Board Regular Meeting · 2021. 1. 5. · Board Regular Meeting Schedule Venue Organizer Wednesday,...

Board Regular Meeting

ScheduleVenue

Organizer

Wednesday, February 26, 2020, 9:00 AM — 12:00 PM TRS Board Room, 5th Floor, 2500 N Lincoln Blvd., Oklahoma City, Okla.Phyllis Bennett

Agenda

1. Roll Call for Quorum

2. Discussion and Possible Action on Approval of January 22, 2020, BoardRegular Meeting Minutes

Bd-2 Minutes-01-22-20-BdRegMtg-draft.docx 1

3. Discussion and Possible Action on Investment Committee Report

3.1. Discussion and Possible Action on Master Custodian RFP Selection

Bd-3.1 Global Custodian RFP Selection.pdf 8

3.2. Discussion and Possible Action on Amendments to Investment PolicyStatement

Bd-3.2 TRS Investment Policy Statement - DRAFT - Feb 26 2020.pdf 14

3.3. Discussion and Possible Action on Selection of Finalists for Open-End Non-Core Real Estate RFP and Amendment of April Investment CommitteeMeeting Time

Bd-3.3 TRSO_Open_End_Core Plus Real Estate RFP 2020.pdf 45

3.4. Discussion and Possible Action on Investment Consultant Quarterly Report

Bd-3.4.a AndCo-QuarterlyReport.pdf 86 Bd-3.4.b 2019-09-30 TRSO (Alternatives Summary) (004).pdf 167

3.5. Discussion and Possible Action in Chief Investment Officer Report

Bd-3.5 CIO Report Feb2020.pdf 269

3.6. Discussion and Possible Action on Harvey Parkway Building Fiscal Year toDate Financial Report

Bd-3.6.a HarveyPkwySummaryBalSheet12-31-19.pdf 275 Bd-3.6.b HarveyParkwayBudget&IncomeStateFYTD 12-31-19.pdf 276

3.7. Discussion and Necessary Action to Approve a Capital Expense for theHarvey Parkway Building in Excess of $50,000

Bd-3.7 HarveyParkway5thFloorHeatPumpsMemo2-21-20.pdf 277

4. Discussion and Possible Action to Approve Budget Changes to Pay forFurniture, equipment and other expenses related to the relocation of the TRSOffice to the Harvey Parkway Building

Bd-4 BudgetChangesReOfficeMove-2-20-20.pdf 278

5. Discussion and Possible Action on Committee Reports:

5.1. Audit Committee

5.2. Governance Committee:Discussion and Possible Action to Approve Amendments to CommitteeCharters Contained in Board Policy Manual

Bd-5.2 Charters Amendments.docx 280

6. Discussion and Possible Action to Approve the GAS B 68 "Schedule ofEmployer Allocations and Collective Pension Amounts" and GASB 75"Schedule of Employer Allocations and Collective Other PostemploymentBenefits Amounts" Prepared by External Auditor Eide Bailly

Bd-6.a GASB 68 2019 AU 260 Letter.pdf 287 Bd-6.b GASB 68 Final Signed 2019 Report.pdf 290 Bd-6.c GASB 75 2019 AU 260 Letter.pdf 318 Bd-6.d GASB 75 2019 Financial Statements.pdf 321

7. Discussion and Possible Action to Set Contribution Rate for Federal and GrantMatching Funded Position for FY 2021

Bd-7 FederalGrantMatchFY2021Memo.pdf 348

8. Discussion and Possible Action to Review First Draft of Board ProcurementPolicy to be Included in the Board Policy Manual Upon Final Approval

Bd-8 Board Procurement Policy Feb 2020.docx 349

9. Discussion and Possible Action on Staff Recommendations on ProposedLegislation for the 2020 Session

Bd-9 TRSOpposeSupport2-22-20.docx 353

10. Discussion and Possible Action on Agency Reports:

10.1. Client Services

Bd-10.1 Feb2020 ClientServicesBd Report.pdf 361

10.2. Human Resources

Bd-10.2 HR Status Report 2020-02-26.pdf 363

10.3. Financea. Employer Reportingb. CFO Report

Bd-10.3.a Employer Reporting.pdf 364Bd-10.3.b CFO Reports.pdf 365

10.4. Deputy Director of Operations

Bd-10.4 DepDirRpt-Feb2020.docx 371

10.5. General Counsel

Bd-10.5 GC Report Feb.docx 372

10.6. Executive Director

2500 N. Lincoln Blvd., 5th Floor, Oklahoma City, OK

11. Questions and Comments from Trustees

12. New Business

13. Adjournment

Next meetings:Investment Committee - 2 p.m. Tuesday, April 21Board Regular Meeting - 9 a.m. Wednesday, April 22

MEETING MINUTES

JANUARY 22, 2020

BOARD OF TRUSTEES REGULAR MEETING

TEACHERS’ RETIREMENT SYSTEM OF OKLAHOMA

A regular meeting of the Board of Trustees of the Teachers’ Retirement System of Oklahoma was called to

order by Roger Gaddis, Vice-Chairman, at 9:02 a.m. January 22, 2020, in the Administration Board Room, 5th

Floor, Oliver Hodge Education Building, 2500 N. Lincoln Blvd., Oklahoma City, Oklahoma. The meeting

notice and agenda were posted in accordance with 25 O.S. Section 311(A)(9).

TRUSTEES PRESENT:

Roger Gaddis, Vice-Chairman

Tim Allen

Bill Bentley

Rod Boles

Lisa Henderson*

Michael Kellogg

Brandy Manek

Brandon Meyer

Chris Rector

Mathangi Shankar

Stephen Streeter

Drew Williamson*

Greg Winters

TRUSTEES ABSENT:

Vernon Florence, Chairman

Judie Harris, Secretary

TRS STAFF PRESENT:

Tom Spencer, Executive Director

Sarah Green, General Counsel

John Santos, Deputy Director of Operations

Dixie Moody, Director of Client Services

Kirk Stebbins, Chief Investment Officer

Sam Moore, Director of Finance/CFO

Kim Bold, Director of Human Resources

Debra Plog, Employer Reporting Manager

Joe Cappello, Sr. Investment Officer

Phyllis Bennett, Executive Assistant

OTHERS PRESENT:

Doug Anderson, AndCo Consulting

Peter Brown, AndCo Consulting

Jack Evatt, AndCo Consulting

Steve Massey, OREA

Wayne Maxwell, RPOE

* Denotes late arrival or early departure

ITEM 1 - ROLL CALL FOR QUORUM: Vice-Chairman Gaddis asked the recording secretary to call roll to

determine if a quorum was present. Trustees responding were Mr. Allen, Mr. Bentley, Mr. Boles, Mr. Gaddis,

Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr. Streeter, and Dr. Winters. A quorum was

present.

ITEM 2 – SWEAR IN NEW NON-VOTING TRUSTEE, BILL BENTLEY: Mr. Bentley read the Oath of

Office and shared some information about himself. Mr. Bentley will serve a one-year term on behalf of Retired

Professional Oklahoma Educators.

Ms. Henderson arrived at 9:02 a.m.

ITEM 3 – DISCUSSION AND ACTION ON APPROVAL OF MINUTES FROM DECEMBER 11, 2019,

BOARD REGULAR MEETING:

Page 1 of 372

A motion made by Dr. Winters with a second made by Mr. Boles to approve the minutes of the December 11,

2019, Board Regular Meeting carried by a unanimous voice vote. Trustees responding were Mr. Allen, Mr.

Boles, Mr. Gaddis, Ms. Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr.

Streeter, and Dr. Winters.

Mr. Williamson arrived at 9:07 a.m.

ITEM 4 – DISCUSSION AND POSSIBLE ACTION ON INVESTMENT COMMITTEE REPORT:

Investment Committee Chairman Roger Gaddis presented items discussed in yesterday’s meeting.

The next item was taken out of sequence.

4.2 - DISCUSSION AND POSSIBLE ACTION ON AMENDMENTS TO LIMITED PARTNERSHIP

AGREEMENT, FEE SCHEDULE AND INVESTMENT MANAGER AGREEMENT WITH L&B

REALTY FOR THE GOLDEN DRILLER FUND: TRS General Counsel Sarah Green reviewed TRS’

relationship with L&B and the proposed amendments to the investment manager agreement with L&B and the

agreement with Golden Driller LP.

A motion out of the Investment Committee to approve the proposed amendments subject to minor modifications

upon legal approval carried by a unanimous voice vote. Trustees responding were Mr. Allen, Mr. Boles, Mr.

Gaddis, Ms. Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr. Streeter, Mr.

Williamson and Dr. Winters.

4.3 - DISCUSSION AND POSSIBLE ACTION ON INVESTMENT CONSULTANT MANAGER

REVIEW: Mr. Gaddis said the report prepared by AndCo Consulting was reviewed in depth at the Investment

Committee meeting yesterday. Investment Consultant to the Board Doug Anderson reviewed Hotchkis & Wiley

and Geneva Capital, which are on AndCo’s watch list due to performance and ownership change respectively.

He also pointed out AndCo’s research group and the reports they generate.

4.4 - DISCUSSION AND POSSIBLE ACTION ON INVESTMENT CONSULTANT REPORT: Mr.

Anderson presented AndCo’s investment performance review for the period ending December 31, 2019. For the

Market, he reported CY 2019 the S&P 500 was up 31.49% and U.S. Aggregate bond index was up 8.72%. Also

for CY 2019, TRS’ Total Fund Composite was up 9.49%; Total Equity Composite was up 25.53%; the Total

International Equity Composite was up 21.34%; and the Total Fixed Income was up 11.83%. TRS’ Total Fund

market value was at $17,741,769,007, and Mr. Anderson said the current value is now higher. He added that

FYTD, the TRS’ Total Fund Composite is up 5.69%.

4.5 - DISCUSSION AND POSSIBLE ACTION ON CHIEF INVESTMENT OFFICER REPORT: TRS

Chief Investment Officer Kirk Stebbins reviewed projects and education sessions planned for 2020. He reported

that the Real Estate open-ended RFP responses are due Friday and the Custodial Bank RFP responses are due

January 31. Mr. Stebbins encouraged Trustees to take a copy of CFA Institute’s “A Primer for Investment

Trustees” that he provided.

4.1 - DISCUSSION AND POSSIBLE ACTION ON MID CAP U.S. EQUITY STRUCTURE: Mr. Gaddis

referred Trustees to the Executive Summary and graphs in the “Mid Cap Equity Structure Review and

Proposal” that the Investment Committee discussed thoroughly yesterday. Mr. Stebbins reviewed the

Conclusion & Recommendation report. There was discussion on the recommended changes, investment

managers involved, and how much TRS can save in fees.

Page 2 of 372

ITEM 5 – DISCUSSION AND POSSIBLE ACTION REGARDING JOINT STAFF AND

CONSULTANT MID CAP U.S. EQUITY STRUCTURAL REVIEW INCLUDING POSSIBLE

CHANGES TO ALLOCATIONS AMONG ACCOUNTS, REALLOCATIONS OF FUNDS TO

ACHIEVE DESIRED ALLOCATIONS AND/OR POTENTIAL TERMINATION OF AGREEMENTS

WITH ANY OR ALL OF THE FOLLOWING ASSET MANAGEMENT SERVICES REQUIRED TO

ACHIEVE DESIRED OUTCOMES

a. AJO, LP

A motion made by Mr. Gaddis with a second made by Dr. Winters to terminate the Mid Cap account managed

by AJO and transition funds to Northern Trust as successor manager and to allow staff to make allocations as

necessary carried by a unanimous voice vote. Trustees responding were Mr. Allen, Mr. Boles, Mr. Gaddis, Ms.

Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr. Streeter, Mr. Williamson and

Dr. Winters.

b. Frontier Capital Management

A motion made by Mr. Gaddis with a second made by Mr. Meyer to terminate the Mid Cap account managed

by Frontier Capital Management and transition funds to Northern Trust as successor manager and to allow staff

to make allocations as necessary carried by a unanimous voice vote. Trustees responding were Mr. Allen, Mr.

Boles, Mr. Gaddis, Ms. Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr.

Streeter, Mr. Williamson and Dr. Winters.

c. Hotchkis & Wiley Capital Management, LLC

d. Wellington Management Company, LLC

e. NTAM Russell 1000 Index

f. NTAM SciBeta Index

Mr. Gaddis said no action will be taken on items c, d, e and f.

ITEM 6 – DISCUSSION AND POSSIBLE ACTION TO AMEND THE INVESTMENT MANAGER

AGREEMENT WITH NORTHERN TRUST TO INCLUDE RUSSELL MID CAP INDEX SERVICES

UNDER MANAGEMENT OF NORTHERN TRUST AND DETAILING FEES AND INVESTMENT

GUIDELINES FOR SERVICES RENDERED:

A motion made by Dr. Winters with a second made by Mr. Rector to amend the investment manager agreement

with Northern Trust to include the Russell Mid Cap Index Services under management of Northern Trust and

detailing fees and investment guidelines for services rendered carried by a unanimous voice vote. Trustees

responding were Mr. Allen, Mr. Boles, Mr. Gaddis, Ms. Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr.

Rector, Ms. Shankar, Mr. Streeter, Mr. Williamson and Dr. Winters.

A motion by Dr. Winters with a second made by Mr. Rector to amend the previous motion to include using

Northern Trust as the transition manager carried by a unanimous voice vote. Trustees responding were Mr.

Allen, Mr. Boles, Mr. Gaddis, Ms. Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar,

Mr. Streeter, Mr. Williamson and Dr. Winters.

ITEM 7 - DISCUSSION AND POSSIBLE ACTION ON COMMITTEE REPORTS:

a. Audit: DISCUSSION AND POSSIBLE ACTION ON STINNETT & ASSOCIATES’ REPORT

ON CYBER SECURITY: Audit Committee Chair Dr. Winters reported that the committee had a

Page 3 of 372

conference call last week about OMES I.T. issues with Stinnett & Associates. He said there is positive

movement with OMES and the committee continues to work with them on the cyber security protection

TRS is seeking. It was decided not to close out the Cyber Security Audit because recommendations are

expected to come at the end of this week. It is hoped that the Cyber Security Audit will be closed out at

the February meeting. TRS Executive Director Tom Spencer shared positive comments about OMES

Director Steven Harpe.

b. Governance: Governance Committee Chair Mr. Kellogg said there was nothing to report.

ITEM 8 – DISCUSSION AND POSSIBLE ACTION ON AMENDMENTS TO VISION STATEMENT:

Mr. Spencer reviewed the Vision Statement that was approved by the Board at the October 2019 Retreat. He

said after further input from Trustees changes were made and he presented a draft of an amended Vision

Statement for consideration.

A motion made by Dr. Winters with a second made by Mr. Kellogg to approve the amended Vision Statement

as presented carried by a unanimous voice vote. Trustees responding were Mr. Allen, Mr. Boles, Mr. Gaddis,

Ms. Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr. Streeter, Mr. Williamson

and Dr. Winters.

ITEM 9 – DISCUSSION AND POSSIBLE ACTION ON FINAL ADOPTION OF PERMANENT

RULES: 715:1-1-5[AMENDED]; 715:10-1-6[AMENDED]; 715:10-5-7[AMENDED]; 715:10-9-

3[AMENDED]; 715:10-13-15[AMENDED]; 715:10-15-3[AMENDED]; 715:10-17-5[AMENDED]; 715:10-

17-16[NEW]: TRS General Counsel Sarah Green explained that in current rulemaking process TRS received no

comments during the public comment period from December 3, 2019, through January 2, 2020, and no one

appeared to comment at the public hearing January 6, 2020. The next step is final adoption by the Board and

then the rules will be submitted to the Governor and Legislature.

A motion made by Mr. Meyer with a second made by Dr. Winters to adopt the permanent rules 715:1-1-

5[AMENDED]; 715:10-1-6[AMENDED]; 715:10-5-7[AMENDED]; 715:10-9-3[AMENDED]; 715:10-13-

15[AMENDED]; 715:10-15-3[AMENDED]; 715:10-17-5[AMENDED]; 715:10-17-16[NEW] carried by a

unanimous voice vote. Trustees responding were Mr. Allen, Mr. Boles, Mr. Gaddis, Ms. Henderson, Mr.

Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr. Streeter, Mr. Williamson and Dr. Winters.

Ms. Green requested a break to allow the executive assistant to fix the orientation of some documents on the

meeting tablets.

A break was taken from 10 a.m. to 10:10 a.m.

ITEM 10 – DISCUSSION AND POSSIBLE ACTION ON SECURITIES LITIGATION REPORT: Ms.

Green explained that one of her duties is to provide the Board an annual report of TRS’ class action claims

filing status. She said TRS’ previous custodial bank was JP Morgan and is now Northern Trust. Staff files

claims involving JP Morgan. She presented Northern Trust’s report of Class Action Activity dating back to

January 2010. Northern Trust gets 2% of proceeds, up to a maximum of $1,000 per claim filed. It recovered

$93,251.34 on behalf of TRS in FY 2019.

ITEM 11 – DISCUSSION AND POSSIBLE ACTION ON STAFF RECOMMENDATIONS ON

PROPOSED LEGISLATION FOR THE 2020 SESSION: Mr. Spencer reviewed bills relevant to TRS that

have been filed for the 2020 Legislative session. There were several bills requesting COLAs to state retirement

systems, a couple of which were held over from last year as they were referred to the Legislative Actuary. Mr.

Page 4 of 372

Spencer explained that last year Gov. Stitt issued an executive order stating that State agencies cannot have

contract lobbyists without approval of their cabinet secretary. TRS did not seek approval for a contract lobbyist.

There was discussion. No action was necessary.

ITEM 12 – DISCUSSION AND POSSIBLE ACTION ON SELECTION OF FINALIST FOR

EXTERNAL AUDITOR SERVICES: Mr. Spencer said TRS’ Board of Trustees and the State Auditor &

Inspector’s office issued a joint RFP for external auditor services. He reviewed information about the five

candidates and said TRS and SAI recommend the Board retain Eide Bailly as TRS’ external auditor. The five-

year contract will cost $502,100.

A motion made by Dr. Winters with a second made by Mr. Allen to retain Eide Bailly for external auditor

services carried by a unanimous voice vote. Trustees responding were Mr. Allen, Mr. Boles, Mr. Gaddis, Ms.

Henderson, Mr. Kellogg, Ms. Manek, Mr. Meyer, Mr. Rector, Ms. Shankar, Mr. Streeter, Mr. Williamson and

Dr. Winters.

ITEM 13 - DISCUSSION AND POSSIBLE ACTION ON AGENCY REPORTS:

13.1 – TRS Client Services Director Dixie Moody reviewed her division’s metrics through December 2019:

There were 350 requests for retirement estimates were received, and around 400 were completed due to

inventory from November. In December there were 4,874 incoming calls, 87% of which were answered by an

Information Center agent within 13 seconds, 11% opted to go through the menu options and 81 callers

abandoned their call after waiting approximately 5 seconds. Client Services received and responded to 228

emails, and 402 members were added to the Member Portal. Of 207 members who applied for a January 1

retirement, 10 were disability retirements, 6 of whom were approved by TRS’ Medical Board, and 4 of by the

Social Security Administration. There were 159 annuities terminated due to death.

13.2 – TRS Human Resources Director Kim Bold reported the manager of the Information Center plans to retire

July 1 and she hopes to fill the position soon to for training purposes. She said department managers are

working on PMPs.

13.3 – Finance:

a. TRS Employer Reporting Manager Debra Plog said there are now two late employer reports and she

explained their reasons for the late reporting.

b. TRS CFO Sam Moore said the Balance Sheet as of December 31, 2019, was up $634.8 million since October

31, 2019. The Statement of Revenues, Expenditures and Changes for the 6 Months Ended December 31, 2019,

reflects late payments to State Credit in FY 2019. Retirement Benefit Payments were lower due to the $18

million stipend that was paid out last year. On the Comparison of Actual Expenditures FY 2019 and FY 2020

for the 6 months ended December 31, 2019, Auditing Services reflects a large decrease because TRS paid BKD

for services, and Postage shows a large decrease because of the large mailing a year ago. On the Comparison of

FY 2020 Budget to Actual Auditing Services was off because TRS had budgeted to pay BKD. The Claims for

Authorized Expenditures were presented without comment.

13.4 – TRS Deputy Director of Operations John Santos reviewed issues he worked on the past month:

• 70,770 1099 forms were generated and sent to a vendor to print and mail. This will result in an increase

in call volume.

• In 2019, there were 81,967 incoming calls, 65,997 answered calls, 33,516 workflows created, 33,417

workflows closed, 2,433 retirements processed and 1,781 terminated annuities processed.

Page 5 of 372

• Annual member statements were generated and available on the Member Portal. TRS is issuing a bid

solicitation for printing and mailing.

• Member Portal: 10,308 user accounts were created in CY 2019. From inception through Jan. 17, 2020,

there are now 32,032.

• OMES has made some progress on the services TRS requested. They scheduled a site visit for network

connectivity to the new building. They also upgraded eight servers and My Consulting will prepare for

testing.

13.5 – TRS General Counsel Ms. Green updated the Board on projects she has been working on:

• Attorney General Opinion Letter Request and Response: Ms. Green reviewed documents related to

TRS’ External Funds Matching Statute.

• Securities Litigation re GE: a. The briefing cycle was completed in November. b. TRS is awaiting

scheduling of oral arguments.

• White Star Bankruptcy: a. A prepetition claim for $169K was filed for May 2019 rent. B. TRS filed a

claim for post-petition debt because White Star’s lease ran through 2021. TRS is limited to one year of

rent, about $1.3 million. Today TRS will file a claim for that amount through its bankruptcy counsel.

White Star originally filed to reject their lease of November 30 but they were still in the building on

December 15, so TRS raised an issue and ended up settling for an additional $50K rent for December

along with furniture White Star left behind.

• Harvey Parkway Building: White Star occupied 72% of the building once and TRS’ property manager is

doing a good job of getting that space filled, which mitigates TRS’ damages from White Star’s lease

running through 2021. a. The first floor has a fitness center and a café area, that is not being used, but

the other side is vacant space where TRS plans to build a conference room. b. Intensity leased one-half

of the 2nd floor January 1, 2020. c. Another company is interested in leasing the remaining 2nd floor

space May 1, 2020. d. Contango, who purchased White Star, leased the entire 3rd floor. Arcadia Capital

who is currently occupying 9,000 square feet on the 4th floor, would like to move to the 6th floor to

occupy 12,000 square feet February 1. Their former 9,000 square foot space will be leased out

eventually. The remaining 4th floor space is occupied by federal tenants and the property manager. e.

TRS renewed the 5-years lease with the Comptroller of the Currency on the 4th floor effective January 1.

f. TRS intends to occupy the entire 5th floor. g. The property manager responded to an RFP from the

Department of Tourism who would like to lease 25K square feet of space. TRS probably does not have

enough space for that but it is good that our property manager responded.

Greg asked how many square feet is on each floor. Mr. Spencer replied it’s 16,000 sq. ft.

• Permanent Rulemaking was discussed earlier in the meeting.

13.6 – TRS Executive Director Tom Spencer shared his activities from December 10 through January 21, 2020:

• Mr. Spencer and TRS CFO Mr. Moore attended Governor Stitt’s Leadership Summit January 7.

Recognition was given to some agencies that had been nominated for various awards. Agency CFOs

later met separately with Secretary of Budget Mike Mazzei.

• Information Technology: In December, the Board authorized TRS to seek a proposal from a software

company to replace ALICE. A request was made to TRS’ Cabinet secretary to approve but he has not

responded.

• Budget Review: Messrs. Spencer, Santos and Moore met with Secretary Mazzei, Secretary of Digital

Transformation David Ostrowe and two OMES budget staffers in December regarding information they

wanted for the Governor’s Annual Budget book. TRS’ highlights include its administrative costs being

some of the lowest in the nation, three of the Oklahoma plans were the top three in the nation with the

highest percentage improvements in funded ratio, and TRS’ long-term investment returns.

• The Legislation report was discussed earlier in the meeting.

Page 6 of 372

• Communications: a. TRS’ Popular Annual Financial Report (PAFR) was included in TRS’ newsletter

which was sent out in December. b. There will be a couple follow-up interviews to hire a

communications firm. c. Mr. Santos talked about the “annual statement”, which is considered a best

practice for public pension plans. It gives members information on their accounts and a benefit estimate.

• The audit was discussed earlier in the meeting.

• Actuarial: Ryan Falls of Gabriel Roeder Smith will present an “experience study” in April. This study is

done to analyze the investment return assumption, inflation, mortality and wage growth. This data is

used for an Asset/Liability study.

• Office Building: Issues with White Star were covered in Ms. Green’s report. Staff was taken in small

groups to tour the Harvey Parkway Building. Mr. Spencer invited Trustees to tour the building.

Meetings with the space planner are ongoing. A moving committee headed by TRS’ Business Manager

is working on details with a goal to be in the building by July 1. There was discussion about furniture

left for TRS at the Harvey Parkway Building and the future of its fitness center. There was also

discussion about sharing TRS’ positive news that was mentioned in the Communications report.

ITEM 14 – QUESTIONS AND COMMENTS FROM TRUSTEES: Mr. Gaddis reviewed upcoming meeting

times of the Investment Committee meeting and reminded Trustees that everyone is invited to attend.

ITEM 15 – NEW BUSINESS: There was no new business.

ITEM 16 – ADJOURNMENT: Mr. Gaddis adjourned the meeting at 11:19 a.m.

By:

_________________________________________

Roger Gaddis, Vice Chairman

Page 7 of 372

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M$3

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$30.42

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$53.6 billion

20

18 ann

ualized

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%2.10

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ualized

return (m

ost u

p‐to‐date)

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nel

Num

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1918

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Page

10

of 3

72

BLEN

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BNY Mellon

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910

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3.3%

89

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3.3%

99

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89

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3.3%

99

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99

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135

115

160

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88%

66%

100%

Page

11

of 3

72

NorthernTrust

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On‐BoardingFee:

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TotalFY21FeeEstimate*

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* Fee

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)

Page

12

of 3

72

APPE

ND

IX: F

Y19

SECU

RITY

LEN

DIN

G BR

EAKD

OW

N

Page

13

of 3

72

Investment Policy Statement adopted September February 1826, 20192020

INVESTMENT POLICY STATEMENT AS OF SEPTEMBER 2019FEBRUARY 2020

Page 14 of 372


Table of Contents

I. INTRODUCTION AND STATEMENTS OF PURPOSE, PHILOSOPHY AND ETHICS .............................. 1

A. Legal Authority and System Description........................................................................ 1

B. Statement of Purpose ...................................................................................................... 2

C. Statement of Investment Philosophy .............................................................................. 3

D. Statement of Ethical Standards ....................................................................................... 4

II. STATEMENT OF DUTIES AND RESPONSIBILITIES ........................................................................ 5

A. Board of Trustees ............................................................................................................ 5

B. Staff ................................................................................................................................. 5

C. Investment Consultant .................................................................................................... 6

D. Investment Managers ...................................................................................................... 7

E. Custodian ........................................................................................................................ 8

F. Securities Lending Agent ............................................................................................... 9

G. Transition Manager ....................................................................................................... 10

III. PROCEDURES .......................................................................................................................... 11

A. Investment Policy Review ............................................................................................ 11

B. Investment Manager Policy Exceptions ....................................................................... 11

C. Third Party Marketing and Referrals Disclosure Policy ............................................... 11

D. Request for Proposal Policy .......................................................................................... 12

E. Additional allocations to a previously retained manager: ............................................ 13

IV. INVESTMENT GOALS AND OBJECTIVES ................................................................................... 14

V. INVESTMENT GUIDELINES AND CONSTRAINTS ........................................................................ 15

A. Public Market Separate Account Investments .............................................................. 15

B. Private Market Partnership Interests and Commingled Account Investments ............. 20

VI. EVALUATION AND REVIEW ..................................................................................................... 23

A. Investment Staff Reporting Requirements .................................................................... 23

B. Investment Consultant Reporting Requirements .......................................................... 23

C. Investment Manager Reporting Requirements ............................................................. 23

APPENDIX A - PERFORMANCE BENCHMARKS .................................................................................. 25

APPENDIX B - STRATEGIC ASSET ALLOCATION ............................................................................... 26

APPENDIX C - REBALANCING POLICY .............................................................................................. 27

APPENDIX D - INVESTMENT MANAGER EXCEPTIONS TO INVESTMENT GUIDELINES ........................ 29

Page 15 of 372


I. INTRODUCTION AND STATEMENTS OF PURPOSE, PHILOSOPHY AND ETHICS

The Board of Trustees of the Teachers’ Retirement System of Oklahoma, as the governing bodyfor the System, deems it prudent and necessary to maintain this Investment Policy Statement to actas the principal governing document for the investment of System assets.

A. Legal Authority and System Description

The System is established by statute; the legal authority and description of the System are detailedbelow.

Constitutional AuthoritySection 62 of Article 5 of the Oklahoma Constitution was added as a result of the passage of StateQuestion 306 on July 14, 1942. This section reads:

“The Legislature may enact laws to provide for the retirement for meritorious service of teachers and other employees in the public schools, colleges and universities in this State supported wholly or in part by public funds, and may provide for payments to be made and accumulated from public funds, either of the State or of the several school districts. Payments from public funds shall be made in conformity to equality and uniformity within the same classifications according to duration of service and remuneration received during such service.”

Statutory Authority As a result of the passage of State Question 306, the Legislature enacted House Bill 297 in the 1943 legislative session that created the Oklahoma Teachers Retirement System (“System”). The legislation has been changed substantially in the years since its creation and is currently codified in Oklahoma Statutes Title 70, Sections 17-101 et. seq. (NOTE: In the remainder of this document, statutory references will follow the notation O.S. 70 § 17-101 to reference Oklahoma Statutes Title 70, Section 17-101.)

Purpose of System In O.S. 70 § 17-102, paragraph 1 creates the Oklahoma Teachers Retirement System and outlines the purpose of the System as follows:

“A retirement system is hereby established and placed under the management of the Board of Trustees for the purpose of providing retirement allowances and other benefits under the provisions of this act for teachers of the State of Oklahoma.”

Board of Trustees Powers The second paragraph of O.S. 70 § 17-102 provides the broad terms of the powers entrusted to the Board of Trustees (“Board”):

“The Board of Trustees shall have the power and privileges of a corporation and shall be known as the "Board of Trustees of the Teachers' Retirement System of Oklahoma", and by such name all of its business shall be

Page 16 of 372


transacted, all of its funds invested, and all of its cash and securities and other property held in trust for the purpose for which received.”

Further powers vested upon the Board are set forth in O.S. 70 § 17-106, in part:

“(1) The general administration and responsibility for the proper operation of the retirement system and for making effective the provisions of the act are hereby vested in a Board of Trustees which shall be known as the Board of Trustees and shall be organized immediately after a majority of the trustees provided for in this section shall have qualified and taken the oath of office.”

and:

“(9) (10) Subject to the limitations of this act, the Board of Trustees shall, from time to time, establish rules and regulations for the administration of the funds created by this act and for the transaction of its business.

Finally, O.S. 70 § 17-106.1, in part, defines the duties of the Board in relation to investment of fund assets:

“A. The Board of Trustees of the Teachers’ Retirement System of Oklahoma shall discharge their duties with respect to the System solely in the interest of the participants and beneficiaries and: 1. For the exclusive purpose of:a. providing benefits to participants and their beneficiaries, andb. defraying reasonable expenses of administering the System;2. With the care, skill, prudence, and diligence under the circumstancesthen prevailing that a prudent person acting in a like capacity and familiarwith such matters would use in the conduct of an enterprise of a likecharacter and with like aims;3. By diversifying the investments of the System so as to minimize the riskof large losses, unless under the circumstances it is clearly prudent not todo so; and4. In accordance with the laws, documents and instruments governing theSystem.”

B. Statement of Purpose

A primary purpose of this investment policy statement is to guide fiduciaries, including the Boardof Trustees, System staff, investment managers, consultants and others responsible for overseeingand investing the assets of the Fund. This policy also communicates foundational tenets underlyingits formulation. This policy provides specific guidance regarding investment objectives, assetallocation, risk management and the means by which investment objectives are intended to beachieved. Additional specific guidance is given in defining roles, delegated duties andaccountabilities of System fiduciaries as well as setting forth logical, disciplined procedures formaking decisions.

Page 17 of 372


C. Statement of Investment Philosophy

Since this policy is a communication tool for System fiduciaries, interested stakeholders as well asother external parties, the Board recognizes that it is important to articulate the underlying beliefsthat are foundational in its formulation. Key aspects of the Board’s investment philosophy aresummarized in the following statements.

1. The Fund has an infinite time horizon and the assets should be invested and managedaccordingly.

2. A central tenet in investing is the tradeoff between risk and return, meaning that the pursuitof higher expected returns is accompanied with higher expected risk. Bearing some degreeof investment risk is necessary in the pursuit of investment return objectives.

3. Investment risk comes in many forms. The most common risk is the volatility of periodicreturns measured by the statistical term known as standard deviation. Additionally, there area variety of other risks to be considered. A partial list of these risks would include the riskof permanent loss of capital, the risk of not meeting objectives, illiquidity risk, credit risk,interest rate risk, inflation risk, leverage risk, concentration risk and manager risk. A primaryfocus of this investment policy is to balance, manage and, to the extent possible, controlthese various risks.

4. Funds with long term investment horizons are able to pursue higher expected returnsassociated with higher risk portfolios because they are able to remain invested when periodicdeclines in market values occur.

5. The Fund will best contribute to the primary goal of providing benefits to participants andtheir beneficiaries by realizing high risk-adjusted net returns.

6. The Board acknowledges that while other institutions may make investment decisions topursue various worthy causes that may be admirable in their own right, the Board’sinvestment decisions are made to achieve the primary goal of providing benefits toparticipants and their beneficiaries and defraying reasonable expenses.

7. Long-term investing success is best accomplished by adhering to a long-term strategic assetallocation rather than engaging in short term tactical market timing among asset classes.

8. Diversification among asset classes and securities is the primary means of controlling therisk of an investment portfolio.

9. The primary factor determining portfolio risk and return is how the portfolio is allocatedamong asset classes.

10. The decision-making process for investments should be both disciplined and logicalderiving support from current academic theory and the application of rigorous analysis.

11. In less efficient markets where the probabilities of achieving net-of-fee outperformancerelative to a passive market index are higher, active management is preferred. In moreefficient markets where the probabilities of achieving net-of-fee outperformance relative toa passive market index are lower, low-cost index management is preferred.

Page 18 of 372


12. Certain asset classes are only accessible in the form of private market interests which havevery limited liquidity and normally higher costs relative to public market instruments.Investing a portion of the Fund in these illiquid asset classes is reasonable to the extent thatthey offer some desirable combination of the following relative to available public marketasset classes: higher expected net return and/or risk reduction through diversification.

D. Statement of Ethical Standards

The Board of Trustees is committed to maintaining and promoting the highest ethical standardsamong Board members and among all parties involved in the administration of fund assets.

The Board expects all parties involved in the administration of fund assets, including all Systemfiduciaries, to conduct their activities according to the highest ethical standards adhering likewiseto the principles expressed in the Board of Trustee Policy Manual Chapter 5 – Code of Conductand Chapter 6 – Ethical and Fiduciary Conduct. Given the nature of fund management andinvesting, particular attention will be given to conflicts of interest. All parties involved in theadministration of fund assets should be free of conflicts of interest to avoid even the appearance ofnot acting in the sole interests of System participants and their beneficiaries. Where any involvedparty becomes aware of an actual or potential conflict of interest it is their duty to disclose theconflict to the Board so that the Board may assess its seriousness.

Page 19 of 372


II. STATEMENT OF DUTIES AND RESPONSIBILITIES

A. Board of Trustees

The Board of Trustees has the final decision making authority for the System. The InvestmentCommittee of the Board has the authority to make investment recommendations to the Board. TheBoard evaluates and decides whether or not to take action on recommendations from the InvestmentCommittee. The Investment Committee’s authority and responsibilities are set forth in theInvestment Committee Charter contained in the Board of Trustees Policy Manual.

