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PORTFOLIO REVIEWLittleton Public SchoolsElizabeth Stemper, AIF , QPFCPeter MustianRyan MurphyPrepared by: John Brock4643 S Ulster Street Suite 1040 Denver, CO 80237 303.694.1900 innovestinc.com2Q19
INNOVEST FIRM UPDATE2018 in Review––––A great year for growth at InnovestWon “Best Places to Work” by Pensions & Investments (4th time in 5 years)Named ColoradoBiz magazine’s Top Company in the Financial Services category6 new hires –2 new principals ––Ended year with 46 employeesKristy LeGrande and Nancy SwansonLaunched NexGen to develop the next generation of leadersHave maintained a 97% five-year average client retention rateClient Survey–––Overall satisfaction with our services was 4.7 (1-5 scale)Highest scores Treatment by our entire team: 4.8 Knowledge and experience of our consultants: 4.8Lowest score Timeliness of the delivery of our services: 4.62019 Priorities–––Continue to provide the highest quality investment advice to our clientsFocus on serving our clients by being thoughtful stewardsGrow our business through client referrals2 2019 INNOVEST PORTFOLIO SOLUTIONS, LLC
INNOVEST’S HISTORY WITH LITTLETON PUBLICSCHOOLS2014-2017 Signed contract between LPS and Innovest Portfolio Solutions,LLC in the 4th Quarter of 2014Negotiated new contract with TIAA after RFI processAssisted with conversionCreated new investment menuCoordinated the education efforts of the rolloutDesigned custom model portfolios as education tool for assetallocation.Replaced money market fund due to money market reforms.2018 Replaced Blackrock Mid Cap Value fund with VanguardSelected Value fund.Conducted Fiduciary Education and share class review.Presented annual asset allocation studyPresented Share Class review in 1Q18Presented Ann Schleck in 1Q18Presented IPS in 2Q18Added Vanguard 2060 Target RetirementReviewed the asset allocation studies for the educationmodels, no changes were made to the asset allocations 4Q182019 Performed annual share class review 1Q19Effective August 12, 2019 changing share classes for theMetropolitan West total Return from MWTIX to MWTSX3
TOPICS AND TRENDS – REGULATORY UPDATEThe SECURE Act of 2019 – Setting Every Community Up for Retirement Enhancement Passed by the House in May 2019, Senate expected to vote this summer Provisions Impacting Plan Sponsors –Allowing long-term part-time workers to participate in retirement plans–Simplification of Safe Harbor rules for 401(k) plans–Update fiduciary safe harbor for selection of a lifetime income annuity provider–Ability to raise auto-escalation cap of EE’s contributions from 10% to 15%–Require annual lifetime income disclosure for DC plans–Increased availability of multi-employer plans (MEPs)Provisions Impacting Individuals–Age of required minimum distributions increased from 70.5 to 72 years.–Repeal of maximum age for IRA contributions–Penalty free withdrawals up to 5,000 for the birth of a child or adoption–Penalty free withdrawals from 529 plans to repay some student loans–Removal of “stretch” inherited IRA provisions4 2019 Innovest Portfolio Solutions, LLC
