RETIREMENT BOARD] MEETING 1.0 Opening ofMeeting. 2022 3.Public Comment. 4. Treasurer's Report: 5. Requisitions: 6.Old Business. 7.New) Business:  November 30, 2022  2.4 Approval ofMinutes No. 287 dated] May 19, 2022 andl No. 288 dated August 18,  Bank] Reconciliations- - July 2022- - October 2022 Requisitions- - August 2022- -November 2022  A. Estimated Pension Costs for 2023 Budget. B. Korn Ferry Feel Increase  C.Portfoliol Presentation: Leel Martin, Ph.D. -M Marquette Associates.  8.Adjoumment.    Draft May 19, 2022  Minutel No. 287  The quarterly meeting oft the Washington County Retirement Board was helda at approximately 3:30j p.m. on' Thursday, May 18,2 2022, in the public meeting room with the following members being present: Commissioners. Diana) Irey Vaughan, Larry Maggi andl Nick Sherman; Treasurer Tom Flickinger; and Controller. April Sloane, viap phone. Also present: Deputy Controller Heather Sheatler; Chief Clerk Cindy Griffin; Secretary Paula. Jansante; Executive. Assistant Marie Trossman; Chief of Staff Michael Namie; andl Leel Martin, Ph.D. representing Marquette  Associates. Approval ofMinutes  Mrs. Vaughan entertained a motion tol hold Minute No.: 286 dated February 17,2022, in abeyance pending corrections. The motion was moved by Mr. Sherman and seconded by! Mr. Maggi  that the above-mentioned: minutes be approved as written.  No discussion followed. Roll call vote taken: Motionj passed unanimously. Public Comment None. Treasurer'sReport statement. Roll call vote taken: Motion passed unanimously. Retirement, Allowance) Report  Ms. Sloane- -yes; Mr. Flickinger- - yes; Mr. Maggi -yes; Mr. Sherman yes; Mrs. Vaughan-y yes.  Mr. Flickinger presented the Bankl Reconciliations for December: 2021.1 It was moved by! Mr. Flickinger and seconded by Mr. Sherman to acceptt the reconciliations oft the above-mentioned Ms. Sloane- -yes; Mr. Flickinger- yes; Mr. Maggi - yes; Mr. Sherman yes; Mrs. Vaughan-yes.  Bank Balance as ofl December 1,2021 Deposits to Checking Account Transfers In Add: ACH Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACH Debits Funds' Transfers Out Bank] Balance: as of] December: 31,2 2021 Transfers to! Mutual Fund Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance: as ofl December 31, 2021  $102,024.87 4,656.2 1,338,021.18 490,578.00 -0- (209,104.80) -0- (858,480.33) -0- $867,695.12 -0- (831,421.97) (36,273.15) $-A-    Requisitions 2022 totaled $3,273,579.54. No discussion: followed. Roll call vote taken: Motion passed unanimously. Distributions Check 2308 2309 2310 2311 2312 2313 2314. 2315 2316 2317 2318 2319 2320 2321 Transfer Transfer  Ms. Sheatler statedt that requisitions fort the months of February 2022, March 2022, and April Itv was moved by Mrs. Sherman ands seconded by Mr. Maggit thatt the requisitions be approved. Ms. Sloane- -yes; Mr.] Flickinger- - yes; Mr. Maggi- - yes; Mr. Sherman -yes; Mrs. Vaughan n-yes.  February2 2022 Payee Estate ofRalph Richards Shawley William] ES Speakman) Jr NFS/FMTÇI IRAI FBOJ Jose Alvarado CapitalE Bank &1 Trust! RA for Candicel Bentz Winfield Carson James! RE Harrington m American General Life ast trustee OfIRAC ofSaraJ JNecciai Jamie) Restanio Steven Scott Gaitens Tucceri &1 Nicholas PCH FBO Charlee Rosini Fidelity ast trustee OfIRAC ofCharleel Rosini Michacl Carso Washington County! Regular Payroll Escrow Account Washington Co. Cash! Disbursement. Acct PNCI Bank Washington Co. Retirement Acct Totall February: 20221 Distributions  Amount 170.62 994.10 20,307.76 17,265.47 703.64 5,383.57 33,664.12 36,190.15 6,235.95 4,484.39 1,821.97 11,807.68 24,494.96 26,906.04 71,792.42 849,714.39 1,105,630.87  2378* VOID- Gaitens' Tucceri &N Nicholas PCFBO Charlee Rosini (check date: 11/30/2021) -6,306.36    March 2022 Payee Robert Greg Fresa Michael Boyza Meloney Dennis Richard Griffith Myra Jakubek John WI Kibbe Paul CF Rock Shalee Schnore  Check 2322 2323 2324 2325 2326 2327 2328 2329 2330 2331 Transfer Transfer  Amount 63.33 242.22 386.48 1,263.04 18,8483.19 2,601.70 99,728.06 2,132.40 24,779.20 58,614.26 76,689.31 847,219.05 1,132,567.24  Washington County Regular Payroll] Escrow Account Washington Co. Cash Disbursement Acct PNÇ Bank Washington Co. Retirment. Acct Totall March 20221 Distributions  April2022 Payee Edward Grey  Check 2332 2334 2335 2336 2337 Transfer Transfer  Amount 3,225.81 3,539.16 78,671.50 23,937.09 6,469.67 59,816.21 849,902.87 1.035,381.43  2333 Capital Bank & Trust Co asa at trustee of IRA of] Joseph. J. Joscsak IV 9,819.12  UPMC Savings Plans FBO Claset. Klos Ameriprise Trust Co ast trusteei ifIRA Deborah C Webb Washington County Regular Payroll Escrow. Account Washington Co. Cashl Disbursement. Acct PNCI Bank Washington Co. Retirment. Acct Total April 2022 Distributions    Old Business None. New Business  Mrs. Vaughan entertained: ai motion to approve ar request from Robert) Lonick to purchase prior service time, dated December 17, 19981 to. July 20, 1999 and September 7, 2004t tol November 8, 2004, int the amount of $2,848.32. The motion was moved by Mr. Sherman and seconded by Mr.  Maggi thatt the above-mentioned, request be approved.  No discussion followed. Roll call vote taken: Motion passed unanimously.  