Introduction
This document sets forth the investment policy for the investment portfolio available to the OPEB/Pension 115 Trust administered by Shuster Advisory Group, LLC.
This policy should be read in conjunction with and subject to the documents related to the Trust, Trust Administrative Services Agreement and Investment Advisor Agreement.
Purpose
The purpose of this investment policy statement is to:
Ensure that all fiduciaries involved in the plan take prudent and careful action to maintain the investment portfolios; Facilitate the process of ongoing communication between the Plan Sponsor and its plan fiduciaries; Confirm the Plan’s investment goals and objectives and management policies as well as cash flow expectations applicable to the investment portfolio identified below and obtained from the Plan Sponsor; Provide a framework to construct a well-diversified asset mix that can potentially be expected to meet the account’s short- and long-term needs that is consistent with account’s investment objectives, liquidity considerations and risk tolerance; Identify any unique considerations that may restrict or limit the investment discretion of the Investment Advisor; Maintain a long-term perspective when market volatility is caused by short-term market events.
Plan Information as of July 2022
Plan Sponsor: City of Signal Hill, CA
Plan Administrator: Sharon del Rosario, Administrative Services Officer/Finance Director Plan Name (“Plan”): City of Signal Hill OPEB Trust Account Type of Account: OPEB Funding
Trustee: Alta Trust
Contact: Adam Ponder, CEO
[email protected] / (303) 996-3786
Custodian: Charles Schwab Trust Bank
Contact: Customer Service,
(800) 435-4000
Trust Administrator: Shuster Advisory Group, LLC
Contact: Mark Shuster, Managing Member
[email protected] / (626) 578-0816
Investment Advisor: Shuster Advisory Group, LLC
Contact: Mark Shuster, Managing Member
[email protected] / (626) 578-0816
Exhibit AExhibit A
Exhibit A
Exhibit A
Investment Advisor Authority
In accordance with the relevant terms of the documents related to Plan, the Plan Sponsor/Plan Administrator has delegated investment discretion and authority to Shuster Advisory Group, LLC., an independent SEC-registered investment advisor.
Except as otherwise noted in this document, Investment Advisor has full investment discretion over the assets in the account that are managed. Investment Advisor is authorized to purchase, sell, exchange, invest, re-invest and manage the designated assets held in the account without prior approval or subsequent approval of any other party to the Plan. This management shall be based upon the account’s investment objectives provided by the Plan Sponsor/Plan Administrator.
Investment Objectives and Constraints
The goal of the Plan’s investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay the present and future obligations of the Plan. The following objectives are intended to assist in achieving this goal:
The Plan should seek to earn a return in excess of its policy benchmark over the life of the Plan.
The Plan’s assets will be managed on a total return basis which takes into consideration both investment income and capital appreciation. While the Plan Sponsor recognizes the importance of preservation of capital, it also adheres to the principle that varying degrees of investment risk are generally rewarded with compensating returns. To achieve these objectives, the Plan Sponsor allocates its assets (asset allocation) with a strategic perspective of the capital markets.
Investment Time Horizon: More than 5 years
Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of the funding of current and future unfunded OPEB liabilities to reduce the impact of future expenses to the Plan Sponsor. It is not anticipated that the Plan will have a high level of disbursements in the next five years, however it is anticipated that a steady increase in disbursements will occur as more employees begin to retire. The goal is the manage the cash flow of the plan via actuarial projections provided by the Plan Sponsor.
Investment Objective: Moderate Growth
The Moderate Growth Portfolio is a globally diversified portfolio consisting of asset classes that may include U.S. and foreign equity, commodities, real estate investment trusts, and bonds. With a greater allocation to more growth-oriented investments, this strategy is designed for the investor with an investment horizon more than 5 years who can withstand fluctuations in their portfolio value.
Risk Tolerance: Moderate Growth
The account’s risk tolerance has been rated moderate growth, which demonstrates that the account can accept average to above-average price fluctuations to pursue its investment objectives.
Strategic Asset Allocation: Moderate Growth:
Equity
Fixed Income
Cash
50-70%
28%-48%
0-10%
Policy: 60%
Policy: 38%
Policy: 2%
Market conditions may cause the account’s asset allocation to vary from the stated range from time to time. The Investment Advisor will rebalance the portfolio no less than quarterly and/or when the actual weighting differs substantially from the strategic range, if appropriate and consistent with your objectives.