TOPICS AND TRENDS – REGULATORY UPDATESEC’s Final Regulation Best Interest, But Still Not Up To Fiduciary Standard Requires brokers and broker dealers to act in client’s best interest when making investmentrecommendation by abiding by four basic obligations: Disclosure – provide disclosure at or before recommendation Duty of Care – exercise reasonable diligence, care and skill in makingrecommendations Conflicts of Interest – establish and enforce policies addressing conflicts of interest Compliance – establish and enforce policies and procedures to achieve compliancewith regulation Applies to recommendations from rollovers and IRAs. Implementing Form Customer/Client Relationship Summary (CRS) - increased disclosure The DOL Fiduciary Ruling was vacated in 2018, but Labor Secretary stated the DOL isworking with the SEC to resurrect the fiduciary rule.5 2019 Innovest Portfolio Solutions, LLC
LITTLETON PUBLIC SCHOOLS 401(a) PLAN SUMMARYCurrent StructureConsiderations and Next StepsPlanProvisions Littleton Public Schools Defined Contribution Retirement PlanVesting Schedule: ImmediateEligibility Requirements: EmploymentRoth: N/ASafe Harbor: N/ANormal Retirement Age: 65 yearsGovernance IPS Updated: June 2019Governance Documents:Plan Documents: Established April 2, 1996, Amended and effective July 1, 2012Fiduciary Education: March 2018Recordkeeper Contract: TIAA, May 13, 2006, amended 2015Innovest Contract: December 2014 Contribution Rate: Dependent on employee classification: Superintendant – Perannual employment contract; Superintendent staff: 2.5% 7,496.64;Administrators: 2.5% 1,300; Administrative Staff 2.5%; Technical support 2.0%Match Provision: N/AEnrollment: MandatoryDistributions Loans: NoHardships: NoInstallments: YesIn-Service Withdrawals: NoCosts Plan Expenses Paid by: Revenue Sharing: Yes 0.42% rev. req. – excess revenue sent to revenuecredit accountAnnual Fee Review: 1Q19Competitive Pricing Analysis: April 2015Other Fees: : Brokerage feesShare Class Review: 1Q19Investments Investment Direction: ParticipantNumber of Investment Options: 18QDIA/DIA: Yes, age-appropriate target date fundRe-enrollment: NoManaged Accounts: NoSelf-Directed Brokerage Window: YesGMWB Options: TIAA TraditionalEducation Participant Education Plan: TIAA – 27 days of on-site educationContributionsAnnual deliverables are listed in ORANGE.IPS review scheduled for 2Q reviewFiduciary Education scheduled for 3Q reviewFee Review update scheduled for 1Q reviewShare Class Review update scheduled for 1Q reviewAsset Allocation Study scheduled for 4Q review6
LITTLETON PUBLIC SCHOOLS 403(b) PLAN SUMMARYCurrent StructureConsiderations and Next StepsPlanProvisions Littleton Public Schools Tax-Deferred Annuity PlanVesting Schedule: ImmediateEligibility Requirements: Immediately EligibleRoth: Yes, effective July 1, 2017Safe Harbor: NoNormal Retirement Age: 65 yearsGovernance IPS Updated: June 2019Governance Documents:Plan Documents: Effective: July 1 1983; amended and restated January 1, 2015Fiduciary Education: March 2018Recordkeeper Contract: TIAA, May 13, 2006, amended 2015Innovest Contract: December 2014Contributions Contribution Rate: EE - voluntary up to 19,000; catch-up contribution up to 6,000Match Provision: Yes, discretionary set by PERAEnrollment: Participant ElectedAutomatic Enrollment: NoAuto-Escalation: NoDistributions Loans: YesUnforeseen Emergencies: YesInstallments: YesIn-Service Withdrawals: Yes at age 59.5Costs Plan Expenses Paid by: Revenue Sharing: Yes 0.42% rev. req. – excess revenue sent to revenuecredit accountAnnual Fee Review: 1Q19Competitive Pricing Analysis: April 2015Other Fees: : Brokerage FeesShare Class Review: 1Q19Investments Investment Direction: ParticipantNumber of Investment Options: 18QDIA/DIA: Yes, age-appropriate target date fundRe-enrollment: NoManaged Accounts: NoSelf-Directed Brokerage Window: YesGMWB Options: TIAA TraditionalEducation Participant Education Plan: TIAA – 27 days of on-site educationFiduciary Education scheduled for 3Q reviewFee Review update scheduled for 1Q reviewShare Class Review update scheduled for 1Q reviewAsset Allocation Study scheduled for 4Q review7Annual deliverables are listed in ORANGE.IPS review scheduled for 2Q review
