SamCERA

SamCERA stands for the San Mateo County Employees' Retirement Association. SamCERA was founded in 1944 by the Board of Supervisors to provide retirement, disability and death benefits to employees of the County. SamCERA administers these benefits for all permanent employees of the County of San Mateo and the San Mateo Mosquito Abatement District.
SamCERA operates as an independent public agency under authority granted by Article XVI of the Constitution of the State of California California Government Code, the County Employees' Retirement Law of 1937 [commencing with Section 31450 of the Government Code of the State of California (also known as the 1937 Act)] [http://law.justia.com/california/codes/gov/31450-31485.11.html California Government Code Sections 31450-31485.11
Article 1 General] ; and case law applicable to public pension plans.
SamCERA is administered by a nine member Board of Retirement. Two of the Board members are elected by the County & District employees who are General Members of SamCERA, one is elected by the County employees who are Safety Members, one is elected by SamCERA's Retired Members. Please call SamCERA for additional information regarding board member elections. Four additional members are appointed by the County's Board of Supervisors. The County's elected Tax Collector/Treasurer serves as the ninth trustee on the Board of Retirement. The four elected & appointed members serve three year terms.
The Board is currently meeting on the 4th Tuesday of each month.
SamCERA's staff is directed by a Chief Executive Officer who serves at the pleasure of the Board of Retirement. The Chief Executive Officer is a County Employee and SamCERA member who serves under contract to the Board.
The Regulations of the Board of Retirement provide the guidelines for the Board and staff 's administration of the provisions of the law for the permanent employees of the County of San Mateo & the Mosquito Abatement District.
Membership
Membership in SamCERA is mandatory for all permanent full-time and permanent part-time employees of San Mateo County and the San Mateo County Mosquito Abatement District.
Membership is optional for certain elected officials.
An individual entering employment prior to July 1, 1996 shall become a Member of SamCERA on the first day of the first pay period commencing after the date of employment. An individual entering employment on or after July 1, 1996 shall become a Member of SamCERA on the first day of employment.
All employees whose service falls in the following categories shall be excluded from membership in SamCERA: Extra Help, Temporary, Seasonal, Intermittent, members of appointed Boards and Commissions, and Judges of the Superior and Municipal Courts.
Membership Eligibility
Plan 1: Permanent full-time and permanent part-time employees employed on or before July 6, 1980, are eligible for membership in Plan 1.
Plan 2: Permanent full-time and permanent part-time employees, employed after July 6, 1980, and before July 13, 1997, are eligible for membership in Plan 2.
Plan 3: Permanent full-time and permanent part-time employees in a job classification which has not been granted safety status are eligible for membership in Plan 3. Plan 3 members with five consecutive years of service credit may elect to become a member of Plan 2, if employed before July 13, 1997, or of Plan 4, if employed after July 12, 1997. The election is for prospective service only. The term "Plan 2" refers to SamCERA Plan 2 for members employed before July 13, 1997, or to SamCERA Plan 4 for members employed after July 12, 1997.
Plan 4: Permanent full-time and permanent part-time employees, who are employed after July 12, 1997 are eligible for membership in Plan 4.
Membership Classifications
Safety Member: An employee whose principal duties consist of active law enforcement shall be a Safety Member. Certain classifications within the Sheriff's Office, and other agencies have been granted Safety Member status. Safety Members may be enrolled in Plan 1, Plan 2 or Plan 4.
Probation Member: Probation Officers have also been granted Safety benefits. Probation Members may be enrolled in Plan 1, Plan 2 or Plan 4.
General Member: A permanent full-time and permanent part-time employee in a job classification which has not been granted Safety status shall be a General Member. General Members may be enrolled in Plan 1, Plan 2, Plan 3 or Plan 4.
Mission & Goals
Mission
SamCERA exists to serve as Loyal Fiduciary for its members, retirees and beneficiaries and as Prudent administrator of the retirement system.