Ms. Sloane- - yes; Mr. Flickinger- -yes; Mr. Maggi- yes; Mr. Sherman- - yes; Mrs. Vaughan-yes.  Portfolio Presentation- - Leel Martin, Ph.D. - Marquette. Associates  Mr. Martin started by pointing out that growth came to a grinding halti int the first quarter. GDP came int below expectations, declining 1.4%, duet tol lower net exports and as slowdown inj private inventory investment. This was attributedi toi inflation and supply chaini issues, leading tol higher prices. He also mentioned thate expectations: forg growth stocks would be lower duet to concerns over global issues such as Russia and Ukraine relations impacting) Europe, as well as China's: zero Covid policy leading to supply chaini issues impactingi inflation aroundt the world. Thisi is concerning because the Federal Government will need to raiser ratesi in order to tackle rising inflation.as inflation risingt too quickly can tipt the country into recession. Mosti forwardi indicators are down significantly, Mr. Martin goes ont tor note that consumer confidence isl low and1 that the public have pulled back from spending due toi inflation. Retailer'se earnings have come in well below expectations because they havet triedt to maintain prices while costs are rising and, thus, their overall net] profits are down. Thisi is also the reason for bigs selloffs int the equityr markets as earnings really drivet the direction of equity prices. He continued! by pointing out! howt the charts of consumer confidence mimics ai market cycle. However, over the last 5) years, our fundsl havel been diversified into many other asset classes Moving on globally, Mr. Martin reiterated that Europe'sc confidence has collapsed due to the Russian/Ukraine war. He statedt that mainland Europe's dependency onl Russian oil and gas! has impacted future growth estimates. Furthermore, China'sz zero covid policy has greatly impacted the global supply chaini issues due to closingl huge economy's such as Shanghai. This is leadingt to continuous supply chaini issues which! has resulted in elevated prices across the world. Mr. Martini noted that developed market, US andi international equities, were down approximately 5% while emerging markets were down roughly 7%. Again, hej points to China asa causation, duet to China being 1/3 of emerging markets and about 8.5% oft the broadi international Switchingt to bonds, Mr.I Martin statedt that core bonds are down nearly 6%,1 leadingt tot the worst quarter for the aggregate index since 1981. He elaborated that, through. April, core bonds were down 9.5%. However, our fixedi income is benchmarked tot the shorter duration intermediate government/credit. index which was only downj just over 6%. He explained that, asi rates go up, the longer duration bonds become more impacted. Thisi ist the reason for the 300-basis point difference.  except for thel Misery Index.  and ast much a quarter ofs said funds are not moving with the market.  market.    Transitioning toi inflation sensitive assets. TIPS were down only 3%, nearly 3%1 better than core bonds. He states that commodities, such as precious metals and energy, are up. He also, pointed out thate every sectori is down outside ofenergy, up 39%, andi utilities, up 4%, which arel linkedi ins some partt toi infrastructure. Mr.] Flickinger askedi ifthel Build Backl Betteri infrastructure investment. has impacted infrastructure. returns. Mr. Martin responded nol because infrastructure isal longt term 30-to- Moving ont tot the portfolio, Mr. Martin stated that Washington County finished the quarter at $205 million. Hej pointed out that thej portfolio was down about $7 million due tol both: stocks and bonds posting negative returns. This equates to al loss of3.3%, whichi is better than policy, and ranking Washington County'sd defined benefit plani int thet top 10% oft the US public fund universe. This higher relative performance is duet tot thej portfolio being well diversified. across numerous asset classes. Thes smaller funds that arej just in stocks and bonds are down more because ofthel lack of diversified: assets. This ist the difference: from 2008 whent thej pension: fundi investments lacked any Touching on real assets, the private equity andp private credit added1 last year, are allj positive for the quarter. Mr. Flickinger asked! Mr. Martint to define private credit. Mr. Martin used the example ofb bank loans that are noti impacted by rising rates ast they write newl loans at! higher rates when Mr. Martin spoke about gains over thej pastf fivey years. Hej pointed out that 4 oft the last 55 years has yielded double figures creating a 200-basis point cushion above the assumed rate of returi inan environment that has fueled risk on equities: equities and! bond prices going up because rates are coming down. Due tot the more diversified: assets, itp produced under the benchmark, however, it was well above the assumed rate of retur.. The goal would bet tor reach 6.5% eachy year with asl little volatility as possible. Additionally, the private equity andy private credit addendum voted on Moving on, Mr. Martinj pointed outt the diversifying assets added over thej past few years. Particularly the defensive equity, siting volatility risk premium yielding ag good premium whent there isv