LITTLETON PUBLIC SCHOOLS 457(b) PLAN SUMMARYCurrent StructureConsiderations and Next StepsPlanProvisions Littleton Public Schools 457(b) Deferred Compensation PlanVesting Schedule: ImmediateEligibility Requirements: Immediately EligibleRoth: Yes, effective July 1, 2017Safe Harbor: N/ANormal Retirement Age: Combination of age years of service credit specified byPERAGovernance IPS Updated: June 2019Governance Documents:Plan Documents: Effective: July 1, 2002; restated July 1, 2005; restated July 1, 2008,amended November 2015Fiduciary Education: March 2018Recordkeeper Contract: TIAA, May 13, 2006, amended 2015Innovest Contract: December 2014Contributions Contribution Rate: EE – voluntary up to 19,000; catch up contribution up to 6,000Match Provision:Enrollment: Participant ElectedAutomatic Enrollment: NoAuto-Escalation: NoDistributions Loans: NoUnforeseen Emergencies: NoInstallments: YesIn-Service Withdrawals: NoCosts Plan Expenses Paid by: Revenue Sharing: Yes 0.42% rev. req. – excess revenue sent to revenuecredit accountAnnual Fee Review: 1Q19Competitive Pricing Analysis: April 2015Other Fees: : Brokerage FeesShare Class Review: 1Q19Investments Investment Direction: ParticipantNumber of Investment Options: 18QDIA/DIA: Yes, age-appropriate target date fundRe-enrollment: NoManaged Accounts: NoSelf-Directed Brokerage Window: YesGMWB Options: TIAA TraditionalEducation Participant Education Plan: TIAA – 27 days of on-site educationAnnual deliverables are listed in ORANGE.IPS review scheduled for 2Q reviewFiduciary Education scheduled for 3Q reviewFee Review update scheduled for 1Q reviewShare Class Review update scheduled for 1Q reviewAsset Allocation Study scheduled for 4Q review8
Littleton Public Schools Combined Annual Fee ReviewPlan assets as of 3/31/2019 Plan12,486,456Benchmark*Similarly SizedInvestment, Recordkeeping and Administrative Costs0.63%1.06%Estimated Total Plan Expenses0.86%N/AEmployer PaidProviderExpense ratio retained by fund managerRevenue sharing sent to recordkeeperFee (in )Employee PaidFee (in %)Fee (in )TotalFee (in %)Fee (in )Fee (in %)Fund Managers 26,3390.21% 26,3390.21%TIAA 2,7600.02% 2,7600.02% 29,0990.23% 29,0990.23%Gross Investment Management Fees -0.00% 49,6830.40% 49,6830.40%Gross Recordkeeping and Administrative Fees -0.00% 49,6830.40% 49,6830.40%Total Investment, Recordkeeping and Administrative Costs -0.00% 78,7820.63% 78,7820.63% 29,1870.23% 29,1870.23% 29,1870.23% 107,9680.86%Recordkeeping/Administration FeeInvestment ConsultantTIAAInnovestTotal Plan Expenses 78,7820.63%*The plan's estimated investment, recordkeeping and administrative costs of 0.63% as shown above, compare favorably to 401(k) Source data, auniverse of 65 similarly sized 401(k) plans with an average investment, recordkeeping and administrative cost of 1.06%.This review illustrates estimated plan costs based on available data.9