Goals
Provide caring, fair, accurate, timely and knowledgeable professional service to SamCERA's clients and the public.
Prudently manage the assets and appropriately fund the actuarial liabilities of the retirement system to minimize the costs to its employers, while assuring the ability to pay all earned benefits.
Constantly improve the effectiveness of SamCERA's services and the efficiency of its operations.
Resolution 95-96-05.as amended February 26, 2002
THIS RESOLUTION, adopted by the Board of Retirement (Board) of the San Mateo County
Employees' Retirement Association (SamCERA), sets forth SamCERA's Mission and Goals.
Whereas, Article XVI, '17(a) of the Constitution of the State of California states in part that "the retirement board...shall have plenary authority and fiduciary responsibility for investment of monies and administration of the system...;" &
Whereas, Article XVI, '17(b) of the Constitution of the State of California states in part
that "the members of the retirement board...shall discharge their duties...solely in the interest of, and for the exclusive purpose of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system. A retirement board's duty to its participants and their beneficiaries shall take precedence over any other duty...;" &
Whereas, Article XVI, '17(c) of the Constitution of the State of California states in part
that "the members of the retirement board...shall discharge their duties with respect to the system with the care, skill, prudence, and diligence...a prudent person acting in like capacity and familiar with these matters would use in the conduct of an enterprise of like character and with like aims;" &
Whereas, Government Code '31520 vests the management of SamCERA in the Board; &
Whereas, the Board wishes to define its mission and goals so as to direct its efforts and the efforts of its staff in concert with the spirit of the law. Now, therefore, be it
Resolved, that the Board hereby adopts the following:
Mission
SamCERA exists to serve as Loyal Fiduciary for our Members, Retirees and Beneficiaries; &
to serve as Prudent Administrator of our County's Retirement System.
Goals
To provide caring, fair, accurate, timely and knowledgeable professional
service to our clients and our public.
To prudently manage the assets and appropriately fund the actuarial liabilities of the Retirement System,
so as to minimize the costs to our County,
while assuring our ability to pay all earned benefits.
To constantly improve the effectiveness of our services and
the efficiency of our operations.
Be it further Resolved, that the Board hereby agrees, and directs the Retirement Administrator, to adhere to the principles set forth herein in the management of the resources of the Association.
ADOPTED by unanimous vote, August 25, 1995
Amended by unanimous vote February 20, 2002
Attest:
Tom E. Bryan, Secretary
Strategic Services
Board Responsibilities and Strategic Services
Resolution 95-96-06, as amended February 26, 2002
THIS RESOLUTION, adopted by the Board of Retirement (Board) of the San Mateo County
Employees' Retirement Association (SamCERA), sets forth the Board's Responsibilities & Strategic Staff Services.
Whereas, Government Code '31520 vests the management of SamCERA in the Board; &
Whereas, Resolution 95-96-05 defines the Board's mission and goals; &
Whereas, the Board wishes to direct its efforts and the efforts of its staff in concert with the spirit of the law and the Board's Mission and Goals. Now, therefore, be it Resolved, that the Board hereby adopts the following:
Board Responsibilities
* Grant Earned Benefits & Provide for the Disbursement of those Benefits
* Provide for the Investment & Safekeeping of Retirement Fund Assets
* Assure the Actuarial Soundness of the System
* Establish & Arrange for the Collection of Contributions
* Manage the Association & System in accordance with the Law
* Define Fiduciary & Ministerial Responsibilities and Effectively Delegate them to, & Monitor the performance of, Designated Fiduciaries
* Select & Monitor the Performance of Designated Fiduciaries, including but not limited to investment managers, consultants and other advisors
* Approve & Monitor Internal Controls & Audit Programs
Staff Strategic Services
MEMBER BENEFIT & ACTUARIAL SERVICES
* Implement the Benefit Services Plan, including individual member counseling
* Establish Eligibility & Process Applications for Membership & Benefits
* Provide for & Monitor Payment of Benefits & Refunds
* Accurately Maintain & Monitor Member & Benefit Databases
* Provide Timely, Accurate & Useful Services, Reports & Recommendations for Members, Retirees, Beneficiaries & the Board
