Tim Barbour

The committee convened to conduct an executive session to discuss the employment of a public employee. Additionally, a compensation consultant provided a presentation reviewing labor market trends, annual salary structure adjustments, and the methodology for merit increases to ensure competitive compensation strategies. The discussion emphasized that salary budget adjustments are necessary to match market trends and that SERS employees do not receive automatic step increases or cost-of-living adjustments.

The committee held a meeting to conduct an internal audit update, which included a review of the Q3 FY2026 Audit Plan, the status of outstanding audit recommendations, and recently completed audits. The committee also reviewed the Internal Audit Strategic Plan for FY2026-FY2029 and the results of a GAP assessment regarding the IIA Global Internal Audit Standards. Executive sessions were held to discuss security matters and the employment of a public employee.

The board meeting agenda and associated minutes covered a range of topics, including the approval of out-of-state board travel and a consent agenda involving investment transactions, retirement reports, and disability benefits. Key discussions included educational sessions on artificial intelligence in investment, annual portfolio reviews of global equities, asset-only optimization, and economic updates. The board also addressed executive director reports on administrative expenses, salary growth information for preliminary budgets, and legislative activity. Furthermore, the documents detailed the annual board workshop, which focused on economic conditions, global growth trends, pension sustainability updates, and the ramifications of mandatory participation in Social Security for public employees.

The committee discussed Q3 service improvements, specifically the implementation and usage statistics of the eSERS live chat feature. The information technology update covered the status of various SMART projects, the Technology Roadmap (TRM) progress, and internal artificial intelligence trials. The risk management segment detailed the completion of a disaster recovery test, the development of an enterprise executive dashboard, the implementation of allow-listing for improved endpoint security, and ongoing enhancements to vendor risk management programs. The meeting also addressed security matters during an executive session.

The meeting featured an Annual Global Equity Portfolio Review focusing on recent allocation changes since 2020, including the transition to long-short positions, repositioning to a global equities portfolio with a single benchmark in 2022, and increasing global mandates in 2025. The strategy also incorporated portable alpha managers in U.S. large cap. An overview of U.S. Economic Conditions and SERS' Investment Performance for the October-December 2025 quarter was presented, noting positive returns for the Total Fund. The Board received an educational session on Capital Market Assumptions from Wilshire Associates regarding 10-year assumed return rates. The Board approved the filing and final filing of amended administrative rules concerning the Contribution Based Benefit Cap (CBBC) to impute contributions for military service, and rules pertaining to federal taxation (SECURE 2.0 Act) and Medicare Part B reimbursement. The SERS Staff Investment Committee approved five new investments across private credit, private equity, and real assets portfolios. Additionally, an education session on actuarial fundamentals was held in preparation for the upcoming five-year experience study. An update on staff compensation included a suggestion for a 2.6% increase to salary ranges for FY2027 budgeting, and notes on the recent Advocacy Group Roundtable and the launch of eSERS Zoom live chat were provided. The Board approved service retirements and survivor benefits for February.