Trustee duties and responsibilities are listed in summary as follows:

1. Adopt, and when deemed necessary, amend this Investment Policy Statement.

2. Determine delegated duties to be performed by other qualified fiduciaries in order to ensurethat the Fund is properly administered and regularly evaluated to assess progress towardsachieving established objectives.

3. Receive and evaluate reports, presentations and other materials provided by investmentconsultant(s), staff, investment managers, and other retained advisors to monitor theadministration of Fund assets in accordance with policy objectives and to regularly assessprogress towards achieving the goals and objectives defined herein.

4. Select and contract with qualified professional advisory organizations to perform functionsdeemed necessary by the Board to manage the Fund in accordance with policy. Commonprofessional advisory organizations would include investment consultant(s), investmentmanagers, global custodians and securities lending agents.

5. Evaluating the performance of retained professional advisory organizations and staff toassess fulfillment of duties, achievement of goals and compliance with policy guidelines.

6. Annually conduct a formal review of the performance of Investment Consultant(s),normally to be performed in the month of April.

7. Terminating the contracts with any retained professional advisory organization whendeemed necessary.

8. Review all costs of investment operations at least annually.

B. Investment Staff

A summary of the duties and responsibilities of the Investment sStaff is as follows:

1. Provide the Board and the Investment Committee with reports, presentations and any othermaterials to assist them in the fulfillment of their duties and responsibilities. The generalcontent and focus of reporting from Investment Staff is further described in Section VI.

2. Serve as the primary liaison between the Board of Trustees and the investment consultant(s),investment managers, custodian, securities lending agent and transition manager(s).

Page 20 of 372


3. Implement Board decisions regarding asset allocation, investment structure, portfoliorebalancing procedures and retention of investment consultant(s), investment managers,custodian and securities lending agent.

4. Coordinate the search, selection and evaluation processes for investment consultant(s),investment managers, custodian and securities lending agent on behalf of the Board ofTrustees.

5. Monitor and review the performance of the total fund, asset class composites, andinvestment managers to evaluate achievement of objectives and compliance with policyguidelines.

6. Monitor and review all costs of investment operations including, but not limited to, feespaid to investment consultant(s), investment managers, and custodian, as well as portfoliotransactions costs.

7. Manage the liquidity in the Total Portfolio as necessary to ensure timely payment of benefitpayments, plan expenses and capital calls, etc. consistent with established asset allocationand portfolio rebalancing policies. The raising of cash amounts greater than two months’worth of benefit payments shall be subject to Board approval.

8. Conduct the search and selection of transition manager(s) in collaboration with theinvestment consultant(s) as directed by the Board.

9. Conduct due diligence in collaboration with the investment consultant(s) when investmentmanagers fail to meet the expectations of the Board or are formally placed ‘On Alert’ or‘On Notice’.

10. Research and review innovative investment ideas and concepts in collaboration with theinvestment consultant(s) in an effort to identify potential modifications to improve theinvestment portfolio.

11. Monitor the performance of the total fund, asset class composites and investment managersto determine if any issues need to be addressed by the Investment Committee or the Boardof Trustees.

C. Investment Consultant

A summary of the duties and responsibilities of the investment consultant(s) retained by the Boardis as follows:

1. Acknowledge status as a fiduciary to the System and remain in compliance both with thisinvestment policy and with the current executed contract with the System.

2. Provide the Board and the Investment Committee with reports, presentations and any othermaterials to assist them in the fulfillment of their duties and responsibilities. The generalcontent and focus of reporting from Investment Consultant is further described in SectionVI.

Page 21 of 372


3. Assist the Board in developing and modifying policy objectives and guidelines, includingthe development of asset allocation strategies, recommendations on long-term assetallocation and the appropriate mix of investment manager styles and strategies.

4. Assist the Board by monitoring compliance with this Investment Policy.

5. Provide assistance in investment performance calculation, evaluation, and analysis.

6. Provide assistance in investment manager searches and selection.

7. Provide assistance in custodian, securities lending agent, transition manager andcommission recapture agent searches and selection.

8.7.Provide timely information, written and/or oral, on investment strategies, instruments, managers and other related issues, as requested by the Board.

9.8.Monitor the Board's System's investment managers and notify the Board and Investment staff of any material changes in the investment managers' organizational structure, their personnel or if there are performance issues.

10.9. Certify in writing to the Board on an annual basis as of the System’s June 30 fiscal year end, the investment consultant’s compliance with this Policy during the fiscal year period ending June 30.

11.10. Review with the Investment staff Staff the status and performance of current investment managers and determine if any issues need to be addressed by the Investment staff Staff or the Board of Trustees.

12.11. Provide assistance in the search and selection of transition manager(s) as directed by the Board.

13.12. Provide assistance in the conduct of due diligence when investment managers fail to meet the expectations of the Board or are placed ‘On Alert’ or ‘On Notice’.

14.13. Explore, research, analyze and review new investment ideas and managers in collaboration with the Investment staff Staff in an effort to keep the system current with investment options.

D. Investment Managers

A summary of the duties and responsibilities of each separate account, public markets investmentmanager retained by the Board is listed below. Commingled account and private market investmentmanagers whose investment activities are governed by subscription agreements or commingledtrust documents should adhere to the duties and responsibilities contained herein to the extentpossible and to the extent that they are not superseded by, or in conflict with, subscriptionagreements or commingled trust documents defining the relationship with the System.


Page 22 of 372


2. Provide the Board, the Investment Committee, the staff and the investment consultant(s)with reports, presentations and any other materials to assist them in the fulfillment of theirduties and responsibilities. The general content and focus of reporting from InvestmentManagers is further described in Section VI.

3. Manage the Fund’s assets in accordance with the policy guidelines and objectives expressedherein.

4. Prudently select investments based on thorough evaluation of all risks applicable to statedmandate.

5. Work with the custodian and the investment consultant to verify monthly accounting andperformance reports.

6. Certify in writing to the Board on an annual basis as of the System’s June 30 fiscal year end,the Investment Manager’s compliance with this Policy during the fiscal year period endingJune 30.

7. Act as a fiduciary in adopting and adhering to proxy voting policies, acknowledging that itsproxy voting policies may affect the value of their respective portfolio.

8. Seek to obtain best execution in all securities transactions to minimize the costs of trading.

E. Custodian

A summary of the duties and responsibilities of the custodian bank(s) retained by the System is asfollows:


2. Provide the Board, the Investment Committee, the staff and the investment consultant(s)with reports, presentations and any other materials to assist them in the fulfillment of theirduties and responsibilities.

3. Accept daily instructions from designated staff.

4. Notify investment managers of proxies, tenders, rights, fractional shares or otherdispositions of holdings.

5. Safekeeping of securities.

6. Timely collection of interest and dividends.

7. Daily cash sweep of idle principal and income cash balances.

8. Process and maintain records of all investment manager transactions.

9. Collect proceeds from maturing securities.

Page 23 of 372


10. Disburse all income or principal cash balances as directed.

11. Perform regular reconciliations of holdings and transactions with the System’s retainedinvestment managers on at least a monthly basis.

12. Work with the System’s staff and the investment consultant to ensure accuracy in reporting.

13. Manage and administer the System’s directed brokerage program.

14. Monitor compliance with this Investment Policies Statement, provide applicable research toensure the validity of suspected breaches, and submit appropriate commentary offering arecommendation to the reported breach.Calculate the investment performance of theSystem’s investment accounts and composites.

15. Participate in an annual review of compliance with the System’s staff, to determine theeffectiveness of investment policy testing. Providing required reports to assist the System’sstaff and vendors with compliance with the Governmental Accounting Standards Board, theInternal Revenue Service, the Securities and Exchange Commission, the Financial IndustryRegulatory Authority and other regulatory agencies.

16. Monitor, file and report on securities class action lawsuits and collect and record settlementproceeds.

17. Process and file Foreign Tax Reclaims on behalf of the System.

F. Securities Lending Agent

A summary of the duties and responsibilities of the securities lending agent retained by the Systemis as follows:


2. Provide the Board, the Investment Committee, the staff and the investment consultant(s)with reports, presentations and any other materials to assist them in the fulfillment of theirduties and responsibilities.

3. Arrange terms and conditions of securities loans.

4. Monitor the market value of the securities lent and mark to market at least daily and ensurethat any necessary calls for additional collateral are made and that such collateral is obtainedon a timely basis.

5. Direct the investment of cash received as collateral in accordance with direction from theBoard, provided that such investments are consistent with guidelines provided in thisdocument.

6. Notify the Board of any changes to the investment guidelines in the Securities and ExchangeCommission’s rule 2A7 for consideration by the Board.

Page 24 of 372


7. Notify the System’s staff in the event that a recalled security has not been returned by aborrowing party within 10 days of the request.

G. Transition Manager

The transition managers shall manage the transition of assets from one or more investmentmanagers or asset categories to one or more other investment managers or asset categories.Transition managers shall be selected among those approved by the Board. Transition managersshall be utilized when such employment is likely to present significant opportunities for costsavings, technical efficiencies or other benefits to the System.

A summary of the duties and responsibilities of Transition Managers retained by the System is asfollows:


2. Provide a pre-trade analysis, which will include, among other things, a trading liquidityanalysis, portfolio sector analysis, volatility analysis, and estimated transaction costs.

3. Provide a detailed written plan of transition execution.

4. Provide a post-trade analysis, comparing the actual costs with the pre-trade estimates. Thereport will also include various trading statistics, benchmarking information, and detailedtrade reports.

5. In all securities transactions, transition managers shall seek to obtain best execution tominimize the costs of trading.

Page 25 of 372


III. PROCEDURES

A. Investment Policy Review

In order to keep the Investment Policy current, the Board will, at least annually, review and modify,as deemed necessary any portions of the policy. The annual review will consider, but not be limitedto, the following: objectives and guidelines, the development of asset allocation strategies,recommendations on long-term asset allocation and the appropriate mix of investment managerstyles and strategies.

The Board, both upon their own initiative and upon consideration of the advice andrecommendations of staff, consultants, the investment managers and other fund professionalsinvolved with the assets, may amend policy guidelines. Proposed modifications should bedocumented in writing to the Board.

B. Investment Manager Policy Exceptions

Requests for an exception to invest in securities precluded by section V. A. or the applicablemandate’s specific policies, should be submitted in writing to the System and include justificationfor such request, , and a requested time period, up to three years. Exception requests will undergoa reevaluation and approval process at the end of each term. Staff and investment consultant willdetermine the investment manager’s process for providing quarterly reporting on attributionanalysis of the contribution of the allowed exception.

C. Third Party Marketing and Referrals Disclosure Policy

The Teachers’ Retirement System of Oklahoma requires transparency and full disclosure of allrelationships in proposed and committed investments with any third parties. A “third partymarketer” is a person who represents an asset management firm or any other type of investmentservices provider, as an independent contractor rather than as an employee of the firm, for thepurpose of making presentations or securing contracts with the System for the firm or provider.Any such third party marketer must disclose himself or herself as a third party marketer before orat the same time as contacting any member of the Board of Trustees, employee of the System orthe outside investment consultant for the System. In addition, firms submitting investmentproposals for consideration by Teachers’ Retirement System of Oklahoma (including any sub-managers or consultants engaged by such firms) are hereby required to disclose the identity of allthird-party marketers and/or individuals by whom the firm has been referred to Teachers’Retirement System of Oklahoma and further indicate those so identified that stand to receive feesor other consideration in the event that a contract between the firm and the Teachers’ RetirementSystem of Oklahoma is secured. Any consideration paid or benefits received, or any relationshipbetween such firm (including any sub-managers or consultants engaged by such firms) and thirdparty marketing entities and/or individuals, shall be disclosed. The disclosure requirementsestablished by this Policy apply throughout the term of any contractual relationship Teachers’Retirement System of Oklahoma may have with any firm and represents a continuing obligation ofdisclosure. This Policy becomes effective immediately and applies to all firms currently managingTeachers’ Retirement System of Oklahoma assets. All firms submitting investment proposals must

Page 26 of 372


make the disclosures required by this Policy prior to any action being taken on the firm's investment proposal by the Board, as well as comply with the continuing obligation of disclosure.

D. Request for Proposal Policy

70 O.S. § 17-106.1(E) provides “The Board of Trustees may retain qualified investment managersto provide for the investment of the monies of the System. The investment managers shall bechosen by a solicitation of proposals on a competitive bid basis pursuant to standards set by theBoard of Trustees. Subject to the overall investment guidelines set by the Board of Trustees, theinvestment managers shall have full discretion in the management of those monies of the Systemallocated to the investment managers[…]”

While TRS statutes provide that investment managers must be retained on a competitive bid basis,this process is not required to conform to the Oklahoma Central Purchasing Act. The process forinvestment manager selection and allocation shall conform to the following process:

1. The Board shall approve all request for proposals (RFPs) issued by the System.

2. Respondents to a proposal shall comply with the procedures and conform to the standardsset forth in the RFP.

3. The issuance of an RFP does not commit the Board to award a contract or make anallocation to a manager or strategy. The Board reserves the right to accept or reject any orall proposals received, to negotiate with any and all qualified bidders, and to cancel in partor in its entirety a solicitation if it is in the best interests of the System to do so.

4. The Board shall award contracts to the most suitable bidder at a specified time and placewhich shall be open to the public pursuant to the Oklahoma Open Meetings Act.

5. Proposals shall be evaluated by the Investment Consultant and the Chief InvestmentOfficerStaff. An evaluation report to identify potential managers shall be presented to theInvestment Committee for recommendation to the Board.

6. Except for the purposes of seeking clarification of RFP responses, no member of theBoard, staff, or Investment Consultant shall knowingly communicate concerning anymatter that is material to the selection process with any party having a direct financialinterest in the award of the contract, an officer or employee of that party, or a placementagent retained or employed by that party, unless the communication is part of the processexpressly described in the RFP or part of any Board meeting prior to the award of thecontract. Any bidder who knowingly participates in a communication that is prohibited bythis subsection shall be disqualified from the contract award.

7. Due diligence shall be conducted on potential managers prior to the award of the contract.The nature of the due diligence shall be recommended to the Board by the InvestmentCommittee with the advice of the Investment Consultant, Chief Investment Officer, andExecutive Director.

Page 27 of 372


E. Additional allocations to a previously retained manager:

1. The Board may at any time make an additional allocation to a manager currently undercontract at its discretion in accordance with this Policy.

2. Additional allocations to subsequent or follow-on closed-end funds of a manager may bemade without the necessity of an additional RFP provided the investment thesis andstrategy of the subsequent or follow-on fund is substantially similar to the fund that wasoriginally allocated on a competitive bid basis. To be substantially similar a fund musthave the same benchmark, the same type of assets, and the investment decisions must bemade by substantially the same people as were managing the original fund/strategy.Closed-end funds are generally in the form of ownership interests in limited partnershipsand may include, but are not limited to, private equity, venture capital, mezzanine anddistressed debt, real estate funds, and natural resource funds.

Page 28 of 372


IV. INVESTMENT GOALS AND OBJECTIVES

To fulfill the System’s Mission Statement set forth in Chapter 2 of the Board of Trustees Policy Manual, the Board has a goal of earning a nominal, long-term, time-weighted, annualized, net total return of 7.5% on the investment portfolio while maintaining liquidity necessary to fund net benefits and operations.

To achieve the goal above the Board believes that several investment objectives need to be attained. In setting the objectives the Board follows the criteria as recommended in “A Primer for Investment Trustees” (Bailey, Jeffery, Jesse Phillips and Thomas Richards. A Primer for Investment Trustees. Charlottesville: Research Foundation of CFA Institute, 2011). Specifically, investment objectives should be

unambiguous and measurable,

specified in advance,

actionable and attainable,

reflective of the Trustees’ risk tolerance and consistent with the System’s mission.

The Board has established several objectives for the investment portfolio that meet the criteria above. These objectives listed below are specified at the Total Fund, Asset Class Composite and individual mandate/Investment Account level.

Total Fund Investment Objectives Achieve or exceed on a three year rolling basis, absolute and risk-adjusted, net excess returns

relative to the Total Fund Policy Index as specified in Appendix A. On a three year rolling basis, maintain relative risk levels equal to or below that of the Total

Fund Policy Index.

Asset Class Investment Objectives Achieve or exceed on a three year rolling basis, absolute and risk-adjusted, net excess returns

relative to the Asset Class Index as specified in Appendix A. On a three year rolling basis, maintain relative risk levels equal to or below that of the Asset

Class Index.

Investment Account Objectives Achieve or exceed on a three year rolling basis, absolute and risk-adjusted, net excess returns

relative to the Investment Account Index as specified in Appendix A. On a three year rolling basis, maintain relative risk levels equal to or below that of the

Investment Account Index.

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V. INVESTMENT GUIDELINES AND CONSTRAINTS

The System maintains a diversified portfolio with investments in multiple asset classes as definedby its strategic asset allocation. Investments in some asset classes can be made through publicsecurities markets while investments in other asset classes are only possible through private marketinvestment vehicles.

Generally the System’s public market investments are held by the System’s Custodian in separateaccounts managed by retained investment management firms. For these public market investmentsin separate accounts at the System’s custody bank, the System defines the parameters within whichthe retained investment managers can manage the portfolio. In addition to public marketinvestments held in separate accounts the System may choose to invest in commingled orpartnership structures alongside other institutional investors where the System does not define theinvestment management parameters but rather accepts the investment management parameters asspecified in commingled trust documents or in partnership agreements.

With the above distinctions in mind, this section of the Policy covering guidelines and constraintsis divided into two subsections and further grouped by asset class. The first subsection addressespublic market investments held in separate accounts by the System’s Custodian. It communicatesto the investment management firms retained to manage these accounts the parameters within whichthey are permitted to manage the portfolio.

The second subsection addresses commingled and private market investments where the Systemaccepts the investment parameters as defined in trust documents or partnership agreements andother associated legal documents. This subsection documents the rationale for choosing acommingled or partnership structure and the general boundaries within which the System will seekto structure its private markets investments.

A. Public Market Separate Account Investments

1. Discretion and Prohibited Investments

Full discretion, within the parameters of these guidelines is granted to the investmentmanagers regarding the allocation of their portfolios, the selection of securities, and thetiming of transactions. Any exception requests to the guidelines listed herein should becommunicated to the System’s Investment staff and Investment Consultant. Due to the everexpanding variety of financial instruments and financial engineering methods, the followinglist of ineligible investments is not considered to be exhaustive. Any instrument, to whichthese Investment Guidelines do not explicitly prohibit, that is not expressly allowed by theapplicable mandate specific guidelines, should be requested through the exception process,detailed in section III. B, prior to investment.

a. Privately placed or other non-marketable debt, except securities issued under Rule144A.

b. Securities denominated in non-US currency, unless provided in accordance with anapplicable mandate.

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c. Lettered, legend or other so-called restricted stock

d. Physical commodities and commodity derivatives

e. Short sales and purchases on margin; leverage is not allowed unless the System hasexpressly given the right to lever to a manager.

f. Direct investments in private placements, real estate, oil and gas and venture capital,unless provided in accordance with an applicable mandate.

2. Index Portfolios

a. All index portfolios characteristics and returns are expected to closely resemble thedesignated benchmark.

b. Index managers may use both full replication and stratified sampling portfolioconstruction methodologies.

3. Cash Rule for Equity Portfolios

a. Investment managers of portfolios consisting of equity securities including MLPsshould seek to remain fully invested. Fully invested for the purposes of this documentshall mean normally maintaining a portfolio allocation to cash investments of 5% orless. Should the investment manager desire to maintain cash investments at a levelgreater than 5% for an extended period of time, the investment manager shall provideadvanced written notification and explanation to the Investment Staff and InvestmentConsultant.

b. No violation shall be deemed to occur if cash investment levels exceed the 5% due toinstructions received from the System. If cash investments breach the 5% threshold forten consecutive business days or 7% for three consecutive business days the managershall submit a written notice and explanation of each such event to Investment Staff andInvestment Consultant.

4. Derivatives

a. Investment managers may be permitted, under the terms of individual investmentcontracts, to use derivative instruments as set forth in each manager’s investmentguidelines. A derivative is a security or contractual agreement that derives its value fromsome underlying security, commodity, currency or index. Some examples of derivativesfor purposes of this Policy are (a) contracts such as forwards, futures, put and calloptions, and swaps and (b) non-traditional securities with embedded options such ascollateralized mortgage obligations (CMOs) and structured note products. Traditionalsecurities with options such as convertible bonds and preferred stock are not consideredderivatives under this policy, nor are warrants.

b. Derivatives shall not be used to introduce leverage, that is, the notional value ofderivatives positions cannot exceed the cash or securities values available from the

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System’s assets. Derivatives may not be used to create levered exposure to the assets being managed. Derivatives may be used for the purpose of reducing effective cash exposure and for hedging currency risk and interest rate risk.

c. Managers must ascertain and carefully monitor the creditworthiness of any third partiesinvolved in derivative transactions.

d. Foreign exchange forward contracts or currency swaps are permitted for currencyhedging purposes. Posting of a “margin” deposit for these contracts is permitted inconnection with foreign exchange forward contracts or currency swaps as such a depositis not considered to be “purchases on margin” or “leverage”.

5. Domestic Equity

a. Domestic Equity portfolios will not concentrate more than the greater of a 2%benchmark-relative active weight or 7% of market value of funds under advisement inholdings of a single issuer.

b. Domestic Equity portfolios will not hold greater than 5% of the outstanding shares of asingle issuer.

c. Domestic Equity portfolios will be limited to holdings of common stock, AmericanDepository Receipts (ADRs) listed on a domestic exchange, non-midstream MLP unitsand any security type that is a constituent in the portfolio’s benchmark index.

d. Domestic Equity portfolios may hold, sell or exercise rights, warrants or otherinstruments received by virtue of corporate actions.

e. Domestic Equity portfolios may purchase unlevered Exchange Traded Funds (ETFs)linked to the portfolio’s benchmark index solely for the purpose of reducing temporarilyhigh cash exposure.

6. International Equity

a. International Equity portfolios will not concentrate more than the greater of a 2%benchmark-relative active weight or 7% of market value of funds under advisement inholdings of a single issuer.

b. International Equity portfolios will not hold greater than 5% of the outstanding sharesof a single issuer.

c. International Equity portfolios will not concentrate more than the greater of a 5%benchmark-relative active weight or 35% of the market value of funds under advisementin issuers from the UK or Japan and no more than 30% of the market value of fundsunder advisement in issuers from any other single country.

d. International Equity portfolios will invest no less than 50% of the portfolio in companieslocated in developed markets as determined by MSCI.

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e. International Equity portfolios will be limited to holdings of common stock, AmericanDepository Receipts (ADRs) listed on a domestic exchange and any other security typethat is a constituent in the portfolio’s benchmark index.

f. International Equity portfolios may hold, sell or exercise rights, warrants or otherinstruments received by virtue of corporate actions.

g. International Equity portfolios may purchase unlevered Exchange Traded Funds (ETFs)linked to the portfolio’s benchmark index or country sub index solely for the purpose ofreducing temporarily high cash exposure. International Equity portfolios may also holdcommingled fund units to gain exposure to markets where individual company sharepurchases are either inefficient or not possible.

7. Fixed Income

a. Fixed Income portfolios will not concentrate greater than 5% of market value of fundsunder advisement in holdings of a single issuer. This restriction does not apply tosovereign issues.

b. Fixed Income portfolios will not hold greater than 5% of the issued securities of a singleissuer.

c. Fixed Income portfolios will not concentrate greater than 20% in non-USD denominatedobligations.

d. Fixed Income portfolios will not concentrate greater than 10% in developing oremerging markets issuers as determined by MSCI.

e. Fixed Income portfolios may hold shares of common stock converted from embeddedcorporate actions. At the time of conversion, managers should communicate issuesconverted into common shares to the System’s Investment staff and InvestmentConsultant.

f. Core Plus Full Discretion Fixed Income

i. Core Plus portfolios will not concentrate greater than 50% in issues which are ratedBa1 or lower by Moody’s, or Moody’s equivalent rating by an SEC registeredNRSRO. If the ratings assigned to an instrument by an SEC registered NRSROare not the same, the highest rating of these rating agencies will be used. If aninstrument is not rated by an SEC registered NRSRO, the equivalent ratingdetermined by the Manager’s internal rating system will be used.

ii. Core Plus portfolios may hold up to 5% of the market value of the account in anycombination of the following: issues which internally or externally are ratedbelow Caa2 Moody’s, or Moody’s equivalent rating by an SEC registeredNRSRO, common stock, preferred stock, closed-end funds or exchange-tradedfunds..

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iii. All holdings of unrated securities and securities subject to the 5% limitation aboveshall be subject to monthly reporting requirements as set forth in Section VI. 3. ofthis Policy.

iv. The Core Plus portfolio manager may not invest more than 10% of the portfolioin unrated securities.

g. Active Duration Fixed Income

i. Active duration portfolios may concentrate holdings up to 100% at any maturityalong the U.S. Treasury term structure.

ii. Active duration portfolio accounts are limited to holding securities backed by thefull faith and credit of the U.S. government and units of the short term investmentfund of the System’s custodial bank.

h. Securities Lending Collateral Pool

i. The investments of the securities lending collateral are governed by a separateinvestment policy document therefore they are not addressed herein.

8. Master Limited Partnership (Midstream Energy Infrastructure)

a. Master Limited Partnership (MLP) portfolios will be limited to the purchase ofinvestments in midstream energy infrastructure, which include: (a) securities such asunits and other ownership instruments issued by MLPs that are organized as partnershipsor limited liability companies which elect to be taxed as a partnership; (b) securities thatoffer economic exposure to MLPs from entities holding primarily general partner ormanaging member interests in MLPs; and (c) equity securities in companies that focuson energy infrastructure and the midstream energy sector.

b. MLP portfolios will not concentrate greater than 15% of market value of funds underadvisement in holdings of unregistered, privately placed securities of publicly tradedMLPs at the time of purchase.

c. MLP portfolios will be permitted to invest in Initial Public Offerings and SecondaryPublic Offerings of MLP securities.

d. MLP portfolios will not concentrate greater than 10% of market value of funds underadvisement in holdings of a single issue. A “single issue” is defined by shares in eitherthe limited partner, or shares in the general partner; or equity securities of midstreamenergy infrastructure companies but shares in the limited partnership and generalpartnership should not be taken in aggregate.

e. MLP portfolios will not hold greater than 5% of the outstanding shares of a singleissuer.

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B. Private Market Partnership Interests and Commingled Account Investments

The System recognizes that private market investments and commingled fund investments are governed by subscription agreements, limited partnership agreements, trust documents and other related legal documents. Additionally, the System recognizes that in the event of a conflict between the aforementioned documents and this Investment Policy Statement, the subscription agreements, limited partnership agreement and other related legal documents shall take precedence in the governance of these investments.

The System determines how it will select and structure its private market and commingled fund investments this section sets forth the guidelines the System will follow for structuring the portion of the portfolio invested in private market and commingled fund investments.

1. Private Equity and Private Debt

a. Private Equity portfolios will be comprised of buyout funds, growth capital funds,turnaround funds venture capital funds and other primarily equity focused strategiesapproved by the System.

b. Private Debt will be comprised of distressed debt funds, mezzanine debt funds, asvarious types of credit funds and other primarily debt focused strategies approved bythe System.

c. For Strategic Asset Allocation purposes, the System regards Private Equity as an assetclass and Private Debt as a sub-category of the Fixed IncomePrivate Equity asset class.

d. In order to achieve a diversified private equity portfolio, the following sub-allocationsshall be used as an overall target for commitment levels within the portfolio:

Segment Long-Term Allocation Ranges Corporate Finance1 80% - 100% Venture Capital 0% - 20% 1 Includes buyout, turnaround and debt related strategies

Region Long-Term Allocation Ranges U.S. and Western Europe 80% - 100% Other 0% - 20%

e. The minimum Private Equity or Private Debt commitment is $10 million.

f. Commitments will not be made to a primary fund which exceeds an amount equal to20% of the total amount raised for a proposed fund.

g. Aggregate commitments to a General Partner may not be greater than 25% of fundsunder advisement.

h. For potential new commitments identified by a retained private markets consulting firm,the private markets consulting firm shall, prior to any commitment, provide detailed

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information on the opportunity, including a final memorandum summarizing all due diligence performed, to Staff, the Investment Consultant, and the Board.

i. The System will not invest funds into opportunities that intend to purchase remainingassets from a previous fund.

j. Funds that meet the following criteria will not be considered eligible for initialevaluation or potential funding commitments:

i. Vehicles which are not backed by accredited investors, as that term is defined inSection 2 of the Federal Securities Act of 1933, as amended, (15 U.S.C. Section77(b)) and rules and regulations promulgated under that section.

ii. Investments representing direct equity ownership in individual companies or otherbusiness entities, without the benefit of an intermediate partnership or otherindirect ownership structure. However, this exception shall not include directequity ownership which results from the distribution of securities frompartnerships to the System. This rule does not restrict the possibility of a co-investment in Private Equity; contingent upon a third party consultant providingthe recommendation and vehicle for investment.

iii. Investments which would violate resolutions passed by the System’s Board.

iv. Investments in which the General Partner has committed to invest no personal orfirm assets.

2. Real Estate

a. Real estate investments will be categorized as Core and Non-Core. The objectives ofreal estate investments are to provide diversification benefits to the overall portfolio,provide protection against inflation, generate stable income, produce attractive risk-adjusted return and preserve capital.

b. Real estate exposure shall be acquired primarily through comingled fund vehicles,both open end and closed end, and, to a lesser extent, joint venture limited partnershipsand separate accounts.

c. The real estate portfolio will be diversified by property type, geographic region andinvestment strategy.

d. Real estate funds will not concentrate, in any single property, an amount exceeding25% of the total Gross Asset Value (GAV) of the overall investment fund.

e. Core real estate funds will include investments that are operating and substantiallyleased, primarily invested in the four main property types including office, industrial,retail and multi-family. Other property types may be included to a lesser extent.Current income will comprise a majority of the total return over an investment cycle.

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f. Core real estate funds will not concentrate greater than 20% of the total GAV of theinvestment fund in Non-Core properties.

g. Core real estate funds will not carry leverage in excess of 35% of the GAV of theinvestment fund.

h. Non-Core real estate funds will include Value-add and Opportunistic investmentstrategies. Non-core funds may purchase and manage, in addition to the four mainproperty types, other specialty properties that may require renovation, rehabilitation ordevelopment. Current income may comprise a minority and appreciation may representthe majority of the total return of these investments.

3. Opportunistic Private Market Investments

a. The Opportunistic Investment category describes investments that are not adequatelyclassified within the other investment mandates. Allocations to opportunisticinvestments may range from 0% to 5% of total portfolio. The Board shall determineappropriate commitment levels subject to the constraints below.

b. The Board shall not make commitments to a single portfolio greater than 20% of thetotal amount of the proposed portfolio.

c. The Board shall not concentrate aggregate commitments to a single investmentmanager’s firm greater than 25% of the firm’s total assets under management.

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VI. EVALUATION AND REVIEW

A. Investment Staff Reporting Requirements

The Investment Staff will at regular periodic Board and Investment Committee meetings report as needed on the following: asset class and manager account variances relative to targets, updates regarding changes within the portfolio including rebalancing and transition events, portfolio risk exposures, asset class structure reviews, special project reports and any other areas of investment portfolio analysis as directed by the Board.

B. Investment Consultant Reporting Requirements

The Investment Consultant will report on investment portfolio performance at regular periodic Board and Investment Committee meetings. These reports will cover the following: recent capital markets developments and consequent impacts on investment portfolio performance both gross and net of fees, asset allocation, return attribution, multi-period analyses of the performance of all investment portfolio accounts and composites relative to benchmarks and comparable universes, analyses of the risks of investment portfolio accounts and composites relative to benchmarks. The Investment Consultant will also prepare and present special reports covering the System’s private markets alternatives investments as well as the System’s 403(b) plan.

In addition to reporting on investment portfolio performance, the Investment Consultant will report to the Board any material recent organizational or personnel developments at the investment firms retained by the System. The Investment Consultant will also report to the Board regarding the investment firms retained by the System any significant changes in clients and assets under management.

To assist the Board in their annual review of the Investment Consultant, the Investment Consultant will provide a report covering material organizational or personnel developments at the firm as well as any significant changes in number of clients and/or assets under advisement. The Investment Consultant will also provide a certification signed by the investment consultant firm’s Chief Compliance Officer or designee that the firm has for the fiscal year remained in compliance with all applicable elements of this Policy, the investment consulting agreement between the firm and the System and any other contractual instruments defining the relationship between the investment consultant and the System. The Investment Consultant will also provide any additional information or disclosures the Board determine necessary to conduct their annual review.

C. Investment Manager Reporting Requirements

Each Investment Manager will timely report to Investment Staff and Investment Consultant any material organizational or personnel developments at their firm as well as any significant changes in number of clients and/or assets under management either for the mandate in which the System is invested or for the entire firm.

In addition to the requirements stated herein, each investment manager will provide any reports as may be required in the investment management agreement or subscription agreement between the

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firm and the System and any other contractual instruments defining the relationship between the investment manager and the System.

On a quarterly basis each Investment Manager will provide to Investment Staff and Investment Consultant performance, transaction and market value data as requested in electronic or hardcopy form to assist Staff and the Investment Consultant in their roles of monitoring the investment portfolio on behalf of the Board. The data requested will be designed by Staff and Investment Consultant to correspond with the Investment Manager’s particular asset class assignment. In their regular quarterly reporting, Core Plus Full Discretion Fixed Income managers will provide a line-item holdings report for unrated securities and investments subject to the 5% limitation as referenced in Section V. A. 7. f. iii.

On a yearly basis for the System’s June 30 fiscal year each Investment Manager shall provide the Staff and the Investment Consultant an annual report consisting of the following:

1. A certification signed by the investment management firm’s Chief Compliance Officer ordesignee that the firm has for the fiscal year remained in compliance with all applicable elementsof this Policy, and any investment guidelines within the investment management agreement orsubscription agreement and any other contractual instruments defining the relationship between theinvestment manager and the System.

2. For firms that cast proxy votes on behalf of the System, a summary of the firm’s philosophywith respect to voting proxies along with a detailed report showing all proxy votes cast during thefiscal year.

3. A detailed report showing investment management fees and expenses charged by the firmto the System whether invoiced or deducted during the fiscal year.

4. A disclosure of any payments, monetary or otherwise, to System fiduciaries including Staff,Investment Consultant or Trustees.

5. A review of the Investment Manager’s investment philosophy and process as well as a June30 fiscal year summary of any material organizational or personnel developments at the firm aswell as any significant changes in number of clients and/or assets under management either for themandate in which the System is invested or for the entire firm during the fiscal year.

6. Each investment manager is required to report to the System’s Investment Staff andInvestment Consultant the types of derivative instruments used along with a narrative explanationof the rationale for using such instruments in their portfolio management process during the pastyear highlighting risks mitigated and or efficiencies achieved.

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APPENDIX A - PERFORMANCE BENCHMARKS

Composite Benchmark Index

Total Portfolio Policy Index* U.S. Equities Russell 3000 International Equities MSCI ACWI ex.US IMI Fixed Income Bloomberg Barclays U.S. Universal Real Estate NCREIF Property Master Limited Partnerships Alerian MLP Private Equity Russell 2000 + 4% Large Cap U.S. Equities Russell 1000 Mid Cap U.S. Equities Russell Mid Cap Small Cap U.S. Equities Russell 2000 Small Cap International Equities MSCI World ex US Small Cap

*The Policy Index is a composite index composed of the monthly asset class benchmark returns weighted by their respectivestrategic asset allocation targets.