volatility in the market. He pointed out the diversified: real assets portfolio which hedgesi inflation. Thisi includes real estate, timber, farmland, and infrastructure. Wheni inflation goes up, these assets tend go up: as well, helpingt to offset some oft the downr market int traditional equity and bonds. With thei recent additions of private equity and private credit, this adds upt toa a diversifying asset allocation Touching on the county'st total equities of 53.5%, Mr. Martin states thisi isa aboutt the median ofa bigi institutional fund. Similarly, fixedi income isal littler more conservative because the assumed rate ofr returni isal little more conservative. The othera assets classes reflect the previously mentioned Year rankings over time, show that the quarter ist top decile, top quartile, and above median going back. The older time periods were periods which were less ini favor. There should be a higher ranking going forward duet tot thep portfolio positioned toj perform relatively well during market Washington Countyi is doing bettere evenj just ony your traditional investments. However, NASDAQ area is  50-year program.  diversifying assets.  interest rates rise.  previously added: 2% and 1%1 respectfully.  of23% att the end of March and this will go to 26%1 this quarter.  median as well.  downturns.  what'sbeing crushed sof fart this quarter.    Moving to fixedi income, thej portfolio duration is at 4.lyears while the aggregate indexi is 6.8years. The 25%1 lower duration isv why therei isa3 300-basis point higher returni ini fixedi income for the year. Thisi is relative to core bonds, which most: funds use. The current yield of about 3% andi is  ine excess of the index duet tot the high yield fund.  Closing with Washington County funds through. April. However, duet to thel length oft time it takes for real estate and private to come out, itist noti included for April. Thel U.S. equity was down 4.6% and benchmark was down 5.3%. There was a better outpertormance byt tiltingi into value. TWIN was ahead 2701 basis points in April, ast they are better at protecting during market selling and that is why they remaini int thej portfolio. Likewise, because GW&K is more ofa growth bent, they lagged the core benchmark: for the first quarter to date but are well ahead fort the one year. GW&K were 1001 basis pointst upi in April. Global equities are at benchmark, however, therei isal lag ofa about 20 basis points for the three-month period yett they about 301 basis points aheadi in April. Headwinds weret the growth managers like Artisan andt the AB Global Core strategy. Ther major contributing strategies were with Dodge & Cox and thel high quality/low volatility manager likel MFS. They were only down 2.7% when the broadi market was down 5.4%. Non-U.S. Equity Composite was 100 basis points behind for the quarter duet tot the emerging market allocation. Washington County did change from thej passive indext to active approach during the quarter but there is nots ai full quarter return, and ity willl bei includedi int the next report. Schroder isi inl line with benchmark: and 130 ahead for the year. Defensive equity wasi inl linei for the quarter. However, over thej past yeari it! has posted 9.5%, above the benchmark of7.8%, ast the volatility premiums are quite higha andl havel been accretive. Int the alternative section, reale estatei is up 29%. Washington County left. JPI Morgan about a year ago.. JP Morgan was struggling due tol large office andi retail allocations. Alternatively, Washington County hired Clarion and TA Realty to manage the real estatei investments. TA only has one retail holding and is up 37.5%1 for the year. Timber andi farmland are yieldingal 10% retum. Infrastructurei is slowly increasing." The county used Cohen & Steers as aj public equity version ont the short term. They were addedi inl November 2020 andl has made 16% relative to 14% for the benchmark, over that period.' Those assets have been used toi fundt the private infrastructure ins a timely manner because equities are selling off andt thej private infrastructure is positive for the quarter. Onj private equity and private credit, public equities are selling off. However, there is ani immediate 1.3% gain from the private equity. The county isi invested in open-ended private equity, providing ani income from day one. Thisi is fortunate int this environment, due publice equities going down.) Likewise, private credit Lastly, for April alone, U.S. equity was down 7.7%but above thel broadr market which was down 9.0%. Global equity was ahead by 301 basis points and non-U.S. equities were behind by 30 basis points. There are currently nor returns posted as of yetf for the alternatives. However, thet things thata ares selling off are not affecting the county'sp portfolio asi negatively as expected. This relative  was positive 0.6% where fixedi income was down 4.5%1 for the quarter.  performance! is expectedi inl May as well.  The meeting was adjourned at4 4:04 p.m.    