INVESTMENT MANAGEMENT SERVICES
* Implement the Investment Plan
* Monitor Manager & Custodial Activity
* Project & Monitor Retirement Fund Cash Flows
* Provide Timely, Accurate & Useful Reports & Recommendations to the Board
BOARD SUPPORT SERVICES
* Faithfully execute the Duties & Responsibilities Delegated by the Board
* Support the Board in its execution of its Powers & Duties
* Provide Timely, Accurate & Useful Information & Recommendations to the Board
* Direct the Benefits, Investments & Management Services Programs
* Provide Member Education, Public Information & Inter-Agency Services
* Propose, Implement & Monitor Internal Control Systems
MANAGEMENT SERVICES
* Implement the Management Services Plan, including Human Resources, Information Systems,
* Fiscal, Accounting, Analytical, Facilities & Support Services
* Manage Contracts
* Maintain liaison with providers of County support services
* Direct Catastrophe Recovery Planning Be it further
Resolved, that the Board hereby expresses its intent to review annually the responsibilities and strategic services set forth herein.
ADOPTED by unanimous vote, August 25, 1995
Amended by unanimous vote, September 19, 1996
Amended by unanimous vote, February 20, 2002
Attest:
Tom E. Bryan, Secretary
Investments
SamCERA's Investment Program
SamCERA exists to provide present and future retirement, disability and survivor benefits to our members and their beneficiaries. The funding of SamCERA assumes that most of the cost of benefits will be paid from investment earnings. It is estimated that in a typical pension plan more than 80% of the total cost of benefits will be paid from investment earnings. Without these earnings, employer and employee contributions would have to increase in order to maintain the current retirement benefit levels.
Board of Retirement Governance
The Board of Retirement has exclusive control to manage and invest SamCERA's assets. Authority for the investment program is granted by Article XVI of the Constitution of the State of California, the California County Employees’ Retirement Law of 1937 and the Board of Retirement’s Resolutions and Regulations. A partial statement of the Board’s authority is found in Article XVI, §17 of the Constitution of the State of California which was amended by the electorate in 1992 to read, in pertinent part, as follows:
Notwithstanding any other provisions of law or this Constitution to the contrary, the retirement board of a public pension or retirement system shall have plenary authority and fiduciary responsibility for investment of moneys and administration of the system, subject to all of the following:
(a) The retirement board-shall have the sole and exclusive fiduciary responsibility over the assets of the ... system. The retirement board shall also have sole and exclusive responsibility to administer the system in a manner that will assure prompt delivery of benefits and related services to the participants and their beneficiaries. The assets ... are trust funds and shall be held for the exclusive purposes of providing benefits to participants ... and their beneficiaries and defraying reasonable expenses of administering the system.
(b) The members of the retirement board ... shall discharge their duties with respect to the system solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the system. A retirement board's duty to its participants and their beneficiaries shall take precedence over any other duty.
(c) The members of the retirement board ... shall discharge their duties with respect to the system with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aims.
(d) The members of the retirement board...shall diversify the investments of the system so as to minimize the risk of loss and to maximize the rate of return, unless under the circumstances it is clearly not prudent to do so.
(e) The retirement board..., consistent with the exclusive fiduciary responsibilities vested in it, shall have the sole and exclusive power to provide for actuarial services in order to assure the competency of the assets of the system ...
SamCERA's investment program is designed to generate investment earnings over an extended time horizon to fund the cost of benefits while minimizing investment risk. All investment transactions are undertaken for the sole benefit of members and their beneficiaries. By establishing a well-structured Investment Plan the Board of Retirement has strengthened control over the achievement of those objectives.
SamCERA's Investment Objectives
* Generate Portfolio returns, which over the long-term, exceed the rate of inflation by not less than 3.25%, by generating market returns within each asset class.