A current listing of the System’s investment managers, accounts and benchmarks can be found on the System’s website at https://www.ok.gov/TRS/Publications/index.html

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APPENDIX B - STRATEGIC ASSET ALLOCATION

The assets of the Plan shall be invested with a focus on meeting long-term objectives in order to fulfill the System’s Mission Statement. Recognizing the goals and objectives of the System, the following strategic asset allocation target has been adopted:

U.S. Equities 43.5%

International Equities 19.0%

Fixed Income 22.0%

Real Estate 9.0%

Private Equity 6.5%

Cash 0%

While the Board of Trustees has adopted the strategic asset allocation above and the rebalancing policy below, the number of investment managers or mandates used is not specifically set forth by policy. The number and type of investment managers to be hired within an asset class shall be determined by the Board of Trustees based upon periodic analyses of asset class portfolio structures.

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APPENDIX C - REBALANCING POLICY

In the event the Plan’s market values change to the extent that asset class percentage allocations fall below defined minimum percentage allocations or exceed defined maximum percentage allocations, staff shall prepare a plan to rebalance the portfolio according to the guidelines shown below:

Minimum Low

Rebalance Point

Target High

Rebalance Point

Maximum

U.S. Equity 36.5% 40.0% 43.5% 47.0% 50.5%

International Equity 14.0% 16.5% 19.0% 21.5% 24.0%

Fixed Income 17.0% 19.5% 22.0% 24.5% 27.0%

Real Estate 6.5% 7.8% 9.0% 10.3% 11.5%

Private Equity 4.5% 5.5% 6.5% 7.5% 8.5%

When allocations move outside minimum or maximum boundaries they will be rebalanced half of the way back to the target percentage. Due to the asymmetrical nature of maximum and minimum boundaries, a full rebalancing of each asset class may not be possible. In such cases, rebalancing asset classes up from their minimums shall take priority. Cash held in short-term investments with the Custodian shall be considered as domestic fixed income for rebalancing purposes. In highly stressed market environments where volatility and transaction costs are elevated, a rebalancing plan designed to reduce tracking error and transaction costs may be developed and substituted for the normal rebalancing approach defined by the boundaries above.

In rebalancing the portfolio, staff shall consider asset class liquidity in determining the timeframe over which the rebalancing should take place in an attempt to reduce transaction costs. Securities may be transferred in lieu of cash, if feasible, to achieve lower transaction costs. Staff and the investment consultant may consult with those managing the affected investment accounts to determine the appropriate incremental amounts to be transferred as well as the appropriate duration of the rebalancing. The primary goal of rebalancing will be to control risk by correcting variances from minimum and maximum asset class allocations: minimizing transaction costs and diversifying across time will be secondary goals. In the event that Plan asset market values change to correct variances from minimum and maximum asset class allocations, rebalancing programs may be halted prior to the anticipated date of completion.

Upon the development of a rebalancing plan consistent with these guidelines, staff will advise the Plan's Custodian of the upcoming changes and direct affected investment managers to implement the required purchases and sales in a manner that leaves the resulting portfolios in concert with their current strategies.

The Staff may defer any element of the rebalancing with concurrence of the Chairman of the Board of Trustees under circumstances where percentage allocation variances outside of minimum and maximum boundaries are minimal and appear to be only temporary in nature or in the event that such rebalancing would not be in the best interest of the Plan.

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Annually, staff may present an optional strategy for rebalancing all asset classes near target allocations, giving due consideration to potential transaction costs.

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APPENDIX D - INVESTMENT MANAGER EXCEPTIONS TO INVESTMENT GUIDELINES

Any exception requests subsequent to the approval of these guidelines should be submitted according to the framework established in Section III, B.

Requesting firm: Loomis, Sayles & Company (Core Plus Full Discretion Fixed Income)

Exception requested: Section V.A.7.d.; Increase the maximum portfolio concentration in developing or emerging markets from 10% to 15%.

Proposition for attribution: Attribution from the allocation reported quarterly as a component of portfolio total return.

Requested term: 12/31/2020

Requesting firm: Hotchkis & Wiley Large and Mid Cap Equity

Exception requested: Section V.A.5.c.; Allow non-U.S. dollar denominated securities traded in local markets and securities of non-U.S. companies (including ADRs) traded over the counter in the U.S. market.

Proposition for attribution: Provide quarterly reporting with and without non-U.S. holdings.


Requesting firm: Wellington Management International Small Cap Equity

Exception requested: Section V.A.6.c.; Increase the maximum portfolio exposure in Japan from 35% to 40%.

Proposition for attribution: When the portfolio exposure in Japan exceeds 35%, provide quarterly reporting illustrating the contribution to total return.


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Cor

e E

qui

ty In

dex

(NFI

-OD

CE

). N

FI-O

DC

E is

a c

apita

lizat

ion-

wei

ght

ed, g

ross

of f

ee, t

ime-

wei

ght

ed r

etur

n in

dex

with

an

ince

ptio

n d

ate

ofD

ecem

ber

31,

197

7. T

he in

dex

is c

urre

ntly

com

pris

ed o

f 24

open

-end

, cor

e re

al e

stat

e fu

nds.

In o

rder

to a

dju

st fo

r th

ehi

ghe

r-ris

k/re

turn

pro

file

of n

on-c

ore

stra

teg

ies

a m

arg

in o

f +10

0 to

200

bp

s m

ay b

e ad

ded

to th

e N

FI-O

DC

E r

etur

n.

RFP

Str

ateg

ic O

verv

iew

Page

46

of 3

72

Th

e ob

ject

ive

of th

e R

FP is

to a

dd

an

open

-end

cor

e p

lus

fund

(s)

to in

crea

se th

e no

n-co

re a

lloca

tion

Th

e co

mm

itmen

t to

an o

pen

-end

fund

(s)

will

mov

e th

e re

al e

stat

e p

ortfo

lio c

lose

r to

the

targ

et s

trat

egy

allo

catio

n of

50%

cor

e an

d 5

0% n

on-c

ore

Th

e q

uart

erly

liq

uid

ity o

f an

open

-end

fund

allo

ws

for

mor

e fle

xib

ility

to r

ebal

ance

the

stra

teg

y al

loca

tion

as n

ewco

mm

itmen

ts a

re m

ade

to fo

llow

-on

fund

s in

the

non-

core

por

tfolio

TRSO

Rea

l Est

ate

Port

folio

–St

rate

gy D

iver

sific

atio

n

Cor

e67

%

Non

-Cor

e33

%

*Str

ateg

y d

iver

sific

atio

n is

bas

ed o

n 9/

30/2

019

mar

ket v

alue

s

TRSO

Rea

l Est

ate

Port

folio

Page

47

of 3

72

Th

e p

acin

g m

odel

was

up

dat

ed to

det

erm

ine

the

pro

ject

ed y

ear-

end

mar

ket v

alue

s fo

r th

e to

tal p

ortfo

lio a

nd th

eco

mp

onen

ts o

f the

rea

l est

ate

por

tfolio

B

ased

on

the

upd

ate,

And

Co

reco

mm

end

s m

akin

g a

com

mitm

ent o

f $10

0 m

illio

n to

two

of th

e ca

ndid

ates

C

omm

ittin

g $

200

mill

ion

pro

vid

es fl

exib

ility

to a

ccou

nt fo

r in

crea

sing

mar

ket v

alue

of n

on-c

ore

com

mitm

ents

mad

ed

urin

g 2

018

as w

ell a

s co

mm

itmen

ts to

follo

w-o

n fu

nds

of n

on-c

ore

real

est

ate

man

ager

s in

the

por

tfolio

RFP

-C

omm

itmen

t Am

ount

*Str

ateg

y d

iver

sific

atio

n is

bas

ed o

n 9/

30/2

019

mar

ket v

alue

s

Proj

ecte

d Ye

ar-E

nd 2

020

TRSO

Rea

l Est

ate

Port

folio

(incl

udin

g $2

00 m

illio

n co

mm

itmen

t)

Target Rea

l Estate : 9

.0%

Target Core: 4.5%

Target Non

‐Core: 4.5%

Yea

r-En

d

20

20

Pacing

Mod

el ‐Projected To

tal Portfolio Value

18,284

,967

,005

Pa

cing

Mod

el ‐Projected Existing Closed

‐End

Non

‐Core (M

V)

423,02

8,94

7 Pa

cing

Mod

el ‐Projected Existing Closed

‐End

Non

‐Core (%

) 2.3%

Projected Nee

d Ope

n‐En

d Non

‐Core (%

) for 4.5% Non

‐Core

2.2%

Projected Nee

d for O

pen‐En

d Non

‐Core ($)

399,79

4,56

9

Total N

on‐Core Re

al Estate MV

822,82

3,51

5 To

tal N

on‐Core Re

al Estate %

4.5%

Projected 20

20 Nee

d for O

E Non

‐Core (M

V)39

9,79

4,56

9

Projected 20

20 ARA

Strategic Value

(MV)

71,547

,404

Ad

ditio

nal o

pen‐en

d ne

eded

328,24

7,16

5

Commitm

ent to AR

A Strategic Va

lue

40,000

,000

Co

mmitm

ent to New

OE Fu

nd(s) from RFP

288,24

7,16

5

Cor

e52

%N

on-C

ore

48%

To

tal R

eal E

stat

e A

lloca

tion:

8.4

%Page

48

of 3

72

D

iver

sifie

d b

y U

.S. g

eog

rap

hic

reg

ion

with

min

imal

exp

osur

e to

Inte

rnat

iona

l

U

nder

wei

ght

in th

e E

ast a

nd W

est r

egio

n re

lativ

e to

NFI

-OD

CE

M

ater

ial o

verw

eig

ht in

the

Mid

wes

t and

Sou

th r

egio

n re

lativ

e to

NFI

-OD

CE

Ta

rget

cha

ract

eris

tics

for

new

fund

com

mitm

ent(

s)

oA

nal

loca

tion

toth

eE

asta

ndW

estr

egio

nsth

atw

illin

crea

seth

ep

ortfo

lio’s

exp

osur

ein

thos

em

arke

ts

oA

nal

loca

tion

toth

eM

idw

estr

egio

nth

atw

illd

ecre

ase

the

por

tfolio

’sex

pos

ure

inth

ose

mar

kets

oW

eb

elie

vean

over

wei

ght

toth

eS

outh

reg

ion

isw

arra

nted

bas

edon

the

pre

senc

eof

seve

ralm

arke

tsth

atra

nkhi

ghl

yin

the

U.S

.for

pop

ulat

ion

gro

wth

and

job

gro

wth

TRSO

Rea

l Est

ate

Port

folio

–G

eogr

aphi

c D

iver

sific

atio

n

TRSO

Por

tfolio

Eas

t21

.2%

Wes

t28

.1%

Sou

th28

.2%M

idw

est

18.7

%

Oth

erU

.S.

0.8%

Eur

ope

2.6%

Asi

a0.

2%La

tinA

mer

ica

0.1%

U.S

. Reg

iona

l Div

ersi

ficat

ion

21.2

%

28.1

%28

.2%

18.7

%

30.8

%

41.7

%

19.0

%

8.5%

0%5%10%

15%

20%

25%

30%

35%

40%

45%

Eas

tW

est

Sou

thM

idw

est

TRS

O P

ortfo

lioN

FI-O

DC

E

Page

49

of 3

72

D

iver

sifie

d b

y p

rop

erty

typ

e w

ith e

xpos

ure

acro

ss p

rimar

y p

rop

erty

typ

es (

offic

e, m

ultif

amily

, ind

ustr

ial)

and

nic

hep

rop

erty

typ

es (

seni

or h

ousi

ng, s

elf-

stor

age,

hot

el, f

or-s

ale

resi

den

tial)

M

ater

ial u

nder

wei

ght

in In

dus

tria

l and

Offi

ce r

elat

ive

to N

FI-O

DC

E

Ta

rget

cha

ract

eris

tics

for

new

fund

com

mitm

ent(

s)

oA

nal

loca

tion

toIn

dus

tria

ltha

twill

incr

ease

the

por

tfolio

’sal

loca

tion

toth

ese

ctor

oA

nal

loca

tion

toR

etai

ltha

twill

dec

reas

eth

ep

ortfo

lio’s

exp

osur

eto

the

sect

or

oM

inim

alal

loca

tion

toni

che

pro

per

tyty

pes

whi

chcu

rren

tlyre

pre

sent

18.6

%of

the

TRS

Op

ortfo

lio

TRSO

Rea

l Est

ate

Port

folio

–Pr

oper

ty T

ype

Div

ersi

ficat

ion

TRSO

Por

tfolio

Offi

ce23

.6%

Mul

tifam

ily27

.3%

For-

sale

Res

iden

tial

1.6%

Ind

ustr

ial

12.7

%

Ret

ail

17.7

%

Hot

el3.

2%

Sen

ior

Hou

sing

6.9%

Sel

fS

tora

ge

5.2%

Land

0.6%

Oth

er1.

0%

Prim

ary

Prop

erty

Typ

es

23.6

%

27.3

%

12.7

%

17.7

%

33.8

%

25.3

%

19.3

%17

.1%

0%5%10%

15%

20%

25%

30%

35%

40%

Offi

ceM

ultif

amily

Ind

ustr

ial

Ret

ail

TRS

O P

ortfo

lioN

FI-O

DC

E

Page

50

of 3

72

Min

imum

& P

refe

rred

Crit

eria

Eva

luat

ion

-Ove

rvie

w

Th

e R

FP g

ener

ated

nin

e un

ique

resp

onse

s

Th

e nu

mb

er o

f op

en-e

nd, c

ore

plu

s re

al e

stat

e in

vest

men

t man

ager

s is

lim

ited

rela

tive

to s

ever

al o

ther

ass

et c

lass

es.

Th

e ta

ble

bel

ow d

enot

es a

rev

iew

of t

he m

inim

um a

nd p

refe

rred

“q

ualif

icat

ions

of t

he b

idd

er”

from

the

RFP

.

A

gre

en s

trate

gy

den

otes

a m

anag

er p

revi

ousl

y ve

tted

and

cur

rent

ly “

Ap

pro

ved

” at

And

Co.

AndC

o Ap

prov

ed S

trate

gy

*It i

s a

min

imum

req

uire

men

t tha

t the

inve

stm

ent m

anag

er p

rod

uct/s

trat

egy

pro

pos

ed fo

r co

nsid

erat

ion

have

a r

edem

ptio

n p

olic

yth

at p

rovi

des

a m

inim

um o

f sem

i-ann

ual l

iqui

dity

(p

ost a

n in

itial

lock

-up

per

iod

).

Cou

ntFi

rm N

ame

Min

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Crit

eria

Des

irabl

e C

riter

ia

SEC

/Ban

k R

egis

tere

dE&

O

Insu

ranc

eO

pen-

End

Sem

i-An

nual

Li

quid

ity

>$1.

5B

Tota

l AU

M

3-YR

Tra

ckR

ecor

d

Div

ersi

fied

by S

ecto

r /

Geo

grap

hy

Tax

Exem

ptIn

vest

ors

1B

rook

field

Ass

et M

anag

emen

tY

esY

esY

esY

esY

esY

esY

esY

es

2JP

Mor

gan

Ass

et M

anag

emen

tY

esY

esY

esY

esY

esY

esY

esY

es

3P

GIM

Rea

l Est

ate

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

4P

rinci

pal

Rea

l Est

ate

Inve

stor

sY

esY

esY

esY

esY

esY

esY

esY

es

5C

arly

le In

vest

men

t Man

agem

ent

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

6C

BR

E G

lob

al In

vest

men

t Par

tner

sY

esY

esY

esY

esY

esY

esY

esY

es

7C

lario

n P

artn

ers

Yes

Yes

Yes

Yes

Yes

Yes

No

Yes

8In

vesc

o A

dvi

sers

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

9K

ayne

And

erso

n R

eal E

stat

eY

esY

esY

esY

esY

esY

esY

esY

es

Page

51

of 3

72

Min

imum

& P

refe

rred

Crit

eria

Eva

luat

ion

-Scr

eeni

ng

C

arly

le In

vest

men

t Man

agem

ent’s

pro

pos

ed fu

nd in

vest

s p

rimar

ily in

nic

he p

rop

erty

typ

es. I

t was

elim

inat

ed b

ecau

seot

her n

on-c

ore

real

est

ate

man

ager

s in

the

por

tfolio

inve

st in

nic

he p

rop

erty

typ

es. T

his

com

mitm

ent(s

) is

inte

nded

top

rimar

ily ta

rget

exp

osur

e to

trad

ition

al p

rop

erty

typ

es

C

BR

E G

lob

al In

vest

ors

pro

pos

ed fu

nd w

as e

limin

ated

bec

ause

ther

e ar

e ot

her

non-

core

man

ager

s in

the

real

est

ate

por

tfolio

that

sp

onso

r fun

ds

with

glo

bal

and

inte

rnat

iona

l man

dat

es

C

lario

n P

artn

ers’

pro

pos

ed fu

nd in

vest

s so

lely

in th

e in

dus

trial

sec

tor.

It w

as e

limin

ated

bec

ause

it is

not

div

ersi

fied

by

pro

per

ty s

ecto

r

In

vesc

o A

dvi

ser’s

pro

pos

ed fu

nd h

as 1

8 in

vest

ors.

It w

as e

limin

ated

bec

ause

of t

he s

mal

l inv

esto

r bas

e

K

ayne

And

erso

n R

eal E

stat

e’s

pro

pos

ed fu

nd in

vest

s p

rimar

ily in

nic

he p

rop

erty

typ

es. I

t was

elim

inat

ed b

ecau

se o

ther

non-

core

real

est

ate

man

ager

s in

the

por

tfolio

inve

st in

nic

he p

rop

erty

typ

es. T

his

com

mitm

ent(s

) is

inte

nded

to p

rimar

ilyta

rget

exp

osur

e to

trad

ition

al p

rop

erty

typ

es

Cou

ntFi

rm N

ame

Min

imum

Crit

eria

Des

irabl

e

SEC

/Ban

k R

egis

tere

dE&

O

Insu

ranc

eO

pen-

End

Sem

i-An

nual

Li

quid

ity

>$1B

To

tal

AUM

3-YR

Tra

ckR

ecor

d

Div

ersi

fied

by S

ecto

r /

Geo

grap

hy

Tax

Exem

ptIn

vest

ors

1C

arly

le In

vest

men

t Man

agem

ent

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

2C

BR

E G

lob

al In

vest

ors

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

3C

lario

n P

artn

ers

Yes

Yes

Yes

Yes

Yes

Yes

No

Yes

4In

vesc

o A

dvi

sers

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

5K

ayne

And

erso

n R

eal E

stat

eY

esY

esY

esY

esY

esY

esY

esY

es

Page

52

of 3

72

Purp

ose

fort

his

Man

ager

Ana

lysi

sR

epor

t:

This

sear

chre

por

tre

view

sp

oten

tial

cand

idat

esfo

ran

allo

catio

nto

open

-end

,co

rep

lus

real

esta

te.

Bas

edon

our

rese

arch

and

due

dili

gen

ceof

core

plu

sre

ales

tate

man

ager

s,as

wel

las

anev

alua

tion

offit

with

the

Sys

tem

’sex

istin

gp

ortfo

lio,w

ew

illre

view

the

follo

win

gca

ndid

ates

for

pot

entia

linv

estm

ent:

Can

dida

tes

Intr

oduc

tion

Firm

Firm

A

bbre

viat

ion

Stra

tegy

Stra

tegy

A

bbre

viat

ion

Bro

okfie

ld A

sset

Man

agem

ent

BA

MB

rook

field

Pre

mie

r R

eal E

stat

e P

artn

ers

BPR

EP

J.P

. Mor

gan

Ass

et M

anag

emen

tJP

MA

MJP

MC

B S

pec

ial S

ituat

ion

Pro

per

ty F

und

SSPF

PG

IM R

eal E

stat

ePG

IM R

EP

RIS

A II

PRIS

A II

Prin

cip

al R

eal E

stat

e In

vest

ors

PREI

Prin

cip

al E

nhan

ced

Pro

per

ty F

und

PEPF

Page

53

of 3

72

Inve

stm

ent M

anag

er a

nd S

trat

egy

Com

par

ison

Page

54

of 3

72

Firm

Ove

rvie

w

Firm

Rea

l Est

ate

Bus

ines

s In

cept

ion

Ow

ners

hip

Rea

l Est

ate

AU

M a

s of

9/

30/2

019

Hea

dqua

rter

sR

eal E

stat

e Pr

ofes

sion

als

BA

M20

01P

ublic

ly-t

rad

ed c

omp

any

(NY

SE

: BA

M)

$82.

0 b

illio

nTo

ront

o, O

ntar

ioFi

rm: 3

80

JPM

AM

1970

Bus

ines

s un

it of

JP

Mor

gan

Inve

stm

ent M

anag

emen

t whi

ch is

a w

holly

-ow

ned

sub

sid

iary

of J

.P. M

org

an C

hase

& C

o., a

pub

licly

-tra

ded

co

rpor

atio

n$7

2.6

bill

ion

New

Yor

k, N

YFi

rm: 1

22

PGIM

RE

1970

Bus

ines

s un

it of

PG

IM, I

nc. t

he in

vest

men

t man

agem

ent b

usin

ess

of

Pru

den

tial F

inan

cial

, Inc

., a

pub

licly

-tra

ded

cor

por

atio

n $4

9.9

bill

ion

Mad

ison

, NJ

Firm

: 188

PREI

1998

Who

lly-o

wne

d s

ubsi

dia

ry o

f Prin

cip

al F

inan

cial

Gro

up, a

pub

licly

-tra

ded

co

mp

any

$77.

1 b

illio

nD

es M

oine

s, IA

Firm

: 165

Page

55

of 3

72

Team

Ove

rvie

w

Firm

Inve

stm

ent T

eam

Supp

ortin

g In

vest

men

t Pro

fess

iona

ls

BA

M

M

anag

ing

Par

tner

Mar

k B

row

n is

the

lead

por

tfolio

man

ager

. Bro

wn

is s

upp

orte

d b

yth

ree

add

ition

al in

vest

men

t pro

fess

iona

ls th

at c

omp

rise

the

ded

icat

ed fu

nd te

am

Inve

stm

ent C

omm

ittee

(IC

) re

view

s an

d a

pp

rove

s al

l tra

nsac

tions

. It i

s co

mp

rised

of

CE

O B

ruce

Fla

tt an

d V

ice

Cha

irman

Bar

ry B

lattm

an fr

om B

AM

and

Cha

irman

Ric

Cla

rk, C

EO

Bria

n K

ing

ston

, and

CO

O B

ill P

owel

l fro

m B

rook

field

Pro

per

ty G

roup

70

acq

uisi

tions

40

ass

et m

anag

emen

t

JPM

AM

M

anag

ing

Dire

ctor

Cra

ig T

heirl

is th

e le

ad p

ortfo

lio m

anag

er

IC r

evie

ws

and

ap

pro

ves

all t

rans

actio

ns. I

t is

com

pris

ed o

f The

irl, C

IO D

oug

Sch

war

tz, H

ead

of A

sset

Man

agem

ent M

ark

Bon

apac

e, a

nd a

sen

ior

rep

rese

ntat

ive

from

the

Rea

l Est

ate

Res

earc

h G

roup

26

acq

uisi

tions

63

ass

et m

anag

emen

t

7 re

sear

ch

PGIM

RE

S

enio

r P

ortfo

lio M

anag

er D

arin

Brig

ht, P

ortfo

lio M

ang

er J

ustin

Gle

ason

, and

Ass

ista

ntP

ortfo

lio M

anag

er C

aitli

n O

’Con

nor

IC

rev

iew

s an

d a

pp

rove

s al

l tra

nsac

tions

. It i

s co

mp

rised

of B

right

, Sen

ior

Por

tfolio

Man

ager

Fra

nk G

arci

a, G

lob

al C

hief

Ris

k O

ffice

r Le

n K

apla

n, H

ead

of A

mer

icas

Res

earc

h Le

e M

enife

e, H

ead

of A

sset

Man

agem

ent C

hris

tina

Hill

, Hea

d o

f U.S

.Tr

ansa

ctio

ns T

odd

Gol

db

erg

, Glo

bal

CO

O C

athy

Mar

cus,

and

Sen

ior

Por

tfolio

Man

ager

Sou

ltana

Rei

gle

46

acq

uisi

tions

10

0 as

set m

anag

emen

t

15 r

esea

rch

PREI

To

dd

Whi

te a

nd M

ark

Sch

olz

are

the

por

tfolio

man

ager

s. W

hite

and

Sch

olz

are

sup

por

ted

by

two

add

ition

al in

vest

men

t pro

fess

iona

ls th

at c

omp

rise

the

ded

icat

edfu

nd te

am

IC r

evie

ws

and

ap

pro

ves

all t

rans

actio

ns. I

t is

com

pris

ed o

f Whi

te a

nd e

ight

mem

ber

sof

the

man

agem

ent t

eam

of P

RE

I

16

acq

uisi

tions

52

ass

et m

anag

emen

t

7 re

sear

ch

Page

56

of 3

72

Port

folio

Sum

mar

y St

atis

tics:

Sep

tem

ber 3

0, 2

019

Firm

Stra

tegy

Ince

ptio

n

Num

ber

ofIn

vest

ors

Num

ber

of

Prop

ertie

s

Gro

ss A

sset

Va

lue

of F

und

($M

M)

Net

Ass

et

Valu

e of

Fun

d ($

MM

)

Valu

e of

in

Plac

e D

ebt

($M

M)

Valu

e of

Fun

d H

eld

in C

ash

& E

quiv

alen

ts

($M

M)

Valu

e of

C

omm

itmen

ts

in

Con

trib

utio

n Q

ueue

($M

M)

Valu

e of

C

omm

itmen

ts

in

Red

empt

ion

Que

ue ($

MM

)

BA

M20

1659

934,

445

2,07

71,

752

3456

050

JPM

AM

1998

9378

7,43

04,

053

3,36

317

038

0

PGIM

RE

1980

104

161

13,0

598,

214

3,48

180

343

0

PREI

2004

108

563,

685

2,00

11,

359

4729

41

Page

57

of 3

72

Inve

stm

ent S

trat

egy

Firm

Stra

tegy

Foc

usR

eal E

stat

e Pr

oper

ty T

ypes

Max

Allo

catio

n to

Non

-Cor

e In

vest

men

ts

Targ

et

Net

Ret

urn

Leve

rage

BA

M

Fund

inve

sts

in p

rop

ertie

s w

ith s

tab

le in

com

e st

ream

s,

hig

h oc

cup

ancy

, and

gro

win

g r

ents

. It l

ever

ages

B

rook

field

’s o

per

atin

g p

latfo

rms

to g

ener

ate

attr

activ

e re

nt g

row

th a

nd e

nhan

ce r

etur

ns o

ver

the

long

-ter

m.

O

ffice

M

ultif

amily

In

dus

tria

l

Ret

ail

M

ax o

f 20%

for

dev

elop

men

t9%

to 1

1%

Ta

rget

: 45%

C

urre

nt: 4

6%

Max

imum

: 50%

JPM

AM

Fund

inve

sts

in a

var

iety

of v

alue

-ad

d o

pp

ortu

nitie

s in

th

e U

.S. s

uch

as le

ase-

up, g

roun

d-u

p d

evel

opm

ent,

red

evel

opm

ent,

and

rep

ositi

onin

g. I

t may

als

o ac

qui

re

vaca

nt la

nd to

be

held

for

futu

re d

evel

opm

ent o

r ap

pre

ciat

ion.

O

ffice

M

ultif

amily

In

dus

tria

l

Ret

ail

M

ax o

f 40%

for

dev

elop

men

t9%

to 1

1%

Targ

et: 4

0% to

50%

C

urre

nt: 4

5%

Max

imum

: 60%

PGIM

RE

Fund

inve

sts

in a

var

iety

of v

alue

-ad

d o

pp

ortu

nitie

s su

ch

as le

asin

g, r

epos

ition

ing

, dev

elop

men

t, an

d a

cqui

sitio

n of

cas

h flo

win

g p

rop

ertie

s at

a d

isco

unt t

o re

pla

cem

ent

cost

whe

re p

ricin

g lo

catio

ns m

ay e

xist

.

O

ffice

M

ultif

amily

In

dus

tria

l

Ret

ail

S

elf-

Sto

rag

e

M

ax o

f 35%

7% to

10%

Ta

rget

: 30%

to 3

5%

Cur

rent

: 35%

M

axim

um: 4

0%

PREI

Fund

inve

sts

in a

com

bin

atio

n of

sta

bili

zed

inco

me

gen

erat

ing

ass

ets

and

val

ue-a

dd

and

dev

elop

men

t p

roje

cts

that

can

gen

erat

e hi

ghe

r ris

k-ad

just

ed re

turn

s.

O

ffice

M

ultif

amily

In

dus

tria

l

Ret

ail

S

tud

ent H

ousi

ng

M

ax o

f 25%

11%

to 1

3%

Targ

et: 4

0% to

45%

C

urre

nt: 3

8%

Max

imum

: 50%

Page

58

of 3

72

Key

Diff

eren

tiato

rs

Firm

Uni

que

Feat

ures

Poin

ts to

Con

side

r

BA

M

S

cale

and

dep

th o

f Bro

okfie

ld’s

op

erat

ing

pla

tform

allo

ws

it to

exe

cute

larg

e-sc

ale

and

com

ple

x tr

ansa

ctio

ns. A

vera

ge

equi

ty in

vest

men

t is

$100

to $

250

mill

ion

P

ortfo

lio c

urre

ntly

has

no

exp

osur

e to

ret

ail a

sset

s

Focu

s on

gat

eway

mar

kets

S

igni

fican

t allo

catio

n of

48%

in th

e W

est r

egio

n

Fund

targ

ets

a 4.

0% a

nnua

l div

iden

d y

ield

Tw

o-ye

ar lo

ck u

p p

erio

d

Thre

e-ye

ar tr

ack

reco

rd fo

r th

e fu

nd, w

hich

isB

AM

’s fi

rst o

pen

-end

rea

l est

ate

offe

ring

B

AM

’s tr

ack

reco

rd p

rior

to th

e fo

rmat

ion

of th

eFu

nd in

clud

es $

3.3

bill

ion

inve

sted

in c

ore

plu

sre

al e

stat

e th

at g

ener

ated

a 1

0.0%

net

IRR

JPM

AM

Ty

pic

al a

lloca

tion

is 5

0% s

tab

ilize

d a

sset

s an

d 5

0% a

sset

s in

var

ious

sta

ges

of d

evel

opm

ent,

rep

ositi

onin

g, a

nd le

asin

g

Focu

s on

gat

eway

mar

kets

S

igni

fican

t allo

catio

n of

51%

in th

e E

ast r

egio

n

Fund

doe

s no

t tar

get

an

annu

al d

ivid

end

dis

trib

utio

n. T

he in

com

e ea

rned

is a

utom

atic

ally

rein

vest

ed

N

o lo

ck u

p p

erio

d

No

per

form

ance

-bas

ed fe

e

Cha

rges

a fe

e b

ased

on

fund

’s d

ebt

O

ver

the

last

5-y

rs, t

he a

lloca

tion

to d

evel

opm

ent

was

in th

e 14

% to

20%

ran

ge

PGIM

RE

M

inim

um o

f 65%

sta

bili

zed

ass

ets

(>80

% le

ased

) an

d u

p to

35%

val

ue-a

dd

and

dev

elop

men

tp

roje

cts

C

onsi

sten

t bia

s to

war

ds

six

coas

tal m

arke

ts: S

an F

ranc

isco

, Sou

ther

n C

alifo

rnia

, Flo

rida,

Was

hing

ton

D.C

., B

osto

n, a

nd N

ew Y

ork/

New

Jer

sey.

Ap

pro

xim

atel

y, 7

5% o

f the

por

tfolio

isin

vest

ed in

thes

e m

arke

ts

Ded

icat

ed a

lloca

tion

to s

elf-

stor

age

D

istr

ibut

es o

per

atin

g c

ash

flow

, for

the

last

5-y

rs th

e d

ivid

end

yie

ld w

as in

the

3.0%

to 3

.5%

rang

e

N

o lo

ck u

p p

erio

d

No

per

form

ance

-bas

ed fe

e

Ove

r th

e la

st 5

-yrs

, the

allo

catio

n to

dev

elop

men

tw

as in

the

6% to

12%

ran

ge

PREI

M

inim

um o

f 75%

inve

sted

in s

tab

ilize

d a

sset

s (>

80%

leas

ed) a

nd u

p to

25%

val

ue-a

dd

and

dev

elop

men

t pro

ject

s

Focu

s on

sec

ond

ary

mar

kets

D

edic

ated

allo

catio

n to

stu

den

t hou

sing

Fu

nd ta

rget

s a

4.0%

to 6

.0%

ann

ual d

ivid

end

yie

ld

N

o lo

ck u

p p

erio

d

Ove

r th

e la

st 5

-yrs

, the

allo

catio

n to

dev

elop

men

tw

as in

the

5% to

11%

ran

ge

Page

59

of 3

72

Term

s

Firm

Stat

ed

Min

imum

C

ontr

ibut

ion

Que

ue /

Estim

ated

Len

gth

Red

empt

ion

Term

sM

anag

emen

t Fee

Ince

ntiv

e Fe

ePr

efer

red

Ret

urn

BA

M$5

mill

ion

Two

to th

ree

qua

rter

s

Qua

rter

ly w

ith 9

0-d

ays

notic

e

1.

00%

on

the

first

$20

0M

0.85

% p

er a

nnum

on

the

rem

aind

er

10

% w

ith a

50%

cat

ch-u

pca

lcul

ated

on

a tr

ailin

gth

ree-

year

per

iod

7%

JPM

AM

$10

mill

ion

One

qua

rter

Q

uart

erly

with

30-

day

sno

tice

1.

25%

exc

ept f

or 0

.15%

on

mar

ket v

alue

of c

ash

abov

e a

5% p

ositi

on

0.62

5% o

n p

ro-r

ata

shar

e of

deb

t

Max

imum

ann

ual f

ee is

1.6

0%

N

one

N/A

PGIM

RE

$5 m

illio

nO

ne q

uart

er

Qua

rter

ly w

ith 9

0-d

ays

notic

e

Fi

rst $

25M

: 1.2

5%

Ove

r $2

5M to

$50

M: 1

.15%

O

ver

$50M

to $

100M

: 1.0

5%

Ove

r$10

0M to

$20

0M: 0

.95%

O

ver

$200

M to

$30

0M: 0

.90%

O

ver

$300

M: 0

.85%

N

one

N/A

PREI

$1 m

illio

nO

ne to

two

qua

rter

s

Qua

rter

ly w

ith 9

0-d

ays

notic

e

$1

M to

$5M

: 1.4

0%

$5M

to $

10M

: 1.3

0%

$10M

to $

50M

: 1.2

0%

$50M

to $

100M

: 1.1

0%

$100

M to

$15

0M: 1

.00%

$1

50M

or

gre

ater

: 0.8

5%

15

% o

ver

the

hurd

le r

ate,

calc

ulat

ed o

n a

trai

ling

thre

e-ye

ar b

asis

Hur

dle

rat

e,

11%

IRR

Page

60

of 3

72

Estim

ated

Fee

Impa

ct

M

anag

er’s

est

imat

ed n

et r

etur

n fo

r va

rious

3-y

ear

gro

ss r

etur

n le

vels

bas

ed o

n a

$100

mill

ion

com

mitm

ent

7.0%

8.0%

9.0%

10.0

%11

.0%

12.0

%B

AM

6.0%

7.0%

7.5%

8.1%

9.0%

9.9%

JPM

AM

5.4%

6.4%

7.4%

8.4%

9.4%

10.4

%P

GIM

RE

5.9%

6.9%

7.9%

8.9%

9.9%

10.9

%P

RE

I6.

0%7.

0%8.

0%9.