TIEFORECOINGMINUTES SUBMITTED: FORAPPROVAL:  2022  ATTEST:    Deaft August 18,2022  Minute No. 288  Thec quarterly meeting oft the Washington County Retirement Board was held at approximately 2:54p p.m. on1 Thursday, August 18, 2022, int thej publicr meetingr room with the following members being present: Commissioners Dianal Irey Vaughan, Larry! Maggia and Nick Sherman; Treasurer Tom Flickinger; and Controller April Sloane. Also present: Chief Clerk Cindy Griffin; Secretary Paula. Jansante; Executive Assistant Marie Trossman; Chiefo of StaffMichael Namie; Solicitor. Jana Grimm; Finance. Director Joshual Hatfield; Davel Reichert representing Korn Ferry; Leel Martin, Ph.D. and! Sara Wilson representing Marquette Associates. Deputy Sheriffs Jack Camerson and' Tyler Pape; andl Payroll Supervisor Brittany Mosco.  Approval ofl Minutes  Mrs. Vaughan entertained a motion to approve Meeting Minutel No. 286 dated February 17, 2022. Thei motion was moved by Mr. Sherman ands seconded by Mr. Maggi thatt the above-mentioned  minutes be approved as written. No discussion: followed. Roll call vote taken: Motion passed unanimously.  Ms. Sloane -yes; Mr.] Flickinger- yes; Mr. Maggi - yes; Mr. Sherman- yes; Mrs. Vaughan-yes. Mrs. Vaughan entertained ar motiont tol holdi the meeting minutes ofl May 19, 2022,in abeyance pending corrections. Ther motion was moved! by Mr. Sherman and seconded by Mr. Maggi Ms. Sloane- no; Mr. Flickinger- yes; Mr.) Maggi - yes; Mr. Sherman- - yes; Mrs. Vaughan-yes.  thatt the above-mentioned minutes bel held for corrections.  Roll call vote taken: Motion passed. Public Comment None. Treasurer'sReport  Mr.] Flickingerr madea ai motion to acceptt the presented reconciliations of January 2022, February 2022, March 2022, April 2022, May 2022, and. June 2022. Mr. Sherman secondedi the Ms. Sloane - yes; Mr. Flickinger - yes; Mr. Maggi - yes; Mr. Sherman yes; Mrs. Vaughan - yes.  motions to acceptt the reconciliations oft the mentioned: above.  Roll call vote taken: Motionj passed unanimously. Retirement Allowance. Report Bankl Balance as of January 1,2 2022 Deposits to Checking Account Transfersl In Add: ACH Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACHI Debits Funds7 Transfers Out  $867,695.12 -0- 285,216,68 262,618,16 -0- (96,775.49) -0- (935,113.65)    Bank Balance aso ofJanuary31,2022 Transferst to! Mutual Fund Less: Outstanding Checks Less: Retirement Check Run Reconciled] Balances as ofJ January 31,2 2022 Bank Balance as ofFebruary 1,2022 Depositst to Checking Account TransfersI In Add: ACHO Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACHI Debits Funds Transfers Out Bankl Balance as ofFebruary; 28,2 2022 Transferst tol Mutuall Fund Less: Outstanding Checks Less: Retirement Check Run Reconciled) Balances aso ofFebruary: 28, 2022 Bank Balance aso ofMarch 1,2022 Depositst to Checking Account Transfersl In Add: ACHO Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACHI Debits Funds Transfers Out Bankl Balance aso ofMach: 31,2 2022 Transfers tol Mutual Fund Less: Outstanding Checks Less: Retirement Check Run Reconciled! Balance aso ofMarch 31, 2022 Bank Balance as ofApril1,2 2022 Depositst to Checking Account Transfers In Add: ACH Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACHI Debits Funds Transfers Out Bank Balances aso ofApril3 30, 2022 Transfers to! Mutual Fund Less: Outstanding Checks  $383,640.82 -0- (338,339.80) (45,301.02) S-0- $383,640.82 -0- -0- 257,460.82 848,170.05 (388,848.82) -0- (897,628.40) 0- $202,794.47 -0- (338,339.80) (29,663.79) $-0- $202,794.47 2,065.96 -0- 272,155.53 858,345.75 (224,336.75) -0- (900,029.95) -0- $210,995.01 -0- (182,832.40) (28,162.61) $-0- $210,995.01 -0- 769,496.02 265,885.41 0- (190,934.68) -0- (885,672.99) -0- $169,768.77 -0- (142,545.77)    Less: Retirement Check Run Reconçiled Balance as ofFebruary! 28, 2022 Bank Balance as ofMayl 1, 2022 Depositst to Checking Account TransfersI In Add: ACH Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACHI Debits Funds Transfers Out Bank Balance aso ofMay 31,2 2022 Transferst tol Mutuall Fund Less: Outstanding Checks Less: Retirement Check Run Checks Duplicated (ck# #2339-2340) Reconciled Balance as of May 31, 2022 Bank Balances as ofJ June 1,2022 Deposits to Checking Account TransfersI In Add: ACHO Credit Other Credits Less: Cancelled Checks Less: Other Debits Less: ACHI Debits Funds Transfers Out Bankl Balance as ofJ June 31,2022 Transferst tol Mutuall Fund Less: Outstanding Checks Checksl Duplicated (2339, 2340and2348) Less: Retirement Check Run Reconciled) Balances asofJ June 31,2 2022  (27,223.00) $-0- $169,768.77 -0- 804.594.42 270.995.93 0-(301,316.22) -0- (888,791.71) -0- $55,251.19 -0- (81,139.07) (29,661.45) 55,549.33 S-0- $55,549.33 -0- 805,310.31 406,600.38 754.64 (192,839.76) -0- (915805.47) -0- $159,271.29 -0- (205,358.64) 74,500.31 (28,412.96) S-0-  Requisitions  Ms. Sloaner madea ai motion to approve the requisitions for the months of May 2022, June 2022, and. July 2022. It was seconded by Mr. Sherman thatt the requisitions be approved.  No discussion followed. Roll call vote taken: Motion passed unanimously.  Ms. Sloane- - yes; Mr.] Flickinger- - yes; Mr. Maggi yes; Mr. Sherman yes; Mrs. Vaughan - yes.    