401(a) Retirement Plan Statistics and Menu CoverageIndustry Averages*Plan AveragesAverage Number Investment Options19Number Investment Options18Average Contribution Rate5.5%/7.0%*Average Contribution RateNAAverage Account Balance 114,465Average Account Balance 21,501*Contribution rate for low er compensated/higher compensated employees as defined by ADP testsSource: PCSA's 59th Annual Survey of Profit Sharing and 401(k) Plans (2015)Menu CoverageTarget Date PortfoliosTIER 1Vanguard TargetRetirement IncomeVanguard TargetRetirement 2035Vanguard TargetRetirement 2040Cash EquivalentsVanguard FederalMoney MarketVanguard TargetRetirement 2045Vanguard TargetRetirement 2025Vanguard TargetRetirement 2050Domestic EquityCoreGrowthDodge & Cox StockVanguard S&P 500IndexHarbor CapitalAppreciationVanguard SelectedValueVanguard Mid CapIndexJanus HendersonEnterpriseDFA U.S. Small Cap Vanguard Small CapValueIndexValueAmerican BeaconInternationalInternational EquityCoreVanguard TotalInternational StockIndex10Vanguard TargetRetirement 2030Vanguard TargetRetirement 2055LargeValueSmallTIER 2Vanguard Total BondMarket IndexVanguard TargetRetirement 2020MidFixed IncomeMetropolitan WestTotal Return BondVanguard TargetRetirement 2015Vanguard TargetRetirement 2060SpecialtyTIAA-CREF SocialChoice EquityVoya Small CapOpportunitiesGrowthAmerican FundsEuropacificStable ValueTIAA TraditionalRetirement Choice
403(b) & 457 Retirement Plan Statistics and Menu CoverageIndustry Averages*Plan AveragesAverage Number Investment Options19Number Investment OptionsAverage Contribution Rate5.5%/7.0%*Average Account Balance 114,46518Average Account Balance-403(b) 29,623Average Account Balance-457 46,768*Contribution rate for low er compensated/higher compensated employees as defined by ADP testsSource: PCSA's 59th Annual Survey of Profit Sharing and 401(k) Plans (2015)Menu CoverageTarget Date PortfoliosTIER 1Vanguard TargetRetirement IncomeVanguard TargetRetirement 2035Vanguard TargetRetirement 2040Fixed IncomeVanguard FederalMoney MarketVanguard TargetRetirement 2045Vanguard TargetRetirement 2025Vanguard TargetRetirement 2050Domestic EquityCoreGrowthDodge & Cox StockVanguard S&P 500IndexHarbor CapitalAppreciationVanguard SelectedValueVanguard Mid CapIndexJanus HendersonEnterpriseDFA U.S. Small Cap Vanguard Small CapValueIndexValueAmerican BeaconInternationalInternational EquityCoreVanguard TotalInternational StockIndex11Vanguard TargetRetirement 2030Vanguard TargetRetirement 2055LargeValueSmallCash EquivalentsVanguard TargetRetirement 2020MidVanguard Total BondMarket IndexTIER 2Metropolitan WestTotal Return BondVanguard TargetRetirement 2015Vanguard TargetRetirement 2060SpecialtyTIAA-CREF SocialChoice EquityVoya Small CapOpportunitiesGrowthAmerican FundsEuropacificStable ValueTIAA Traditional
Asset Allocation - 401(a)Asset AllocationAsset AllocationMar-2019( )%Jun-2019( )Large Cap EquityDodge & Cox StockVanguard S&P 500 IndexHarbor Capital AppreciationTotal Large Cap ,065243,34994,785364,1980.706.542.559.79Mid Cap EquityVanguard Selected ValueVanguard Mid Cap IndexJanus Henderson EnterpriseTotal Mid Cap 375,650103,698121,7860.330.152.793.27Small Cap EquityDFA US Small Cap ValueVanguard Small Cap IndexVoya Small Cap OpportunitiesTotal Small Cap 9851,0490.361.020.001.37SpecialtyTIAA-CREF Social Choice40,6791.1142,1711.13International EquityAmerican Beacon Intl EquityVanguard Total Intl Stock IndexAmerican Funds EuroPacific GrTotal International ,196140,45047,443215,0890.733.781.285.78Fixed