* Generate Portfolio returns not less than the returns of a commitment-weighted aggregate of the performance benchmarks specified for the individual investment managers.
* Provide for the full funding of the Pension Benefit Obligation by the year 2012.
* Stabilize the employer contribution rate, as a percentage of payroll, for the present configuration of benefits, to the extent that the Board of Retirement has control.
* Structure an investment program such that the short-term volatility of returns does not induce the Board to alter its long-term asset allocation strategies, by striving for an annualized tracking error around the aggregate benchmark of ±3%.
SamCERA's Investment Management Team
Investment Team Strategy Summaries
Aberdeen Asset Management - Core Fixed Income
http://www.aberdeen-asset.com/
Aberdeen Asset Management’s approach is bottom up, looking for relative value among specific issues. The Core Fixed Income investment process is duration neutral and relies on credit exposure as the primary means of adding value. Fundamental credit research requires knowledge of the underlying credit and identification of pricing inefficiencies uncovered through proprietary research. They focus on high quality issues, maintaining an average AA quality in the portfolio.
The investment process also stresses a detailed knowledge of a bond’s structure, in particular options and prepayment characteristics. The bond selection process typically identifies securities with more predictable cash flows. Yield curve positioning is diversified, and bets along the yield curve tend to be modest. The bottom up process can lead to heavy sector concentrations, particularly in corporates. The process incorporates the use of taxable municipal securities which is unusual
among US fixed income managers.
Barclays Global Investors - Alpha Tilts Russell 1000
http://barclaysglobal.com/
Barclays Global Investors (BGI) uses a quantitative, disciplined, risk-controlled approach to portfolio management. BGI’s Russell 1000 Alpha Tilts investment
philosophy strives to achieve superior returns through the management of returns, risks and cost. Specifically, Russell 1000 Alpha Tilts seeks to provide 1-2% alpha over the Russell 1000 with tracking error of less than 2% a year. The Russell 1000 Alpha Tilts investment strategy seeks to capture market inefficiencies by overweighting undervalued stocks and underweighting overvalued stocks. This tilt towards or away from securities is based on fundamental data as well as analyst expectations and corporate activities. The optimized portfolio holds between 300 and 400 U.S. securities and maintains capitalization characteristics similar to the Russell 1000 benchmark.
Barclays Global Investors - Russell 1000 Index
http://barclaysglobal.com/
Barclays Global Investors (BGI) uses a full replication approach. They hold each stock in the same proportion in which it is represented in the Russell 1000 Index.
BGI monitors the funds daily to ensure that additions and deletions to the Russell 1000, mergers and acquisitions, restructurings and other capitalization changes are made to the fund in such a way to minimize tracking error and transactions costs.
Brandes Investment Partners - US Small Cap Value Equity
http://www.brandes.com/
Brandes is a bottom-up, Graham & Dodd, value-oriented, equity manager. The firm’s philosophy is based on the premise that stock prices are more volatile than the underlying intrinsic value of businesses. The key to success, in their view, is to buy stocks of businesses which have determinable value, but which are unpopular or overlooked at the moment. The process focuses on the fundamental characteristics of a company in order to develop an estimate of its intrinsic value. Brandes chooses stocks that they believe are selling at a substantial discount to internal estimates of their intrinsic business value and offer a margin of safety. Brandes’ Investment Committee makes all portfolio decisions as a team. The US Small Cap Value Equity portfolio holds 45-75 stocks and is subject to diversification constraints. Stocks typically have a market capitalization of less than $1.5 billion at time of purchase. This product is closed to new investors.
Chartwell Investment Partners - Small Cap Growth
http://www.chartwellip.com/
Chartwell’s Small Cap Growth product strives to hold stocks with strong fundamentals that are best positioned for rapid growth. These businesses typically demonstrate strong increases in earnings per share. Chartwell invests in these securities with an intermediate time horizon in mind. They initiate investments opportunistically and when stocks are attractively valued. Chartwell focuses on high growth companies that lie in the middle of the momentum and growth at a reasonable price continuum, and construct Small Cap Growth portfolios with fairly low tracking errors. Portfolios contain 50-70 stocks with market capitalizations between $200 million and $2.5 billion at purchase. Meetings with management are an important part of the investment process. This product is closed to new investors.