0%10

.0%

10.9

%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0

%

12.0

%

Net Return

Estim

ated

Net

Ret

urn

BA

MJP

MA

MP

GIM

RE

PR

EI

Page

61

of 3

72

Geo

grap

hic

Allo

catio

n: S

epte

mbe

r 30,

201

9

BA

MJP

MA

MP

GIM

RE

PR

EI

Eas

t34

%50

%42

%36

%W

est

48%

16%

31%

36%

Sou

th15

%13

%24

%23

%M

idw

est

3%20

%3%

6%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Page

62

of 3

72

Prop

erty

Typ

e A

lloca

tion:

Sep

tem

ber 3

0, 2

019

BA

MJP

MA

MP

GIM

RE

PR

EI

Offi

ce32

%49

%35

%23

%M

ultif

amily

30%

33%

34%

26%

Ind

ustr

ial

38%

11%

4%24

%R

etai

l0%

6%18

%17

%S

tud

ent H

ousi

ng0%

0%0%

10%

Sel

f-S

tora

ge

0%0%

5%0%

Land

0%2%

5%0%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Page

63

of 3

72

Prop

erty

Life

Cyc

le A

lloca

tion:

Sep

tem

ber 3

0, 2

019

BA

MJP

MA

MP

GIM

RE

PR

EI

Sta

bili

zed

86%

77%

83%

83%

Leas

e U

p3%

0%4%

9%R

epos

ition

ing

0%0%

0%0%

Red

evel

opm

ent

0%6%

0%0%

Dev

elop

men

t12

%17

%13

%9%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Page

64

of 3

72

Inve

stm

ent S

ize

Allo

catio

n: S

epte

mbe

r 30,

201

9

BA

MJP

MA

MP

GIM

RE

PR

EI

Ove

r $1

00M

55%

70%

55%

23%

$50M

to $

100M

28%

22%

21%

35%

Less

than

$50

M17

%9%

24%

42%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Inve

stm

ent s

ize

is r

epre

sent

ed b

y th

e G

ross

Ass

et V

alue

Page

65

of 3

72

Prop

erty

Age

Allo

catio

n: S

epte

mbe

r 30,

201

9

BA

MJP

MA

MP

GIM

RE

PR

EI

Ove

r 20

49%

51%

23%

21%

10 to

20

13%

2%30

%32

%5

to 1

010

%2%

20%

4%U

nder

528

%45

%27

%44

%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Page

66

of 3

72

Inve

stm

ent S

truc

ture

: Sep

tem

ber 3

0, 2

019

BA

MJP

MA

MP

GIM

RE

PR

EI

Who

lly-o

wne

d59

%8%

43%

54%

Join

t Ven

ture

41%

92%

55%

46%

Oth

er0%

0%1%

0%

0%10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Page

67

of 3

72

IMP

AC

T O

N P

OR

TFO

LIO

DIV

ER

SIF

ICA

TIO

N

Page

68

of 3

72

Cha

nge

in P

ortfo

lio D

iver

sific

atio

n

$1

00 m

illio

n co

mm

itmen

t to

BA

M

22.1

%

29.6

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Trac

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Page

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2017

2016

2015

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2013

2012

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Page

77

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Inve

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78

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inth

e9%

to11

%ra

nge.

Itp

rimar

ilyta

rget

scl

ass

Aq

ualit

yp

rop

ertie

sth

atw

illne

edso

me

com

bin

atio

nof

mov

ing

bel

owm

arke

tren

tsto

mar

ket

leve

ls,

leas

e-up

ofva

canc

y,or

light

reno

vatio

nsto

gen

erat

ea

10%

to12

%re

turn

atth

ein

vest

men

tle

vel.

Itm

ayal

soal

loca

teup

to20

%to

dev

elop

men

tp

roje

cts.

The

fund

will

inve

stin

the

four

prim

ary

pro

per

tyty

pes

with

anem

pha

sis

onp

rimar

ym

arke

ts.

The

typ

ical

tran

sact

ion

size

isup

per

mar

ket

with

anav

erag

eeq

uity

inve

stm

ent

inth

e$1

00to

$200

mill

ion

rang

e.Th

eav

erag

eho

ldp

erio

dw

illb

ese

ven

year

sor

mor

ew

ithp

erio

dic

shor

ter-

term

dis

pos

ition

sof

pro

per

ties

that

have

limite

din

com

eg

row

thp

rosp

ects

.Th

eta

rget

leve

rag

era

tiofo

rth

efu

ndis

45%

with

am

axim

umlim

itof

50%

.

Expe

ctat

ions

Ove

rth

elo

ng-t

erm

the

targ

etne

tIR

Rof

9%to

11%

isa

reas

onab

leex

pec

tatio

nfo

rin

vest

ors.

How

ever

,in

the

near

term

the

NO

Ig

row

thfo

rth

ein

itial

inve

stm

ents

isp

roje

cted

toex

ceed

9%ov

erth

ene

xtth

ree

year

s,w

hich

pro

vid

esa

pot

entia

ltai

lwin

dfo

rth

ere

turn

toex

ceed

the

targ

etra

nge.

Asi

gni

fican

tsl

owin

gof

job

gro

wth

and

/or

anac

cele

ratio

nof

new

sup

ply

coul

dp

rese

nta

chal

leng

eto

achi

evin

gth

ele

asin

gth

atis

need

edto

achi

eve

9%N

OIg

row

th.

Poin

tsto

Con

side

r

Bef

ore

esta

blis

hing

BP

RE

P, B

rook

field

’s r

eal e

stat

e tr

ack

reco

rd in

clud

es $

3.3

bill

ion

ofc a

pita

l com

mitt

ed to

cor

e p

lus

real

est

ate

thro

ugh

two

clos

ed-e

nd fu

nd v

ehic

les

with

200

6an

d 2

013

vint

ages

, res

pec

tivel

y. T

he tw

o fu

nds

have

gen

erat

ed a

com

bin

ed 1

0.0%

net

IRR

and

1.9

x m

ultip

le.

B

PR

EP

cur

rent

ly h

as n

o ex

pos

ure

to r

etai

l pro

per

ties.

It w

ill e

vent

ually

be

a co

mp

onen

t of t

hep

ortfo

lio. H

owev

er, t

he te

am is

taki

ng a

mea

sure

d a

pp

roac

h to

dep

loyi

ng c

apita

l int

o th

e sp

ace.

The

leve

l of a

gg

reg

ate

leve

rag

e co

uld

exc

eed

the

50%

lim

it in

the

near

-ter

m. T

here

is a

thre

e-ye

ar g

race

per

iod

on

the

max

imum

whi

le th

e p

ortfo

lio is

con

stru

cted

.

An

affil

iate

Bro

okfie

ld P

rop

erty

Par

tner

s (B

PY

) ac

qui

res

real

est

ate

for

its o

wn

bal

ance

she

et.

BP

Y m

ay h

ave

over

lap

pin

g in

vest

men

t ob

ject

ives

as

BP

RE

P. T

here

is th

e p

oten

tial t

hat

occa

sion

ally

inve

stm

ents

may

firs

t be

offe

red

to B

PY

or

be

allo

cate

d to

bot

h B

PY

and

BP

RE

P. W

e ap

pre

ciat

e th

e tr

ansp

aren

cy B

AM

pro

vid

es in

to th

is. I

t is

req

uire

d in

the

qua

rter

l yan

d a

nnua

l rep

orts

to p

rovi

de

a lis

t of a

ll in

vest

men

ts th

at m

et th

e fu

nd’s

ob

ject

ive,

whi

ch th

efu

nd w

as n

ot o

ffere

d.

Rec

omm

enda

tion

Sum

mar

yB

PR

EP

is a

diff

eren

tiate

d s

trat

egy

with

in th

e co

re p

lus

spac

e. T

he s

cale

and

dep

th o

f B

rook

field

’s r

eal e

stat

e op

erat

ing

pla

tform

set

s it

apar

t fro

m c

omp

etito

rs o

fferin

g c

ore

and

cor

e p

lus

stra

teg

ies.

Bro

okfie

ld’s

op

erat

iona

l res

ourc

es a

llow

it to

exe

cute

larg

e-sc

ale

and

com

ple

x tr

ansa

ctio

ns th

at m

ost c

ore

plu

s st

rate

gie

s d

o no

t pur

sue.

Whi

le B

PR

EP

is o

nly

app

roac

hing

its

two-

year

trac

k re

cord

, Bro

okfie

ld h

as g

ener

ated

sol

id r

etur

ns a

cros

s ot

her

fund

veh

icle

s th

at

pur

sue

core

plu

s, v

alue

-ad

d, a

nd o

pp

ortu

nist

ic s

trat

egie

s.

The

BP

RE

P lo

ng-t

erm

, tar

get

net

IRR

is 9

% to

11%

with

targ

et le

vera

ge

of 4

5%. B

PR

EP

can

be

pos

ition

ed a

s a

com

ple

men

t to

an a

lloca

tion

to a

cor

e re

al e

stat

e fu

nd o

r as

the

prim

ary

real

es

tate

allo

catio

n of

a c

lient

with

out t

he r

esou

rces

to im

ple

men

t a n

on-c

ore

real

est

ate

pro

gra

m.

Page

79

of 3

72

JPM

CB

Spe

cial

Situ

atio

n Pr

oper

ty F

und

Firm

Ove

rvie

wJ.

P. M

org

an h

as o

ffere

d a

sset

man

agem

ent s

ervi

ces

for

over

a c

entu

ry, o

rigin

ally

thro

ugh

the

Trus

t and

Inve

stm

ent D

ivis

ion

of J

.P. M

org

an &

Co.

, Inc

. and

mor

e re

cent

ly th

roug

h J.

P. M

org

an

Inve

stm

ent M

anag

emen

t Inc

. (JP

MIM

), a

who

lly o

wne

d s

ubsi

dia

ry o

f JP

Mor

gan

Cha

se &

Co.

JP

MIM

was

foun

ded

and

reg

iste

red

with

the

SE

C in

198

4. T

he c

ong

lom

erat

e b

ank

is

head

qua

rter

ed in

New

Yor

k, N

Y, a

s is

the

ban

k’s

asse

t man

agem

ent d

ivis

ion,

J.P

.M

org

an A

sset

Man

agem

ent (

JPM

AM

). J

.P. M

org

an A

sset

Man

agem

ent –

Glo

bal

Rea

l Ass

ets

(JP

M-G

RA

) ha

s m

anag

ed o

pen

-end

rea

l est

ate

com

min

gle

d fu

nds

sinc

e 19

70. T

he p

aren

t firm

is

a p

ublic

ily tr

aded

com

pan

y on

the

NY

SE

(Ti

cker

: JP

M).

Team

Ove

rvie

wC

raig

Thei

rlis

the

ded

icat

edp

ortfo

liom

anag

erfo

rth

eS

pec

ial

Situ

atio

nP

rop

erty

Fund

(SS

PF)

Thei

rlha

sse

rved

inth

isro

lesi

nce

Janu

ary

2016

.P

rior

tob

eing

nam

edth

ep

ortfo

liom

anag

er,

hew

asth

eH

ead

ofS

outh

-Mid

wes

tA

cqui

sitio

ns.

Inth

isro

le,

hew

asin

volv

edin

man

yac

qui

sitio

nsfo

rth

eS

pec

ial

Situ

atio

nP

rop

erty

Fund

(SS

PF)

.S

SP

Fis

man

aged

by

the

pro

fess

iona

lsof

the

Rea

lE

stat

eA

mer

icas

div

isio

n.Th

eA

mer

icas

div

isio

nin

clud

es30

asse

tm

anag

ers,

26ac

qui

sitio

nsof

ficer

s,an

dsi

xd

evel

opm

ent

and

eng

inee

ring

pro

fess

iona

ls.

The

Inve

stm

ent

Com

mitt

ee(I

C),

whi

chap

pro

ves

all

tran

sact

ions

,is

com

pris

edof

thirt

een

seni

orp

rofe

ssio

nals

from

all

oper

atio

nal

area

sin

volv

edin

man

agin

gS

SP

F.U

nani

mou

sap

pro

val

isre

qui

red

from

the

four

votin

gm

emb

ers

whi

chin

clud

esTh

eirl,

Chi

efIn

vest

men

tO

ffice

rD

oug

Sch

war

tz,

the

asse

tm

anag

emen

tse

ctor

head

resp

onsi

ble

for

the

per

form

ance

ofth

eas

set,

and

ase

nior

real

esta

tere

sear

chp

rofe

ssio

nal.

Stra

tegy

Ove

rvie

w

SS

PF

focu

ses

onm

id-

tola

rge-

size

dp

rop

ertie

sw

ithin

the

four

mai

np

rop

erty

typ

esth

atar

ein

prim

ary

mar

kets

.S

SP

Fin

vest

sin

asse

tsre

qui

ring

the

exec

utio

nof

ava

riety

ofva

lue-

add

stra

teg

ies

tore

ach

stab

iliza

tion

incl

udin

gle

ase-

up,

and

rep

ositi

onin

gas

wel

lre

dev

elop

men

tan

dd

evel

opm

ent

pro

ject

s.In

vest

men

tsw

illp

rimar

ilyb

em

ade

via

the

equi

typ

ortio

nof

the

cap

itals

tack

and

opp

ortu

nist

ical

lyvi

am

ezza

nine

deb

t.

The

und

erw

ritin

gfo

ra

pot

entia

lac

qui

sitio

nis

aco

llab

orat

ive

pro

cess

invo

lvin

gp

rofe

ssio

nals

from

acq

uisi

tions

,as

set

man

agem

ent,

the

finan

cial

gro

up,

and

the

dev

elop

men

tan

den

gin

eerin

gg

roup

.U

pon

com

ple

tion

ofd

ued

ilig

ence

,Th

eirl

and

all

othe

rp

rofe

ssio

nals

that

par

ticip

ated

inth

ed

ued

ilig

ence

pro

cess

sig

nof

fon

com

ple

ted

chec

klis

tb

efor

eth

eas

set

rece

ives

final

app

rova

lfro

mth

eIC

.A

sset

man

ager

sar

ere

spon

sib

lefo

rth

ep

erfo

rman

ceof

the

asse

tp

ost-

acq

uisi

tion

asa

resu

ltth

eyar

ehe

avily

invo

lved

inun

der

writ

ing

tod

eter

min

eif

the

assu

mp

tions

inth

eb

usin

ess

pla

nar

eco

nsis

tent

with

wha

tis

occu

rrin

gin

the

mar

ket.

Ass

etm

anag

ers

cond

uct

anan

nual

hold

/sel

lan

alys

isfo

rea

chas

set

with

thei

rho

ld/s

ell

reco

mm

end

atio

nre

qui

red

tob

ere

view

edan

dac

cep

ted

by

the

IC.

Expe

ctat

ions

The

per

form

ance

obje

ctiv

eof

SS

PF

isto

outp

erfo

rmth

eN

FI-O

DC

EIn

dex

(VW

)b

ya

min

imum

of20

0b

asis

poi

nts.

We

bel

ieve

that

isa

reas

onab

leex

pec

tatio

nfo

rth

est

rate

gy

inm

ost

pha

ses

ofth

ere

ales

tate

cycl

e.H

owev

er,

we

exp

ect

the

stra

teg

yw

illun

der

per

form

the

Ind

exsi

gni

fican

tlyd

urin

ga

real

esta

tep

rice

corr

ectio

nb

ased

onits

hig

her

leve

rag

ean

dsi

gni

fican

tle

vel

ofex

pos

ure

tova

lue-

add

and

dev

elop

men

t.

Poin

tsto

Con

side

r

Th

e p

ortfo

lio c

omp

ositi

onis

targ

eted

to b

e ap

pro

xim

atel

y 50

% s

tab

ilize

d a

sset

s an

d 5

0%as

sets

und

erg

oing

a v

alue

-ad

d s

trat

egy

or d

evel

opm

ent p

roje

cts

Le

vera

ge

leve

ls w

ill b

e in

the

40%

to 5

0% r

ang

e

Dev

elop

men

t can

be

up to

40%

of t

he p

ortfo

lio. H

owev

er, T

heirl

is c

omfo

rtab

le w

ith a

nal

loca

tion

in th

e 15

% to

23%

ran

ge

S

SP

F is

not

man

aged

to h

ave

sim

ilar

allo

catio

ns to

geo

gra

phi

c re

gio

ns a

nd p

rop

erty

typ

esas

the

NFI

-OD

CE

Ind

ex (

VW

)

The

inco

me

yiel

d w

ill b

e lo

wer

than

a c

ore

fund

with

an

estim

ate

in th

e 3%

to 4

% r

ang

e

Rec

omm

enda

tion

Sum

mar

y

The

size

and

scop

e of

the

JPM

AM

rea

l est

ate

pla

tform

sta

nds

abov

e its

pee

rs. T

heirl

and

the

pro

fess

iona

ls th

at s

erve

as

the

head

s of

the

five

oper

atio

nal a

reas

ave

rag

e cl

ose

to tw

o d

ecad

es

of te

nure

with

the

firm

and

25

year

s of

ind

ustr

y ex

per

ienc

e. T

he te

am a

lso

incl

udes

the

reso

urce

s of

an

in-h

ouse

deb

t gro

up a

nd a

dev

elop

men

t and

eng

inee

ring

gro

up. A

dd

ition

ally

, th

e te

am c

an a

lso

leve

rag

e th

e eq

uity

and

fixe

d in

com

e re

sear

ch c

apab

ilitie

s of

JP

MA

M fo

r cr

edit

and

ind

ustr

y an

alys

is.

Whi

le h

is te

nure

as

por

tfolio

man

ager

has

bee

n b

rief,

Thei

rl ha

s b

een

heav

ily in

volv

ed in

the

acq

uisi

tion

of m

any

of th

e as

set i

n th

e p

ortfo

lio. H

is le

vel o

f fam

iliar

ity w

ith th

e p

ortfo

lio e

limin

ates

an

y co

ncer

ns w

e ha

ve w

ith h

is r

ecen

t ap

poi

ntm

ent t

o th

e p

ositi

on. A

dd

ition

ally

, it i

s im

por

tant

to

reco

gni

ze th

at th

e in

vest

men

t pro

cess

is h

ighl

y co

llab

orat

ive

req

uirin

g s

igni

fican

t inv

olve

men

t of

pro

fess

iona

ls fr

om a

ll op

erat

iona

l are

as o

f the

Rea

l Est

ate

Am

eric

as d

ivis

ion

to s

ourc

e,

und

erw

rite

and

man

age

asse

ts.

SS

PF

is r

ecom

men

ded

for

any

clie

nt im

ple

men

ting

an

allo

catio

n to

non

-cor

e p

rivat

e re

al e

stat

e th

at c

anno

t allo

cate

to th

e m

ore

pre

vale

nt c

lose

d-e

nd, l

imite

d p

artn

ersh

ip v

ehic

les.

On

the

risk-

spec

trum

, SS

PF

falls

bet

wee

n m

ost o

pen

-end

cor

e p

lus

stra

teg

ies

and

a ty

pic

al v

alue

-ad

d

stra

teg

y as

the

por

tfolio

will

tend

to b

e co

mp

rised

of 5

0% s

tab

ilize

d p

rop

ertie

s w

ith th

e re

mai

nder

con

sist

ing

of v

alue

-ad

d in

vest

men

ts a

nd d

evel

opm

ent p

roje

cts.

Page

80

of 3

72

PGIM

PR

ISA

IIFi

rmO

verv

iew

PG

IMR

ealE

stat

eop

erat

esas

ab

usin

ess

unit

ofP

GIM

,an

ind

irect

sub

sid

iary

ofp

ublic

ly-t

rad

edP

rud

entia

l,In

c.(N

YS

E:

PR

U).

PG

IMR

eal

Est

ate

has

bee

nm

anag

ing

core

real

esta

tein

vest

men

tsfo

rp

ensi

onfu

ndcl

ient

ssi

nce

1970

whe

nit

laun

ched

the

ind

ustr

y’s

first

open

-end

com

min

gle

dfu

nd,

PR

ISA

.Th

efir

mha

sa

glo

bal

pre

senc

ew

ith17

loca

tions

acro

ssth

eU

.S.,

Eur

ope,

Asi

aP

acifi

can

dLa

tinA

mer

ica.

Item

plo

ysov

er60

0p

rofe

ssio

nals

wor

ldw

ide

with

over

350

ded

icat

edto

the

U.S

.Th

efir

mcu

rren

tlym

anag

esst

rate

gie

sth

atsp

anth

eris

ksp

ectr

umfr

omco

reto

opp

ortu

nist

icin

bot

heq

uity

and

deb

tst

ruct

ures

asw

ella

sb

oth

priv

ate

real

esta

tean

dp

ublic

ly-t

rad

edre

ales

tate

secu

ritie

s.

Team

Ove

rvie

wTh

e28

pro

fess

iona

lsco

mp

risin

gth

ed

edic

ated

PR

ISA

IIte

amar

ele

db

yS

enio

rP

ortfo

lioM

anag

erD

arin

Brig

ht.B

right

has

bee

na

mem

ber

ofth

ep

ortfo

liom

anag

emen

ttea

mfo

rP

RIS

AII

sinc

e20

04.

He

issu

pp

orte

db

yP

ortfo

lioM

anag

erJu

stin

Gle

ason

and

Ass

ista

ntP

ortfo

lioM

anag

erJe

ssic

aN

ewth

.Th

eot

her

key

com

pon

ent

ofth

eP

RIS

AII

team

are

the

18as

set

man

agem

ent

pro

fess

iona

lsth

atar

ere

spon

sib

lefo

rth

ed

evel

opm

ent,

imp

lem

enta

tion,

and

mon

itorin

gof

the

bus

ines

sp

lans

for

each

ofth

eFu

nd’s

asse

ts.

Ad

diti

onal

ly,

the

PG

IMR

Ere

sear

chte

amis

anin

teg

ral

com

pon

ent

ofal

lp

hase

sof

the

pro

cess

from

dev

elop

men

tof

PR

ISA

IIst

rate

gy

asw

ella

sfr

omun

der

writ

ing

tod

isp

ositi

onat

the

asse

tlev

el.

Stra

tegy

Ove

rvie

wP

RIS

A II

was

the

first

op

en-e

nd, c

ore

plu

s st

rate

gy

in h

isto

ryw

ith a

n in

cep

tion

in 1

980.

It

focu

ses

on u

pp

er m

idd

le-m

arke

tto

larg

e-si

zed

pro

per

ties

acro

ss th

e fo

ur m

ain

pro

per

ty ty

pes

p

lus

the

Sel

f-S

tora

ge

sect

or th

at a

re p

rimar

ily lo

cate

d in

the

maj

or c

oast

al m

arke

ts T

he te

am

may

inve

st u

p to

35%

of P

RIS

A II

in v

alue

-ad

d a

nd d

evel

opm

ent p

roje

cts

with

the

rem

aind

er

req

uire

d to

be

inve

sted

in s

tab

ilize

d, i

ncom

e-g

ener

atin

g a

sset

s th

at a

re a

min

imum

80%

leas

ed.

PR

ISA

II tr

ansa

ctio

ns a

re s

ourc

edth

roug

h a

varie

ty o

f cha

nnel

s, in

clud

ing

JV

par

tner

s, b

roke

rs,

pro

per

ty o

wne

rs a

nd o

per

ator

s, a

nd th

e b

road

er le

gal

and

fina

ncia

l com

mun

ity. A

fter

a ne

w

inve

stm

ent h

as b

een

app

rove

d b

y th

e In

vest

men

t Com

mitt

ee (

IC),

the

acq

uisi

tions

pro

fess

iona

l b

egin

s to

fina

lize

due

dili

gen

ce w

hich

is r

evie

wed

with

the

asse

t man

ager

and

por

tfolio

m

anag

er. F

ollo

win

g fi

nal a

pp

rova

l the

ass

et is

ass

igne

d to

the

asse

t man

ager

who

then

d

evel

ops

and

exe

cute

s th

e b

usin

ess

pla

n fo

r th

e as

set.

A fo

rmal

hol

d/s

ell a

naly

sis

is c

omp

lete

d

on a

n an

nual

bas

is b

y th

e as

set m

anag

er a

nd is

pro

vid

ed to

the

por

tfolio

man

agem

ent t

eam

w

hich

has

the

dis

cret

ion

to d

irect

a h

old

or

sell

dec

isio

n.

All

acq

uisi

tions

, dis

pos

ition

s, d

evel

opm

ent a

nd fi

nanc

ing

s ar

e re

view

ed a

nd v

oted

on

by

the

firm

’s IC

. The

IC is

com

pris

ed o

f eig

ht p

rofe

ssio

nals

that

are

the

mos

t sen

ior

lead

ers

acro

ss a

ll op

erat

iona

l are

as o

f PG

IM R

E. T

he IC

mem

ber

s av

era g

e ov

er tw

o d

ecad

es o

f exp

erie

nce.

Expe

ctat

ions

The

PR

ISA

IIlo

ng-t

erm

,tar

get

netr

etur

nis

8%to

10%

with

ab

ench

mar

kof

the

NFI

-OD

CE

Ind

ex(V

W)

plu

s10

0b

ps.

We

bel

ieve

itis

are

ason

able

exp

ecta

tion

for

the

stra

teg

yin

mos

tp

hase

sof

the

real

esta

tecy

cle.

How

ever

,re

lativ

eto

the

NFI

-OD

CE

Ind

exw

eex

pec

tth

est

rate

gy

will

und

erp

erfo

rmsi

gni

fican

tlyd

urin

ga

real

esta

tep

rice

corr

ectio

nb

ased

onits

hig

her

leve

rag

ean

dsi

gni

fican

tlev

elof

exp

osur

eto

valu

e-ad

dan

dd

evel

opm

ent.

Poin

tsto

Con

side

r

P

RIS

AII

is s

light

ly h

ighe

r ris

k re

lativ

e to

mos

t cor

e fu

nds

bas

ed o

n th

e ta

rget

leve

rag

e in

the

30%

to 3

5% L

TV r

ang

e as

wel

l as

a g

reat

er le

vel o

f exp

osur

e to

val

ue-a

dd

and

dev

elop

men

t.

PR

ISA

II w

ill te

nd to

hav

e a

prim

ary

focu

s on

larg

er a

sset

s lo

cate

d in

the

maj

or c

oas t

alm

arke

ts. P

RIS

A II

als

o in

clud

es a

n al

loca

tion

ded

icat

ed to

the

Sel

f-S

tora

ge

s ect

or.

Rec

omm

enda

tion

Sum

mar

y

The

com

bin

atio

n of

the

hist

ory

and

rep

utat

ion

of P

GIM

Rea

l Est

ate

alon

g w

ith th

e si

ze a

nd

exp

erie

nce

of th

e d

edic

ated

PR

ISA

II te

am is

not

able

am

ong

cor

e p

lus

fund

s. B

right

has

bee

n a

mem

ber

of t

he p

ortfo

lio m

anag

emen

t tea

m fo

r ov

er a

dec

ade,

whi

le b

oth

Gle

ason

and

New

th

pro

vid

e m

ore

than

a d

ecad

e of

exp

erie

nce

each

acr

oss

acq

uisi

tions

, deb

t wor

kout

s an

d

finan

cing

s, a

nd a

sset

man

agem

ent.

Ad

diti

onal

ly, t

he 1

8 as

set m

anag

emen

t pro

fess

iona

ls

aver

age

over

a d

ecad

e of

ass

et m

anag

emen

t exp

erie

nce.

PR

ISA

II is

a tr

ue c

ore

plu

s st

rate

gy

with

muc

h of

the

acq

uisi

tion

activ

ity ta

king

pla

ce w

ithin

its

non-

core

allo

catio

n ra

ther

than

acq

uirin

g a

nd le

verin

g u

p c

ore

asse

ts. T

he n

on-c

ore

por

tfolio

fo

cuse

s on

the

acq

uisi

tion

of a

sset

s th

at w

ill b

e of

hig

h en

oug

h q

ualit

y to

be

held

as

a p

art o

f the

co

re p

ortfo

lio u

pon

com

ple

tion

of a

val

ue-a

dd

or

dev

elop

men

t bus

ines

s p

lan.

The

cor

e p

ortfo

lio

gen

erat

es o

ver

90%

of t

he F

und

’s in

com

e re

turn

with

the

obje

ctiv

e of

miti

gat

ing

som

e of

the

risk

of th

e hi

ghe

r-ris

k/re

turn

non

-cor

e in

vest

men

ts.

PR

ISA

IIis

rec

omm

end

ed fo

r an

ycl

ient

allo

catin

g to

priv

ate

real

est

ate.

Rel

ativ

e to

cor

e st

rate

gie

s, P

RIS

A II

pro

vid

es a

mod

erat

ely

hig

her

risk/

retu

rn p

rofil

e b

ased

on

the

gre

ater

al

loca

tion

to v

alue

-ad

d/d

evel

opm

ent a

nd ta

rget

leve

rag

e of

35%

to 4

0%. F

or s

mal

ler

clie

nts,

the

com

bin

atio

n of

65%

sta

bili

zed

pro

per

ties

and

up

to 3

5% v

alue

-ad

d/d

evel

opm

ent p

ositi

ons

PR

ISA

II w

ell t

o b

e a

sole

allo

catio

n p

rovi

din

g d

iver

sific

atio

n ac

ross

str

ateg

y ty

pes

. Ad

diti

onal

ly,

with

its

pro

pen

sity

to b

e p

ositi

oned

prim

arily

in m

ajor

coa

stal

mar

kets

it c

an b

e p

ositi

oned

as

a cl

ient

’s s

ole

allo

catio

n to

rea

l est

ate

or a

s a

com

ple

men

tary

str

ateg

y to

a c

ore

fund

with

a

sig

nific

ant f

ocus

on

seco

ndar

y m

arke

ts.

Page

81

of 3

72

Prin

cipa

l Enh

ance

d Pr

oper

ty F

und

Expe

ctat

ions

The

PE

PF

long

-ter

m,

targ

etne

tre

turn

is11

%to

13%

.W

eb

elie

veth

atis

are

ason

able

exp

ecta

tion

for

the

stra

teg

yin

mos

tpha

ses

ofth

ere

ales

tate

cycl

e.H

owev

er,r

elat

ive

toth

eN

FI-

OD

CE

Ind

exw

eex

pec

tth

est

rate

gy

will

und

erp

erfo

rmsi

gni

fican

tlyd

urin

ga

real

esta

tep

rice

corr

ectio

nb

ased

onits

hig

her

leve

rag

ean

dsi

gni

fican

tle

vel

ofex

pos

ure

tova

lue-

add

and

dev

elop

men

t.

Poin

tsto

Con

side

r

PE

PF

is s

light

ly h

ighe

r ris

k re

lativ

e to

mos

t cor

e fu

nds

bas

ed o

n th

e ta

rget

leve

rag

e in

the

40%

to 4

5% L

TV r

ang

e as

wel

l as

a g

reat

er le

vel o

f exp

osur

e to

val

ue-a

dd

and

dev

elop

men

t.

PE

PF

will

tend

to h

ave

a p

rimar

y fo

cus

on s

ubur

ban

ass

ets

loca

ted

in s

econ

dar

y m

arke

ts.

The

inco

me

yiel

d h

as c

onsi

sten

tly b

een

in th

e 4%

to 6

% r

ang

e.

Rec

omm

enda

tion

Sum

mar

yTh

est

abili

tyan

dco

ntin

uity

ofth

ete

amis

nota

ble

with

the

Fund

und

erth

esa

me

lead

ersh

ipsi

nce

ince

ptio

n.D

urin

gth

eir

tenu

re,

Whi

tean

dS

chol

zha

ved

emon

stra

ted

ad

isci

plin

eof

opp

ortu

nist

ical

lyre

aliz

ing

gai

nsan

dre

pos

ition

ing

the

por

tfolio

whe

reg

reat

erva

lue

can

be

foun

d.

PR

EI

has

asi

gni

fican

tlo

ng-t

erm

pre

senc

ein

alla

reas

ofre

ales

tate

inve

stin

gin

clud

ing

priv

ate

equi

tyan

dd

ebt

asw

ell

asp

ublic

equi

tyan

dd

ebt

whi

chcr

eate

sop

por

tuni

ties

for

incr

ease

dd

ealf

low

.P

artic

ular

lyin

the

priv

ate

deb

tsp

ace

whe

rele

ndin

gre

latio

nshi

ps

com

mon

lyre

sult

inan

equi

tyre

latio

nshi

p.

Ad

diti

onal

ly,

the

gre

ater

reso

urce

sof

PG

Ica

nb

ele

vera

ged

asa

par

tof

the

inve

stm

ent

pro

cess

.Fo

rex

amp

le,

the

fixed

inco

me

gro

upof

PG

Iis

used

for

tena

ntcr

edit

anal

ysis

.

PE

PF

isre

com

men

ded

for

any

clie

ntal

loca

ting

top

rivat

ere

ales

tate

.Rel

ativ

eto

core

stra

teg

ies,

PE

PF

pro

vid

esa

mod

erat

ely

hig

her

risk/

retu

rnp

rofil

eb

ased

onth

eg

reat

eral

loca

tion

tova

lue-

add

/dev

elop

men

tan

dta

rget

leve

rag

eof

40%

to45

%.

For

smal

ler

clie

nts,

the

com

bin

atio

nof

75%

stab

ilize

dp

rop

ertie

san

dup

to25

%va

lue-

add

/dev

elop

men

tp

ositi

ons

PE

PF

wel

lto

be

aso

leal

loca

tion

with

div

ersi

ficat

ion

acro

ssst

rate

gy

typ

es.

Ad

diti

onal

ly,

with

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rop

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pos

ition

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top

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cond

ary

mar

kets

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nb

ep

ositi

oned

asa

com

ple

men

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eco

rest

rate

gie

sth

atfo

cus

prim

arily

onm

ajor

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kets

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Firm

Ove

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rinci

pal

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ate

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stor

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RE

I)is

aw

holly

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ned

sub

sid

iary

ofP

rinci

pal

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bal

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s(P

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mem

ber

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ted

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roup

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arat

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sor

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that

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firm

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per

ienc

eas

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ales

tate

inve

stor

orig

inat

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1959

whe

nit

beg

anm

akin

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ngle

pro

per

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vest

men

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dco

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allo

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for

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real

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test

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sac

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equi

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firm

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here

app

roxi

mat

ely

95%

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ein

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nals

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loca

ted

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rem

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cag

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acra

men

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.

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rvie

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led

by

co-P

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lioM

anag

ers

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dW

hite

and

Mar

kS

chol

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ptio

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chol

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nce

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pp

orte

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inot

her

oper

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nal

area

sin

clud

ing

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uisi

tions

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pos

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set

man

agem

ent,

rese

arch

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ce.

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acq

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tran

sact

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dw

itha

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vote

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the

firm

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ittee

(MC

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sent

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llop

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iona

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PR

EI.

Stra

tegy

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rvie

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EP

Fis

anop

en-e

nd,

core

plu

sfu

ndth

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unch

edin

2004

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focu

ses

onm

id-

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rge-

size

dp

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ross

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ions

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ater

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ete

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ctto

the

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nstr

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ete

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vest

upto

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valu

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dan

dd

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the

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erre

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vest

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stab

ilize

d,i

ncom

e-g

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atin

gas

sets

that

are

am

inim

um80

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ased

.

The

inve

stm

ent

pro

cess

beg

ins

with

the

co-p

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liom

anag

ers

and

the

team

esta

blis

hing

ast

rate

gy

bas

edon

the

outlo

okfo

rth

em

arke

tan

dav

aila

ble

inve

stm

ent

opp

ortu

nitie

s,w

hich

isco

mm

unic

ated

toth

eot

her

oper

atio

nal

area

s.D

urin

gth

ep

relim

inar

yre

view

,th

ete

amw

orks

clos

ely

with

the

acq

uisi

tions

gro

upto

revi

ewp

oten

tial

inve

stm

ents

with

the

rese

arch

,as

set

man

agem

ent

and

mor

tgag

eun

der

writ

ing

team

sre

spon

sib

lefo

rm

arke

tan

dp

rop

erty

spec

ific

anal

ysis

.Ass

ets

that

pas

sth

ep

relim

inar

yre

view

mov

eto

the

final

due

dili

gen

cep

roce

ssw

here

the

acq

uisi

tion

man

ager

dire

cts

are

view

with

inp

utfr

omth

efo

llow

ing

team

s:p

ortfo

liom

anag

emen

t,as

set

man

agem

ent,

por

tfolio

acco

untin

g,

rese

arch

,le

gal

,ap

pra

isal

,en

gin

eerin

gan

den

viro

nmen

tal.

