Overland Pension Plan (Non-Uniform) Board of Trustees - Regular Meeting

May 7th, 2026. Uh, Melissa, if you could please call roll. Scott Pope here. Katie Sanders here. Mark Jeru here. Ken Crowder here. Mayor Little here. Steven Boyce here. Lieutenant Leiden here. Sergeant Ryan here. And Chief Mackey is excused. All right. Thank you. And for those of you who have not noticed, please welcome Sergeant Ryan here to join us. He's taking Captain Morgan's place on the pension committee,

so he's with us indefinitely. So, welcome. Um, first item here is approval of the minutes from the joint board of trustees uh meeting February 5th uh 2026. And before we uh have a motion and approval, uh, Sergeant Ryan, since you weren't in attendance there, you can feel free to abstain on the minute approvals. Um, so with that said, I will seek a motion for approval. I'll make the motion. Second. And all those in favor? I.

Any opposed? Uh, any abstained? Great. Thank you. Uh minutes are approved. On to approval of the bills. We'll start with the non-uniform bills 13,328 and.37 cents. I seek a motion for approval there from the non-uniform folks. I'll make a motion. I'll second. All those in favor? I. Any opposed? Non-uniform bills are approved on to police bills of 14,198.38 cents. I'll make the motion. Second. All those in favor? I. Any opposed? That motion uh carries. Uh Melissa, the staff report, please.

Um the 2026 cost of living adjustment. Last meeting I told you about the police pension. This time it's about the non-uniform pension. Uh the change this h this part hasn't changed. The change in St. Louis Metropolitan CPI is 2.36% in accordance with the municipal code 125.200. Eligible retire retirees of the non-uniform plan will receive a cost of living adjustment on June 1st of this year. Um, which is 60% of the change in CPI. So, their COLA will be 1.42%. The total monthly increase is $1,199 for an annual increase of $14,390.75 overall. And then the actuarial valuation is in process. Um, all required information has been sent to Milleman and they will have the report for us at the next meeting.

Perfect. Thank you. Thank you. Uh, legal council report, please.

The Missouri Legislature is now in session and the hot item on their agenda is tax reform. There are probably almost two dozen bills pending that address different types of taxes. The one that has made its way through would impact income tax, which um I don't think your pensions receive money from income tax. I think it's more property tax, but they have voted to put a measure on either the November ballot or special election ballot so that we can all vote to decide whether we want to repeal income tax or not. It would be replaced with sales tax. So, you won't be getting off without tax. It would just be a different tax. Um, but still pending are a lot of different bills that would address real estate taxes, which could impact your pension funding. They have looked at ideas like putting caps on increases or maybe making some exceptions like for veterans. At this point, there are so many different pending bills that I'm just going to wait until our next meeting to let you know what did or did not pass. just know that that is something on their minds right now looking into the possibility of lowering real estate taxes or at least limiting the amount that they can increase each year. Any questions?

Okay, that is all then. Thank you. Thank you. And on to the financial advisor report. Mr. Flynn, welcome back.

Thank you all. Um, I will start with the thick quarterly reports. I'm going to speak to the police, but um, I think that all the information, all the page numbers are the same as usual. Um, if you've paid attention, there's a lot of uncertainty. I could probably start off every presentation by talking about the uncertainty and then wrap it up by saying despite the uncertainty, the markets continue to just go higher and higher. So remain invested. Don't be alarmed. Stick to the the long-term plan. So, can avoid everything else I want to say, but if you want, um I'm not gonna put you through too much detail, but hopefully just a few minutes on the markets into the good news of the portfolio. Uh March was okay of a month. Not nothing to write home about. Um on a on an absolute basis, was pretty good relatively compared to benchmarks. Managers did well when markets were choppy. And then April, you know, things went haywire. Straight up. Everything's good. Markets are continuing to climb, set new all-time highs. So, taking a step back, the first quarter, you know, the book ends as of March 31st and all the events and stuff, but on page five, we have a lot of I put some bullets in about what's going on. Of course you know that uh the the war conflict whatever is going on in Iran now uh straight of hormuse where 20% plus of oil travels through uh to get to the global economy that's pretty much shut down right now. So the effect of that on markets is that uh prices are going up. So prices for oil have gone up u because the supply has been cut. Um there's been this period where all these nothing's going through here. Uh and that's starting to to impact the the global economy. Oil is an input into a lot of a lot of things. Uh and how that trickles down still remains to be seen. So when that initially happened at I think February 28th markets sold off. The S&P