IncomeMet West Total ReturnVanguard Total Bond Market IdxTotal Fixed S 401(a) Total FundMar-2019( )%%Stable ValueTIAA Traditional Annuity Retirement et Date FundsVanguard Target Retirement IncomeVanguard Target Retirement 2015Vanguard Target Retirement 2020Vanguard Target Retirement 2025Vanguard Target Retirement 2030Vanguard Target Retirement 2035Vanguard Target Retirement 2040Vanguard Target Retirement 2045Vanguard Target Retirement 2050Vanguard Target Retirement 2055Vanguard Target Retirement 2060Total Target Date 1.180.210.0171.52LPS 401(a) Total Fund3,653,397100.003,719,698100.00Cash & EquivalentsVanguard Federal Money Market12Jun-2019( )%
Asset Allocation - 403(b)Asset AllocationAsset AllocationMar-2019( )%Large Cap EquityDodge & Cox StockVanguard S&P 500 IndexHarbor Capital AppreciationTotal Large Cap EquityJun-2019( 12,351734,571264,4871,111,4091.6410.733.8716.24Mid Cap EquityVanguard Selected ValueVanguard Mid Cap Index JanusHenderson EnterpriseTotal Mid Cap ,60155,727307,063395,3910.480.814.495.78Small Cap EquityDFA US Small Cap ValueVanguard Small Cap IndexVoya Small Cap OpportunitiesTotal Small Cap A-CREF Social Choice Equity112,3591.74119,2451.74International EquityAmerican Beacon Intl EquityVanguard Total Intl Stock IndexAmerican Funds EuroPacific GrTotal International 8,520260,701177,535496,7560.863.812.597.26Fixed IncomeMet West Total ReturnVanguard Total Bond Market IdxTotal Fixed Littleton Public Schools 403(b)Mar-2019( )%%Stable ValueTIAA Traditional Annuity Retirement Choice rget Date FundsVanguard Target Retirement IncomeVanguard Target Retirement 2015Vanguard Target Retirement 2020Vanguard Target Retirement 2025Vanguard Target Retirement 2030Vanguard Target Retirement 2035Vanguard Target Retirement 2040Vanguard Target Retirement 2045Vanguard Target Retirement 2050Vanguard Target Retirement 2055Vanguard Target Retirement 2060Total Target Date 912.580.090.0450.99LPS 403(b) Total Fund6,455,725100.006,843,108100.00Cash & EquivalentsVanguard Federal Money Market13Jun-2019( )%
Asset Allocation - 457Asset AllocationAsset AllocationMar-2019( )%Large Cap EquityDodge & Cox StockVanguard S&P 500 IndexHarbor Capital AppreciationTotal Large Cap EquityJun-2019( ,489140,251422,142702,8825.785.7717.3628.90Mid Cap EquityVanguard Selected ValueVanguard Mid Cap Index JanusHenderson EnterpriseTotal Mid Cap 16,34647,51665,0860.050.671.952.68Small Cap EquityDFA US Small Cap ValueVanguard Small Cap IndexVoya Small Cap OpportunitiesTotal Small Cap EF Social Choice Equity38,2841.6140,6881.67International EquityAmerican Beacon Intl EquityVanguard Total Intl Stock IndexAmerican Funds EuroPacific GrTotal International 99265,69221,746116,4301.192.700.894.79Fixed IncomeMet West Total ReturnVanguard Total Bond Market IdxTotal Fixed S 457 Total FundMar-2019( )%%Stable ValueTIAA Traditional Annuity Retirement Choice Plus152,4756.41145,0155.96Cash & EquivalentsVanguard Federal Money Market258,39110.87260,06610.69Target Date FundsVanguard Target Retirement IncomeVanguard Target Retirement 2015Vanguard Target Retirement 2020Vanguard Target Retirement 2025Vanguard Target Retirement 2030Vanguard Target Retirement 2035Vanguard Target Retirement 2040Vanguard Target Retirement 2045Vanguard Target Retirement 2050Vanguard Target Retirement 2055Vanguard Target Retirement 2060Total Target Date 2,431,941100.00LPS 457 Total Fund14Jun-2019( )%