Distributions Check 2341 2342 2343 2344 2345 2346 2347 Transfer Transfer  May2022 Payee National Financial Services as Trustee ofD IRA ofCasey Bamberger Principal Trust Company FBOI Danielle MI Deklewa Rosemari JFassette Zackary! Fike TDA Ameritrade as" Trustee ofIRA ofLauren Wadsworth Washington County! Regular PayrollE Escrow Account Washington Co. Cashl Disbursement. Acct PNCBank Washington Co. Retirement Acct Total May 2022 Distributions June 2022 Payee  Amount 23,385.85 15,986.27 1,926.36 10,345.70 1,998.13 22,839.30 86.270.94 61,418.14 851,419.66 1,075,590.35  Check 2349 2350 2351 2352 2353 2354 2355 2356 2357 2358 2359 2360 2361 2362 2363 2364 2365 2366 2367 Transfer: Transfer:  Amount 2.437.32 58,757.05 10,700.00 8.740.81 10.750.79 2,085.78 59.071.31 2,559.96 3,827.42 776.52 48,853.89 6.520.46 9,593.88 1.357.20 3.845.03 187.24 187.24 21.971.82 18.950.98 86.154.81 854,581.18 1,211,910.69  Matrix Trust Company FBO) Ryan' Wilityer Trustee OfGBUF Financial LifeF FBOI Heather Smith Capital Bank & Trusta ast trustee ofIRA ofJ Jeffrey Al Franks Fidelity! Management: Trust CoF FBO John Edward Bumett Fidelity Management Trust CoF FBO John Edward Bumett  Cheisey Cook Billie Jol Mance David Oglive]r Joshua TPeake Zoey Porter Benjamin Cagnon William. Al Franks) Jr Roni Sprowls Jeremy Emph Kaylal DN Martin LindaL L Snyder Francis EJ Jeffers Washington County! Regular Payroll Escrow Account Washington Co. Cash Disbursement. Acct PNC Bank Washington Co. Retirement Acct. Total June: 20221 Distributions  July2022 Payee Benjamin Cagnon- VOD Benjamin Cagnon- REISSUE Wayne! Kress Beth Phillips Lisal Leach Najah McBryde Meganl Lindley  Check 2368 2369 2370 2371 2372 2373 2374  Amount (48,853.89) 48,853.89 1.114.31 12.625.37 989.46 902.35 9.895.67    2375 2376 2377 2378 2380 2381 2382 2383 Transfer: Transfer:  Mina Thompson Garland) Fuquall II Maureen Springmeyer Jordan McCrae Anna Tutwiler-Emler for Brooke Emler Alton) Eckert George Eckert Washington Countyl Regular Payroll Escrow Account Washington Co. Cashl Disbursement. Acct PNCI Bank Washington Co. Retirement Acct. Total July 2022 Distributions  2,430.06 3.429.17 8.373.07 9.030.50 18.940.04 18.940.04 32.68 32.68 22,313.54 3.304.34 71.369.83 857,733.68 1,0041,456.79  2379 Annal Tutwiler- Emler for Zachary Emler  Old Business None. New Business  Mrs. Vaughan entertained: a motion to approve ai request from] Raffaele Casale toj purchase prior service time, dated December: 27, 20041 tol March 17,2 2006 in the amount of$1975.75. The motion was moved by Mr. Sherman and seconded by Mr. Maggi that the above-mentioned: request be  approved. No discussion followed. Roll call vote taken: Motion passed unanimously. Presentation- - Davel Reichert  Ms. Sloane - yes; Mr. Flickinger- yes; Mr. Maggi - yes; Mr. Sherman - yes; Mrs. Vaughan- -yes.  Mr. Reichert began with as summary oft the valuation report, noting thatt thej purpose oft the valuation report ist to givea a budgetary number eachy yeart to putf fundsi into the plan so that whent the partition participants retiret therei is enough money. However, thet true cost to the retirement; plan are what benefits are actually paid out. The estimate ist the valuation report ands sincei itis an estimate, the goali ist tol keept the contribution int the. ADC eachy year as level as possible. Washington County's contribution has been somewhere: int the $4 million to $5 million range. Therei is an effortt tol keepi it consistent by smoothing the assets. Mr. Reichert pointed to a chartt that shows the effects oft the asset smoothing over a five-year period. Therei isar recognition ofag gain orl loss ofe each year of20% overa five-year period until all the gain or lossf for that yeari isi recognized. He went ont tor note thatt the market value as of] January 15, was $214 million but for the valuation purpose, $199 million was used. Mr. Reichert moved on tot the summery of demographics. He statedt that the numbers are consistent for 2021 to 2022. That leads one to believe that the numbers will stay çonsistent from year to year. Het then went on to1 reviewing thatt the ADCI numbers went down to $100,000 due tot the assets having agood year. Ther normal costs remained the same as well as the expected member contribution, however, amortization charges went down, andt thisi is what was affected by the assets. Funded ratio did go up, fromj just below 90%1 toj just below 94%. Most counties arel between 80-100%. The funded ratioi isa always calculated based ont the assumptions. Washington County'sa assumptions are  However, numbers now are above! $199: million, whichi isap positive.    much lowers andi is conservative. Thes satirized report thati is] presentedi inl December willj puti in perspective how Washington County is doing comparative to other counties. Mr.) Reichert went ont toj present a 10-year history oft the: funded ratio.1 He notedt thej positive aspect of thei increase. While Washington County may not always be at 95%, buti itisa always trendingi int the right direction, reflecting thej positive contributions in the last 10s years, noting aj job well done in Hei moved ont to review the history ofthei investment return assumptions over the last 20 years. The median 20 years ago was 8% and' Washington County was at7.5%. Thisi isa a reflection ofhowt the county hasl been ahead oft the curve as far as Pennsylvania counties are concerned. He notest the downwardi trend oft thei investment rate retum assumption goes from 8%, 20 years ago, tor median being 7%. He points outt that Washington County has always been! below thatr median and currently sits at6 6.5%. This puts the county ina a good position asf far as the assumption chart. Finally, Mr. Reichert notedt tol keep tracko oft the investment return assumption and consistently monitor it. He also goes ont tot touch on the COLAI letter iss sent out every October, noting thatt there only at requirement tol look ati ite everyt threes years, andi itr may need to be voted on. He also brings forth a reminder thats and estimate letter for next yeari isa alsos sent att that time as well. Portfolio Presentation- Leel Martin, Ph.D. -Marquette. Associates  managing the retirement fund.  