County Regional Conservation
Authority
Pollution Control Districts
Bay Area Air Quality Management District (Dual)
Butte County Air Quality Management District
Sacramento Metropolitan Air Quality Mgt. District
Yolo-Solano Air Quality Management District
Sanitation Districts
Alameda County Waste Management Authority
Big Bear Area Regional Wastewater Agency
Carmel Area Wastewater District (CEPPT)
Castro Valley Sanitary District (Dual)
Central Marin Sanitation Agency
Costa Mesa Sanitary District
Del Norte Solid Waste Management Authority
East Bay Dischargers Authority
Encina Wastewater Authority
East Palo Alto Sanitary District
Fairfield-Suisun Sewer District (Dual)
Goleta Sanitary District
Ironhouse Sanitary District
Las Gallinas Valley Sanitary District
Leucadia Wastewater District
Los Angeles County Sanitation District No. 2
Midway City Sanitary District (Dual)
Mt. View Sanitary District
Murphys Sanitary District (CEPPT)
Napa Sanitation District
Ojai Valley Sanitary District
Oro Loma Sanitary District
Richardson Bay Sanitary District
Ross Valley Sanitary District (Dual)
Salinas Valley Solid Waste Authority (Dual)
Sanitary District No. 5 of Marin County
Sausalito-Marin City Sanitary District (Dual)
Selma-Kingsburg-Fowler County Sanitation District
Silicon Valley Clean Water
Stege Sanitary District
Tahoe-Truckee Sanitation Agency
Truckee Sanitary District (Dual)
Union Sanitary District
Vallejo Flood & Wastewater District
Valley Sanitary District
West Contra Costa Integrated Waste Management
Authority (Dual)
West Valley Sanitation District of Santa Clara County
School Districts & Offices of Education
Acalanes Union High School District
Alhambra Unified School District
Barstow Community College District
Burlingame School District
Butte-Glenn Community College District
Cabrillo Joint Community College District
Campbell Union Elementary School District
Center Unified School District
Chula Vista Elementary School District
Dehesa Elementary School District
Del Mar Union Elementary School District
Eden Area Regional Occupation Program
Enterprise Elementary School District
Fairfield-Suisun Unified School District
Fallbrook Union High School District
Foothill-DeAnza Community College District
Franklin Elementary School District
Fremont Union High School District
Fresno Unified School District
Glendale Community College District
Grossmont Union High School District
Hartnell Community College District
Igo, Ono, Platina Union Elementary School District
Lafayette School District
Laguna Beach Unified School District
Lakeside Union Elementary School District
Las Lomitas Elementary School District
Liberty Union High School District
Los Angeles Community College District
Los Angeles County Office of Education
Los Angeles Unified School District
Lowell Joint School District
Luther Burbank Elementary School District
Lynwood Unified School District
Marin Community College District
Menlo Park City Elementary School District
Metropolitan Education District
Mill Valley School District
Mt. San Jacinto Community College District
Napa Community College District
Napa County Office of Education
Orinda Union School District
Pleasanton Unified School District
Rancho Santa Fe Elementary School District
Redding Elementary School District
Reed Union School District
Rialto Unified School District
Riverside Community College District
Riverside County Office of Education
Robla Elementary School District
Rocklin Unified School District
Sacramento City Unified School District
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 276, Packet Page 591 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
5 Sacramento County Office of Education
San Bernardino City Unified School District
San Diego County Office of Education
San Francisco Unified School District
San Joaquin County Schools
San Joaquin Delta Community College District
San Marcos Unified School District
San Ramon Valley Unified School District
Santa Ana Unified School District
Santa Clara County Schools
Santa Cruz County Office of Education
Santa Monica Community College District
Santa Monica-Malibu Unified School District
Sequoia Union High School District
Shasta County Schools
Shasta Union Elementary School District
Shasta Union High School District
Siskiyou County Office of Education
St. Helena Unified School District
Tamalpais Union High School District
Trinity County Schools
Vacaville Unified School District
West Contra Costa Unified School District
West Valley-Mission Community College District
Western Placer Unified School District
William S. Hart Union High School District
Yreka Union Elementary School District
Yreka Union High School District
Yuba Community College District
State of California
23 Bargaining Units
Superior Courts
Alpine County Superior Court
Amador County Superior Court (CEPPT)
Butte County Superior Court