THE MARKETSINVESTMENT RETURNS AS OF JUNE 30TH, 2019S&P 500 TR USDRussell 2000 TR USDMSCI EAFE NR USDMSCI EM NR USDBBgBarc US Agg Bond TR USD25.00%20.00%15.00%10.00%5.00%0.00%-5.00%1st Quarter2nd 0.58%0.61%6.11%3.08%
TRADE DISPUTES — WHY THEY MATTERTariffs have weakened International Trade Disrupt global trade– Bolster inflation– Tariffs on products imported intothe U.S. push up prices over time.Reduce growth– Over the last two years globaltrade growth has declinedsignificantly.China’s economy will likely bemore negatively impacted thanthe U.S. economy.Source: WSJ, SPDR American Research as of 6/6/19US-China tariffs affect global activitySpook the markets–Trade pessimism reducescorporate and investorconfidence.* Dark bars reflect prior tariffs of 10%.Shaded bars reflect tariff increase to 25%and China retaliatingSource: Oxford Economics as of 5/10/1916
INDICATION OF A FED RATE CUTUnemployment and Wage Growth Converging Despite low unemployment,continued growth, and tariffimplementation, inflation has notbeen rising. The yield curve is currently inverted,which if prolonged will be a headwindfor growth.Source: BLS, FactSet, JPM Guide to the Markets as of 6/30/19 Fed rate cuts can serve to stimulatethe economy.U.S. Treasury YieldsJune 30th3-mo. Ago5 yrs. Ago3-mo. Treasury2.122.430.0410-yr. Treasury2.002.392.53Security2.71.70.7-0.33 mo6 mo1 yrJun 30thSource: U.S. Department of the Treasury as of 6/30/19172 yr3 yr3-Mo. Ago5 yr7 yr5-Yrs. Ago10 yr
REASSESSING EQUITY VALUATIONS2019 EPS Growth Estimates The estimated growth in globalearnings for 2019 has declined inrecent months, in part due toconcerns about global trade. Emerging markets equities continueto be attractively valued relative toU.S. stocks. Investors should maintaindiversification among global equities,as well as employ portfoliorebalancing.Source: WSJ, SPDR American Research as of 6/6/19EM vs. US Relative ValuationsSource: FactSet, as of 5/7/19 and State Street Global Advisors18
OUTSTANDING CORPORATE DEBTBBB Corporate Bond Index Exposure Over the last 10 years corporatedebt levels have dramaticallyincreased, while credit quality hasdecreased. In a recession, BBB bonds would besusceptible to downgrades andselling pressures.Source: PIMCO, Bloomberg Barclays U.S. Credit Index, Bloomberg Barclays U.S. Credit BBB Index as of 12/31/2018.US Corporate Credit Spreads vs the Risk-Free RateSource: PIMCO, Bloomberg as of 3/29/2019.19
GLOBAL EQUITY INDICES2nd Quarter 2019YTD as of June 30th, 2019Domestic EquityValueCoreGrowthValue1 YearDomestic EquityCoreGrowthValueDomestic .0%20.4%Small-6.2%-3.3%-0.5%Developed International EquityValueCoreGrowth1.5%3.7%5.7%Emerging Markets0.6%Developed International EquityValueCoreGrowth9.6%14.0%18.5%Emerging Markets10.6%Developed International EquityValueCoreGrowth-2.1%1.1%4.2%Emerging Markets1.2%3 Year Annualized5 Years Annualized10 Years AnnualizedDomestic EquityValueCoreGrowthLargeValueDomestic EquityCoreGrowthValueDomestic .1%8.6%Small12.4%13.4%14.4%Developed International EquityValueCoreGrowth8.5%9.1%9.7%Emerging Markets10.7%Developed International EquityValueCoreGrowth0.1%2.2%4.4%Emerging Markets2.5%Developed International EquityValueCoreGrowth5.5%6.9%8.2%Emerging Markets5.8%Large Cap Equity returns based off return data for the S&P 500, S&P 500 Value, and S&P 500 Growth indices. Mid Cap Equity returns based off return data for the Russell Mid Cap, Russell Mid Cap Value, and Russell Mid Cap Growth indices. Small CapEquity returns based off return data for the Russell 2000, Russell 2000 Value, and Russell 2000 Growth indices. International and EM Equity returns based off return data for the MSCI EAFE, MSCI EAFE Value, MSCI EAFE Growth, MSCI EM indices. Returns fortime periods of 3 years or longer are annualized.20
