A Conversation With ... Janell Manley

What is your role?
Well, it’s a role that’s never been filled before, so it’s kind of (evolving) as we go. I’m a contract employee. Basically, I work for the board and help them come up with possible new investment options. I’m the contact point for the participants and their spouses, if they have questions on the plan. Basically, I serve at the board’s leisure. We just finished updating our investment policy statement. They’re trying to consolidate everything so the director can be the point of contact for any questions on the plan.

The pension fund reached its lowest funding level – 28.5 percent with $90 million – in 2009, the same year that voters approved a 3/4-cent sales tax to bolster the fund. Where is the fund now and what’s the goal?
We’d like to be at 100 percent funded. (The fund) is closed to new hires, which, I believe is anything after 2006. Currently, we have more retirees than we do active people putting into the fund. Our retiree participants are about 55 percent. So you have fewer people putting in and more people taking retirement benefits out. We are currently 54 percent funded, so the tax has helped immensely, but we have a lot of work still to do. At the end of March, it was $207 million, which is a good step forward. Based on the last actuarial study, we need a minimum of about $350 million in assets, and that changes every year.

What options are available for shoring up the plan?
We have the employees’ money, the employer contributions and earnings on investments. So what we have to do is try to get our earnings on the investments up without extending too much risk. Part of our investment policy that we’re revising is that we’d like to eliminate some of the volatility in our investments. We’d like to enhance returns without assuming the total risk of the stock market. This is a defined benefit plan, which means that the employer – in this case the board of trustees – decides what is invested in, and they take care of monitoring those investments.

What investment vehicles are attractive in terms of eliminating volatility?
We just added commodities as part of our alternative category, and the board has approved, though we haven’t invested yet, Treasury Inflation-Protected Securities, which are inflation-related bonds. There’s not as much risk in those, but you do have a guaranteed return. But right now, it’s so low, you have to buffer that with some stock market.

The 2009 tax sunsets in 2014. Then what?
We’re going to set up a subcommittee of the board to look at what we want to do for the future, to make recommendations to the board and to City Council as to how we want to proceed. (Extending the tax) is certainly a possibility, yes, looking at where we have to be, looking at the investments, unless investments start coming in at 20 percent to 30 percent guaranteed, which isn’t going to happen. So we have to look at other alternatives. The pension language in the ordinances that were passed call for the tax to sunset, or 100 percent funding, whichever comes first. So we’ll have to look at the possibility of renewing that tax.

Do you know the average age of plan enrollees?
No, but the youngest (enrollee) we’re aware of is Adam Carter, who is on the board as a Fire representative, and I believe he’s 28. So we could possibly have another 60 years, and we have to plan for that. (The pension fund) isn’t something that’s going to end in 2020 or 2030 or 2040. We have to plan for 50 to 60 years minimum.