An

asse

tth

atsu

cces

sful

lyp

asse

sth

roug

hfin

ald

ued

ilig

ence

issu

bm

itted

toth

eM

anag

emen

tCom

mitt

eefo

rap

pro

valt

om

ove

tocl

osin

g.

Page

82

of 3

72

Glo

ssar

y of

Ter

ms

Cap

italS

truc

ture

orC

apita

lSta

ck–

Ref

ers

toth

ele

gal

org

aniz

atio

nof

all

ofth

eca

pita

lp

lace

din

toan

asse

t.Th

ere

are

four

bas

icty

pes

ofst

ruct

ures

:se

nior

deb

t,m

ezza

nine

deb

t,p

refe

rred

equi

tyan

deq

uity

.

Cap

italC

all–

Occ

urs

whe

na

man

ager

req

uest

sa

tran

sfer

ofth

ep

ortio

nof

the

cap

ital

anin

vest

orha

sco

mm

itted

.Th

eca

lled

cap

ital

isut

ilize

db

yth

em

anag

erto

mak

ein

vest

men

tsan

dco

ver

exp

ense

s.

Cap

Rat

e-

Am

easu

reof

the

inco

me

retu

rnof

real

esta

te.

The

cap

rate

for

ap

rop

erty

isg

ener

ally

calc

ulat

edb

yd

ivid

ing

the

neto

per

atin

gin

com

eof

ap

rop

erty

by

the

curr

entm

arke

tva

lue.

Car

ried

Inte

rest

–Th

em

anag

er’s

shar

eof

the

fund

’sov

eral

lp

rofit

s,ty

pic

ally

20%

.It

isty

pic

ally

rece

ived

by

the

man

ager

afte

rre

turn

ing

calle

dca

pita

lto

inve

stor

sp

lus

ap

refe

rred

retu

rn.A

lso

know

nas

“car

ry”

or“p

rom

ote”

.

Cat

chUp

–O

ccur

saf

ter

the

man

ager

has

mad

ed

istr

ibut

ions

toin

vest

ors

equi

vale

ntto

are

turn

ofth

eca

lled

cap

ital

plu

sth

ep

refe

rred

retu

rn.

At

this

poi

ntth

em

anag

erg

ener

ally

rece

ives

50%

offu

ture

dis

trib

utio

nsun

tilto

tald

istr

ibut

ions

are

equa

lto

the

man

ager

’sca

rrie

din

tere

stal

loca

tion.

Com

mitt

edC

apita

l–Th

eam

ount

ofca

pita

ltha

tan

inve

stor

has

agre

edto

inve

stin

ap

rivat

efu

nd.T

heca

pita

lis

calle

don

anas

need

edb

asis

by

the

man

ager

.

Equi

ty–

Rep

rese

nts

the

owne

rshi

pin

tere

stin

the

pro

per

ty.

The

equi

tyho

lder

only

rece

ives

cash

flow

afte

ral

loft

heot

her

inve

stor

slo

wer

inth

eca

pita

lsta

ckha

veb

een

pai

d.

Equi

tyM

ultip

le–

Ap

erfo

rman

cem

easu

refo

rp

rivat

ein

vest

men

tfu

nds.

Itre

pre

sent

sth

em

ultip

leof

the

calle

dca

pita

ltha

tis

retu

rned

toin

vest

ors.

Gen

eral

Part

ner(

GP)

–Th

eG

Pis

the

man

ager

ofth

efu

ndw

hile

the

inve

stor

sof

the

fund

are

the

limite

dp

artn

ers

(LP

s).T

heG

Pre

tain

slia

bili

tyfo

rth

eac

tions

ofth

ep

artn

ersh

ip.

Inte

rnal

Rat

eof

Ret

urn

(IRR

)–

Ap

erfo

rman

cem

easu

refo

rp

rivat

ein

vest

men

tfu

nds

that

acco

unts

for

the

man

ager

sco

ntro

lofw

hen

cash

flow

soc

cur

and

the

irreg

ular

timin

gof

cash

flow

s.

Inve

stm

ent

Perio

dor

Com

mitm

ent

Perio

d–

Ref

ers

toth

ees

tab

lishe

dle

ngth

oftim

ea

man

ager

can

mak

ein

vest

men

ts,g

ener

ally

two

toth

ree

year

s.

Lim

ited

Part

ners

hip

–Th

ele

gal

entit

yco

mp

rised

ofa

gen

eral

par

tner

and

limite

dp

artn

ers.

The

gen

eral

par

tner

islia

ble

for

the

actio

nsof

the

par

tner

ship

whi

leth

elim

ited

par

tner

sar

eg

ener

ally

pro

tect

edfr

omle

gal

actio

nsan

dan

ylo

sses

bey

ond

thei

ror

igin

alin

vest

men

t.

Lim

ited

Part

ner

(LP)

–Th

ein

vest

orin

alim

ited

par

tner

ship

.Th

eLP

rece

ives

inco

me

and

cap

ital

gai

ns.

Itis

also

pro

tect

edfr

omle

gal

actio

nsan

dlo

sses

bey

ond

itsor

igin

alin

vest

men

t.

Loan

-to-C

ost(

LTC)

–A

met

ricus

edb

ya

lend

erto

exp

ress

the

ratio

ofa

loan

toth

eto

talc

ost

ofco

mp

letin

ga

dev

elop

men

tpro

ject

.

Loan

-to-V

alue

(LTV

)–

Am

etric

used

by

ale

nder

toex

pre

ssth

era

tioof

alo

anto

the

fair

mar

ketv

alue

ofth

ep

rop

erty

.

Mez

zani

neD

ebt–

Ahy

brid

bet

wee

neq

uity

and

deb

t.It

isse

nior

toeq

uity

but

sub

ord

inat

eto

seni

ord

ebt.

Am

ezza

nine

inve

stor

typ

ical

lyre

ceiv

esa

fixed

inte

rest

pay

men

tove

ra

spec

ified

term

but

may

also

par

ticip

ate

inth

eup

sid

eof

the

inve

stm

ent.

Net

Ope

ratin

gIn

com

e(N

OI)

–A

llre

venu

eg

ener

ated

from

ap

rop

erty

min

usth

ene

cess

ary

oper

atin

gex

pen

ses

req

uire

dto

run

and

mai

ntai

nth

eb

uild

ing

Pref

erre

dEq

uity

–A

hyb

ridb

etw

een

equi

tyan

dd

ebt

sim

ilar

tom

ezza

nine

deb

t.It

isse

nior

toeq

uity

but

sub

ord

inat

eto

deb

t.In

vest

ors

rece

ive

cash

flow

sah

ead

ofeq

uity

but

also

par

ticip

ate

inth

eup

sid

eof

the

inve

stm

ent.

Pref

erre

dR

etur

n–

The

“hur

dle

rate

ofre

turn

”th

atth

elim

ited

par

tner

sm

ustr

ecei

veon

calle

dca

pita

lin

ord

erfo

rth

em

anag

erto

beg

inre

ceiv

ing

itsca

rrie

din

tere

st.

Prim

ary

orG

atew

ayM

arke

ts–

Are

the

maj

orco

asta

lm

arke

ts(B

osto

n,N

ewY

ork,

San

Fran

cisc

o,Lo

sA

ngel

es)

asw

ella

sC

hica

go

and

Was

hing

ton

D.C

.Th

ese

mar

kets

tend

tob

eth

em

ostl

iqui

dw

ithth

ehi

ghe

stle

velo

ftra

nsac

tion

volu

me.

Rep

ositi

onin

g–

An

inve

stm

ent

stra

teg

yw

here

the

owne

rad

ds

valu

eto

the

pro

per

tyb

yco

mp

letin

gd

efer

red

mai

nten

ance

,im

pro

ving

the

phy

sica

lap

pea

ranc

ean

d/o

rop

erat

ions

inor

der

toin

crea

sere

nts

and

/or

attr

actn

ewte

nant

s.

Red

evel

opm

ent–

An

inve

stm

ent

stra

teg

yth

atin

clud

essi

gni

fican

tp

hysi

calu

pg

rad

esto

the

pro

per

tyw

hich

may

resu

ltin

ahi

gh-

leve

lofv

acan

cyun

tilth

ep

roje

ctis

com

ple

te.

Seco

ndar

yM

arke

ts–

Are

othe

rsi

zab

lem

arke

tsw

ithso

lidtr

ansa

ctio

nvo

lum

esan

dp

rese

nce

ofin

stitu

tiona

linv

esto

rs.E

xam

ple

sin

clud

eA

tlant

a,A

ustin

,Cha

rlotte

and

Pho

enix

.

Seni

orD

ebt

–A

loan

secu

red

by

the

pro

per

tyw

hich

serv

esa

colla

tera

lfo

rth

elo

an.

Itis

seni

orto

equi

ty,

pre

ferr

edeq

uity

and

mez

zani

ned

ebt.

The

hold

erof

the

deb

tre

ceiv

esin

tere

stp

aym

ents

bef

ore

cash

flow

can

be

dis

trib

uted

toth

ein

vest

ors

com

pris

ing

the

hig

her

pos

ition

sin

the

cap

itals

tack

.

Tert

iary

Mar

kets

–A

rem

arke

tsw

ithlo

wtr

ansa

ctio

nvo

lum

esan

da

limite

dp

rese

nce

ofin

stitu

tiona

linv

esto

rs.E

xam

ple

sar

eC

inci

nnat

i,C

olum

bus

and

Mem

phi

s.

Vint

age

–Th

eca

lend

arye

arin

whi

chth

em

anag

erb

egin

sin

vest

ing

the

cap

ital

ofa

priv

ate

fund

.

Page

83

of 3

72

IMPO

RTA

NT

DIS

CLO

SUR

EIN

FOR

MA

TIO

N

This

mat

eria

lis

conf

iden

tiala

ndno

tint

end

edfo

rd

istr

ibut

ion

toth

ep

ublic

.A

ndC

oC

onsu

lting

(“A

ndC

o”)

com

pile

dth

isre

por

tfor

the

sole

use

ofth

ecl

ient

for

whi

chit

was

pre

par

ed.

And

Co

uses

the

mat

eria

lcon

tain

edin

this

eval

uatio

nto

mak

eob

serv

atio

nsan

dre

com

men

dat

ions

toth

ecl

ient

,ho

wev

erth

est

rate

gie

slis

ted

may

not

be

suita

ble

for

all

inve

stor

san

dth

ere

isno

gua

rant

eeth

atth

est

rate

gie

slis

ted

will

be

succ

essf

ul.

Any

info

rmat

ion

cont

aine

din

this

rep

ort

isfo

rin

form

atio

nal

pur

pos

eson

lyan

dsh

ould

not

be

cons

true

dto

be

anof

fer

tob

uyor

sell

any

secu

ritie

s,in

vest

men

tco

nsul

ting

,or

inve

stm

ent

man

agem

ent

serv

ices

.A

dd

ition

ally

,th

ean

alys

isp

rovi

ded

,w

hile

gen

eral

lyco

mp

rehe

nsiv

e,is

not

inte

nded

top

rovi

de

com

ple

tein

form

atio

non

each

ofth

em

anag

emen

torg

aniz

atio

nsor

thei

run

der

lyin

gst

rate

gie

s.P

leas

ere

fer

toth

eir

resp

ectiv

eFo

rmA

DV

s,p

itch

boo

ks,a

nd/o

rof

ferin

gd

ocum

ents

for

com

ple

tete

rms,

incl

udin

gris

ksan

dex

pen

ses.

Info

rmat

ion

isb

ased

onso

urce

san

dd

ata

bel

ieve

dto

be

relia

ble

,b

utA

ndC

oca

nnot

gua

rant

eeth

eac

cura

cy,

adeq

uacy

orco

mp

lete

ness

.Th

ein

form

atio

np

rovi

ded

isva

lidas

ofth

ed

ate

ofd

istr

ibut

ion

orth

eas

-of

dat

ein

dic

ated

and

not

asof

any

futu

red

ate,

and

will

not

be

upd

ated

orot

herw

ise

revi

sed

tore

flect

info

rmat

ion

that

sub

seq

uent

lyb

ecom

esav

aila

ble

,or

circ

umst

ance

sex

istin

gor

chan

ges

occu

rrin

gaf

ter

such

dat

e.

The

sour

ceof

dat

aan

dfig

ures

pro

vid

edis

gen

eral

lyth

ere

spec

tive

man

ager

s,in

clud

ing

thei

rFo

rmA

DV

s,p

itchb

ooks

,of

ferin

gd

ocum

ents

and

othe

rsi

mila

rd

ocum

enta

tion.

Ad

diti

onal

info

rmat

ion

incl

uded

inth

isd

ocum

ent

may

cont

ain

dat

ap

rovi

ded

by

3rd

par

tysu

bsc

riptio

ns,

ind

exd

atab

ases

orp

ublic

econ

omic

sour

ces.

Ret

urn

dat

ap

rese

nted

inth

e“T

rack

Rec

ord

s”is

pro

vid

edfo

rhi

stor

ical

and

info

rmat

iona

lp

urp

oses

only

.Th

ere

sults

show

nre

pre

sent

pas

tp

erfo

rman

cean

dd

ono

trep

rese

ntex

pec

ted

futu

rep

erfo

rman

ceor

exp

erie

nce.

Pas

tper

form

ance

doe

sno

tgua

rant

eefu

ture

resu

lts.R

etur

nsst

ated

are

net

offe

es,

whi

chm

ayin

clud

e:in

vest

men

tad

viso

ryfe

es,

taxe

san

dot

her

exp

ense

s.W

hen

clie

nt-s

pec

ific

per

form

ance

issh

own,

And

Co

uses

time-

wei

ght

edca

lcul

atio

ns,

whi

char

efo

und

edon

stan

dar

ds

reco

mm

end

edb

yth

eC

FAIn

stitu

te.

Inth

ese

case

s,th

ep

erfo

rman

ce-r

elat

edd

ata

show

nar

eb

ased

onin

form

atio

nth

atis

rece

ived

from

cust

odia

ns.

As

are

sult,

this

pro

vid

esA

ndC

ow

itha

reas

onab

leb

asis

that

the

inve

stm

ent

info

rmat

ion

pre

sent

edis

free

from

mat

eria

lmis

stat

emen

t.

RIS

KFA

CTO

RS

As

pre

sent

edin

this

rep

ort,

alth

oug

hin

vest

ing

inp

rivat

ein

fras

truc

ture

fund

sca

nb

eb

enef

icia

l,it

isal

soim

por

tant

toco

nsid

erth

eas

soci

ated

risks

.In

vest

ing

inp

rivat

ein

fras

truc

ture

fund

sis

hig

her

risk,

may

invo

lve

spec

ulat

ion,

and

isno

tsui

tab

lefo

ral

linv

esto

rs.P

rosp

ectiv

ein

vest

ors

shou

ldb

eaw

are

ofth

elo

ng-t

erm

natu

reof

anin

vest

men

tin

priv

ate

infr

astr

uctu

refu

nds.

Inve

stm

ents

(dire

ctor

ind

irect

)in

priv

ate

infr

astr

uctu

rear

ety

pic

ally

illiq

uid

.O

ther

gen

eral

risks

and

imp

orta

ntco

nsid

erat

ions

asso

ciat

edw

ithp

rivat

ein

fras

truc

ture

fund

sin

clud

e,b

utar

eno

tlim

ited

to:

vola

tiliti

esin

pol

itica

l,m

arke

tan

dec

onom

icco

nditi

ons;

exte

nsiv

ean

dfr

eque

ntly

chan

gin

gre

gul

atio

n;d

ownt

urns

ind

eman

d;

chan

ges

toin

fras

truc

ture

valu

esan

dta

xes;

valu

atio

nan

dap

pra

isal

met

hod

olog

ies;

inte

rest

rate

s;an

den

viro

nmen

tali

ssue

s.Th

eris

ksou

tline

dhe

rein

do

not

pur

por

tto

cove

ral

lris

ksor

und

erly

ing

fact

ors

asso

ciat

edw

ithin

vest

ing

inin

fras

truc

ture

fund

s.P

leas

ere

fer

toth

ere

spec

tive

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ring

doc

umen

tsfo

rco

mp

lete

info

rmat

ion.Dis

clos

ure

Info

rmat

ion

Page

84

of 3

72

<CBDoc TenantId="2" EntityTypeId="3100" EntityId="2545" DocumentTypeId="1" EffectiveDate="12/31/2019" Interval="3" Description="Net Executive

Summary" />

Inve

stm

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ing

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r 3

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20

19

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ac

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rs' R

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en

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Fe

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)

Page

86

of 3

72

And

Co

Firm

Upd

ate

Firs

tand

fore

mos

t,“T

hank

you”

forg

ivin

gAn

dCo

the

oppo

rtuni

tyto

serv

eyo

u.O

nbe

half

ofou

rent

ireor

gani

zatio

n,w

ear

eex

trem

ely

grat

eful

and

appr

ecia

tive

ofou

rclie

ntpa

rtner

ship

san

dw

illco

ntin

uew

orki

ngha

rdto

mai

ntai

nyo

urtru

stan

dco

nfid

ence

.Our

mis

sion

stat

emen

trea

ds“T

ore

pres

entt

heso

lein

tere

stof

ourc

lient

sby

rede

finin

gin

depe

nden

ce.”

We’

reha

ppy

tore

port

that

we

rem

ain

stea

dfas

tin

this

core

belie

fand

cont

inue

tobu

ildan

orga

niza

tion

with

ase

rvic

em

odel

that

isin

depe

nden

t,si

ngul

arly

focu

sed,

cust

omiz

edan

dpa

ssio

nate

lyde

liver

ed.

2020

isa

big

year

for

AndC

o.W

ear

ece

lebr

atin

gou

r20

-yea

ran

nive

rsar

yof

serv

ing

our

valu

able

clie

nts.

Asw

est

art

2020

,w

ear

e89

peop

lest

rong

advi

sing

appr

oxim

atel

y$9

2bi

llion

incl

ient

asse

ts–

are

cord

high

.In

2019

we

hire

d9

new

team

mem

bers

.Al

ldep

artm

ents

with

inAn

dCo

have

grow

nov

erth

eye

ars

asw

eth

ough

tfully

inve

stin

our

firm

topr

ovid

eth

ese

rvic

esyo

uex

pect

.W

eha

vein

clud

edou

ror

gani

zatio

nalc

hart

inth

isre

port

whi

chyo

urco

nsul

tant

will

revi

ewto

prov

ide

you

avi

sual

izat

ion

ofou

rco

ntin

ued

com

mitm

entt

ose

rvic

ean

dqu

ality

.

2020

will

also

repr

esen

tan

othe

rye

arof

sign

ifica

ntin

vest

men

tin

the

orga

niza

tion.

Asa

resu

lt,yo

urfe

edba

ckis

inva

luab

leas

we

cont

inue

tofo

cus

ourr

einv

estm

enti

nar

eas

that

will

enha

nce

ours

ervi

ces

tocl

ient

s.W

ew

ould

like

toth

ank

ever

yone

fort

heir

parti

cipa

tion

inou

rclie

ntsu

rvey

last

year

.Yo

urho

nest

yan

dca

ndor

allo

wed

usto

accu

rate

lyas

sess

whe

rew

ear

est

rong

and

whe

reth

ere

are

oppo

rtuni

ties

for

impr

ovem

ent.

The

area

sw

here

our

clie

nts

indi

cate

pote

ntia

lro

omfo

rim

prov

emen

tdr

ive

muc

hof

our

inve

stm

ent

and

focu

s.Th

isis

apr

imar

yre

ason

why

we

hire

d7

new

team

mem

bers

inou

rre

sear

chgr

oup

last

year

tohe

lppr

omot

ein

vest

men

tid

eas

and

supp

ort

our

cons

ulta

nts.

Toda

y,w

eha

ve19

dedi

cate

dre

sear

chan

alys

ts.

As20

20pr

ogre

sses

,w

ear

eta

rget

ing

addi

tiona

lin

vest

men

tsw

ithin

our

finan

ce,

com

plia

nce,

hum

anre

sour

ces,

info

rmat

ion

tech

nolo

gy,m

arke

ting

and

rese

arch

depa

rtmen

ts.

Mor

eove

r,ea

chJa

nuar

yw

eha

veou

rann

ualf

irmw

ide

retre

at.T

his

retre

atis

agr

eat

time

for

all

ofou

rem

ploy

ees

tosp

end

time

toge

ther

and

for

usto

rein

forc

eev

eryo

ne’s

unde

rsta

ndin

gof

AndC

o’s

prim

ary

purp

ose,

shar

ere

sults

high

light

edby

ours

trate

gic

goal

s,an

dre

view

area

sof

focu

sfo

rthe

upco

min

gye

ar.

Sinc

eth

ein

cept

ion

ofAn

dCo,

the

idea

has

been

tom

ake

the

firm

am

ultig

ener

atio

nal

orga

niza

tion

owne

dan

dop

erat

edby

itsem

ploy

ees.

Asa

resu

lt,si

nce

2015

,alo

ngw

ithth

est

rate

gic

elem

ents

ofou

ran

nual

retre

at,w

eal

soan

noun

cene

wpa

rtner

sof

the

firm

tosu

ppor

tour

succ

essi

onpl

anan

dth

elo

ng-te

rmsu

stai

nabi

lity

ofth

eor

gani

zatio

n.To

day

we

have

ato

tal

of10

partn

ers

cont

rollin

g10

0%of

the

com

pany

.Th

isye

arw

ead

ded

two

new

partn

ers

Kim

Spur

linan

dEv

anSc

usse

l.Ki

mha

sbe

enon

our

Exec

utiv

eLe

ader

ship

team

for

the

past

7ye

ars

and

curre

ntly

serv

esas

our

CFO

.Eva

nha

sbe

enon

our

rese

arch

team

for

7ye

ars

and

was

rece

ntly

prom

oted

toa

Res

earc

hD

irect

or.

We

coul

dn’t

beha

ppie

rfor

both

Kim

and

Evan

.

The

evol

utio

nof

ourf

irmw

ould

notb

epo

ssib

lew

ithou

tgre

atcl

ient

partn

ers

like

you.

Our

nam

ere

min

dsus

who

we

wor

kfo

rev

ery

day

“Our

Clie

nt”

&Co.

You

will

alw

ays

beou

rfir

stpr

iorit

y.As

we

cont

inue

todi

scus

sst

rate

gic

deci

sion

sre

gard

ing

ourf

irm,p

leas

ekn

owev

ery

deci

sion

isfil

tere

dth

roug

hth

efo

llow

ing

ques

tion

“How

does

this

bene

fitou

rcl

ient

s?”

and

ifit

does

n’tb

enef

ityo

u,w

edo

n’td

oit,

it’s

that

sim

ple.

We

said

this

last

year

and

we’

llsa

yit

agai

nne

xtye

ar.I

fthi

sco

mm

itmen

teve

rfal

ters

,you

need

tofin

da

new

cons

ulta

nt.

We

know

each

ofou

rcl

ient

sis

faci

ngm

any

chal

leng

esan

dw

ew

ant

tobe

ther

eto

help

supp

ort

you

thro

ugh

all

envi

ronm

ents

.W

ear

eho

nore

dan

dhu

mbl

edth

atyo

uha

vech

osen

AndC

oas

your

partn

er.

We

dono

tta

keth

atre

latio

nshi

pan

dre

spon

sibi

lity

forg

rant

edan

dw

illco

ntin

ueto

wor

ktir

eles

sly

toex

ceed

your

expe

ctat

ions

.

On

beha

lfof

AndC

o,th

ank

you

fory

ourv

alue

dpa

rtner

ship

and

the

oppo

rtuni

tyto

serv

eyo

u.

Mik

e W

elke

r, C

FA®

CEO

Page

87

of 3

72

Org

aniz

atio

nal

Char

t

PART

NER

SHIP

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stin

Bre

wer

, CFA

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lic F

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me

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edge

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me

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id J

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Dav

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72

4th

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etric

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sell

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sell

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sell

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sell

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sell

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sell

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sell

1000

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sell

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1-Ye

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erfo

rman

ce

Page

90

of 3

72

Sou

rce:

Inve

stm

ent M

etric

s

The

Mar

ket

Envi

ronm

ent

Dom

estic

Equ

ity S

tyle

Inde

x Pe

rfor

man

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of D

ecem

ber 3

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019

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ains

tthe

larg

ely

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tive

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onom

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ious

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ocks

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arily

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rate

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ters

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sell

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sell

1000

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ing

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perio

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lar

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sell

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11.4

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2000

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x

2000

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ue

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wth

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ue

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1-Ye

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Rus

sell

Styl

e Se

ries

Page

91

of 3

72

Pe

rform

ance

was

posi

tive

acro

ssal

lele

ven

larg

eca

pec

onom

icse

ctor

sfo

rth

e4t

hqu

arte

rbu

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urou

tpac

edth

ere

turn

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mor

eec

onom

ical

lyse

nsiti

vese

ctor

s,su

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tech

nolo

gy,

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dco

mm

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ectiv

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prov

ed.H

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chno

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ader

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ctor

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wer

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onom

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ere

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Page

92

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72

The

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93

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72

Sou

rce:

MS

CI G

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Page

94

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72

The

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and

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Page

95

of 3

72

Sou

rce:

Blo

ombe

rg

The

Mar

ket E

nviro

nmen

tD

omes

tic B

ond

Sect

or &

Bro

ad/G

loba

l Bon

d M

arke

t Per

form

ance

(Dur

atio

n)As

of D

ecem

ber 3

1, 2

019

Fi

xed

inco

me

mar

kets

exte

nded

thei

rga

ins

inth

e4t

hqu

arte

r,ex

cept

for

US

Trea

sury

bond

sw

hich

decl

ined

durin

gth

epe

riod.

Inte

rest

rate

sro

sem

odes

tlyac

ross

the

US

Trea

sury

Yiel

dC

urve

thro

ugh

the

quar

ter

asin

vest

ors’

conf

iden

cege

nera

llyim

prov

edw

hich

resu

lted

inbo

ndpr

ices

fallin

g.Th

eFe

dco

ntin

ued

topr

ovid

eliq

uidi

tyby

cutti

ngsh

ort-t

erm

inte

rest

rate

sby

25ba

sis

poin

tsto

betw

een

1.50

%an

d1.

75%

inO

ctob

er.T

heFe

dbe

gan

expa

ndin

gits

bala

nce

shee

tby

purc

hasi

ngse

curit

ies

topr

ovid

eth

em

arke

tw

ithliq

uidi

tyw

hich

isan

othe

rfo

rmof

mon

etar

yea

sing

.Th

eFe

dm

ade

noch

ange

sto

mon

etar

ypo

licy

atth

eir

Dec

embe

rm

eetin

gan

dsi

gnal

edth

atth

eyw

ould

rem

ain

onho

ldbu

tw

ould

cont

inue

tom

onito

rth

eec

onom

ycl

osel

yfo

ran

yfu

rther

dete

riora

tion.

Impo

rtant

ly,

the

US

Trea

sury

Yiel

dC

urve

norm

aliz

edbe

twee

nth

e2-

year

and

10-y

ear

issu

esw

hich

sugg

ests

that

the

thre

atof

anim

min

entr

eces

sion

has

been

redu

ced.

Anin

verte

dyi

eld

curv

eha

shi

stor

ical

lypr

eced

eda

rece

ssio

nw

ithin

the

next

6-24

mon

ths.

The

bellw

ethe

rBlo

ombe

rgBa

rcla

ysU

SAg

greg

ate

Inde

xad

ded

0.2%

durin

gth

e4t

hqu

arte

rw

hile

retu

rnin

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7%fo

rthe

1-ye

arpe

riod

endi

ngin

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embe

r.

W

ithin

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stm

ent

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ality

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esre

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edth

eir

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gher

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ityis

sues

asin

vest

ors’

appe

tites

for

risk

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ease

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ring

the

quar

ter.

Bond

sra

ted

Baa

wer

eth

ebe

stpe

rform

ing

inve

stm

entg

rade

cred

itqu

ality

segm

entr

etur

ning

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for

the

quar

ter,

whi

leAA

Aw

asth

ew

orst

perfo

rmin

g,re

turn

ing

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%.

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hyi

eld

corp

orat

ebo

nds

outp

aced

allo

ther

cred

itse

ctor

sdu

ring

the

quar

terr

etur

ning

2.6%

.For

the

full

year

both

inve

stm

entg

rade

and

high

yiel

dbo

nds

deliv

ered

stro

ngpe

rform

ance

retu

rnin

g14

.5%

and

14.3

%re

spec

tivel

y.

Pe

rform

ance

acro

ssde

fens

ive

sect

ors

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mor

tgag

eba

cked

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ritie

san

dTI

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ere

mix

eddu

ring

the

quar

term

ostly

due

toth

eir

dura

tion

prof

iles.

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ing

inte

rest

rate

sdu

ring

the

quar

ter

acte

das

ahe

adw

ind

tope

rform

ance

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are

sult,

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sury

bond

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ortg

age

bond

san

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turn

ed-0

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7%an

d0.

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spec

tivel

y.O

vera

ll,fe

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ing

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tion

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ain

rela

tivel

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ww

hile

expe

ctat

ions

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apo

sitiv

eec

onom

icen

viro

nmen

tre

mai

nst

rong

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are

sult,

for

the

full

1-ye

arpe

riod,

US

Trea

sury

,mor

tgag

esan

dTI

PSre

turn

ed6.

9%,

6.4%

and

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resp

ectiv

ely,

trailin

gal

lco

rpor

ate

cred

itse

ctor

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gnifi

cant

lyov

erth

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llye

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tiver

se (7

.0)

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bal A

gg x

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(8.2

)

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rmed

iate

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(3.7

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egat

e (5

.9)

U.S

. TIP

S (4

.7)

U.S

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pora

te IG

(7.9

)

U.S

. Mor

tgag

e (3

.2)

U.S

. Tre

asur

y (6

.5)

U.S

. Hig

h Yi

eld

(3.0

)

Baa

(8.0

)

A (7

.8)

AA (6

.8)

AAA

(5.1

)

Qua

rter

Per

form

ance

7.1%

5.1%

6.7%

8.7%

8.4%

14.5

%

6.4%6.

9%

14.3

%

16.4

%

13.0

%

9.5%

6.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0

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.0%

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%16

.0%

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%

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tiver

se (7

.0)

Glo

bal A

gg x

US

(8.2

)

Inte

rmed

iate

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(3.7

)

Aggr

egat

e (5

.9)

U.S

. TIP

S (4

.7)

U.S

. Cor

pora

te IG

(7.9

)

U.S

. Mor

tgag

e (3

.2)

U.S

. Tre

asur

y (6

.5)

U.S

. Hig

h Yi

eld

(3.0

)

Baa

(8.0

)

A (7

.8)

AA (6

.8)

AAA

(5.1

)

1-Ye

ar P

erfo

rman

ce

Page

96

of 3

72

Sou

rce:

US

Dep

artm

ent o

f Tre

asur

y, F

RE

D (F

eder

al R

eser

ve o

f St.

Loui

s)

The

Mar

ket E

nviro

nmen

tM

arke

t Rat

e &

Yie

ld C

urve

Com

paris

onAs

of D

ecem

ber 3

1, 2

019

G

loba

lfix

edin

com

ere

turn

sw

ere

posi

tive

durin

gth

e4t

hqu

arte

r.G

ener

ally

,gl

obal

cent

ral

bank

mon

etar

ypo

licy

rem

ains

supp

ortiv

eas

low

econ

omic

grow

thpe

rsis

tsin

muc

hof

the

wor

ldou

tsid

eof

the

US.

Asa

resu

lt,ne

gativ

ein

tere

stra

tes

pers

isti

nm

uch

ofEu

rope

and

Japa

n.H

owev

er,t

henu

mbe

rof

bond

sw

ithne

gativ

eyi

elds

decl

ined

inre

cent

mon

ths

asfu

ture

expe

ctat

ions

for

econ

omic

grow

thim

prov

ed.

Asm

entio

ned

prev

ious

ly,

we

saw

curre

ncy

vola

tility

incr

ease

durin

gth

equ

arte

rw

ithth

eU

SDm

ovin

glo

wer

agai

nstm

ost

maj

orde

velo

ped

and

emer

ging

mar

ket

curre

ncie

s.Th

ede

prec

iatio

nof

the

USD

acte

das

aca

taly

stfo

rU

Sin

vest

ors

com

pare

dto

loca

linv

esto

rs.G

loba

lbo

nds,

asre

pres

ente

dby

the

Bloo

mbe

rgBa

rcla

ysG

loba

lAgg

rega

teex

US

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x,re

turn

edw

as0.

7%du

ring

the

quar

ter

whi

chou

tper

form

edU

Sbo

nds

repr

esen

ted

byth

eBl

oom

berg

Barc

lays

Aggr

egat

eIn

dex.

For

the

full

1-ye

arpe

riod,

glob

albo

nds

unde

rper

form

eddo

mes

ticbo

nds

5.1%

vers

us8.

7%re

spec

tivel

y.

M

uch

ofth

ein

dex

perfo

rman

cede

taile

din

the

bar

grap

hson

the

prev

ious

page

isvi

sibl

eon

atim

ese

ries

basi

sby

revi

ewin

gth

elin

egr

aphs

toth

erig

ht.

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‘1-Y

earT

railin

gM

arke

tRat

es’c

hart

illust

rate

sth

atov

erth

ela

stye

ar,t

he10

-yea

rTr

easu

ryyi

eld

(gre

enlin

e)fe

llfro

mhi

ghs

near

2.8%

,to

yiel

dsbe

low

1.5%

befo

reen

ding

the

quar

ter

at1.

92%

.The

blue

line

illust

rate

sch

ange

sin

the

BAA

OAS

(Opt

ion

Adju

sted

Spre

ad).

This

mea

sure

quan

tifie

sth

ead

ditio

nal

yiel

dpr

emiu

mth

atin

vest

ors

requ

ireto

purc

hase

and

hold

non-

Trea

sury

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es.T

his

line

illust

rate

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ine

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ly2.