DOMESTIC EQUITY SECTOR PERFORMANCESECOND QUARTER %0%2%5.3%4%6%8%UtilitiesTelecom ServicesReal EstateMaterialsInfo TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer Discretionary10%ONE YEAR (ENDING 5.0%10.0%13.0%16.4%15.0%UtilitiesTelecom ServicesReal EstateMaterialsInfo TechnologyIndustrialsHealth CareFinancialsEnergyConsumer StaplesConsumer DiscretionaryReturns are based off return data for the eleven sectors according to the S&P 5002116.8%14.3%10.2%-15.0%19.0%20.0%25.0%
FIXED INCOME AND ADDITIONAL ASSET CLASSESFIXED INCOME INDICESADDITIONAL ASSET CLASSESBarclays Agg U.S. BondHedge Fund of Funds IndexQTDYTD1 Year3 Year5 Year10 YearQTDYTD1 Year3 Year5 Year10 22%Barclays U.S. Government 1-3 YearBloomberg CommodityQTDYTD1 Year3 Year5 Year10 YearQTDYTD1 Year3 Year5 Year10 2%-3.7%Barclays Municipal BondAlerian MLP InfrastructureQTDYTD1 Year3 Year5 Year10 YearQTDYTD1 Year3 Year5 Year10 %9.1%Credit Suisse Leveraged LoanDeveloped PropertyQTDYTD1 Year3 Year5 Year10 YearQTDYTD1 Year3 Year5 Year10 1.8%U.S. Corporate High YieldQTDYTD1 Year3 Year5 Year10 Year2.5%9.9%7.5%7.5%4.7%9.2%Credit Spreads sourced from Eaton Vance as of 6/30/19Returns based off return data for the BBgBarc US Agg Bond, BBgBarc US Corporate High Yield, BBgBarc US Govt 1-3 Yr, Credit Suisse Leveraged Loan, BBgBarc Municipal, Bloomberg Commodity, Alerian MLP Infrastructure, HFRI Fund of Fund Index, and theS&P Developed Property indices. Returns for time periods of 3 years or longer are annualized.22
Manager Score CardCriteriaOrganizationPeoplePhilosophy& ProcessStyleConsistencyAsset BasePerformanceExpensesOverallDodge & Cox Stock (DODGX)Vanguard 500 Idx;Adm (VFIAX)Harbor:Cap Apprec;Inst (HACAX)Vanguard Sel Value;Inv (VASVX)Vanguard Md-Cp I;Adm (VIMAX)Jns Hndsn:Enterprise;N (JDMNX)DFA US Small Cap Val;I (DFSVX)Vanguard S-C Id;Adm (VSMAX)Voya:SmCp Opptys;R6 (ISOZX)TIAA-CREF:Soc Ch Eq;Inst (TISCX)Am Beacon:Intl Eq;Inst (AAIEX)Vanguard Tot I S;Adm (VTIAX)American Funds EuPc;R6 (RERGX)Met West:Total Return;I (MWTIX)Vanguard Tot Bd;Adm (VBTLX)TIAA-TraditionalVanguard Fed MM;Inv (VMFXX)Vanguard Target Date (VTHRX)Exp 730.110.490.450.050.000.110.14CostsMedianExp 130.931.140.690.690.000.470.80Ratio ofExp toMedian 64.6011.8342.9865.217.250.0023.4017.50Legend For Overall CriteriaNo/Minimum ConcernsMinor ConcernMajor ConcernUnder ReviewNew No/Minimum ConcernsUpgrade to Minor ConcernDowngrade to Minor ConcernNew Major ConcernManagerHarbor:Cap Apprec;Inst (HACAX)Score FactorOrganizationVoya:SmCp Opptys;R6 (ISOZX)Voya:SmCp Opptys;R6 (ISOZX)Asset BasePerformanceTIAA-TraditionalExp Ratio (BasisPoints)CommentsHarbor Capital Advisors’ model of using single subadvisors in their products can result in sudden changes to the investmentstrategy of a fund, which is out of the control of investors. Such changes could result in new mandates that don’t fit the originalpurpose and lead to large capital gain distributions in taxable accounts.Outflows relative to strategy AUM warrants increased monitoring and diligence. We will continue to closely monitor outflows.2018 proved to be a very challenging year for the fund. Stock selection was a major detractor, especially in the biotech sector.Historically the fund has been underweight momentum as well which has been a major headwind for the fund.Expenses cannot be determined as it is a spread product.The Expense Ratio and Median Expense Ratio for Hedge Fund of Funds and Private Equity Fund of Funds excludes underlying fund expenses; the expenses shown are only at the Fund of Funds level.