Mr. Martin begins bys stating that GDP contracted' by 1%i in Q2 ands so growth has declined fort the second quarter ina ar row. This contraction was not as significant ast the first quarter. Thisi is on the back ofboth private andr retail investment being reduced. Privatei investment due to inflation impacting future earnings and whatt the federal governmenti is doingt thru tightening to cullt the economy.. Residential investments slow down ont the back oft rates going up so thati it costs more to borrow: money. Thel National Bureau of Economic Research defines ar recession as a significant decline of economic activity. Thisi is derived bys several economic: indicators. The strongj jobi market is holding them from declaringa ar recession. And while unemployment indicators tend tol be lagging, job claims are al better indicator because ofat timelier reflection. Unemployment claims are starting to goup. He notes that everyt time claims start to rise, ai recession occurs eminently. A1 future lookback at this current time may indicate a recession, but expectations aret that by the end oft the year ori in 2023, wes should expect a recession. There is not al lott tol be done tos stopi it. The government has culledt the market al bit but toi impact inflation, there needst tol bei impact ont the supply side, but tightening does nothing toi impact the supply side. The expectation ist thati inflation will stay! higher. Though inflation has come down about 501 basis points from the previous month, and producer prices have come down about 501 basis points, thati is expected duet to the Fed tightening starting to work its wayt through the economy. Inflation willr remain elevated for longer than expected though, ass some areas ofinflation willl be sticky, like wages andi rent/shelter inflation. This is not simply going to go    away. Some inflation is transitory: commodity prices and energy prices go up and down. However, there are some that arei more permanent and sticky, likei in the servicei industries. The resulting  expectation! is fori inflation tol be higher forl longer.  Moving on tot the Globall Economy, Mr. Martinj points out the similar dynamics across the world. He notes that) Europe isi in a worse state due tot thei ties tol Russia for energy. Using Sweden asa predictor, Europe will goi into ai recession. Thoughi itmay be rougher thani int the US, again, due tot the ties tol Russian energy markets. Mr. Maggi pausest toi inquire about grain andi its effect, to whichl Mr. Martin explains thati is why food prices are up So1 much. Stating it ties back intot the supply side. Moving ont to China, Mr. Martin touches ont their real estate issue and their zero Covid policy taking them back years. Chinai ist tryingt tol kickstart the economy andy put just over a1 trillion dollars into their economy tot try and buildi infrastructure. They were positive in Q2 and equity markets were down double: figures. However, in. July morei issues arose, and Chinal has dropped al lot again. Equities were down 16.7% int the US. Thisi is no surprise because inflation isl high, profit margins are down, and future earnings expectations are lower. Thei international: market dids slightly better, down 14.5%.1 Inl local terms, it was only down about 8%. The US Doller appreciated ont the back oft the rate increase, by about 6.5%r making a bigi impact oni international returns. Touching ont bonds, int the: first half oft the year bonds are down 10.3%r making itt the worse start to a year sincet the bond index commencedi in 1970. The rising rates are impacting the bonds." TIPS came int below bondsi int the first quarter, down 6.1%, due to oft the slowing inflationary environment. TIPS has been a great investment: for the past 18 months, buti iti is starting tol be worse than core bonds. Commodities and infrastructure are down 7.5%, whichi is negative, however still 9%1 better than the broad equity  market.  Focusing on' Washington County Employees' Retirement Systems, Mr. Martin starts by noting that as Os of] June 30 the fund finished atj just over $1881 million. Therel has already been a gain ofs about $12million sot fari in quarter 3 making up aj portion oft the $16.6r million lost in quarter 2.1 It was down 8.1%r neti including all thef fees for the quarter whichi is 1001 basis points above thej policyi index. This ranks the county int the 11" percentile amongt the peer ranking, outperforming about 89% ofallt the public fundsi in thel US for the quarter. Because oft the diversity and conservative: nature oft the portfolio, there ist no surprise that the county is outperforming in this type ofr risk offr market. Thisi is aided byt the higher quality positions within thej portfolio as well ast thel low volatility type managers.    