5%in

the

1stq

uarte

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tole

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6%in

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tera

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vest

ors

soug

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gard

ing

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and

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pote

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ra

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the

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read

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arte

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corp

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nds,

whi

chpr

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esan

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ary

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72

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T

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Eq

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Po

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16

.60

13

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12

.94

30

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Re

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Page

114

of 3

72

Co

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Tra

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10

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YR

1 Y

RF

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DY

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R

To

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un

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om

po

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.50

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7.0

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19

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T

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Po

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9.7

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.46

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O

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7.5

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7.5

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7.5

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3.6

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7.5

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A

ll P

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lan

s-T

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Me

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.26

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59

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18

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6.0

51

8.5

25

.19

To

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ity

Co

mp

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11

.13

8.4

41

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5.5

26

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25

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7.9

9

T

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Po

licy

10

.88

9.6

21

3.2

22

8.0

99

.44

28

.09

9.1

7

To

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Eq

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cti

ve

Co

mp

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ite

N/A

9.3

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9)

11

.94

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8.1

4(5

3)

6.9

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1)

28

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(53

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.82

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T

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l Do

me

stic

Eq

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Po

licy

13

.39

(45

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1.3

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3)

14

.57

(37

)3

1.0

2(3

5)

10

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9.1

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3)

I

M U

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qu

ity (

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Me

dia

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3.1

81

0.0

21

2.3

22

8.5

38

.55

28

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8.2

6

To

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es

tic

Eq

uit

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cti

ve

Mid

Ca

p C

om

po

sit

e1

2.6

7(7

1)

8.2

0(7

4)

11

.86

(51

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8.0

8(6

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6.0

0(7

8)

28

.08

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)7

.80

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)

T

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Mid

Ca

p E

qu

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9.3

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12

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7.5

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30

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I

M U

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ap

Eq

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A+

CF

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ed

ian

13

.46

9.7

61

1.9

62

9.9

77

.52

29

.97

7.2

5

AJO

Mid

Ca

p E

qu

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2.5

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6.7

8(8

8)

8.5

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8)

22

.58

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.31

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R

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Mid

cap

In

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9.3

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12

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7.5

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30

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I

M U

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ap

Eq

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(S

A+

CF

) M

ed

ian

13

.46

9.7

61

1.9

62

9.9

77

.52

29

.97

7.2

5

Fro

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r M

id C

ap

Gro

wth

13

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16

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3.2

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7.1

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33

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R

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Mid

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Gro

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In

de

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11

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7.3

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35

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(25

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.45

(52

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5.4

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5)

8.1

7(3

0)

I

M U

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Eq

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A+

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ed

ian

13

.46

9.7

61

1.9

62

9.9

77

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29

.97

7.2

5

Ho

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Mid

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13

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13

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R

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Mid

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Va

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In

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27

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I

M U

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Eq

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13

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9.7

61

1.9

62

9.9

77

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29

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7.2

5

We

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Gro

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13

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22

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40

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9.8

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R

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Mid

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Gro

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In

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11

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35

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.45

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5.4

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I

M U

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Eq

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13

.46

9.7

61

1.9

62

9.9

77

.52

29

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7.2

5

To

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Eq

uit

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Sm

all

Ca

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po

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6)

9.9

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10

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26

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T

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8.5

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25

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.30

(44

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5.5

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9.9

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I

M U

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ma

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ap

Eq

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(S

A+

CF

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ed

ian

12

.96

8.9

88

.79

25

.82

6.9

92

5.8

28

.52

Ge

ne

va U

S S

ma

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ap

Gro

wth

N/A

14

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(15

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4)

28

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.73

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8.8

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R

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20

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Gro

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In

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12

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6.7

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28

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I

M U

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Gro

wth

Eq

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A+

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ian

14

.43

11

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15

.80

28

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4.8

92

8.4

29

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Co

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Page

115

of 3

72

Co

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R

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20

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In

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I

M U

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Va

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Eq

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A+

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12

.08

7.6

65

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25

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7.5

92

5.0

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Ne

um

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11

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10

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23

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N

eu

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Po

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10

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25

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)

I

M U

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Va

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Eq

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12

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7.6

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25

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7.5

92

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Sh

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En

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12

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25

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R

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20

00

In

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5.5

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4)

9.9

4(2

6)

I

M U

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Eq

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(S

A+

CF

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ian

12

.96

8.9

88

.79

25

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6.9

92

5.8

28

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Wa

satc

h S

ma

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Co

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18

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35

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R

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20

00

Gro

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In

de

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9.3

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12

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(71

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8(5

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6.7

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9)

28

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(50

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7)

I

M U

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ma

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Gro

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Eq

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(S

A+

CF

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ed

ian

14

.43

11

.48

15

.80

28

.42

4.8

92

8.4

29

.36

To

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es

tic

Eq

uit

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nd

ex

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Co

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N/A

N/A

13

.96

(41

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9.2

8(4

6)

9.4

9(3

7)

29

.28

(46

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.80

(76

)

R

uss

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30

00

In

de

x1

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11

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(36

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31

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31

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I

M U

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21

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22

8.5

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28

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8.2

6

To

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es

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Eq

uit

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nd

ex

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N/A

11

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(48

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2)

31

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31

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R

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In

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31

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31

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I

M U

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Eq

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ian

13

.43

11

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14

.59

30

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10

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30

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8.7

3

No

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Tru

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10

00

N/A

N/A

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31

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31

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R

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In

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I

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In

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19

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To

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No

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27

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S

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Hig

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27

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I

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Eq

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13

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11

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14

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30

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10

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30

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8.7

3

Sci

Be

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FE

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MS

N/A

N/A

N/A

27

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Hig

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27

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)

I

M U

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qu

ity (

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Me

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21

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22

8.5

38

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28

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8.2

6

Re

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as

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Ne

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f fe

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rns.

Page

116

of 3

72

Co

mp

ara

tiv

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an

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- N

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To

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As

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mb

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9

10

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To

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ati

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al

Eq

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om

po

sit

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.92

(69

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.06

(60

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21

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(60

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1.3

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9.7

7(5

5)

T

ota

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tern

atio

na

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Po

licy

5.6

8(7

3)

6.2

0(5

8)

10

.36

(53

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2.2

4(5

3)

7.5

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7)

22

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(53

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.26

(62

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I

M In

tern

atio

na

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(S

A+

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) M

ed

ian

6.8

46

.60

10

.64

22

.54

7.8

42

2.5

49

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To

tal In

tern

ati

on

al

La

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Ca

p E

qu

ity

Co

mp

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N/A

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8)

11

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(43

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7.7

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22

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T

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tern

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Ca

p E

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ity P

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22

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I

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al M

anag

emen

tM

id-C

ap V

alue

8.94

%8.

68%

9.28

%

Wel

ling

ton

Man

agem

ent

Co

mp

any

Mid

Cap

Gro

wth

9.08

%9.

06%

9.11

%

Fro

nti

er C

apit

al

Man

agem

ent

Sm

all C

ap V

alue

6.76

%6.

69%

6.82

%

Do

mes

tic

Eq

uit

y M

anag

er(S

mal

l Cap

)1.

U.S

. sto

cks

rose

sha

rply

dur

ing

the

quar

ter

as th

e U

.S. a

nd C

hina

dec

lare

d a

prel

imin

ary

trad

e de

al w

hile

the

Fed

eral

Res

erve

red

uced

its

fede

ral f

unds

rat

e ta

rget

by

25 b

asis

poi

nts,

the

third

such

red

uctio

n du

ring

2019

.2.

The

por

tfolio

's te

n be

st c

ontr

ibut

ing

stoc

ks a

dded

on

aver

age

appr

oxim

atel

y 40

bas

is p

oint

s to

abso

lute

per

form

ance

. The

hol

ding

s in

clud

ed s

tock

s ac

ross

five

sec

tors

.

3.T

he to

p co

ntrib

utor

was

Ban

corp

(T

BB

K),

a n

on-t

radi

tiona

l ban

k th

at g

ener

ates

sig

nific

ant f

ee

inco

me

on a

ccou

nts

tied

to d

ebit

and

prep

aid

card

s. T

he s

tock

add

ed a

ppro

xim

atel

y 50

bas

is p

oint

s

to p

erfo

rman

ce.

1.F

or th

e qu

arte

r, o

ur u

nder

perf

orm

ance

was

due

to s

tock

sel

ectio

n w

hile

sec

tor

allo

catio

n w

as a

mod

est c

ontr

ibut

or.

2.T

he p

ortfo

lio’s

ten

wor

st c

ontr

ibut

ing

stoc

ks tr

imm

ed a

ppro

xim

atel

y 30

bas

is p

oint

s ea

ch o

n av

erag

e fr

om p

erfo

rman

ce.

The

se s

tock

s w

ere

spre

ad o

ver

six

sect

ors.

3.T

he la

rges

t det

ract

or w

as J

ames

Riv

er G

roup

Hol

ding

(JR

VR

), a

pro

pert

y &

cas

ualty

insu

ranc

e

com

pany

, whi

ch d

etra

cted

50

basi

s po

ints

from

per

form

ance

. W

hile

the

stoc

k ap

prec

iate

d ov

er th

e

full

year

, it d

eclin

ed d

urin

g th

e fo

urth

qua

rter

afte

r ta

king

a $

50 m

illio

n ch

arge

rel

ated

to it

s bu

sine

ss

with

rid

e-ha

iling

com

pany

Ube

r an

d te

rmin

atin

g its

rel

atio

nshi

p w

ith th

at c

lient

.

Do

mes

tic

Eq

uit

y M

anag

er(M

id C

ap)

1. V

alue

2. M

anag

emen

t and

sen

timen

t

1. M

omen

tum

2. B

otto

m-u

p dr

iven

indu

stry

bet

s

1. S

ecur

ity s

elec

tion

in in

form

atio

n te

chno

logy

, hea

lth c

are,

and

fina

ncia

ls c

ontr

ibut

ed to

res

ults

.

2. T

he to

p 5

indi

vidu

al c

ontr

ibut

ors

wer

e C

erid

ian,

SS

&C

Tec

hnol

ogie

s, T

witt

er (

did

not h

old)

,

Cen

tene

, and

Doc

uSig

n.

3. N

ot h

oldi

ng th

e co

nsum

er s

tapl

es a

nd m

ater

ials

sec

tors

aid

ed r

elat

ive

perf

orm

ance

.

1.S

ecur

ity s

elec

tion

in c

onsu

mer

dis

cret

iona

ry a

nd in

dust

rials

det

ract

ed fr

om r

elat

ive

perf

orm

ance

.

2.T

he b

otto

m 5

indi

vidu

al d

etra

ctor

s w

ere

Exp

edia

, Hex

cel,

Bla

ckba

ud, B

right

Hor

izon

s, a

nd

Ara

mar

k.

3.T

he o

verw

eigh

t to

cons

umer

dis

cret

iona

ry a

nd u

nder

wei

ght t

o he

alth

car

e de

trac

ted

from

rel

ativ

e

resu

lts.

1.T

he o

verw

eigh

t pos

ition

and

sto

ck s

elec

tion

in e

nerg

y de

trac

ted

from

per

form

ance

.

2.T

he s

tock

sel

ectio

n in

indu

stria

ls a

nd te

chno

logy

det

ract

ed fr

om p

erfo

rman

ce.

3.T

he la

rges

t det

ract

ors

to r

elat

ive

perf

orm

ance

wer

e W

hitin

g P

etro

leum

, Mal

linck

rodt

,

Sup

erio

r E

nerg

y S

ervi

ces,

McD

erm

ott,

and

C&

J E

nerg

y S

ervi

ces.

1. T

he la

rges

t det

ract

or to

sto

ck s

elec

tion

occu

rred

in th

e he

alth

car

e se

ctor

.

2. O

n a

sect

or a

lloca

tion

basi

s, b

eing

ove

rwei

ght i

n m

ater

ials

& p

roce

ssin

g hi

nder

ed p

erfo

rman

ce

by 2

0bps

.

3. T

he tw

o la

rges

t det

ract

ors

in th

e qu

arte

r hu

rt p

erfo

rman

ce b

y 90

bps.

The

se s

tock

s w

ere

soci

al

med

ia c

ompa

ny T

witt

er In

c. a

nd a

lum

inum

can

pro

duce

r B

all C

orpo

ratio

n.

1. R

elat

ive

perf

orm

ance

was

driv

en b

y fa

vora

ble

stoc

k se

lect

ion

with

con

trib

utio

ns fr

om c

onsu

mer

disc

retio

nary

, tec

hnol

ogy,

fina

ncia

l ser

vice

s an

d en

ergy

.

2. U

nder

wei

ght p

ositi

ons

in c

onsu

mer

sta

ples

add

ed r

ough

ly 2

0bps

to o

ur p

erfo

rman

ce a

s th

e

sect

or u

nder

perf

orm

ed th

e be

nchm

ark

over

all.

3. P

ositi

ve s

tock

sel

ectio

n in

con

sum

er d

iscr

etio

nary

led

buy

gam

ing

com

pany

Eld

orad

o R

esor

ts

whi

ch r

ose

50%

dur

ing

the

quar

ter

as th

e co

mpa

ny o

utpa

ced

expe

ctat

ions

. A

dditi

onal

ly, h

ad

posi

tive

stoc

k se

lect

ion

in te

chno

logy

led

by s

emic

ondu

ctor

hol

ding

s.

1.T

he o

verw

eigh

t and

pos

itive

sto

ck s

elec

tion

in fi

nanc

ials

hel

ped

rela

tive

perf

orm

ance

.

2.T

he la

rges

t pos

itive

con

trib

utor

s in

the

Ene

rgy

sect

or w

ere

Oph

ir E

nerg

y, C

airn

Ene

rgy

and

Nex

Tie

r O

ilfie

ld S

olut

ions

.

3.T

he la

rges

t pos

itive

con

trib

utor

s al

so in

clud

ed B

ed B

ath

& B

eyon

d an

d C

itize

ns F

inan

cial

.

Exe

cuti

ve S

um

mar

y

To

tal F

un

dA

s o

f D

ecem

ber

31,

201

9

OT

RS

Man

ager

Su

mm

ary

Wh

at H

elp

edW

hat

Hu

rt

Page

131

of 3

72

Exe

cuti

ve S

um

mar

y

To

tal F

un

dA

s o

f D

ecem

ber

31,

201

9

Gen

eva

Cap

ital

M

anag

emen

tU

S S

mal

l Cap

Gro

wth

7.48

%7.

17%

7.58

%

Neu

mei

er P

om

aS

mal

l-Cap

Val

ue7.

21%

6.45

%8.

09%

Sh

apir

o C

apit

al

Man

agem

ent

Sm

all C

ap8.

35%

7.39

%8.

41%

Was

atch

Ad

viso

rsS

mal

l Cap

Cor

e

Gro

wth

8.79

%8.

59%

8.99

%

1.T

actil

e S

yste

ms

repo

rted

ear

ning

s ea

rlier

this

mon

th a

nd r

epor

ted

very

str

ong

resu

lts; r

even

ue

was

up

37%

and

the

com

pany

bea

t on

EB

ITD

A/E

PS

as

wel

l. M

anag

emen

t rai

sed

FY

gui

danc

e an

d

they

con

tinue

to g

row

in 3

0% r

ange

but

ther

e w

ere

ques

tions

on

and

impl

ied

Q4

dece

lera

tion

(don

’t

guid

e qu

arte

rly).

Man

agem

ent d

oesn

’t ex

pect

the

busi

ness

to d

ecel

erat

e an

d th

ey a

re p

repa

ring

for

mor

e he

ad a

nd n

eck

grow

th a

nd a

n A

ir W

ear

com

mer

cial

laun

ch n

ext y

ear.

2.F

air

Isaa

c C

orp

repo

rted

a v

ery

stro

ng q

uart

er a

nd b

eat a

cros

s th

e bo

ard;

the

appl

icat

ions

segm

ent g

rew

8%

and

boo

king

s w

ere

up 2

0%, S

core

s gr

ew 3

0% w

ith B

2B u

p 40

% (

a lo

t due

to

tact

ical

pric

ing)

and

B2C

7%

. The

202

0 gu

idan

ce w

as b

asic

ally

in li

ne w

ith c

onse

nsus

but

not

baki

ng in

any

sco

res

pric

e in

crea

ses

whi

ch s

houl

d pr

ovid

e up

side

as

man

agem

ent h

as a

lread

y

talk

ed a

bout

thei

r ab

ility

to c

ontin

ue r

aisi

ng p

ricin

g.

3.B

otto

mlin

e T

echn

olog

ies

repo

rted

a s

tron

g qu

arte

r w

ith r

even

ues

and

earn

ings

sur

pris

ing

to th

e up

side

. M

anag

emen

t pro

vide

d fo

rwar

d qu

arte

rly g

uida

nce

abov

e es

timat

es a

nd r

eite

rate

d F

Y

guid

ance

. Sub

s an

d tr

ansa

ctio

n gr

owth

was

abo

ve e

xpec

tatio

ns a

nd th

ey s

aw a

n ac

cele

ratio

n in

num

ber

of P

aym

ode-

X d

eals

.

1.V

ocer

a re

port

ed a

n in

-line

qua

rter

, Q4

guid

ance

was

take

n do

wn

and

early

indi

catio

ns fo

r 20

20

wer

e be

low

exp

ecta

tions

. Inv

esto

rs e

xpec

ted

reve

nue

grow

th to

acc

eler

ate

to m

id-t

eens

but

the

com

pany

gui

ded

for

flat g

row

th in

201

9 an

d M

SD

ove

r th

e ne

xt c

oupl

e of

qua

rter

s. T

he i

ssue

appe

ars

to b

e th

e el

onga

ting

sale

s cy

cle;

thes

e en

terp

rise

deal

s ar

e go

od fo

r th

e bu

sine

ss b

ut

mak

es th

e pr

oces

s lo

nger

. Mar

ket c

omm

enta

ry in

dica

ted

the

larg

est p

ipel

ine

ever

and

goo

d w

in

rate

s.

2.B

lack

baud

rep

orte

d a

quar

terly

rev

enue

and

ear

ning

s be

at a

nd th

ey r

eaffi

rmed

full

year

gui

danc

e.

Rec

urrin

g re

venu

e gr

ew 8

.6%

and

org

anic

rec

urrin

g gr

ew 5

.6%

whi

ch w

as a

slig

ht a

ccel

erat

ion

but

mar

gins

com

pres

sed

give

n in

vest

men

ts in

the

busi

ness

.

3.S

uper

nus

Pha

rmac

eutic

als

repo

rted

qua

rter

ly e

arni

ngs

whi

ch m

isse

d ex

pect

atio

ns b

ut th

e m

ore

sign

ifica

nt n

ews

was

the

failu

re o

f th

e ph

ase

III tr

ial o

f SP

N-8

10. T

he s

tudy

rev

eale

d pa

tient

s

rece

ivin

g S

PN

-810

did

now

sho

w a

sta

tistic

ally

sig

nific

ant i

mpr

ovem

ent v

ersu

s th

ose

rece

ivin

g th

e

plac

ebo.

The

com

pany

is a

lso

halti

ng e

nrol

lmen

t of t

he P

302

stud

and

P50

3 st

udie

s.

1.9

out o

f 10

stoc

ks o

f our

top

ten

hold

ings

wer

e up

dou

ble

digi

ts in

the

quar

ter.

2.S

uper

ior

stoc

k se

lect

ion

perf

orm

ance

in te

ch n

ames

.

3.H

AS

I whi

ch is

list

ed a

s a

RE

IT, c

onsi

dera

bly

outp

erfo

rmed

the

inde

x's

RE

IT s

ecto

r.

1.In

dust

rial s

tock

s un

derp

erfo

rmed

the

inde

x.

2.S

mal

ler

allo

catio

n an

d st

ock

sele

ctio

n in

hea

lth c

are.

3.C

ash

allo

catio

n cr

eate

d a

drag

vs.

the

inde

x.

1. F

or th

e fir

st ti

me

in r

ecen

t mem

ory

ener

gy e

xpos

ure

help

ed th

e po

rtfo

lio w

ith th

e se

ctor

rec

ordi

ng

a po

sitiv

e (t

houg

h be

low

mar

ket)

ret

urn

for

the

quar

ter.

Sto

ck s

elec

tion

adde

d va

lue

with

Tul

sa

base

d W

PX

Ene

rgy

prov

ing

the

top

cont

ribut

or to

the

port

folio

’s g

ains

in th

e qu

arte

r.

2. S

tock

sel

ectio

n w

ithin

the

info

rmat

ion

tech

nolo

gy g

roup

con

trib

uted

exc

ess

perf

orm

ance

led

by

long

term

hol

ding

Fire

Eye

and

opp

ortu

nist

ical

ly p

urch

ased

App

le a

s an

“en

hanc

ed”

inve

stm

ent.

3. A

n ov

er a

lloca

tion

to th

e m

ater

ials

sec

tor

also

ben

efitt

ed p

erfo

rman

ce w

ith h

eavi

ly w

eigh

ted

Gra

phic

Pac

king

bei

ng th

e fo

urth

larg

est c

ontr

ibut

or to

the

port

folio

. In

addi

tion

salt/

fert

ilize

r

com

pany

Com

pass

Min

eral

s pe

rfor

med

wel

l as

did

rece

nt a

dditi

on L

iven

t.

1. B

oth

unde

rexp

osur

e an

d st

ock

sele

ctio

n w

ithin

the

heal

thca

re s

ecto

r pe

naliz

ed p

erfo

rman

ce.

Hea

lthca

re s

econ

d be

st s

ecto

r re

turn

was

led

by th

e bi

otec

h su

bsec

tor

gain

of 3

0%. B

iote

chno

logy

com

pani

es in

the

smal

l cap

uni

vers

e ar

e un

ique

ly r

isky

bei

ng a

lmos

t exc

lusi

vely

in th

e cl

inic

al tr

ial

stag

e of

bus

ines

s de

velo

pmen

t, m

ost o

ften

with

out r

even

ues

whi

ch a

re a

min

imal

req

uire

men

t for

our

inve

stm

ent.

Avo

idin

g sm

all c

ap b

iote

chs

may

cau

se p

erio

ds o

f sho

rt te

rm u

nder

perf

orm

ance

in

spec

ulat

ive

mar

kets

suc

h as

the

four

th q

uart

er b

ut h

asn’

t det

ract

ed fr

om o

ur lo

ng te

rm r

esul

ts. T

he

one

com

pany

in o

ur p

ortfo

lio th

at is

cat

egor

ized

as

heal

thca

re is

Alls

crip

ts a

dig

ital h

ealth

care

prov

ider

we

belie

ve is

bet

ter

desc

ribed

as

a so

ftwar

e co

mpa

ny.

Alls

crip

ts d

id n

ot p

artic

ipat

e in

the

heal

thca

re/b

iote

ch r

ally

.

2. T

he p

ortfo

lio’s

sto

ck s

elec

tion

with

in th

e In

form

atio

n te

chno

logy

sec

tor

adde

d va

lue

how

ever

the

port

folio

was

und

erex

pose

d to

this

gro

up w

hich

out

perf

orm

ed th

e m

arke

t.

3. T

he s

tock

sel

ectio

n de

trac

ted

perf

orm

ance

in th

e co

nsum

er d

iscr

etio

nary

sec

tor

as tw

o pr

oduc

t

com

pani

es H

anes

bran

ds a

nd U

rban

Out

fitte

rs d

eclin

ed d

ue to

inve

stor

con

cern

rel

atin

g to

ret

ail

appa

rel.

Do

mes

tic

Eq

uit

y M

anag

er(S

mal

l Cap

)

1. In

form

atio

n te

chno

logy

was

a s

ourc

e of

str

engt

h. P

aylo

city

Hol

ding

Cor

p. (

PC

TY

), th

e st

rate

gy’s

third

-bes

t ove

rall

cont

ribut

or. P

aylo

city

’s s

tock

pric

e ro

se d

urin

g N

ovem

ber

afte

r qu

arte

rly e

arni

ngs

and

reve

nues

exc

eede

d W

all S

tree

t for

ecas

ts a

nd m

anag

emen

t rai

sed

its fu

ll-ye

ar g

uida

nce.

With

abou

t 20,

000

curr

ent c

lient

s an

d a

pote

ntia

l mar

ket o

f aro

und

600,

000

busi

ness

es, t

he c

ompa

ny s

till

has

sign

ifica

nt h

eadr

oom

for

grow

th in

our

vie

w.

2.T

he s

trat

egy’

s to

p co

ntrib

utor

was

hea

lth-c

are

hold

ing

Pen

nant

Gro

up, I

nc. (

PN

TG

). P

enna

nt is

the

seco

nd s

ucce

ssfu

l spi

n-of

f of E

nsig

n G

roup

, Inc

. (E

NS

G)

in th

e pa

st fi

ve y

ears

. (In

cide

ntal

ly,

Ens

ign

is a

noth

er o

f the

str

ateg

y’s

curr

ent h

oldi

ngs.

)

3.In

dust

rial h

oldi

ngs

addi

ng to

the

stra

tegy

’s r

etur

n. B

arne

s G

roup

, Inc

. (B

) pe

rfor

man

ce w

as a

case

of “

bette

r-th

an-f

eare

d” r

esul

ts in

the

com

pany

’s m

ost-

rece

nt e

arni

ngs

rele

ase.

Bar

nes

has

two

prim

ary

divi

sion

s: a

eros

pace

, whi

ch h

as b

een

a st

rong

and

con

sist

ent s

ourc

e of

rev

enue

for

the

com

pany

, and

indu

stria

ls, t

he p

erfo

rman

ce o

f whi

ch te

mpo

raril

y st

utte

red

due

to tr

ade

conf

licts

.

Goi

ng fo

rwar

d, a

ny fu

rthe

r im

prov

emen

ts r

egar

ding

trad

e sh

ould

ben

efit

Bar

nes.

1.H

ealth

-car

e ho

ldin

gs, w

hile

add

ing

to th

e st

rate

gy’s

four

th-q

uart

er r

etur

n, d

etra

cted

from

perf

orm

ance

rel

ativ

e to

the

Inde

x. T

his

was

prim

arily

due

to le

sser

focu

s on

bio

tech

nolo

gy a

nd

phar

mac

eutic

als,

whi

ch w

ere

the

best

-per

form

ing

indu

strie

s in

the

benc

hmar

k.

2.T

he la

rges

t ove

rall

detr

acto

r fr

om s

trat

egy

perf

orm

ance

for

the

four

th q

uart

er w

as P

roof

poin

t,

Inc.

(P

FP

T),

a c

yber

secu

rity

firm

. Prio

r to

the

corr

ectio

n in

the

stoc

k pr

ice,

had

a s

igni

fican

t gai

n in

Pro

ofpo

int a

nd tr

imm

ed p

ositi

on o

n va

luat

ion

conc

erns

. Mor

e re

cent

ly, h

owev

er, a

dded

to p

ositi

on

at lo

wer

pric

es—

as o

ur lo

ng-t

erm

out

look

s fo

r P

roof

poin

t tre

nd r

emai

n po

sitiv

e.

3.T

he 2

nd la

rges

t det

ract

or w

as R

BC

Bea

rings

. Whi

le R

BC

’s in

dust

rial b

earin

gs b

usin

ess

has

post

ed s

atis

fact

ory,

the

aero

spac

e bu

sine

ss h

as p

rope

lled

the

com

pan'

s va

luat

ion

forw

ard.

RB

C’s

stoc

k de

clin

ed in

late

201

8. T

he s

tock

’s r

esur

genc

e in

the

first

hal

f of 2

019

show

ed h

ow q

uick

ly

mar

ket s

entim

ent c

an c

hang

e. F

or th

e fo

urth

qua

rter

, how

ever

, the

sto

ck w

as d

own

agai

n bu

t onl

y

by a

sm

all a

mou

nt. B

elie

ve th

e ch

alle

nges

rel

ated

to th

e M

AX

are

tem

pora

ry a

nd th

e br

oade

r

fund

amen

tals

of t

he a

eros

pace

indu

stry

—an

d R

BC

’s lo

ng-t

erm

com

petit

ive

posi

tion

with

in th

e

indu

stry

—ar

e st

rong

.

Page

132

of 3

72

Exe

cuti

ve S

um

mar

y

To

tal F

un

dA

s o

f D

ecem

ber

31,

201

9

Alli

anz

Bes

t Sty

les

Inte

rnat

iona

l

Equ

ity M

SC

I

AC

WI e

x-U

S (

Net

)

8.75

%

OT

RS

only

acco

unt.

OT

RS

only

acco

unt.

Cau

sew

ay C

apit

al

Man

agem

ent

Inte

rnat

iona

l

Opp

ortu

nitie

s12

.00%

11.3

2%12

.16%

Wel

ling

ton

Man

agem

ent

Co

mp

any

Inte

rnat

iona

l

Qua

lity

Gro

wth

9.26

%3.

88%

9.45

%

Was

atch

Ad

viso

rsIn

tern

atio

nal

Gro

wth

12.7

4%11

.95%

13.0

6%

Wel

ling

ton

Man

agem

ent

Co

mp

any

Inte

rnat

iona

l

Sm

all C

ap E

quity

11.7

9%11

.62%

11.8

3%

1.H

ong

Kon

g w

as th

e la

rges

t det

ract

or fr

om s

trat

egyd

ue p

rimar

ily to

Vita

soy

Inte

rnat

iona

l Hol

ding

s

Ltd.

, the

larg

est o

vera

ll de

trac

tor

durin

g th

e pe

riod.

A m

ultin

atio

nal b

ased

in H

ong

Kon

g, th

e

com

pany

offe

rs s

oy m

ilk, t

ofu,

ric

e m

ilk, t

ea, j

uice

s an

d re

late

d fo

od-a

nd-b

ever

age

prod

ucts

in C

hina

an

d ot

her

coun

trie

s. In

vest

ors

reac

ted

nega

tivel

y to

Vita

soy’

s pl

ans

to in

vest

mor

e he

avily

in it

s so

y-

milk

bus

ines

s to

sta

ve o

ff co

mpe

titiv

e pr

essu

res

and

pave

the

way

for

futu

re g

row

th. B

elie

ve

com

pany

’s s

trat

egy

mak

es s

ense

, how

ever

—es

peci

ally

in v

iew

of t

he la

rge

unta

pped

pot

entia

l for

pack

aged

soy

milk

and

Vita

soy’

s st

rong

bra

nd p

rese

nce

in th

e m

arke

ts it

ser

ves.

2.R

ayS

earc

h La

bora

torie

s A

B w

as th

e se

cond

-larg

est d

etra

ctor

. The

com

pany

dev

elop

s in

nova

tive

softw

are

solu

tions

for

canc

er tr

eatm

ent p

lann

ing

syst

ems,

incl

udin

g ne

w s

olut

ions

that

inco

rpor

ate

mac

hine

lear

ning

. The

com

pany

’s o

rder

s te

nd to

be

larg

e an

d un

even

from

qua

rter

to q

uart

er. T

he

third

qua

rter

of 2

019

saw

a d

ecre

ase

in s

oftw

are

licen

sing

sal

es. C

ontin

ue to

like

com

pany

fund

amen

tals

, and

they

hav

e se

en a

pro

mis

ing

incr

ease

in to

tal o

rder

inta

ke.

3.D

urin

g th

e qu

arte

r, s

old

posi

tion

in A

fterp

ay L

td, w

as th

e st

rate

gy’s

third

-larg

est d

etra

ctor

.

Inte

rnat

ion

al E

qu

ity

Man

ager

(Lar

ge

Cap

)1.

Val

ue fi

nish

ed th

e ye

ar o

n a

stro

ng n

ote,

alth

ough

out

perf

orm

ance

was

not

as

bene

ficia

l as

in th

e U

.S.

In a

dditi

on, V

alue

per

form

ance

in J

apan

and

em

ergi

ng m

arke

ts w

as r

ough

y fla

t.

2.S

mal

ler

cap

stoc

ks a

nd o

ff be

nchm

ark

nam

es o

utpe

rfor

med

the

broa

der

mar

ket.

3.S

tock

sel

ectio

n in

Fin

anci

als

wer

e th

e be

st r

elat

ive

perf

orm

ers,

but

ove

rall

attr

ibut

ion

from

a

sect

or/in

dust

ry a

nd c

ount

ry p

ersp

ectiv

e w

as b

enig

n.

1.S

ecur

ity s

elec

tion

in fi

nanc

ials

, com

mun

icat

ion

serv

ices

, and

mat

eria

ls a

ided

rel

ativ

e

perf

orm

ance

.

2.T

he to

p 5

indi

vidu

al c

ontr

ibut

ors

wer

e V

olut

ion

Gro

up, N

RW

, Con

sort

, oO

h!m

edia

, and

Hill

&

Sm

ith.

3.S

tock

sel

ectio

n in

Dev

elop

ed A

sia

Pac

ific

ex J

apan

and

Em

ergi

ng M

arke

ts c

ontr

ibut

ed to

rela

tive

resu

lts.

1.S

tock

sel

ectio

n, b

oth

on a

cou

ntry

and

sec

tor

basi

s, c

ontr

ibut

ed to

the

stra

tegy

’s o

utpe

rfor

man

ce.

Top

-con

trib

utin

g co

untr

ies

incl

uded

the

Uni

ted

Kin

gdom

, Jap

an, G

erm

any

and

Tai

wan

. The

bes

t

cont

ribut

ors

to p

erfo

rman

ce r

elat

ive

to th

e be

nchm

ark

on a

sec

tor

basi

s w

ere

info

rmat

ion

tech

nolo

gy

and

indu

stria

ls.

2.S

ilerg

y C

orp.

was

the

stro

nges

t con

trib

utor

.Sile

rgy’

s st

ock

pric

e ha

d la

ngui

shed

dur

ing

the

latte

r

half

of 2

018

and

early

201

9 as

slu

ggis

h de

man

d ca

used

a b

uild

up o

f inv

ento

ry in

sem

icon

duct

or

supp

ly c

hann

els.

An

uptic

k in

sal

es d

urin

g M

ay s

park

ed a

turn

arou

nd in

the

stoc

k th

at a

ccel

erat

ed

durin

g th

e fo

urth

qua

rter

. In

Dec

embe

r, S

ilerg

y an

noun

ced

that

con

solid

ated

rev

enue

s fo

r N

ovem

ber

had

risen

38.

0% in

loca

l cur

renc

y an

d 39

.7%

in U

.S. d

olla

rs v

ersu

s N

ovem

ber

2018

. Sile

rgy

was

also

the

top-

cont

ribut

ing

com

pany

in th

e in

form

atio

n-te

chno

logy

sec

tor.

3.T

he s

trat

egy’

s se

cond

-larg

est i

ndiv

idua

l con

trib

utor

Hyp

opor

t AG

. Hyp

opor

t ope

rate

s a

larg

e

elec

tron

ic m

arke

tpla

ce, E

urop

ace,

a b

usin

ess-

to-b

usin

ess

plat

form

for

finan

cial

pro

duct

s. H

ypop

ort

has

been

inve

stin

g to

rep

licat

e its

pla

tform

in o

ther

are

as in

clud

ing

real

est

ate

and

insu

ranc

e. F

or th

e

year

end

ed D

ecem

ber

31, 2

019,

Hyp

opor

t’s s

hare

pric

e m

ore

than

dou

bled

.

1.S

ecur

ity s

elec

tion

with

in c

onsu

mer

dis

cret

iona

ry, c

onsu

mer

sta

ples

, and

indu

stria

ls d

etra

cted

fr

om r

elat

ive

retu

rns.

2.T

he b

otto

m 5

indi

vidu

al d

etra

ctor

s w

ere

ST

RA

TE

C, K

yund

enko

, Mai

sons

du

Mon

de, P

igeo

n, a

nd

Hic

kma

Pha

rmac

eutic

als.

3.S

tock

sel

ectio

n in

Dev

elop

ed E

urop

e &

Mid

dle

Eas

t ex

UK

det

ract

ed fr

om r

elat

ive

retu

rns.

Inte

rnat

ion

al E

qu

ity

Man

ager

(Sm

all C

ap)

1.T

rend

follo

win

g st

yles

of M

omen

tum

and

Rev

ison

s un

derp

erfo

rmed

dur

ing

the

quar

ter,

esp

ecia

lly

in J

apan

.

2.T

he Q

ualit

y st

yle

unde

rper

form

ed d

urin

g th

e qu

arte

r, w

hich

is n

ot s

urpr

isin

g gi

ven

it w

as m

ore

of

a "r

isk

on"

mar

ket e

nviro

nmen

t.

3.C

olle

ctiv

ely,

our

20

bigg

est o

verw

eigh

ts a

nd u

nder

wei

ghts

con

trib

uted

abo

ut -

40 b

ps o

f

unde

rper

form

ance

, alth

ough

with

the

exce

ptio

n of

an

unde

rwei

ght t

o T

awia

n S

emic

ondu

ctor

, no

indi

vidu

al h

oldi

ngs

cont

ribut

ed m

ore

than

6 b

ps in

rel

ativ

e un

derp

erfo

rman

ce.

1.S

ecur

ity s

elec

tion

with

in in

dust

rials

and

com

mun

icat

ion

serv

ices

con

trib

uted

to r

elat

ive

perf

orm

ance

.

2.T

he to

p 5

indi

vidu

al c

ontr

ibut

ors

wer

e T

AL

Edu

catio

n, T

aiw

an S

emic

ondu

ctor

, Alib

aba,

ICIC

I Ban

k, a

nd M

edia

Tek

.

3.S

tock

sel

ectio

n in

Em

ergi

ng M

arke

ts a

nd J

apan

con

trib

uted

to r

elat

ive

retu

rns.