Goldman Sachs Asset Management - Structured US Small Cap
http://www2.goldmansachs.com/client_services/asset_management/index.html
Goldman Sachs Asset Management’s (GSAM’s) Structured US Small Cap approach attempts to add value through stock selection. The goal is to outperform the index by overweighting the stocks that are most likely to beat the benchmark, while underweighting the stocks that they believe are least likely to beat the benchmark. The process combines fundamental analysis with quantitative modeling. The objective is to run a portfolio that looks very much like the benchmark in terms of sector weights and risk characteristics, but to earn positive excess returns by making many small security level bets vis-à-vis the index. GSAM regularly reviews the inputs of its multifactor model and continually updates the model. GSAM constructs the Structured US Small Cap portfolio using its own proprietary optimization program which measures the same risk and return attributes. Portfolios are broadly diversified with 500-600 stocks.
INVESCO Realty Advisors - INVESCO Core Equity, LLC
http://www.institutional.invesco.com/
SamCERA is a founding member of INVESCO’s open end Core Equity real estate fund and rolled its separate account properties into the fund. INVESCO Core
Equity, LLC (the “Fund”) is a perpetual life, open-end vehicle which invests in a diversified portfolio of institutional quality office, retail, industrial and multifamily residential real estate assets. The Fund buys core properties that are located within the United States, typically requiring an investment of $10 million or more.
The portfolio cannot be more than 30% leveraged.
Julius Baer Investment Management - International Equity
http://www.juliusbaer.com/
Julius Baer’s investment philosophy is that a well diversified international equity portfolio provides better risk-adjusted returns than a concentrated portfolio.
Overall, the approach can be characterized as flexible with regard to style, market cap, country and sector weightings, and cash exposure; but disciplined with regard to security diversification. The investment process is based on fundamental assessment of companies, sectors and macroeconomic influences on regions and countries. The process is both top down and bottom up. In emerging countries and, to some degree in Japan, investment ideas are driven by the team’s view of factors such as GDP growth rates, political issues, interest rates and currencies. However, in the developed markets, traditional fundamental security analysis and industry analysis are the primary drivers of stock selection. The analysts employ multiple valuation metrics depending on what is most appropriate for a given sector. They also consider growth factors at a country, industry and stock level. The portfolio typically invests 5%-15% in emerging markets and 10% in smaller capitalization stocks but at any given time the exposure to these asset classes can vary substantially. While the managers do not entirely ignore the benchmark, country and sector weightings can also diverge quite sharply from the index. The main risk control is diversification at the security level with the number of portfolio holdings at approximately 300 names. This product is closed to new investors.
Mondrian Investment Partners - International Equity
http://www.mondrian.com/
Mondrian is a value-oriented, defensive manager whose investment philosophy is based on the principle that investments must be evaluated for their fundamental long-term value. The firm’s philosophy involves three stated investment objectives: 1) provide a rate of return meaningfully greater than the client’s domestic rate of inflation, 2) structure client portfolios that preserve capital during protracted international market declines, and 3) provide portfolio performance that is less volatile than benchmark indices and other international managers. Mondrian applies typical value screening criteria to a universe of 1,500 stocks, from which 500 are selected for more detailed work. Through fundamental research, and the deliberations of the Investment Committee, the universe is further reduced to a list of 150 stocks. The investment team conducts detailed fundamental analysis on the remaining stocks, a process which includes applying the firm’s dividend discount model consistently across all markets and industries. Mondrian also uses a purchasing power parity model to give an accurate currency comparison of
the value of the stocks under consideration. The firm will only consider buying stocks in countries with good investor protection practices and relatively simple repatriation procedures. A computer based optimization program is employed in the portfolio construction process. Mondrian’s portfolio holds 80-125 issues.