was down about 5% in March, but as I will show bounced back pretty sharply in April as investors generally said, "Okay, they'll come to a some sort of agreement. this isn't going to evolve into World War II and let's remain invested and even buy low, push the markets higher. And that's what's happened so far. So the big concern is that these higher prices are going to lead to higher inflation. Uh so far it's too early to really measure how that's impacting inflation at home. U but what has happened the third bullet there, the Federal Reserve was previously expected to cut rates twice this year. So cut interest rates by about a half a percent. Now, uh, the expectations are that the Fed is not going to cut rates because inflation's a little bit higher. Lower rates boosts inflation. So, you want inflation to come down, they can cut rates, and that's kind of the happy medium. But so far, expectations are that rates are not going to go down any further, which isn't good for your fixed income. Isn't, you know, it's okay for equities. There's other factors that are going to impact that, but um unemployment rate has been pretty stable despite all this. um inflation, you know, I say there long-term inflation is expected to remain about where it is, but short-term could have spikes because of the the short-term volatility in oil. So, overall, a lot of questions that that kind of uh proceeded through the end of the first quarter. Um I covered a lot of that, but you see, um on page six, the the left chart um that just shows monthly returns for various indices. And had we met on April 1st, you might be concerned. You might say, "Oh, markets were down." Emerging markets equities were down 13%. Because those China, India, those are more reliant on Middle Eastern oil. So those were hurt more. The S&P 500 and the Russell 2000, those those US indices were only down about 5% because the US produces its own oil, doesn't need it from the Middle East. And then uh fixed income rates, those were negative

because when interest rates go down, that's good for fixed income. interest rates are going to stay where they are, potentially go up. That's not good for So that's generally what had happened through the end of March. Um page eight, just taking a long-term view at what this means. This is the S&P 500's return since precoid days. we show that that dip uh in in early 2020 but since then there have been some some dips in the market but generally take a wider angle view and markets have continued to just go straight up on the very far right you can see that decline in March so 5% seems like a big decline but when you look at the big picture it's happened before it's happened recently uh several times and still markets continue to climb and if we tacked on what happened in April uh you would be, you know, back to new all-time highs. Uh, page 10, the bottom right, um, we look at, and so we kind of focus on the S&P 500 just because the companies, you know, it's a big piece of portfolio. It's a lot easier to understand that story than it is some small cap Russell 2000 stock that's a much smaller piece. You might not be familiar with the name, but a lot of the concern is that the magnificent seven uh is the seven biggest tech stocks playing too big of a role in the economy. The bottom right here shows uh the last four years, you know, three complete years and then year-to- date what's happened. The the S&P 7 versus the S&P 493, so I guess the magnificent seven, Google, Tesla, Meta, all those that are listed there. Um those have outperformed the S&P 500 in 23 and 24 and just Sorry, did I say the S&P 500? The S&P 493. So the majority of returns came from just those stocks, those seven stocks two years in a row and they were pretty much even in 2025. So the concern now is that these stocks are going to sell off and as they did in

the first quarter, uh the S&P 493 was pretty much flat, but these stocks that had had flown very maybe too close to the sun were down quite a bit uh driving the entirety of the the negative return. So they contributed 5% decline the entirety of the the 5% decline in the first quarter. You might think, okay, we have too much large cap, the market's overvalued. Let's let's trim. Let's remain balanced. I really just point this out to give an update because these are questions that people have at the end of March. But then things change uh as as we proceed now into into early May. So page 12 shows the the quarterly returns for various asset classes. The three months is just year-to- date through March. and then of course longer term periods out to the right. So for the three months for the quarter the S&P 500 was down you know 4.3% the Russell 2000 those are small cap US stocks were slightly up but all other asset classes were were flat to modestly down despite you know they were up through the first two months down quite a bit in March and then what's happened since then is that things have gone straight up and and recovered quite sharply. The S&P 500 in April was up 10%. Emerging markets since those had fallen more were up almost 15% in April. So really all maybe all was for not all the all the concern maybe were past most of the concerns that that everybody had but still we're not out of the clear just yet. So what this means is I'm going to I'm addressing the issues the concerns that we had but also saying that the markets have generally moved past those. Uh but that's not to say there won't be a tweet or a con conversation tomorrow or today that they could send things the other way. But so far uh I think the worst of the concerns are so how do the portfolios look on uh page 23 and I guess I will side by side look at the police and the non-uniform. So we

have those both on on page 23 as they respect books. the the total assets are are pretty consistent across these two plans. The police plan 16.7 million at the end of the quarter. The non-uniform plan 15.1. Uh just looking side by side, the equity target for the police plan is 65%. The equity target for the non-uniform plan is 60%. All else is is pretty consistent aside from that. So um when equity markets are have outsized returns the plan with more equity is going to do a little better and and vice versa when things go down. Um on the following page page 24 we just see the you know beginning market value ending market value what the impact of investing is. Uh 10 years ago you started the the the decade with uh in the police case 11.8 8 million and you've grown to $16.7 million while taking out $6 million. So the impact of investing has gained almost $1 million for that plan. The non-uniform has gone from 9.4 million to 15.1 million while taking out $3.4 million. So the the growth the ROI there the the benefit of investing and doing all this brain damage and you know keeping tabs on your investment managers 9.1 million of growth there. So really good good times you have participated in these these record highs that the stock market continues to make. And then finally um with a quarter book page 28 I think I'll highlight that uh the three-month period for both of these plans plans were slightly down. Um the police plan was down 77%. So not a significant decrease. Uh the non-uniform plan was down 66%. So small quarterly decreases, they happen from time to time. They have been a lot less frequently in recent years. Uh but you compare those with the policy index. The policy index both cases were down about

2%. So what happened is that the managers were able to be a little more nimble were a little more opportunistic when markets were down and that's what we like to see. So pretty much across the board small cap and non- US managers in particular when those stocks are selling off and going haywire they may have a little more cash. they may invest in a little higher quality companies. And generally what we like to see and what we evaluate managers are is their downside protection when markets go down. We're a little more comfortable with markets trailing on the upside so long as they protect on the downside. Gives you a much smoother ride. I just wanted to point out that that came to fruition in the first quarter. So it's not necessarily that you're outperforming when things are really good. It's you're outperforming when things are really bad. And that's just as important if not more important. you know, collectively they all kind of did that in unison, which was really good to see in looking at this report. Then finally, I'll go to the the April reports, the the printed out stapled versions. Uh both plans, as I mentioned, as you can infer, were up quite a bit. Uh almost 6% for the month. Um the values are at all-time highs again, seeing that the year-to- date returns are both about up about 5%. So, you know, you're at all-time highs at the end of December, all-time highs at the end of March. Longer term history. Over the last decade, both plans have outperformed their policy index, which means that managers collectively are beating their benchmarks. You roll that all up and things are working as planned and we're pretty comfortable with the lineup and how you all are managing and keeping tabs on. That's my long- winded explanation, but overall we've got our eyes on things and manager lineups appropriate. We're doing all the right things, so keep it up.

Any questions? Thank you. Thank you. All right. on our end here unless there are any other matters that we need to take up today. Uh we got to talk about next meeting date. So we have three Does everybody have three options on their minutes? Uh if not, I have three dates here. If uh anybody could tell me if they're not able to make any of these? Uh first option would be July 30th at 1:30 p.m. That's a Thursday. It's good.

See good from everybody. All right. What's plan for that one then? All right. And that was a quick one today. Thank you everybody. Everything's moving the way it should here. Uh with that uh said, I'd like to seek a motion to adjurnn. So move. Second. All those in favor? I. Any opposed? We'rejourn. Thank you.