The emerging markets was accretive for Washington County but that was really ont thel back of Russia in Q2. Allt thej private real assets are positive: the infrastructure, the real estate, and the timber-farmland. What didn'twork as well for the quarter, with as small allocation you! have international small cap and! highy yield, because spreads blew out a little bit during the quarter. Though, in. July they were thei two areas that leadt the market, whichi is why the county has diversified across a lot of asset types. When one is more conservative, from an assumed rate ofreturn position, one cant tilt thej portfolio al littler more to thel higher quality type assets. However, whent therei isa higher target, one must bet more aggressively invested, resulting ini more in small caps because one Int the pastt ten years, Washington County has averaged about 7.6% per year, gaining $112 million and rankingi int the 37h percentile oft the public fund universe. That! has beeni in a very strong return environment; post GFC. Thec county did finally get the lasto calls for private equity and credit. Leaving nothing really ont thel horizon before becoming fully diversified. In. June, there were some redemptions puti in on real estate. Reale estate was up over 30% this year. Valuations have gone through the roof, particularlyi ini industrial sectors. Thel key with private real estate is one wants tol be on the front end oftrimming, takingt theg gains out. Just asi iti is gated ont the way ini itd can be gated on the way outi ifeveryone tries to gett thei money out att the same time." The county goti in early previously, resulting in getting the money back, bringing it halfway back tot target. By banking half oft the gains, they will come back into thej plan and! back into equities andi fixed. Under net cash flow, int the second quarter no money: neededt taken out, only $1.7m was taken out early in the first quarter. Unlikea al lot of counties that are! having tot take money out every month, the first! half oft the yeart the ADCs supported any payments for Washington. Therefore, all the negative returns are onp paper. The negative returni is only banked wheni itiss sold. However, there will start to be an need tos sell assets tos support benefit payments for the rest oft this year. This ist the case for all counties this point. Ther market has recoveredab bit over the summer, sot the assets will notl be sold at lows. Because the county has de-risked the plan overt time, is not down asi much as others, helping to Washington County has held up al lot better on the downside. Even fors aj plan of Washington County'ss size, whichi isa a small or midi institutional sized fund, ifeffort and work are puti in, there will bear nicely diversified fund thatl looks more like al largei institutional fund. The county is not only diversified across asseto classes, equities, and bonds, therei is also volatility risk premium, reale estate, timber farmland, and infrastructure. Also, there ist this hybrid ofprivate equity and private credit. So,  needs to chase return more.  limit losses.    there's not only diversity by asset class, but there are also two ort three managers in each ofthese areast too, giving diversity within the asset class. This has alll helped tos smooth and lower volatility. Ideally, thel bestt thingi ist toi invest for achieving. your assumed rate ofr return withi thel lowest volatility Thep past year produced good relative performance as well as good protection against the policy index. The county came in down 6.9%1 for they year and the policyi index was down 8.1%.1 However, the ranking oft the policyi index was int the 18thp percentile. That means great work from an asset allocation point of view, andt thei implementation oft the managers have added another 1201 basis points oft return above that. Now, compare that to aj plans or smaller counties that can'to diversify, and theyj justi indexed 65/35. Thel bottom line ist the county would be down 13%f fort the year, ify you only invested ins stocks and bonds. Now, you will seet the opposite when you geta a recovery in stocks and bonds. Those funds willj jump up a little more, and the county won'th be up asl high. But whent that occurs, others making 20%, and Washington itn might be making 17%. The assumed: rate ofreturni is 6.5%. Thef finded ratio wills stilll be going up at that point. Thef focus for unfunded pension fundsi is US equities were without 2% ahead for the quarter and 2.5%1 for the year. This is duet tot the two defensive active managers' TWIN and GWK. They are more ofal higher quality approach. TWINis more ofa dividend payer, itt tendst to be more ofal larger cap dividend payer, and they tend tol hold up betteri in downi markets. TWIN was lagging abouta ay year ago int thel low-quality rallies and they should be ahead when wel have a stressed market. Whent the county went more conservative and de- risked, they