Calaveras County Superior Court (CEPPT)
Contra Costa Superior Court
Colusa County Superior Court
El Dorado County Superior Court
Glenn County Superior Court
Lake County Superior Court
Lassen County Superior Court
Madera County Superior Court
Mariposa County Superior Court
Modoc County Superior Court
Mono County Superior Court (CEPPT)
Monterey County Superior Court
Napa County Superior Court
Nevada County Superior Court
Placer County Superior Court
Plumas County Superior Court
Riverside County Superior Court
Sacramento County Superior Court
San Bernardino County Superior Court
San Francisco County Superior Court
San Luis Obispo County Superior Court
Santa Clara County Superior Court
Sierra County Superior Court
Santa Cruz County Superior Court
Solano County Superior Court
Sutter County Superior Court
Trinity County Superior Court
Yolo County Superior Court
Yuba County Superior Court
Transportation & Transit Districts
Alameda-Contra Costa Transit District
Alameda Corridor Transportation Authority
Alameda County Transportation Commission
Border Coast Regional Airport Authority
Contra Costa Transportation Authority
El Dorado County Transit Authority (Dual)
El Dorado County Transportation Commission (Dual)
Gold Coast Transit
Livermore/Amador Valley Transit Authority (Dual)
Morongo Basin Transit Authority (Dual)
Napa County Transportation & Planning Agency
Peninsula Traffic Congestion Relief Alliance
Placer County Transportation Planning Agency
Riverside County Transportation Commission
Riverside Transit Agency
Sacramento Regional Transit District
San Diego County Regional Airport Authority
San Francisco Bay Area Water Emergency
Transportation Authority
San Francisco County Transportation Authority
San Mateo County Transit District
Santa Barbara Metropolitan Transit District
Santa Cruz County Regional Transportation Commission
(Dual)
Shasta Regional Transportation Agency (Dual)
Southern California Regional Rail Authority
Transportation Authority of Marin (Dual)
Ventura County Transportation Commission
Yolo County Transportation District
Utility Districts
Calaveras Public Utility District
Foresthill Public Utility District
Inverness Public Utility District
Lassen Municipal Utility District
Mojave Public Utility District
North Tahoe Public Utility District (CEPPT)
Northern California Power Agency
Sacramento Municipal Utility District
South Placer Municipal Utility District (Dual)
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 277, Packet Page 592 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
6 Tahoe City Public Utility District
Truckee Donner Public Utilities District
Tuolumne Utilities District
Water/Flood Control Districts
Alameda County Water District
Alpine Springs County Water District
Arrowbear Park County Water District (Dual)
Association of California Water Agencies
Bay Area Water Supply & Conservation Agency
Beaumont-Cherry Valley Water District
Bella Vista Water District
Byron-Bethany Irrigation District
Calleguas Municipal Water District
Callayomi County Water District (CEPPT)
Carmichael Water District
Carpinteria Valley Water District
Casitas Municipal Water District
Central Basin Municipal Water District
Chino Basin Water Conservation District (CEPPT)
Citrus Heights Water District
Crescenta Valley Water District
Crestline-Lake Arrowhead Water Agency
Cucamonga Valley Water District
Del Paso Manor Water District
Del Puerto Water District
Diablo Water District
East Valley Water District
El Dorado Hills County Water District
El Dorado Irrigation District
Fern Valley Water District
Florin Resource Conservation District Elk Grove Water
Works
Helix Water District
Imperial Irrigation District
Indian Wells Valley Water District
Inland Empire Utilities Agency
Kaweah Delta Water Conservation District
Kern County Water Agency
La Puente Valley County Water District
Lakeside Water District
Las Virgenes Municipal Water District
Marin Municipal Water District
Merced Irrigation District
Metropolitan Water District of Southern California
Mojave Water Agency
Monte Vista Water District
Moulton Niguel Water District
Nevada Irrigation District
Orchard Dale Water District
Otay Water District
Padre Dam Municipal Water District
Palmdale Water District
Palo Verde Irrigation District
Pico Water District
Pine Cove Water District
Placer County Water Agency
Quartz Hill Water District
Reclamation District #1000
Reclamation District No. 900
Regional Water Authority
Rincon del Diablo Municipal Water District
Rio Alto Water District
Rio Linda Elverta Community Water District
Riverside County Flood Control & Water Conservation
District
Sacramento Suburban Water District
San Benito County Water District
San Bernardino Valley Municipal Water District
San Bernardino Valley Water Conservation District
San Diego County Water Authority