Pyramis Global Advisors - Broad Market Duration Commingled Pool
http://www.pyramis.com/
Pyramis’ Broad Market Duration (BMD) investment strategy seeks to achieve absolute and risk-adjusted returns in excess of the Lehman Aggregate Index,
focusing its investments in US Treasuries, agencies, investment grade corporate bonds, mortgage-backed and asset-backed securities. The BMD commingled pool can also hold small, opportunistic positions in out-of-benchmark securities, such as inflation-linked bonds. The investable universe includes all US dollar denominated, investment grade debt securities. The BMD investment approach emphasizes issuer and sector valuation and individual security selection. Through the integration of fundamental and quantitative research and trading, the BMD strategy is implemented in a team environment. Risk management technology is utilized to explicitly quantify benchmark exposures on a daily basis, and Pyramis uses the same analytical framework to assess both index and portfolio risk.
Tracking error should range between 40 and 60 basis points per annum over the benchmark, and stringent portfolio construction risk control rules are strictly adhered to.
Western Asset Management - U.S. Core Full Discretion
http://www.westernasset.com/
Western Asset’s investment philosophy has three key components. First, as sector rotators, the firm seeks out long term value by fundamentally analyzing all sectors of the fixed income market. Second, Western employs multiple strategies, proportioned so that no single adverse market event would have an
overwhelming negative impact on performance. The third component of the investment philosophy is opportunistic trading. Western Asset adds value with
opportunistic trades that attempt to exploit market inefficiencies. Non-US investment grade sovereigns, high yield and emerging market debt securities are used opportunistically in this approach. Western uses a team approach to portfolio management with duration, term structure, and sector allocation decisions developed by the Investment Strategy Group. The Research Group employs these determinations as they look for issues and issuers that are appropriate for the firm’s eligible universe. Factors such as relative credit strength, liquidity, issue structure, event risk, covenant protection, and market valuation are central to its inquiries. Throughout this process, the Portfolio Management Group provides both teams with a picture of key capital markets. The Portfolio Management Group is also responsible for portfolio structuring and implementation. The U.S. Core Full Discretion portfolio holds between 40-60 issues and can hold up to 20% in high yield and 20% in non-US exposure. The portfolio’s 10% maximum weight in emerging debt securities is counted towards the 20% maximum non-US exposure.
STATE STREET CALIFORNIA
http://www.ssga.com/
The Board retained State Street to serve as Global Custodian for SamCERA's Assets effective July 1, 1999.
Funding
Introduction:
SamCERA is responsible for the actuarial soundness of San Mateo County’s and the Mosquito Abatement District’s defined benefit pension programs for their permanent employees.
The Actuary:
SamCERA’s Board of Retirement retains the services of an independent actuary, Mercer Human Resources Consulting. Mercer evaluates SamCERA’s actuarial assets and liabilities and makes recommendations that assure that SamCERA will be able to pay all earned benefits to our members at an optimum cost to their employers.
The actuary uses statistical and econometric tools to construct a three-dimensional model of SamCERA’s Actuarial Assets, Liabilities and Future Contributions.
The actuary studies
(1) the life expectancy of each of SamCERA’s members and their beneficiaries,
(2) the probability that the member will remain in service and eventually retire with a monthly benefit,
(3) the probability that the member will become disabled on the job or off,
(4) the member’s projected salary increases,
(5) the potential growth in the employers’ payrolls,
(6) the potential return on SamCERA’s investments,
(7) the outlook for inflation,
(8) the retiree’s projected cost of living increases, and
(9) a myriad of other factors.
The actuary takes all of this information and, like the alchemists of old, stirs it up in a big computerized kettle.
The sum of SamCERA’s Pension Promises minus SamCERA’s Assets equals Future Contributions. When the actuary is done, he recommends what the next year’s Contribution Rates should be in order to keep SamCERA actuarially sound.

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