1981-024-Recommending Review Of Current Investment Policies By Pers Board Of DirectorsRESOLUTION NO. 1931 -24
A RESOLUTION RECOMMENDING REVIEW OF CURRENT
INVESTMENT POLICIES BY PERS BOARD OF DIREC-
TORS.
WHEREAS, the most recent Report to the Governor from the Board of Directors
of the Public Employees' Retirement System dated January 12, 1981,
reveals that the "computed rate of return" on the entire $12.85
billion investment portfolio was 7.91% for the fiscal year ending
June 30, 1980; and
WHEREAS, the interest crediting rate was increased by PERS Board of
Administration to 6.5% effective July 1, 1980; and
WHEREAS, Federal Treasury Notes, Federal T- Bills; and Short -Term Commercial
Paper has been yielding interest rates ranging from 12% to 20%
over the past 18 months, depending on the amount to be invested;
and
WHEREAS, 49% of the PERS $12.85 billion investment portfolio as of
June 30, 1980, is placed in bonds, many of which are long -term
investments yielding only 3% and 4 %; and
WHEREAS, only 4.1% of the investment portfolio as of June 30, 1980, is
placed in short -term investments, at a time when money market
funds are earning up to 20% for large investments; and
WHEREAS, public agency employers such as PERS member cities and counties
are experiencing continuous employer rate increases, following
periodic audits of the financial integrity of the PERS system;
NOW, THEREFORE, BE IT RESOLVED that the Town of Los Gatos hereby recommends:
1. That the Board of Administration of PERS explore whether a
significantly higher percentage of investments should be
placed in short -term investment with higher yield than most
typical long -term investments; and
2. That the League of California Cities take whatever steps
are necessary to encourage the PERS Board of Directors to
fully investigate their investment policies, especially as
they relate to the amounts invested in long -term as compared
with short -term investments; and
3. That the Town urge State Senator Daniel O'Keefe and State
Assemblyman Ernie Konnyu to support the current efforts of
Assemblyman Louis J. Papan in creating a Legislative Committee
to investigate the investment policies of the Public Employees'
Retirement System; and
4. That the sole purpose of this resolution is to maximize the
interest earnings from investments for the benefit of member
cities and individual members of the Public Employees
Retirement System (PERS), and in so doing to reduce the
need for employer rate increases which would otherwise
have to be funded from tax revenues.
5. That copies of this resolution be forwarded to the following:
President, League of California Cities
President, Board of Administration, Public Employees'
Retirement System (PERS)
Executive Officer, PERS
State Senator Daniel O'Keefe
State Assemblyman Ernie Konnyu
PASSED AND ADOPTED BY THE TOWN COUNCIL OF THE TOWN OF LOS GATOS, CALIFORNIA,
at a regular
meeting held this 2nd
February , 1981, by the following vote:
ATTEST:
day of
AYES: COUNCIL MEMBERS Ruth Cannon, Marlyn J. Rasmussen,
Peter W. Siemens, Brent N. Ventura and Thomas
J. Ferrite
NOES: COUNCIL MEMBERS None
ABSENT: COUNCIL MEMBERS None
ABSTAIN: COUNCIL MEMBERS None
SIGNED:
lqAYOR OF HE TVKCrF LOS GATOS
'6 ,Lr
CLERK OF THE TOWN OF LOS GATOS
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