San Dieguito Water District
San Gabriel County Water District
San Gabriel Valley Municipal Water District
San Gorgonio Pass Water Agency
San Juan Water District
San Lorenzo Valley Water District
Santa Ana Watershed Project Authority
Santa Clara Valley Water District
Santa Clarita Valley Water Agency
Santa Fe Irrigation District
Serrano Water District (CEPPT)
Solano County Water District
Soquel Creek Water District
South Coast Water District
South San Joaquin Irrigation District
Stinson Beach County Water District
Sunnyslope County Water District (Dual)
Sweetwater Authority
Sweetwater Springs Water District
Tehachapi-Cummings County Water District
Trabuco Canyon Water District (Dual)
Turlock Irrigation District
Twentynine Palms Water District
United Water Conservation District
Upper San Gabriel Valley Municipal Water District (Dual) Vallecitos Water District
Valley Center Municipal Water District
Valley County Water District
Valley of the Moon Water District
Vista Irrigation District
Water Replenishment District of Southern California
West Basin Municipal Water District
Westborough Water District
Westlands Water District
West Valley Water District
Yorba Linda Water District
Yuba County Water Agency
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 278, Packet Page 593 www.calpers.ca.gov/ceppt www.calpers.ca.gov/cerbt
7 Yuima Municipal Water District
Other Special Districts
ACWA Joint Powers Insurance Authority
Big Bear City Airport District
Central Marin Police Authority
Cooperative Personnel Services
CSAC Excess Insurance Authority
Golden Sierra Job Training Agency (Dual)
Local Agency Formation Commission - Los Angeles
March Joint Powers Authority
Marin Local Agency Formation Commission
Mojave Air & Space Port
Municipal Pooling Authority
Oxnard Harbor District
Planning & Service Area II Area Agency on Aging
Port of Oakland
Public Agency Risk Sharing Authority of California
Rural County Representatives of California
Sacramento Metropolitan Cable Television Commission
Sacramento Regional Fire/EMS Communication Center
South Bay Regional Public Communications Authority
Special District Risk Management Authority
State Bar of California
Transbay Joint Powers Authority
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 279, Packet Page 594 Attachment 4
CEPPT Contracting Documents
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 280, Packet Page 595 CALIFORNIA EMPLOYERS’ PENSION PREFUNDING TRUST PROGRAM

AGREEMENT AND ELECTION
OF
(NAME OF EMPLOYER)
to Prefund Employer Contributions to a Defined Benefit
Pension Plan
WHEREAS (1) Government Code (GC) Section 21711(a) establishes in the State Treasury the California Employers’ Pension Prefunding Trust Fund (CEPPT), a special trust fund for the purpose of allowing eligible employers to prefund their required pension contributions to a defined benefit pension plan (each an Employer Pension Plan) by receiving and holding in the CEPPT amounts that are intended to be contributed to an Employer Pension Plan at a later date; and WHEREAS (2) GC Section 21711(b) provides that the California Public Employees' Retirement System (CalPERS) Board of Administration (Board) has sole and exclusive control of the administration and investment of the CEPPT, the purposes of which include, but are not limited to (i) receiving contributions from participating employers; (ii) investing contributed amounts and income thereon, if any, in order to receive yield on the funds; and (iii) disbursing contributed amounts and income thereon, if any, to pay for costs of administration of the CEPPT and to deposit employer contributions into Employer Pension Plans in accordance with their terms; and WHEREAS (3) _____________________________________________________ (NAME OF EMPLOYER) (Employer) desires to participate in the CEPPT upon the terms and conditions set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the CEPPT upon (i) approval by the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund Employer Contributions to a Defined Benefit Pension Plan (Agreement) as provided in the terms and conditions of the Agreement; and
WHEREAS (5) The CEPPT is a trust fund that is intended to perform an essential governmental function (that is, the investment of funds by a State, political subdivision or 115 entity) within the meaning of Internal Revenue Code (Code) Section 115 and Internal Revenue Service Revenue Ruling 77-261, and as an Investment Trust Fund, as defined in Governmental Accounting Standards Board (GASB) Statement No. 84, Paragraph 16, for accounting and financial reporting of fiduciary activities from the 1/12/2022 Page 1 of 11
Attachment 3
Council Regular Meeting, 3/21/2023, Item No. 16., Item Page 281, Packet Page 596 1/12/2022

Page 2 of 11 ends

Monterey City CouncilMarch 21, 2023

Monterey City Council
March 21, 2023