changed' TWIN'ss strategy tot thel higher quality Dividend Select. Ont the global side, Washington County is about 250bps ahead for the quarter, really driven by the valuer manager, Dodge and Cox. As rates go up, that favors value over more highly levered growth stocks. They were down only 9.7% whereas ACWI was down 15.7%. The other accretive strategy was the MFSI low volatility fund, down only 8.9%f for the quarter. Additionally, for the year, Low Volatility only being down 11.4% whereas ACWI has been down 20%. What didn'twork well for the quarter was the growth strategies. This did greatt two years ago but is about on benchmark for the quarter. Though, Artisan is doing wellt this quarter to date asi it has pivoted back to growth outperforming value and. Artisan hast more techi int their portfolio. With the different pieces ofe each, the goal ist tot try toj pick up return every quarter from different areas oft the market.  possible eachy year.  to focus ont the downside.    Ont thei international side, Washington Countyi is about 2% ahead for the quarter, sinçe Schroders was down only about 12%, ACWI was down 14.3%, and the emerging markets was down only 10%. Defensive equities are where one would expect to outperform when there is volatility in the markets. Down about 5% over one) year ands stocks were down about 20% over the one year. That has been Moving on to private real estate. A couple ofs years ago, the county moved out ofJ JPI Morgan, which hadal lot ofretail and office. This was positive because the ones chosen more overweighti in the areas thata are doing great, industrial and apartment, and very mucht underweight inr retail and office. The performance from that, over the one year, is up nearly 32%. Whicha again, goesi into why the choice was made tos start redeeming. Thec county is about 2.5% percent abovet target." The only wayt tol have gainsi is tol bank them. Both Clarion and TAI have done well. Hancock isj just getting fully funded out. They may have one more call. Then, they can be measured against the 50/50.1 Itv will not add: asi much as real estate int thisi inflationary environment, buti it's positive. It'sa good! hedge for inflation in the Infrastructure has been positive so far this year at3. .5%. IFM is up 3.8% and. JPI Morgan is up 3.5% for the quarter as well,j just over 1% above, year-to-date. Cohen and Steers isal listedi infrastructure equity. It's negative but it's not down anywhere near as much ast thel broad equity markets. About $300,000 is kept there tor rebalance ina and out ofinfrastructure: ast tol leavet thej private investments Private equity and private credit year-to-date, private equityi is only down 501 basis points whereas stocks are down 17% and 18%5 year-to-date. Thep private credit, over thej past years, have been down Thel little things added! have been different, from a return pattern point-of-view, ultimately leading to ac drop in volatility and better protection ont the downside. Iftherei isaf fast aggressive growing equity market, ity willl lagt the market int thatt that environment, but from an absolute return point-of-view, returs should be well abovet the assumed rate ofreturn Int that environment. Washington County is nicely diversified sot there shouldi never be al bigs shock because there ares sOI many different  truet toi its name of defensive equity.  real asset bucket.  alone.  only 1% whereas the other fixedi income is down around 7%.  investments doing different things.  The traditional assetsi in OPEB are very similar but this fund is smaller sot there are noj privates ini it. There is listed infrastructure instead ofp private infrastructure. The only private ini it is private real estate. Outside that, looking at performance, itf finished at $22.5 million, down 9.3%, so the absolute    is downa al littler more than the pension fund due tot the more aggressive investment and there not being as much private. Relatively, itisa about 180b basis points above policyi index because the structure withini iti ist more like our OCIO model. Thisi is due toi itb being built from the ground up, where the pension fund! hasi investments that! havel beent there many: years. Other things were fita around it, so that isv why absolute little worse. Itisr more aggressively invested but relatively better because the OCIO portfolio isi modeled tol be optimal andt top quartile performers in risk off markets. Similarly, things worked well and didn't work as well from an attribution point of view. Overt the pasts seven, therel has been a gain of over $71 million. Compared to other counties, many others that have this liability do notl have ai fund. Washington County fundedt that over seven years ago. By putting moneyi into ai fund, al higher discount rate is used, duet toi investment, bringing liability down. Morei importantly, with over $71 million of gains, money doesn'thave tol be takent from the general fund. Longer term performance was predominantly indexing, but more importantly, more recently itl has been diversified, atl least across thet traditional asset classes. For the year, itis over 2% ahead.  The meeting was adjourned at 3:41 p.m.  THE FOREGOING MINUTES SUBMITTED FOR APPROVAL:  2022  ATTEST: