Board Adopts New Portfolio Construction Process
Presented at December 2, 2015 meeting
The Functionally Focused Portfolio (“FFP”) construction framework was adopted by the Board of CCCERA at the December 2, 2015 meeting. The Functionally Focused Portfolio breaks the investment portfolio into three pools along functional lines; a liquidity portfolio for paying current benefits, a growth portfolio to grow CCCERA’s assets to pay future benefits, and a diversifying portfolio to offset risks in the growth portfolio.
Verus, CCCERA’s investment consultant, developed a series of asset mixes through which to implement the Functionally Focused Portfolio. These asset mixes are shown in Verus’ asset allocation report, which was also presented at the December 2, 2015 Board meeting. At that meeting, the Board voted to adopt the 4-year, unconstrained FFP model, which calls for four years of benefit payments to be held in safe, liquid assets in the liquidity portfolio. CCCERA will begin implementation of the FFP in 2016.