Performance Benchmarks: The performance of the total Plan shall be measured over a three and five-year periods. These periods are considered sufficient to accommodate the market cycles experienced with investments. The performance shall be compared to the return of the total portfolio blended benchmark shown below.
ICE BofA 0-3 Mon US Treasury Bill 4%
Bloomberg US Agg Intermediate 36%
MSCI EAFE 23%
MSCI EM 7%
Russell 2000 3%
S&P 500 21%%
S&P MidCap 400 6%
Security Selection: Investment Advisor may utilize a full range of investment vehicles when constructing the investment portfolio, including but not limited to individual securities, mutual funds, and exchange- traded funds.
Investment Limitations: The following investment transactions are prohibited:
Direct investments in precious metals (precious metals mutual funds and exchange-traded funds are permissible).
Venture Capital
Short sales*
Purchases of Letter Stock or direct payments
Leveraged Transactions*
Commodities Transactions Puts, calls, straddles, or other option strategies* Purchases of real estate, with the exception of REITs*
Derivatives, with exception of Exchange Traded Funds (ETFs)* *Permissible in diversified mutual funds, exchange-traded funds, private equity and private debt transactions Duties and Responsibilities
The Plan Sponsor/Plan Administrator is responsible for:
Confirming the accuracy of this Investment Policy Statement, in writing.
Advising Trustee, Custodian and Investment Advisor of any change in the plan/account’s financial situation, funding status, or cash flows, which could possibly necessitate a change to the account’s overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to the overall investment objective and goals for the account.
Monitoring and supervising all service vendors and investment options, including investment managers.
Avoiding prohibited transactions and conflicts of interest.
The plan Custodian is responsible for:
Valuing the holdings.
Collecting all income and dividends owed to the Plan.
Settling all transactions (buy-sell orders).
The plan Trustee is responsible for:
Tracking valuation of the holdings.
Holding assets in Trust as directed trustee.
The Trust Administrator and Investment Advisor is responsible for:
Assisting the Plan Sponsor/Plan Administrator with the development and maintenance of this Investment Policy Statement.
Meeting with Plan Sponsor/Plan Administrator to review portfolio structure, holdings, and performance.
Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this statement.
Researching and monitoring investment advisers and investment vehicles.
Purchasing, selling, and reinvesting in securities held in the account.
Monitoring the performance of all selected assets.
Voting proxies, if applicable.
Recommending changes to any of the above.
Periodically reviewing the suitability of the investments, being available to meet with the committee at least once each year and being available at such other times within reason at your request.
Preparing and presenting appropriate reports.
Acknowledgement and Acceptance
I/We being the Plan Sponsor with responsibility for the account(s) held on behalf of the Plan Sponsor specified below, designate Investment Advisor as having the investment discretion and management responsibility indicated in relation to all assets of the Plan or specified Account. If such designation is set forth in the Plan/trust, I/We hereby confirm such designation as Investment Advisor.
I have read the Investment Guidelines Document, and confirm the accuracy of it, including the terms and conditions under which the assets in this account are to be held, managed, and disposed of by Investment Advisor. This Investment Guidelines Document supersedes all previous versions of an Investment Guidelines Document or investment objective instructions that may have been executed for this account.
Plan Sponsor: City of Signal Hill, California
Name:
Sharon del Rosario
Title:
Administrative Services Officer/Finance Director
Signature:
Date:
Investment Advisor: Shuster Advisory Group, LLC
Name:
Mark Shuster
Title:
Managing Member
Signature:
Date:
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Investment Policy Statement as of July 8, 2022 for OPEB/Pension 115 Trust for The City of Signal Hill, CA OPEB Trust AccountInvestment Policy Statement as of July 8, 2022 for OPEB/Pension 115 Trust for The City of Signal Hill, CA OPEB Trust Account Investment Policy Statement as of July 8, 2022 for
OPEB/Pension 115 Trust for
The City of Signal Hill, CA OPEB Trust Account
Investment Policy Statement as of July 8, 2022 for
OPEB/Pension 115 Trust for
The City of Signal Hill, CA OPEB Trust Account