*Effective July 2018, certain funds that utilize derivatives and more opportunistic approaches are required to include investment-related expenses in their net expense ratios. While the expense reportingrequirements have been modified, funds’ actual expenses have not changed23
Table of ReturnsLastQuarterYearToDateLarge Cap EquityDodge & Cox StockS&P 500 ValueIM U.S. Large Cap Value Equity (MF) Median2.60 (75) 13.15 (84)4.02 (31) 16.70 (26)3.4715.17Vanguard S&P 500 IndexS&P 500 IndexIM U.S. Large Cap Core Equity (MF) ionDate8.26 (14) 13.89 (1)7.92 (18) 12.16 (21)6.9011.3914.04 (6) 12.93 (9)13.10 (20) 11.93 (18)12.1210.6810/01/20154.30 (45) 18.53 (38)4.30 (45) 18.54 (38)4.1717.8810.38 (34) 14.15 (27) 10.68 (15) 13.94 (17)10.42 (34) 14.19 (26) 10.71 (14) 13.98 (16)9.2613.119.3312.8914.67 (13) 14.34 (15)14.70 (12) 14.38 (15)13.3612.8310/01/2015Harbor Capital AppreciationS&P 500 GrowthIM U.S. Large Cap Growth Equity (MF) Median3.03 (91) 21.11 (61)4.56 (58) 20.19 (79)4.7721.808.04 (81) 20.20 (18) 13.60 (25) 16.07 (20)12.02 (32) 17.26 (57) 13.09 (38) 15.53 (32)10.5617.7112.5314.9815.91 (26) 16.11 (40)16.10 (21) 16.37 (34)15.0915.6210/01/2015Mid Cap EquityVanguard Selected ValueRussell Midcap Value IndexIM U.S. Mid Cap Value Equity (MF) Median4.60 (10) 18.24 (17)3.19 (37) 18.02 (22)2.8616.49-0.68 (44)3.68 (21)-0.974.62 (57) 11.09 (37)6.72 (15) 12.34 (10)4.8610.7312.98 (44) -3.42 (76)14.56 (8)2.33 (25)12.780.0401/01/2018Vanguard Mid Cap IndexCRSP U.S. Mid Cap TR IndexIM U.S. Mid Cap Core Equity (MF) Median4.36 (38) 21.86 (12)4.37 (38) 21.90 (10)4.0818.908.82 (16) 13.37 (8)8.85 (14) 13.39 (7)6.0411.0715.21 (5)15.16 (7)12.5911.77 (26)11.80 (25)9.5510/01/2015Janus Henderson EnterpriseRussell Midcap Growth IndexIM U.S. Mid Cap Growth Equity (MF) Median7.23 (26) 26.39 (56)5.40 (70) 26.08 (63)6.3926.79N/A18.14 (6)16.02 (20) 14.86 (36)14.7113.7110/01/2015Small Cap EquityDFA US Small Cap ValueRussell 2000 Value IndexIM U.S. Small Cap Value Equity (MF) Median4.14 (78) 14.43 (3)8.67 (28) 10.64 (47)6.3910.525Years9.25 (30)8.95 (35)8.347.83 (18) 12.32 (22)7.85 (18) 12.36 (19)4.259.7016.92 (15) 19.02 (21) 14.52 (3)N/A13.94 (41) 16.49 (40) 11.10 (35) 14.76 (31)12.8915.9410.3613.67-0.79 (66) 10.55 (67) -10.84 (66)1.38 (16) 13.47 (28) -6.24 (19)0.0912.25-9.177.71 (44)9.81 (16)7.423.32 (50) 10.19 (16)5.39 (13) 10.31 (16)3.318.5812.92 (14) 7.57 (49)12.40 (26) 10.31 (17)11.367.4910/01/2015Vanguard Small Cap IndexCRSP U.S. Small Cap TR IndexIM U.S. Small Cap Core Equity (MF) Median2.87 (16) 19.51 (8)2.86 (16) 19.54 (8)1.6713.472.26 (2)2.29 (2)-6.1112.38 (12)12.37 (12)10.057.72 (22) 12.68 (12)7.70 (22) 12.83 (8)6.3510.7114.79 (10) 12.14 (16)15.14 (7) 12.13 (16)13.199.5510/01/201
- Update fiduciary safe harbor for selection of a lifetime income annuity provider - Ability to raise auto-escalation cap of EE's contributions from 10% to 15% - Require annual lifetime income disclosure for DC plans - Increased availability of multi- employer plans (MEPs) Provisions Impacting Individuals
