Board acts according to policy, places large-cap value equity portfolio on ‘watch list’
The Washington County Retirement Board last week voted to place the large-cap value equities of the C.S. McKee L.P. institutional investment management firm of Pittsburgh on a “watch list,” as required by the board’s policy statement, because that specific portfolio did not meet benchmarks.
The vote was unanimous among the retirement board, which includes Washington County commissioners, county Treasurer Francis King and Washington County Controller Michael Namie. The specific portfolio has declined 3.1 percent so far this year, according to information prepared for the county, but the retirement board took into account the past five years.
“The stocks that they’re picking have just not done well,” Namie said after Thursday’s meeting.
Instead of 12.9 percent of the portfolio, the C.S. McKee value equity will make up 9 percent. The board will move assets taken from the McKee portfolio to the Vanguard Institutional Index.
Eugene M. Natali Jr., senior vice president of C.S. McKee, compared current market conditions to those of 1998 and 1999 and asked “for patience on both sides … We had these same conversations 15 years ago.”
Commission Vice Chairman Diana Irey Vaughan has the most seniority as a Washington County commissioner and has been a member of the retirement board longer than her colleagues, three-term Commissioner Larry Maggi and one-term Commissioner Harlan Shober.
Irey Vaughan said, “I was here during that time in the ’90s. You’ve had so many changes internally. That is what concerns me.” The board’s investment management consultant, Peirce Park Group, charted the departure, for various reasons, of five key people from the firm.
By law, Pennsylvania counties are required to have defined-benefit plans for employees. Washington County’s retirement system has 683 pensioners and 1,034 active members, according to Namie. The fund contained $144,241,753 at the end of November.