1.S

ecur

ity s

elec

tion

with

in h

ealth

car

e, in

form

atio

n te

chno

logy

, and

indu

stria

ls d

etra

cted

from

rel

ativ

e re

turn

s.

2.T

he b

otto

m 5

indi

vidu

al d

etra

ctor

s w

ere

Uni

leve

r, P

agse

guro

Dig

ital,

Qia

gen,

Saf

ran,

and

Dol

lara

ma.

3.S

tock

sel

ectio

n in

Dev

elop

ed E

urop

e &

Mid

dle

Eas

t ex

UK

det

ract

ed fr

om r

elat

ive

retu

rns.

1.H

oldi

ngs

in G

erm

any,

the

Uni

ted

Kin

gdom

, Ita

ly, S

witz

erla

nd, a

nd Ir

elan

d

2.H

oldi

ngs

in b

anks

, foo

d be

vera

ge &

toba

cco,

util

ities

, aut

omob

iles

& c

ompo

nent

s, a

nd in

sura

nce

indu

stry

gro

ups

3.T

op c

ontr

ibut

ors:

ban

king

& fi

nanc

ial s

ervi

ces

com

pany

, Uni

Cre

dit S

.p.A

. (Ita

ly),

ban

king

&

finan

cial

ser

vice

s co

mpa

ny, B

arcl

ays

Plc

(U

nite

d K

ingd

om),

aut

omob

ile m

anuf

actu

rer,

Vol

ksw

agen

A

G (

Ger

man

y), l

ife in

sure

r, P

rude

ntia

l Plc

(U

nite

d K

ingd

om),

and

Tak

eda

Pha

rmac

eutic

al C

o., L

td.

(Jap

an)

1. H

oldi

ngs

in C

anad

a an

d S

outh

Kor

ea, a

long

with

an

unde

rwei

ght p

ositi

ons

in S

wed

en, D

enm

ark,

and

Sou

th A

fric

a

2. H

oldi

ngs

in c

onsu

mer

dur

able

s &

app

arel

, ene

rgy,

cap

ital g

oods

, and

food

& s

tapl

es r

etai

ling

indu

stry

gro

ups,

alo

ng w

ith a

n un

derw

eigh

t pos

ition

in th

e di

vers

ified

fina

ncia

ls in

dust

ry g

roup

3. T

op d

etra

ctor

s: a

ppar

el m

anuf

actu

rer,

Gild

an A

ctiv

ewea

r (C

anad

a), j

et e

ngin

e m

anuf

actu

rer,

Rol

ls-R

oyce

Hol

ding

s P

lc (

Uni

ted

Kin

gdom

), m

ajor

pas

seng

er r

ailw

ay o

pera

tor,

Eas

t Jap

an R

ailw

ay

Co.

(Ja

pan)

, pro

pert

y &

cas

ualty

insu

rer,

Som

po H

oldi

ngs,

Inc.

(Ja

pan)

, and

mul

tinat

iona

l foo

d

proc

essi

ng c

ompa

ny, J

BS

SA

(B

razi

l)

Page

133

of 3

72

Exe

cuti

ve S

um

mar

y

To

tal F

un

dA

s o

f D

ecem

ber

31,

201

9

Lo

om

is, S

ayle

s &

C

om

pan

yC

ore

Plu

s F

ixed

Inco

me

1.44

%0.

74%

1.96

%

Lo

rd A

bb

ett

Cor

e P

lus

0.66

%0.

66%

0.67

%

Mac

kay

Sh

ield

sC

ore

Plu

s

Ext

ende

d

Dis

cret

ion

1.30

%

OT

RS

only

acco

unt.

OT

RS

only

acco

unt.

Ho

isin

gto

n In

vest

men

t M

anag

emen

tM

acro

econ

omic

Fix

ed In

com

e-5

.31%

-5.2

0%-5

.49%

* M

anag

er p

rovi

ded

data

1.T

he la

rges

t con

trib

utor

to r

elat

ive

perf

orm

ance

ove

r th

e qu

arte

r w

as s

ecur

ity s

elec

tion

with

in

mor

tgag

e-ba

cked

sec

uriti

es (

MB

S).

Spe

cific

ally

, a d

own-

in-c

oupo

n bi

as le

d to

out

perf

orm

ance

as

low

er c

oupo

n M

BS

out

perf

orm

ed h

ighe

r co

upon

MB

S fr

om b

oth

a ca

rry

and

spre

ad p

ersp

ectiv

e.

2.A

lso

cont

ribut

ing

to th

e po

rtfo

lio o

ver

the

quar

ter

was

an

unde

rwei

ght t

o U

.S. T

reas

ury

bond

s.

The

ass

et c

lass

und

erpe

rfor

med

ove

r th

e qu

arte

r as

the

yiel

d cu

rve

stee

pene

d, w

ith r

ates

ris

ing

on

the

long

-end

of t

he c

urve

.

1.T

he la

rges

t det

ract

or fr

om r

elat

ive

perf

orm

ance

ove

r th

e qu

arte

r ca

me

from

an

over

wei

ght

allo

catio

n to

ass

et –

back

ed s

ecur

ities

(A

BS

). T

he a

sset

cla

ss u

nder

perf

orm

ed th

e be

nchm

ark

durin

g th

e pe

riod,

as

corp

orat

e de

bt o

utpe

rfor

med

con

sum

er-b

acke

d A

BS

.

2.A

n re

lativ

e un

derw

eigh

t to

high

yie

ld c

orpo

rate

deb

t als

o de

trac

ted

durin

g th

e qu

arte

r. H

igh

yiel

d co

rpor

ate

cred

it ex

perie

nced

spr

ead

tight

enin

g am

id c

ontin

ued

posi

tive

econ

omic

gro

wth

.

1.In

vest

men

t gra

de c

orpo

rate

s co

ntrib

uted

pos

itive

ly to

per

form

ance

dur

ing

the

quar

ter,

led

by

bank

ing,

tele

com

mun

icat

ions

and

sel

ect c

onsu

mer

cyc

lical

s.

2.T

he p

ortfo

lio's

ove

rwei

ght t

o hi

gh y

ield

deb

t als

o co

ntrib

uted

. P

ositi

onin

g in

bas

ic in

dust

ry,

cons

umer

cyc

lical

s an

d ca

pita

l goo

ds o

utpe

rfor

med

. W

e al

so m

aint

aine

d an

up-

in-q

ualit

y, s

hort

er

spre

ad d

urat

ion

post

ure.

3.S

elec

t opp

ortu

nitie

s in

em

ergi

ng m

arke

t deb

t, in

clud

ing

sove

reig

ns a

nd h

ard-

curr

ency

(U

SD

)

corp

orat

es b

enef

itted

per

form

ance

dur

ing

the

quar

ter.

In

part

icul

ar, s

tate

cha

mpi

on n

ames

suc

h

as P

emex

and

Gaz

prom

wer

e am

ong

the

top

perf

orm

ers

in th

e po

rtfo

lio.

1.T

he p

ortfo

lio's

yie

ld c

urve

pos

ture

det

ract

ed s

light

ly a

s th

e cu

rve

stee

pene

d.

2.T

he u

nder

wei

ght t

o U

S T

reas

urie

s cr

eate

d a

slig

ht y

ield

dra

g re

lativ

e to

the

benc

hmar

k.

3.Is

sue

sele

ctio

n fr

om s

elec

t hig

her

qual

ity C

MO

s m

odes

tly u

nder

perf

orm

ed d

urin

g th

e qu

arte

r

as r

ate

vola

tility

pic

ked-

up.

1.T

he u

nder

wei

ght t

o hi

gh y

ield

cre

dit w

eake

ned

outp

erfo

rman

ce.

2.Li

quid

inve

stm

ents

hin

dere

d re

lativ

e pe

rfor

man

ce a

s hi

gher

-yie

ldin

g as

sets

out

pace

d th

e sp

ace.

3.S

ecur

itize

d ho

ldin

gs, s

peci

fical

ly R

MB

S, w

eigh

ed o

n ex

cess

ret

urns

.

Fix

ed In

com

e (C

ore

)

1.The

long

er d

urat

ion

secu

ritie

s re

turn

ed a

neg

atvi

e nu

mbe

r fo

r th

is q

uart

er o

f 201

9, b

ut a

posi

tive

retu

rn o

vera

ll fo

r th

e ye

ar. *

*Com

posi

te Q

uart

er R

etur

n is

GR

OS

S o

f fee

s.

2.The

sig

nific

ant d

epth

of t

he tr

easu

ry m

arke

t allo

ws

for

all a

ccou

nts

to h

old

the

sam

e se

curit

ies

help

ing

to r

educ

e re

turn

var

ianc

e.

1.A

sig

nific

ant o

verw

eigh

t allo

catio

n to

inve

stm

ent g

rade

cre

dit w

as th

e pr

imar

y so

urce

of e

xces

s

retu

rns

for

the

quar

ter.

2.A

not

able

und

erw

eigh

t allo

catio

n in

US

Tre

asur

ys a

lso

gene

rate

d st

rong

rel

ativ

e pe

rfor

man

ce.

3.S

ecur

ity s

elec

tion

in e

mer

ging

mar

ket c

redi

t, es

peci

ally

in T

eva

Pha

ram

aceu

tical

s, b

olst

ered

pe

rfor

man

ce.

Page

134

of 3

72

TO

TA

L D

OM

ES

TIC

EQ

UIT

Y

Page

135

of 3

72

De

ce

mb

er

31

, 2

01

9 :

$7

,87

2,5

78

,35

0

AJO

Mid

Ca

p E

qu

ity5

.8%

Fro

ntie

r M

id C

ap

Gro

wth

6.7

%

Ho

tch

kis

& W

iley

Mid

Ca

p V

alu

e5

.0%

We

llin

gto

n M

id C

ap

Gro

wth

7.2

%

Ge

ne

va U

S S

ma

ll C

ap

Gro

wth

2.9

%

Fro

ntie

r S

ma

ll C

ap

Va

lue

2.9

%

Ne

um

eie

r P

om

a S

ma

ll C

ap

Va

lue

3.4

%

Sh

ap

iro

En

ha

nce

d S

ma

ll C

ap

Va

lue

10

.0%

Wa

satc

h S

ma

ll C

ap

Co

re G

row

th3

.0%

Sci

Be

ta U

S H

FE

MB

MS

32

.0%

No

rth

ern

Tru

st R

uss

ell

10

00

21

.4%

As

se

t A

llo

ca

tio

n B

y M

an

ag

er

To

tal D

om

es

tic

Eq

uit

y

As

of

De

ce

mb

er

31

, 2

01

9

Gre

en

: M

C. Y

ello

w:

SC

.

Re

d:I

nd

exe

d

Page

136

of 3

72

Co

mp

ara

tiv

e P

erf

orm

an

ce

D

om

es

tic

Eq

uit

y S

um

ma

ry a

s o

f D

ec

em

be

r 3

1,

20

19

Mid

Ca

pS

ma

ll C

ap

Eq

uity

Ca

p W

gt

Eq

uity

No

nC

ap

To

tal D

om

est

ic E

qu

ity C

om

po

site

To

tal D

om

est

ic E

qu

ity P

olic

y

0.0

6.0

12

.0

18

.0

24

.0

30

.0

36

.0

Return (%)

10

YR

5 Y

R3

YR

1 Y

RQ

TD

13

.4

11

.4

14

.6

31

.0

9.1

12

.8

9.4

12

.2

27

.7

7.3

10

.6

14

.0

27

.9

5.4

11

.2

14

.5

31

.4

9.0

11

.9

9.9

10

.5

26

.9

7.9

12

.7

8.2

11

.9

28

.1

7.8

10

YR

5 Y

R3

YR

1 Y

RQ

TD

Mid

Ca

p1

2.7

8.2

11

.92

8.1

7.8

Sm

all

Ca

p1

1.9

9.9

10

.52

6.9

7.9

Eq

uity

Ca

p W

gt

N/A

11

.21

4.5

31

.49

.0

Eq

uity

No

nC

ap

N/A

10

.61

4.0

27

.95

.4

To

tal D

om

est

ic E

qu

ity C

om

po

site

12

.89

.41

2.2

27

.77

.3

To

tal D

om

est

ic E

qu

ity P

olic

y1

3.4

11

.41

4.6

31

.09

.1

Co

mp

ara

tiv

e P

erf

orm

an

ce

- N

ET

To

tal D

om

es

tic

Eq

uit

y

As

of

De

ce

mb

er

31

, 2

01

9

Re

turn

s a

re e

xpre

sse

d a

s p

erc

en

tag

es.

Page

137

of 3

72

Co

mp

ara

tiv

e P

erf

orm

an

ce

Tra

ilin

g R

etu

rns

10

YR

5 Y

R3

YR

1 Y

RQ

TD

To

tal D

om

es

tic

Eq

uit

y C

om

po

sit

e1

2.7

5(5

9)

9.4

1(5

8)

12

.23

(51

)2

7.6

6(5

7)

7.3

0(6

9)

T

ota

l Do

me

stic

Eq

uity

Po

licy

13

.39

(45

)1

1.3

7(3

3)

14

.57

(37

)3

1.0

2(3

5)

9.1

0(3

3)

D

iffe

ren

ce-0

.64

-1.9

6-2

.34

-3.3

6-1

.80

IM

U.S

. E

qu

ity (

SA

+C

F)

Me

dia

n1

3.1

81

0.0

21

2.3

22

8.5

38

.26

To

tal D

om

es

tic

Eq

uit

y A

cti

ve

Co

mp

os

ite

N/A

9.3

1(5

9)

11

.94

(52

)2

8.1

4(5

3)

7.8

2(6

0)

T

ota

l Do

me

stic

Eq

uity

Po

licy

13

.39

(45

)1

1.3

7(3

3)

14

.57

(37

)3

1.0

2(3

5)

9.1

0(3

3)

D

iffe

ren

ceN

/A-2

.06

-2.6

3-2

.88

-1.2

8

IM

U.S

. E

qu

ity (

SA

+C

F)

Me

dia

n1

3.1

81

0.0

21

2.3

22

8.5

38

.26

To

tal D

om

est

ic E

qu

ity A

ctiv

e M

id C

ap

Co

mp

osi

te1

2.6

7(7

1)

8.2

0(7

4)

11

.86

(51

)2

8.0

8(6

4)

7.8

0(3

8)

T

ota

l Do

me

stic

Mid

Ca

p E

qu

ity P

olic

y1

3.1

9(5

7)

9.3

3(5

7)

12

.06

(50

)3

0.5

4(4

6)

7.0

6(5

7)

D

iffe

ren

ce-0

.52

-1.1

3-0

.20

-2.4

60

.74

IM

U.S

. M

id C

ap

Eq

uity

(S

A+

CF

) M

ed

ian

13

.46

9.7

61

1.9

62

9.9

77

.25

To

tal D

om

est

ic E

qu

ity A

ctiv

e S

ma

ll C

ap

Co

mp

osi

te1

1.9

5(7

6)

9.9

1(3

9)

10

.48

(39

)2

6.8

7(4

2)

7.9

1(6

4)

T

ota

l Do

me

stic

Sm

all

Ca

p P

olic

y1

1.8

3(7

9)

8.2

3(6

2)

8.5

9(5

3)

25

.53

(54

)9

.94

(26

)

D

iffe

ren

ce0

.12

1.6

81

.89

1.3

4-2

.03

IM

U.S

. S

ma

ll C

ap

Eq

uity

(S

A+

CF

) M

ed

ian

12

.96

8.9

88

.79

25

.82

8.5

2

To

tal D

om

es

tic

Eq

uit

y I

nd

ex

ed

Co

mp

os

ite

N/A

N/A

13

.96

(41

)2

9.2

8(4

6)

6.8

0(7

6)

R

uss

ell

30

00

In

de

x1

3.4

2(4

5)

11

.24

(36

)1

4.5

7(3

7)

31

.02

(35

)9

.10

(33

)

D

iffe

ren

ceN

/AN

/A-0

.61

-1.7

4-2

.30

IM

U.S

. E

qu

ity (

SA

+C

F)

Me

dia

n1

3.1

81

0.0

21

2.3

22

8.5

38

.26

To

tal D

om

est

ic E

qu

ity I

nd

ex

Ca

p W

gt

Co

mp

osi

teN

/A1

1.2

3(4

8)

14

.54

(52

)3

1.3

9(4

0)

9.0

2(4

3)

R

uss

ell

10

00

In

de

x1

3.5

4(4

4)

11

.48

(42

)1

5.0

5(4

4)

31

.43

(40

)9

.04

(42

)

D

iffe

ren

ceN

/A-0

.25

-0.5

1-0

.04

-0.0

2

IM

U.S

. L

arg

e C

ap

Eq

uity

(S

A+

CF

) M

ed

ian

13

.43

11

.10

14

.59

30

.22

8.7

3

To

tal D

om

est

ic E

qu

ity I

nd

exe

d N

on

Ca

p C

om

po

site

N/A

10

.60

(57

)1

3.9

6(5

6)

27

.90

(68

)5

.37

(95

)

S

ciB

eta

US

Hig

h F

act

orE

xpo

sure

In

de

xN

/AN

/AN

/A2

7.9

7(6

7)

5.3

7(9

5)

D

iffe

ren

ceN

/AN

/AN

/A-0

.07

0.0

0

IM

U.S

. L

arg

e C

ap

Eq

uity

(S

A+

CF

) M

ed

ian

13

.43

11

.10

14

.59

30

.22

8.7

3

Co

mp

ara

tiv

e P

erf

orm

an

ce

To

tal D

om

es

tic

Eq

uit

y C

om

po

sit

es

As

of

De

ce

mb

er

31

, 2

01

9

Re

turn

s fo

r p

eri

od

s g

rea

ter

tha

n o

ne

ye

ar

are

an

nu

aliz

ed

.R

etu

rns

are

exp

ress

ed

as

pe

rce

nta

ge

s.

Page

138

of 3

72

Co

mp

ara

tiv

e P

erf

orm

an

ce

Tra

ilin

g R

etu

rns

10

YR

5 Y

R3

YR

1 Y

RQ

TD

To

tal D

om

es

tic

Eq

uit

y A

cti

ve

Mid

Ca

p C

om

po

sit

e1

2.6

7(7

1)

8.2

0(7

4)

11

.86

(51

)2

8.0

8(6

4)

7.8

0(3

8)

T

ota

l Do

me

stic

Mid

Ca

p E

qu

ity P

olic

y1

3.1

9(5

7)

9.3

3(5

7)

12

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6)

7.0

6(5

7)

D

iffe

ren

ce-0

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-1.1

3-0

.20

-2.4

60

.74

IM

U.S

. M

id C

ap

Eq

uity

(S

A+

CF

) M

ed

ian

13

.46

9.7

61

1.9

62

9.9

77

.25

AJO

Mid

Ca

p E

qu

ity1

2.5

1(7

4)

6.7

8(8

8)

8.5

5(7

8)

22

.58

(92

)5

.16

(93

)

R

uss

ell

Mid

cap

In

de

x1

3.1

9(5

7)

9.3

3(5

7)

12

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(50

)3

0.5

4(4

6)

7.0

6(5

7)

D

iffe

ren

ce-0

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-2.5

5-3

.51

-7.9

6-1

.90

IM

U.S

. M

id C

ap

Eq

uity

(S

A+

CF

) M

ed

ian

13

.46

9.7

61

1.9

62

9.9

77

.25

Fro

ntie

r M

id C

ap

Gro

wth

13

.20

(83

)1

1.0

6(6

8)

16

.01

(72

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3.2

5(6

6)

8.0

9(4

1)

R

uss

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Mid

cap

Gro

wth

In

de

x1

4.2

4(5

2)

11

.60

(54

)1

7.3

6(5

2)

35

.47

(54

)8

.17

(38

)

D

iffe

ren

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4-1

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2-0

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IM

U.S

. M

id C

ap

Gro

wth

Eq

uity

(S

A+

CF

) M

ed

ian

14

.28

11

.80

17

.60

35

.72

7.5

7

We

llin

gto

n M

id C

ap

Gro

wth

13

.37

(80

)1

2.7

3(4

1)

22

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0.6

7(2

0)

9.0

1(2

3)

R

uss

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Mid

cap

Gro

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In

de

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11

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)1

7.3

6(5

2)

35

.47

(54

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.17

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)

D

iffe

ren

ce-0

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1.1

35

.45

5.2

00

.84

IM

U.S

. M

id C

ap

Gro

wth

Eq

uity

(S

A+

CF

) M

ed

ian

14

.28

11

.80

17

.60

35

.72

7.5

7

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Page

139

of 3

72

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Page

140

of 3

72

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Page

141

of 3

72

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Page

142

of 3

72

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Page

143

of 3

72

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devi

atio

n of

a p

ortfo

lio's

per

form

ance

rela

tive

to th

e ris

k fre

e re

turn

.

Info

rmat

ion

Rat

io

- Thi

s ca

lcul

ates

the

valu

e-ad

ded

cont

ribut

ion

of th

e m

anag

er a

nd is

der

ived

by

divi

ding

the

activ

e ra

te o

f ret

urn

of th

e po

rtfol

io b

y th

e tra

ckin

g er

ror.

The

high

er th

e In

form

atio

n R

atio

, the

mor

e th

e m

anag

er h

as a

dded

val

ue to

the

portf

olio

.

Publ

ic M

arke

t Equ

ival

ent (

PME)

- D

esig

ns a

set

of a

naly

ses

used

in th

e Pr

ivat

e Eq

uity

Indu

stry

to e

valu

ate

the

perfo

rman

ce o

f a P

rivat

e Eq

uity

Fun

d ag

ains

t a p

ublic

ben

chm

ark

or in

dex.

R-S

quar

ed

- The

per

cent

age

of a

por

tfolio

's p

erfo

rman

ce th

at c

an b

e ex

plai

ned

by th

e be

havi

or o

f the

app

ropr

iate

ben

chm

ark.

A h

igh

R-S

quar

ed m

eans

the

portf

olio

's p

erfo

rman

ce h

as

hist

oric

ally

mov

ed in

the

sam

e di

rect

ion

as th

e ap

prop

riate

ben

chm

ark.

Ret

urn

- Com

poun

ded

rate

of r

etur

n fo

r the

per

iod.

Shar

pe R

atio

- R

epre

sent

s th

e ex

cess

rate

of r

etur

n ov

er th

e ris

k fre

e re

turn

div

ided

by

the

stan

dard

dev

iatio

n of

the

exce

ss re

turn

. The

resu

lt is

an

abso

lute

rate

of r

etur

n pe

r uni

t of r

isk.

A

high

er v

alue

dem

onst

rate

s be

tter h

isto

rical

risk

-adj

uste

d pe

rform

ance

.

Stan

dard

Dev

iatio

n - A

sta

tistic

al m

easu

re o

f the

rang

e of

a p

ortfo

lio's

per

form

ance

. It r

epre

sent

s th

e va

riabi

lity

of re

turn

s ar

ound

the

aver

age

retu

rn o

ver a

spe

cifie

d tim

e pe

riod.

Tota

l Val

ue to

Pai

d In

(TVP

I) - T

he ra

tio o

f the

cur

rent

val

ue o

f rem

aini

ng in

vest

men

ts w

ithin

a fu

nd, p

lus

the

tota

l val

ue o

f all

dist

ribut

ions

to d

ate,

rela

tive

to th

e to

tal a

mou

nt o

f cap

ital p

aid

into

the

fund

to

dat

e. I

t is

a go

od m

easu

re o

f per

form

ance

bef

ore

the

end

of a

fund

’s li

fe

Tr

acki

ng E

rror

- T

his

is a

mea

sure

of t

he s

tand

ard

devi

atio

n of

a p

ortfo

lio's

retu

rns

in re

latio

n to

the

perfo

rman

ce o

f its

des

igna

ted

mar

ket b

ench

mar

k.

Tr

eyno

r Rat

io

- Sim

ilar t

o Sh

arpe

ratio

but

util

izes

bet

a ra

ther

than

exc

ess

risk

as d

eter

min

ed b

y st

anda

rd d

evia

tion.

It is

cal

cula

ted

by ta

king

the

exce

ss ra

te o

f ret

urn

abov

e th

e ris

k fre

e ra

te d

ivid

ed b

y be

ta to

der

ive

the

abso

lute

rate

of r

etur

n pe

r uni

t of r

isk.

A h

ighe

r val

ue in

dica

tes

a pr

oduc

t has

ach

ieve

d be

tter h

isto

rical

risk

-adj

uste

d pe

rform

ance

.

Up

Mar

ket C

aptu

re

- The

ratio

of a

vera

ge p

ortfo

lio p

erfo

rman

ce o

ver t

he d

esig

nate

d be

nchm

ark

durin

g pe

riods

of p

ositi

ve re

turn

s. A

hig

her v

alue

indi

cate

s be

tter p

rodu

ct p

erfo

rman

ce.

Page

164

of 3

72

D

iscl

osur

es

AndC

o co

mpi

led

this

repo

rt fo

r the

sol

e us

e of

the

clie

nt fo

r whi

ch it

was

pre

pare

d. A

ndC

o is

resp

onsi

ble

for e

valu

atin

g th

e pe

rform

ance

resu

lts o

f the

Tot

al F

und

alon

g w

ith th

e in

vest

men

t adv

isor

s by

com

parin

g th

eir p

erfo

rman

ce w

ith in

dice

s an

d ot

her r

elat

ed p

eer u

nive

rse

data

that

is d

eem

ed a

ppro

pria

te.

AndC

o us

es th

e re

sults

from

this

eva

luat

ion

to m

ake

obse

rvat

ions

and

reco

mm

enda

tions

to th

e cl

ient

. An

dCo

uses

tim

e-w

eigh

ted

calc

ulat

ions

whi

ch a

re fo

unde

d on

sta

ndar

ds re

com

men

ded

by th

e C

FA In

stitu

te.

The

calc

ulat

ions

and

val

ues

show

n ar

e ba

sed

on in

form

atio

n th

at is

rece

ived

from

cus

todi

ans.

And

Co

anal

yzes

tran

sact

ions

as

indi

cate

d on

the

cust

odia

n st

atem

ents

and

revi

ews

the

cust

odia

l mar

ket v

alue

s of

the

portf

olio

. As

a re

sult,

this

pro

vide

s An

dCo

with

a re

ason

able

bas

is th

at th

e in

vest

men

t inf

orm

atio

n pr

esen

ted

is fr

ee fr

om m

ater

ial m

isst

atem

ent.

Thi

s m

etho

dolo

gy o

f eva

luat

ing

and

mea

surin

g pe

rform

ance

pro

vide

s An

dCo

with

a p

ract

ical

foun

datio

n fo

r our

obs

erva

tions

and

reco

mm

enda

tions

. N

othi

ng c

ame

to

our a

ttent

ion

that

wou

ld c

ause

And

Co

to b

elie

ve th

at th

e in

form

atio

n pr

esen

ted

is s

igni

fican

tly m

isst

ated

. Th

is p

erfo

rman

ce re

port

is b

ased

on

data

obt

aine

d by

the

clie

nt’s

cus

todi

an(s

), in

vest

men

t fun

d ad

min

istra

tor,

or o

ther

sou

rces

bel

ieve

d to

be

relia

ble.

Whi

le th

ese

sour

ces

are

belie

ved

to b

e re

liabl

e, th

e da

ta

prov

ider

s ar

e re

spon

sibl

e fo

r the

acc

urac

y an

d co

mpl

eten

ess

of th

eir s

tate

men

ts. C

lient

s ar

e en

cour

aged

to c

ompa

re th

e re

cord

s of

thei

r cus

todi

an(s

) to

ensu

re th

is re

port

fairl

y an

d ac

cura

tely

refle

cts

thei

r var

ious

as

set p

ositi

ons.

Th

e st

rate

gies

list

ed m

ay n

ot b

e su

itabl

e fo

r all

inve

stor

s. W

e be

lieve

the

info

rmat

ion

prov

ided

her

e is

relia

ble,

but

do

not w

arra

nt it

s ac

cura

cy o

r com

plet

enes

s. P

ast p

erfo

rman

ce is

not

an

indi

catio

n of

futu

re

perfo

rman

ce.

Any

info

rmat

ion

cont

aine

d in

this

repo

rt is

for i

nfor

mat

iona

l pur

pose

s on

ly a

nd s

houl

d no

t be

cons

trued

to b

e an

offe

r to

buy

or s

ell a

ny s

ecur

ities

, inv

estm

ent c

onsu

lting

, or i

nves

tmen

t man

agem

ent

serv

ices

. Ad

ditio

nal i

nfor

mat

ion

incl

uded

in th

is d

ocum

ent m

ay c

onta

in d

ata

prov

ided

by

from

inde

x da

taba

ses,

pub

lic e

cono

mic

sou

rces

and

the

man

ager

s th

emse

lves

.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y Bl

oom

berg

Bar

clay

s.

Bloo

mbe

rg B

arcl

ays

Inde

x da

ta p

rovi

ded

by w

ay o

f Bar

clay

s Li

ve.

Th

is d

ocum

ent m

ay c

onta

in d

ata

prov

ided

by

Stan

dard

and

Poo

r’s.

Not

hing

con

tain

ed w

ithin

any

doc

umen

t, ad

verti

sem

ent o

r pre

sent

atio

n fro

m S

&P In

dice

s co

nstit

utes

an

offe

r of s

ervi

ces

in ju

risdi

ctio

ns w

here

S&

P In

dice

s do

es n

ot h

ave

the

nece

ssar

y lic

ense

s. A

ll in

form

atio

n pr

ovid

ed b

y S&

P In

dice

s is

impe

rson

al a

nd is

not

tailo

red

to th

e ne

eds

of a

ny p

erso

n, e

ntity

or g

roup

of p

erso

ns. A

ny re

turn

s or

per

form

ance

pr

ovid

ed w

ithin

any

doc

umen

t is

prov

ided

for i

llust

rativ

e pu

rpos

es o

nly

and

does

not

dem

onst

rate

act

ual p

erfo

rman

ce. P

ast p

erfo

rman

ce is

not

a g

uara

ntee

of f

utur

e in

vest

men

t res

ults

.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y M

SCI,

Inc.

Cop

yrig

ht M

SCI,

2017

. U

npub

lishe

d. A

ll R

ight

s R

eser

ved.

Thi

s in

form

atio

n m

ay o

nly

be u

sed

for y

our i

nter

nal u

se, m

ay n

ot b

e re

prod

uced

or

redi

ssem

inat

ed in

any

form

and

may

not

be

used

to c

reat

e an

y fin

anci

al in

stru

men

ts o

r pro

duct

s or

any

indi

ces.

Thi

s in

form

atio

n is

pro

vide

d on

an

“as

is” b

asis

and

the

user

of t

his

info

rmat

ion

assu

mes

the

entir

e ris

k of

any

use

it m

ay m

ake

or p

erm

it to

be

mad

e of

this

info

rmat

ion.

Nei

ther

MSC

I, an

y of

its

affil

iate

s or

any

oth

er p

erso

n in

volv

ed in

or r

elat

ed to

com

pilin

g, c

ompu

ting

or c

reat

ing

this

info

rmat

ion

mak

es a

ny

expr

ess

or im

plie

d w

arra

ntie

s or

repr

esen

tatio

ns w

ith re

spec

t to

such

info

rmat

ion

or th

e re

sults

to b

e ob

tain

ed b

y th

e us

e th

ereo

f, an

d M

SCI,

its a

ffilia

tes

and

each

suc

h ot

her p

erso

n he

reby

exp

ress

ly d

iscl

aim

all

war

rant

ies

(incl

udin

g, w

ithou

t lim

itatio

n, a

ll w

arra

ntie

s of

orig

inal

ity, a

ccur

acy,

com

plet

enes

s, ti

mel

ines

s, n

on-in

fring

emen

t, m

erch

anta

bilit

y an

d fit

ness

for a

par

ticul

ar p

urpo

se) w

ith re

spec

t to

this

info

rmat

ion.

W

ithou

t lim

iting

any

of t

he fo

rego

ing,

in n

o ev

ent s

hall

MSC

I, an

y of

its

affil

iate

s or

any

oth

er p

erso

n in

volv

ed in

or r

elat

ed to

com

pilin

g, c

ompu

ting

or c

reat

ing

this

info

rmat

ion

have

any

liab

ility

for a

ny d

irect

, ind

irect

, sp

ecia

l, in

cide

ntal

, pun

itive

, con

sequ

entia

l or a

ny o

ther

dam

ages

(inc

ludi

ng, w

ithou

t lim

itatio

n, lo

st p

rofit

s) e

ven

if no

tifie

d of

, or i

f it m

ight

oth

erw

ise

have

ant

icip

ated

, the

pos

sibi

lity

of s

uch

dam

ages

.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y R

usse

ll In

vest

men

t Gro

up.

Rus

sell

Inve

stm

ent G

roup

is th

e so

urce

ow

ner o

f the

dat

a co

ntai

ned

or re

flect

ed in

this

mat

eria

l and

all

trade

mar

ks a

nd c

opyr

ight

s re

late

d th

eret

o. T

he m

ater

ial m

ay c

onta

in c

onfid

entia

l inf

orm

atio

n an

d un

auth

oriz

ed u

se, d

iscl

osur

e, c

opyi

ng, d

isse

min

atio

n or

redi

strib

utio

n is

stri

ctly

pro

hibi

ted.

Thi

s is

a u

ser p

rese

ntat

ion

of th

e da

ta.

Rus

sell

Inve

stm

ent

Gro

up is

not

resp

onsi

ble

for t

he fo

rmat

ting

or c

onfig

urat

ion

of th

is m

ater

ial o

r for

any

inac

cura

cy in

pre

sent

atio

n th

ereo

f. Th

is d

ocum

ent m

ay c

onta

in d

ata

prov

ided

by

Mor

ning

star

. Al

l rig

hts

rese

rved

. U

se o

f thi

s co

nten

t req

uire

s ex

pert

know

ledg

e. I

t is

to b

e us

ed b

y sp

ecia

list i

nstit

utio

ns o

nly.

The

info

rmat

ion

cont

aine

d he

rein

: (1)

is

prop

rieta

ry to

Mor

ning

star

and

/or i

ts c

onte

nt p

rovi

ders

; (2)

may

not

be

copi

ed, a

dapt

ed o

r dis

tribu

ted;

and

(3) i

s no

t war

rant

ed to

be

accu

rate

, com

plet

e or

tim

ely.

Nei

ther

Mor

ning

star

nor

its

cont

ent p

rovi

ders

are

re

spon

sibl

e fo

r any

dam

ages

or l

osse

s ar

isin

g fro

m a

ny u

se o

f thi

s in

form

atio

n, e

xcep

t whe

re s

uch

dam

ages

or l

osse

s ca

nnot

be

limite

d or

exc

lude

d by

law

in y

our j

uris

dict

ion.

Pas

t fin

anci

al p

erfo

rman

ce is

not

gu

aran

tee

of fu

ture

resu

lts.

Page

165

of 3

72

<CBDoc TenantId="2" EntityTypeId="3100" EntityId="2545" DocumentTypeId="1" EffectiveDate="09/30/2019" Interval="3" Description="Alternatives

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72

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72

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72

Pri

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72

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211

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72

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72

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72

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72

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223

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72

Pri

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72

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72

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s, b

an

kru

ptc

y co

urt

s a

nd

oth

er

dis

tre

sse

d s

elle

rs.

SO

F X

’s s

tra

teg

y is

de

sig

ne

d t

o a

llow

th

e F

un

d t

o g

en

era

te a

targ

et

gro

ss I

RR

of

18

-20

% (

14

-16

% n

et)

, a

nd

a 2

.0x

mu

ltip

le w

ith m

od

est

leve

rag

e,

by

acq

uir

ing

re

al e

sta

te w

ith s

tro

ng

po

ten

tial f

un

da

me

nta

ls a

t a

sig

nifi

can

t d

isco

un

t to

re

pla

cem

en

t co

st,

with

str

on

g r

esi

du

al v

alu

e g

row

th a

nd

po

ten

tial d

ou

ble

-dig

it cu

rre

nt

op

era

ting

yie

lds.

Sta

rwo

od

Ca

pita

l ha

s a

n a

ctiv

e p

ipe

line

of

op

po

rtu

niti

es

acr

oss

th

e s

pe

ctru

m o

f a

sse

t cl

ass

es

an

dca

pita

l sta

ck.

On

an

ab

solu

te b

asi

s, w

e b

elie

ve o

pp

ort

un

istic

re

al e

sta

te is

a c

om

pe

llin

g in

vest

me

nt.

Th

ere

are

stil

l op

po

rtu

niti

es

in b

oth

th

e U

.S.

an

d E

uro

pe

to

bu

y a

sse

ts a

t la

rge

dis

cou

nts

to

rep

lace

me

nt

cost

an

d g

en

era

te s

tro

ng

cu

rre

nt

cash

re

turn

s o

f 1

0+

%.

We

exp

ect

ad

diti

on

al u

psi

de

th

rou

gh

ap

pre

cia

tion

fro

m (

1)

the

imp

lem

en

tatio

n o

f S

tarw

oo

d C

ap

ital’s

va

lue

ad

dst

rate

gie

s to

imp

rove

th

e c

ash

flo

ws

of

un

de

rlyi

ng

pro

pe

rtie

s, (

2)

the

an

ticip

atio

n o

f n

ew

ca

pita

l flo

ws

into

a m

ark

et

pu

shin

g d

ow

n c

ap

ra

tes,

(3

) e

con

om

ic g

row

th w

ithin

th

e t

arg

ete

d m

ark

ets

dri

vin

g r

en

tal r

eve

nu

e g

row

th,

an

d/o

r (4

) th

e c

are

ful c

ulti

vatio

n a

nd

se

lect

ion

of

the

ap

pro

pri

ate

exi

t st

rate

gy

to m

axi

miz

e p

ort

folio

or

pla

tfo

rm v

alu

es.

Sim

ilar

to S

OF

VII

I a

nd

SO

F I

X,

Sta

rwo

od

Ca

pita

l be

lieve

s th

at

SO

F X

ca

n g

en

era

te s

tro

ng

ris

k-a

dju

ste

d r

etu

rns

by

leve

rag

ing

th

e f

ollo

win

g m

acr

o-

an

d m

icro

-eco

no

mic

fa

cto

rs:

• G

en

era

ting

yie

ld in

a y

ield

-le

ss w

orl

d•

Fo

cusi

ng

on

str

on

g e

con

om

ic g

row

th a

rea

s a

nd

pro

fitin

g f

rom

imp

rovi

ng

fu

nd

am

en

tals

fo

r re

al e

sta

te in

vest

me

nts

• In

vest

ing

in d

istr

ess

ed

op

po

rtu

niti

es

in t

he

U.S

. a

nd

Eu

rop

e a

s th

ey

con

tinu

e t

o e

me

rge

• C

ap

italiz

ing

on

op

po

rtu

niti

es

to p

urc

ha

se a

sse

ts a

t d

isco

un

ts t

o r

ep

lace

me

nt

cost

Ca

sh

Flo

w S

um

ma

ry

Ca

pit

al C

om

mit

ted

:$

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al In

ve

ste

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nt

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tal C

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l C

om

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me

nt:

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tal D

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t V

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nd

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po

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30

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9

Page

229

of 3

72

Pri

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72

Pri

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3

Page

231

of 3

72

Fu

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72

Pri

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72

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72

Pri

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9

Page

251

of 3

72

Pri

va

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cil

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9

Page

252

of 3

72

Pri

va

te E

qu

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Fin

an

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cilia

tio

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PIM

CO

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Page

253

of 3

72

Pri

va

te E

qu

ity

Fin

an

cia

l R

ec

on

cilia

tio

n

PIM

CO

Bra

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Fu

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72

Pri

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Page

258

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72

Pri

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72

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9

Page

261

of 3

72

Pri

va

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Fin

an

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ec

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cilia

tio

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PIM

CO

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262

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72

Fu

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72

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Page

265

of 3

72

Rep

ort S

tatis

tics

Def

initi

ons

and

Des

crip

tions

Activ

e R

etur

n-A

rithm

etic

diff

eren

ce b

etw

een

the

man

ager

’s p

erfo

rman

ce a

nd th

e de

sign

ated

ben

chm

ark

retu

rn o

ver a

spe

cifie

d tim

e pe

riod.

A lph

a-A

mea

sure

of t

he d

iffer

ence

bet

wee

n a

portf

olio

's a

ctua

l per

form

ance

and

its

expe

cted

retu

rn b

ased

on

its le

vel o

f ris

k as

det

erm

ined

by

beta

. It d

eter

min

es th

e po

rtfol

io's

non-

syst

emic

retu

rn, o

r its

his

toric

al p

erfo

rman

ce n

ot e

xpla

ined

by

mov

emen

ts o

f the

mar

ket.

Bet

a-A

mea

sure

of t

he s

ensi

tivity

of a

por

tfolio

to th

e m

ovem

ents

in th

e m

arke

t. It

is a

mea

sure

of t

he p

ortfo

lio's

sys

tem

atic

risk

.

Con

sist

ency

-T

he p

erce

ntag

e of

qua

rters

that

a p

rodu

ct a

chie

ved

a ra

te o

f ret

urn

high

er th

an th

at o

f its

ben

chm

ark.

Hig

her c

onsi

sten

cy in

dica

tes

the

man

ager

has

con

tribu

ted

mor

e to

the

prod

uct’s

per

form

ance

.

Dis

trib

uted

to P

aid

In (D

PI)

-The

ratio

of m

oney

dis

tribu

ted

to L

imite

d Pa

rtner

s by

the

fund

, rel

ativ

e to

con

tribu

tions

. It

is c

alcu

late

d by

div

idin

g cu

mul

ativ

e di

strib

utio

ns b

y pa

id in

cap

ital.

Thi

s m

ultip

lesh

ows

the

inve

stor

how

muc

h m

oney

they

got

bac

k. I

t is

a go

od m

easu

re fo

r eva

luat

ing

a fu

nd la

ter i

n its

life

bec

ause

ther

e ar

e m

ore

dist

ribut

ions

to m

easu

re a

gain

st.

Dow

n M

arke

t Cap

ture

-T

he ra

tio o

f ave

rage

por

tfolio

per

form

ance

ove

r the

des

igna

ted

benc

hmar

k du

ring

perio

ds o

f neg

ativ

e re

turn

s. A

low

er v

alue

indi

cate

s be

tter p

rodu

ct p

erfo

rman

ce

Dow

nsid

e R

isk

-A m

easu

re s

imila

r to

stan

dard

dev

iatio

n th

at u

tiliz

es o

nly

the

nega

tive

mov

emen

ts o

f the

retu

rn s

erie

s. It

is c

alcu

late

d by

taki

ng th

e st

anda

rd d

evia

tion

of th

e ne

gativ

equ

arte

rly s

et o

f ret

urns

. A h

ighe

r fac

tor i

s in

dica

tive

of a

risk

ier p

rodu

ct.

Exce

ss R

etur

n -A

rithm

etic

diff

eren

ce b

etw

een

the

man

ager

’s p

erfo

rman

ce a

nd th

e ris

k-fre

e re

turn

ove

r a s

peci

fied

time

perio

d.

Exce

ss R

isk

-A m

easu

re o

f the

sta

ndar

d de

viat

ion

of a

por

tfolio

's p

erfo

rman

ce re

lativ

e to

the

risk

free

retu

rn.

Info

rmat

ion

Rat

io

-Thi

s ca

lcul

ates

the

valu

e-ad

ded

cont

ribut

ion

of th

e m

anag

er a

nd is

der

ived

by

divi

ding

the

activ

e ra

te o

f ret

urn

of th

e po

rtfol

io b

y th

e tra

ckin

g er

ror.

The

high

er th

eIn

form

atio

n R

atio

, the

mor

e th

e m

anag

er h

as a

dded

val

ue to

the

portf

olio

.

Publ

ic M

arke

t Equ

ival

ent (

PME)

-D

esig

ns a

set

of a

naly

ses

used

in th

e Pr

ivat

e Eq

uity

Indu

stry

to e

valu

ate

the

perfo

rman

ce o

f a P

rivat

e Eq

uity

Fun

d ag

ains

t a p

ublic

ben

chm

ark

or in

dex.

R-S

quar

ed-T

he p

erce

ntag

e of

a p

ortfo

lio's

per

form

ance

that

can

be

expl

aine

d by

the

beha

vior

of t

he a

ppro

pria

te b

ench

mar

k. A

hig

h R

-Squ

ared

mea

ns th

e po

rtfol

io's

per

form

ance

has

hist

oric

ally

mov

ed in

the

sam

e di

rect

ion

as th

e ap

prop

riate

ben

chm

ark.

Ret

urn

-Com

poun

ded

rate

of r

etur

n fo

r the

per

iod.

Shar

pe R

atio

-R

epr e

sent

s th

e ex

cess

rate

of r

etur

n ov

er th

e ris

k fre

e re

turn

div

ided

by

the

stan

dard

dev

iatio

n of

the

exce

ss re

turn

. The

resu

lt is

an

abso

lute

rate

of r

etur

n pe

r uni

t of r

isk.

Ahi

gher

val

ue d

emon

stra

tes

bette

r his

toric

al ri

sk-a

djus

ted

perfo

rman

ce.

Stan

dard

Dev

iatio

n -A

st a

tistic

al m

easu

re o

f the

rang

e of

a p

ortfo

lio's

per

form

ance

. It r

epre

sent

s th

e va

riabi

lity

of re

turn

s ar

ound

the

aver

age

retu

rn o

ver a

spe

cifie

d tim

e pe

riod.

Tota

l Val

ue to

Pai

d In

(TVP

I) -T

he ra

tio o

f the

cur

rent

val

ue o

f rem

aini

ng in

vest

men

ts w

ithin

a fu

nd, p

lus

the

tota

l val

ue o

f all

dist

ribut

ions

to d

ate,

rela

tive

to th

e to

tal a

mou

nt o

f cap

ital p

aid

into

the

fund

to d

ate.

It i

s a

good

mea

sure

of p

erfo

rman

ce b

efor

e th

e en

d of

a fu

nd’s

life

Trac

king

Err

or

-Thi

s is

a m

easu

re o

f the

sta

ndar

d de

viat

ion

of a

por

tfolio

's re

turn

s in

rela

tion

to th

e pe

rform

ance

of i

ts d

esig

nate

d m

arke

t ben

chm

ark.

Trey

nor R

atio

-Sim

ilar t

o Sh

arpe

ratio

but

util

izes

bet

a ra

ther

than

exc

ess

risk

as d

eter

min

ed b

y st

anda

rd d

evia

tion.

It is

cal

cula

ted

by ta

king

the

exce

ss ra

te o

f ret

urn

abov

e th

e ris

k fre

era

te d

ivid

ed b

y be

ta to

der

ive

the

abso

lute

rate

of r

etur

n pe

r uni

t of r

isk.

A h

ighe

r val

ue in

dica

tes

a pr

oduc

t has

ach

ieve

d be

tter h

isto

rical

risk

-adj

uste

d pe

rform

ance

.

Up

Mar

ket C

aptu

re

-The

ratio

of a

vera

ge p

ortfo

lio p

erfo

rman

ce o

ver t

he d

esig

nate

d be

nchm

ark

durin

g pe

riods

of p

ositi

ve re

turn

s. A

hig

her v

alue

indi

cate

s be

tter p

rodu

ct p

erfo

rman

ce.

Page

266

of 3

72

Dis

clos

u res

AndC

o co

mpi

led

this

repo

rt fo

r the

sol

e us

e of

the

clie

nt fo

r whi

ch it

was

pre

pare

d. A

ndC

o is

resp

onsi

ble

for e

valu

atin

g th

e pe

rform

ance

resu

lts o

f the

Tot

al F

und

alon

g w

ith th

e in

vest

men

t adv

isor

s by

com

parin

g th

eir p

erfo

rman

ce w

ith in

dice

s an

d ot

her r

elat

ed p

eer u

nive

rse

data

that

is d

eem

ed a

ppro

pria

te.

AndC

o us

es th

e re

sults

from

this

eva

luat

ion

to m

ake

obse

rvat

ions

and

reco

mm

enda

tions

to th

e cl

ient

.

AndC

o us

es ti

me-

wei

ghte

d ca

lcul

atio

ns w

hich

are

foun

ded

on s

tand

ards

reco

mm

ende

d by

the

CFA

Inst

itute

. Th

e ca

lcul

atio

ns a

nd v

alue

s sh

own

are

base

d on

info

rmat

ion

that

is re

ceiv

ed fr

om c

usto

dian

s. A

ndC

o an

alyz

es tr

ansa

ctio

ns a

s in

dica

ted

on th

e cu

stod

ian

stat

emen

ts a

nd re

view

s th

e cu

stod

ial m

arke

t val

ues

of th

e po

rtfol

io.

As a

resu

lt, th

is p

rovi

des

AndC

o w

ith a

reas

onab

le b

asis

that

the

inve

stm

ent i

nfor

mat

ion

pres

ente

d is

free

from

mat

eria

l mis

stat

emen

t. T

his

met

hodo

logy

of e

valu

atin

g an

d m

easu

ring

perfo

rman

ce p

rovi

des

AndC

o w

ith a

pra

ctic

al fo

unda

tion

for o

ur o

bser

vatio

ns a

nd re

com

men

datio

ns.

Not

hing

cam

e to

ou

r atte

ntio

n th

at w

ould

cau

se A

ndC

o to

bel

ieve

that

the

info

rmat

ion

pres

ente

d is

sig

nific

antly

mis

stat

ed.

This

per

form

ance

repo

rt is

bas

ed o

n da

ta o

btai

ned

by th

e cl

ient

’s c

usto

dian

(s),

inve

stm

ent f

und

adm

inis

trato

r, or

oth

er s

ourc

es b

elie

ved

to b

e re

liabl

e. W

hile

thes

e so

urce

s ar

e be

lieve

d to

be

relia

ble,

the

data

pr

ovid

ers

are

resp

onsi

ble

for t

he a

ccur

acy

and

com

plet

enes

s of

thei

r sta

tem

ents

. Clie

nts

are

enco

urag

ed to

com

pare

the

reco

rds

of th

eir c

usto

dian

(s) t

o en

sure

this

repo

rt fa

irly

and

accu

rate

ly re

flect

s th

eir v

ario

us

asse

t pos

ition

s.

The

stra

tegi

es li

sted

may

not

be

suita

ble

for a

ll in

vest

ors.

We

belie

ve th

e in

form

atio

n pr

ovid

ed h

ere

is re

liabl

e, b

ut d

o no

t war

rant

its

accu

racy

or c

ompl

eten

ess.

Pas

t per

form

ance

is n

ot a

n in

dica

tion

of fu

ture

pe

rform

ance

. An

y in

form

atio

n co

ntai

ned

in th

is re

port

is fo

r inf

orm

atio

nal p

urpo

ses

only

and

sho

uld

not b

e co

nstru

ed to

be

an o

ffer t

o bu

y or

sel

l any

sec

uriti

es, i

nves

tmen

t con

sulti

ng, o

r inv

estm

ent m

anag

emen

t se

rvic

es.

Addi

tiona

l inf

orm

atio

n in

clud

ed in

this

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y fro

m in

dex

data

base

s, p

ublic

eco

nom

ic s

ourc

es a

nd th

e m

anag

ers

them

selv

es.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y Bl

oom

berg

Bar

clay

s.

Bloo

mbe

rg B

arcl

ays

Inde

x da

ta p

rovi

ded

by w

ay o

f Bar

clay

s Li

ve.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y St

anda

rd a

nd P

oor’s

. N

othi

ng c

onta

ined

with

in a

ny d

ocum

ent,

adve

rtise

men

t or p

rese

ntat

ion

from

S&P

Indi

ces

cons

titut

es a

n of

fer o

f ser

vice

s in

juris

dict

ions

whe

re

S&P

Indi

ces

does

not

hav

e th

e ne

cess

ary

licen

ses.

All

info

rmat

ion

prov

ided

by

S&P

Indi

ces

is im

pers

onal

and

is n

ot ta

ilore

d to

the

need

s of

any

per

son,

ent

ity o

r gro

up o

f per

sons

. Any

retu

rns

or p

erfo

rman

ce

prov

ided

with

in a

ny d

ocum

ent i

s pr

ovid

ed fo

r illu

stra

tive

purp

oses

onl

y an

d do

es n

ot d

emon

stra

te a

ctua

l per

form

ance

. Pas

t per

form

ance

is n

ot a

gua

rant

ee o

f fut

ure

inve

stm

ent r

esul

ts.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y M

SCI,

Inc.

Cop

yrig

ht M

SCI,

2017

. U

npub

lishe

d. A

ll R

ight

s R

eser

ved.

Thi

s in

form

atio

n m

ay o

nly

be u

sed

for y

our i

nter

nal u

se, m

ay n

ot b

e re

prod

uced

or

redi

ssem

inat

ed in

any

form

and

may

not

be

used

to c

reat

e an

y fin

anci

al in

stru

men

ts o

r pro

duct

s or

any

indi

ces.

Thi

s in

form

atio

n is

pro

vide

d on

an

“as

is” b

asis

and

the

user

of t

his

info

rmat

ion

assu

mes

the

entir

e ris

k of

any

use

it m

ay m

ake

or p

erm

it to

be

mad

e of

this

info

rmat

ion.

Nei

ther

MSC

I, an

y of

its

affil

iate

s or

any

oth

er p

erso

n in

volv

ed in

or r

elat

ed to

com

pilin

g, c

ompu

ting

or c

reat

ing

this

info

rmat

ion

mak

es a

ny

expr

ess

or im

plie

d w

arra

ntie

s or

repr

esen

tatio

ns w

ith re

spec

t to

such

info

rmat

ion

or th

e re

sults

to b

e ob

tain

ed b

y th

e us

e th

ereo

f, an

d M

SCI,

its a

ffilia

tes

and

each

suc

h ot

her p

erso

n he

reby

exp

ress

ly d

iscl

aim

all

war

rant

ies

(incl

udin

g, w

ithou

t lim

itatio

n, a

ll w

arra

ntie

s of

orig

inal

ity, a

ccur

acy,

com

plet

enes

s, ti

mel

ines

s, n

on-in

fring

emen

t, m

erch

anta

bilit

y an

d fit

ness

for a

par

ticul

ar p

urpo

se) w

ith re

spec

t to

this

info

rmat

ion.

W

ithou

t lim

iting

any

of t

he fo

rego

ing,

in n

o ev

ent s

hall

MSC

I, an

y of

its

affil

iate

s or

any

oth

er p

erso

n in

volv

ed in

or r

elat

ed to

com

pilin

g, c

ompu

ting

or c

reat

ing

this

info

rmat

ion

have

any

liab

ility

for a

ny d

irect

, ind

irect

, sp

ecia

l, in

cide

ntal

, pun

itive

, con

sequ

entia

l or a

ny o

ther

dam

ages

(inc

ludi

ng, w

ithou

t lim

itatio

n, lo

st p

rofit

s) e

ven

if no

tifie

d of

, or i

f it m

ight

oth

erw

ise

have

ant

icip

ated

, the

pos

sibi

lity

of s

uch

dam

ages

.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y R

usse

ll In

vest

men

t Gro

up.

Rus

sell

Inve

stm

ent G

roup

is th

e so

urce

ow

ner o

f the

dat

a co

ntai

ned

or re

flect

ed in

this

mat

eria

l and

all

trade

mar

ks a

nd c

opyr

ight

s re

late

d th

eret

o. T

he m

ater

ial m

ay c

onta

in c

onfid

entia

l inf

orm

atio

n an

d un

auth

oriz

ed u

se, d

iscl

osur

e, c

opyi

ng, d

isse

min

atio

n or

redi

strib

utio

n is

stri

ctly

pro

hibi

ted.

Thi

s is

a u

ser p

rese

ntat

ion

of th

e da

ta.

Rus

sell

Inve

stm

ent

Gro

up is

not

resp

onsi

ble

for t

he fo

rmat

ting

or c

onfig

urat

ion

of th

is m

ater

ial o

r for

any

inac

cura

cy in

pre

sent

atio

n th

ereo

f.

This

doc

umen

t may

con

tain

dat

a pr

ovid

ed b

y M

orni

ngst

ar.

All r

ight

s re

serv

ed.

Use

of t

his

cont

ent r

equi

res

expe

rt kn

owle

dge.

It i

s to

be

used

by

spec

ialis

t ins

titut

ions

onl

y. T

he in

form

atio

n co

ntai

ned

here

in: (

1) is

pr

oprie

tary

to M

orni

ngst

ar a

nd/o

r its

con

tent

pro

vide

rs; (

2) m

ay n

ot b

e co

pied

, ada

pted

or d

istri

bute

d; a

nd (3

) is

not w

arra

nted

to b

e ac

cura

te, c

ompl

ete

or ti

mel

y. N

eith

er M

orni

ngst

ar n

or it

s co

nten

t pro

vide

rs a

re

resp

onsi

ble

for a

ny d

amag

es o

r los

ses

aris

ing

from

any

use

of t

his

info

rmat

ion,

exc

ept w

here

suc

h da

mag

es o

r los

ses

cann

ot b

e lim

ited

or e

xclu

ded

by la

w in

you

r jur

isdi

ctio

n. P

ast f

inan

cial

per

form

ance

is n

ot

guar

ante

e of

futu

re re

sults

.

Page

267

of 3

72

Compo

site

Market V

alue

Market A

llocatio

nTarget Allo

catio

nMin % Allo

catio

nMax % Allo

catio

nCash and

Equ

ivalen

ts$2

75,492

,433

1.5%

0.0%

0.0%

0.0%

Fixed Income

$4,071

,473

,712

22.9%

22.0%

17.0%

27.0%

U.S. Equ

ity$7

,810

,509

,004

43.9%

43.5%

36.5%

50.5%

International Equ

ity$2

,855

,322

,935

16.0%

19.0%

14.0%

24.0%

Real Estate

$1,183

,708

,659

6.6%

9.0%

5.0%

11.5%

Private Capital

$1,609

,481

,287

9.0%

6.5%

4.5%

8.5%

Grand

Total

17,805

,988

,030

100.00

%10

0.00

%

Compo

site

$ Va

riance to Target

% Variance to

Target

Target M

arket V

alue

$ Be

low M

inMin $ Allo

catio

nMax $ Allo

catio

n$ Ab

ove Max

Cash and

Equ

ivalen

ts$2

75,492

,433

1.55

%$0

$0$0

$275

,492

,433

Fixed Income

$154

,156

,346

0.87

%$3

,917

,000

,000

$3,027

,000

,000

$4,808

,000

,000

U.S. Equ

ity$6

4,90

4,21

10.36

%$7

,746

,000

,000

$6,499

,000

,000

$8,992

,000

,000

International Equ

ity‐$52

7,81

4,79

1‐2.96%

$3,383

,000

,000

$2,493

,000

,000

$4,273

,000

,000

Real Estate

‐$41

8,83

0,264

‐2.35%

$1,603

,000

,000

$890

,000

,000

$2,048

,000

,000

Private Equity

$452

,092

,065

2.54

%$1

,157

,000

,000

$801

,000

,000

$1,514

,000

,000

$95,48

1,28

7

Compo

site*

MTD

QTD

YTD

FYTD

Oklah

oma Teache

rs Total Fun

d0.22

%‐0.21%

‐0.21%

5.46

%

Domestic

Equ

ity0.39

%‐0.79%

‐0.79%

6.09

%International Equ

ity‐1.74%

‐5.08%

‐5.08%

1.84

%Fixed Income

1.40

%4.02

%4.02

%7.24

%* Net of Fee

Returns

as of Feb

ruary 24

, 202

0Asset A

llocatio

n vs Policy Targets & Recen

t Perform

ance

Composites & Accounts Market Value MTD QTD YTD FYTD

Oklahoma Teachers' Total Fund 17,805,988,031 0.22 ‐0.21 ‐0.21 5.46

Cash 275,492,433 0.28 0.42 0.42 1.46

Domestic Equity 7,810,395,746 0.39 ‐0.79 ‐0.79 6.09

Active Mid Cap 924,269,065 ‐0.57 ‐1.53 ‐1.53 4.38ARONSON, JOHNSON & ORTIZ 71,834 ‐‐ ‐‐ ‐‐ ‐‐FRONTIER MID CAP 15,280 ‐‐ ‐‐ ‐‐ ‐‐WELLINGTON MID CAP 567,514,132 0.81 0.69 0.69 10.64HOTCHKIS & WILEY MID CAP 356,667,819 ‐2.70 ‐9.36 ‐9.36 ‐8.20

Small Cap 1,692,256,599 0.71 ‐2.32 ‐2.32 3.78SHAPIRO CAP SMALL CAP 742,846,736 0.10 ‐5.23 ‐5.23 0.31GENEVA CAPITAL 232,232,367 2.32 3.45 3.45 8.35WASATCH ADV SMALL CAP 239,791,846 1.49 2.18 2.18 10.85FRONTIER CAP SMALL CAP 211,230,016 ‐0.45 ‐5.86 ‐5.86 ‐0.22NEUMEIER POMA SMALL CAP 266,155,634 1.29 0.42 0.42 7.45

Cap Weighted Index 2,677,316,452 0.47 0.60 0.60 11.22RUSSELL 1000 1,689,720,714 0.38 0.51 0.51 11.13RUSSELL MIDCAP 987,595,738 0.55 ‐‐ ‐‐ ‐‐

Non‐Cap Weighted Index 2,516,553,629 0.48 0.02 0.02 8.81SCI BETA US HFE MBMS 6F 2,516,553,629 0.48 0.02 0.02 8.81

International Equity 2,854,457,976 ‐1.74 ‐5.08 ‐5.08 1.84

Int'l Large Cap 2,004,650,831 ‐1.70 ‐4.94 ‐4.94 2.41ALLIANZ INTL 1,000,422,780 ‐1.69 ‐5.08 ‐5.08 1.21WELLINGTON INTL 542,166,365 ‐1.07 ‐2.43 ‐2.43 5.67CAUSEWAY CAPITAL 462,061,687 ‐2.45 ‐7.43 ‐7.43 1.34

Int'l Small Cap 849,807,144 ‐1.84 ‐5.42 ‐5.42 0.66EPOCH INTL 388,973 ‐‐ ‐‐ ‐‐ ‐‐WASATCH INTL 321,946,341 ‐2.49 ‐4.28 ‐4.28 3.75WELLINGTON INTL 257,357,932 ‐2.90 ‐7.79 ‐7.79 1.09SSGA EMSC 270,113,898 0.00 ‐4.47 ‐4.47 ‐0.55

Fixed Income 4,071,473,712 1.40 4.02 4.02 7.24

Active Duration 799,800,497 4.11 12.28 12.28 17.41HOISINGTON INVESTMENT 799,800,497 4.11 12.28 12.28 17.41

Core Plus Fixed Income 3,271,673,215 0.75 2.18 2.18 5.14LOOMIS SAYLES CORE PLUS FD 1,084,068,965 0.69 1.85 1.85 4.55LORD ABBETT CORE PLUS FD 1,092,795,707 0.76 2.74 2.74 5.29MACKAY SHIELDS CORE PLUS FD 1,094,808,543 0.82 1.95 1.95 5.56

Investment Portfolio ReturnsNet of Fee as of February 24, 2020

Cash 275,492,432.77 1.5% 0.0% ‐ 275,492,433 CashFixed Income 4,071,473,712 22.9% 22.0% 3,917,317,367 154,156,346 Fixed Income

HOISINGTON INVESTMENT 799,800,497 4.5% 4.1% 734,497,006 65,303,491 DurationLOOMIS SAYLES CORE PLUS 1,084,068,965 6.1% 6.0% 1,060,940,120 23,128,845 Core PlusLORD ABBETT CORE PLUS 1,092,795,707 6.1% 6.0% 1,060,940,120 31,855,586 Core PlusMACKAY SHIELDS CORE PLUS 1,094,808,543 6.1% 6.0% 1,060,940,120 33,868,423 Core Plus

Public Equity 10,665,831,939 59.9% 62.5% 11,128,742,519 (462,910,580) Public EquityDomestic Equity 7,810,509,004 43.9% 43.5% 7,745,604,793 64,904,211 Domestic EquityLarge Cap 4,206,387,602 23.6% 23.3% 4,146,569,463 59,818,139 Large CapSAWGRASS LG CAP 155 0.0% 0.0% ‐ 155 GrowthHOTCHKIS & WILEY LG CAP 113,103 0.0% 0.0% ‐ 113,103 ValueNT RUSSELL 1000 1,689,720,714 9.5% 9.3% 1,655,956,887 33,763,827 PassiveSCI BETA US HFE MBMS 2,516,553,629 14.1% 14.0% 2,492,838,324 23,715,305 Factor

Mid Cap 1,911,864,803 10.7% 10.6% 1,885,208,983 26,655,821 Mid CapARONSON, JOHNSON & ORTIZ 71,834 0.0% 0.0% ‐ 71,834 CoreFRONTIER MID CAP 15,280 0.0% 0.0% ‐ 15,280 GrowthWELLINGTON MID CAP 567,514,132 3.2% 2.6% 471,302,246 96,211,887 GrowthHOTCHKIS & WILEY MID CAP 356,667,819 2.0% 2.6% 471,302,246 (114,634,426) ValueRUSSEL MIDCAP 987,595,738 5.5% 5.3% 942,604,491 44,991,247 Core

Small Cap 1,692,256,599 9.5% 9.6% 1,713,826,348 (21,569,749) Small CapSHAPIRO CAP SMALL CAP 742,846,736 4.2% 4.7% 839,774,911 (96,928,174) CoreGENEVA CAPITAL 232,232,367 1.3% 1.2% 218,512,859 13,719,507 GrowthWASATCH ADV SMALL CAP 239,791,846 1.3% 1.2% 218,512,859 21,278,987 GrowthFRONTIER CAP SMALL CAP 211,230,016 1.2% 1.2% 218,512,859 (7,282,843) ValueNEUMEIER POMA SMALL CAP 266,155,634 1.5% 1.2% 218,512,859 47,642,774 Value

International Equity 2,855,322,935 16.0% 19.0% 3,383,137,726 (527,814,791) International EquityInt'l Large Cap 2,004,650,831 11.3% 11.9% 2,114,461,079 (109,810,247) Int'l Large CapALLIANZ INTL 1,000,422,780 5.6% 6.2% 1,099,519,761 (99,096,981) FactorWELLINGTON INTLGR EQ 542,166,365 3.0% 2.9% 507,470,659 34,695,706 GrowthCAUSEWAY CAPITAL 462,061,687 2.6% 2.9% 507,470,659 (45,408,972) Value

Int'l Small Cap 850,672,104 4.8% 7.1% 1,268,676,647 (418,004,544) Int'l Small CapEPOCH INTL 388,973 0.0% 1.8% 317,169,162 (316,780,188) CoreWASATCH INTL 321,946,341 1.8% 1.8% 317,169,162 4,777,179 CoreWELLINGTON INTL 257,357,932 1.4% 1.8% 317,169,162 (59,811,230) CoreSSGA EMSC 270,113,898 1.5% 1.8% 317,169,162 (47,055,264) Emerging Market

Real Estate 1,183,708,659 6.6% 9.0% 1,602,538,923 (418,830,264) Real EstateCore RE 745,249,832 4.2% 4.5% 801,269,461 (56,019,629) Core RE

AEW CORE PROPERTY TRUST 328,387,635 1.8% 1.5% 267,089,820 61,297,814 CoreL&B CORE INCOME 92,993,049 0.5% 1.5% 267,089,820 (174,096,772) CoreHEITMAN AMERICA REAL ESTATE 323,869,149 1.8% 1.5% 267,089,820 56,779,328 Core

Non Core RE 438,458,827 2.5% 4.5% 801,269,461 (362,810,634) Non Core RE 844,100,000 AMERICAN STRATEGIC VALUE 67,788,069 0.4% Value Add 93,750,000 ANGELO GORDON X 11,350,620 0.1% Value Add ‐ Global 60,000,000 ARTEMIS REAL ESTATE III 7,579,838 0.0% Value Add 50,000,000 DUNE REAL ESTATE III 53,556,119 0.3% Value Add 53,750,000 DUNE REAL ESTATE IV 10,375,467 0.1% Value Add 60,000,000 FCP REALTY 8,485,016 0.0% Value Add 35,000,000 GREENOAK US II 37,831,489 0.2% Value Add 50,000,000 GREENOAK US III 16,048,840 0.1% Value Add ‐ Constr. 60,000,000 HARBERT EUROPEAN REAL ESTATE V 13,852,561 0.1% Value Add ‐ Europe 44,100,000 HARVEY PARKWAY BUILDING 13,120,000 0.1% Value AddINVESCO STRATEGIC OPPS 8,232,112 0.0% Value Add ‐ Global 60,000,000 L&B GOLDEN DRILLER 77,955,053 0.4% Senior Housing 75,000,000 LANDMARK REAL ESTATE VII 15,688,588 0.1% Value Add 35,000,000 Lyrical‐OTRS Realty Partner IV 64,926,898 0.4% Value Add 53,750,000 STARWOOD OPPORTUNITY X 21,290,875 0.1% Value Add 53,750,000 STARWOOD OPPORTUNITY XI 10,377,283 0.1% Value Add 60,000,000

Private Capital 1,609,481,287 9.0% 6.5% 1,157,389,222 452,092,065 Private Capital 2,112,500,000 Private Equity 1,303,172,901 7.3% Private Equity 1,587,500,000 LEGACY LP 13,949,943 0.1% Legacy 97,500,000 FRANKLIN PARK 1,289,222,958 7.2% Fund of Funds 1,490,000,000

Private Debt 306,308,386 1.7% Private Debt 525,000,000 PIMCO BRAVO III 136,944,053 0.8% Debt ‐ Mtge 175,000,000 PIMCO BRAVO II 70,577,423 0.4% Debt ‐ Mtge 150,000,000 PIMCO BRAVO 1,222,833 0.0% Debt ‐ Mtge 100,000,000 PIMCO COF II 97,564,077 0.5% Debt ‐ Credit 100,000,000

Grand Total 17,805,988,031 100.0% 100.0%

Mandate Style

Proposed Portfolio vs Policy Targetsas of February 24, 2020

% of fund

Composites & Accounts Market Value Target % Target ($) Over (Under) Committed Capital

Cash 275,359,261.90 1.5%Fixed Income 4,040,233,488 22.2% 7,419,382 18

HOISINGTON INVESTMENT 776,526,147 4.3% 687,668 9

LOOMIS SAYLES CORE PLUS 1,081,744,510 6.0% 2,565,118 24

LORD ABBETT CORE PLUS 1,088,838,672 6.0% 1,849,655 17

MACKAY SHIELDS CORE PLUS 1,093,124,159 6.0% 2,316,942 21

Public Equity 11,073,275,497 60.9% 29,585,240 27 Domestic Equity 8,134,783,225 44.8% 16,134,097 20 Large Cap 4,368,917,752 24.0% 1,986,675 5 SAWGRASS LG CAP 155 0.0% 1 40

HOTCHKIS & WILEY LG CAP 113,103 0.0% 7 1

NT RUSSELL 1000 1,765,538,115 9.7% 147,243 1

SCI BETA US HFE MBMS 2,603,266,378 14.3% 1,839,425 7

Mid Cap 1,996,699,997 11.0% 2,232,105 11

ARONSON, JOHNSON & ORTIZ 71,821 0.0% 395 55

FRONTIER MID CAP 15,277 0.0% 115 75

WELLINGTON MID CAP 591,268,269 3.3% 1,477,655 25

HOTCHKIS & WILEY MID CAP 377,659,927 2.1% 753,941 20

NT RUSSELL MIDCAP 1,027,684,703 5.7% 102,768 1

Small Cap 1,769,165,477 9.7% 11,915,318 67 SHAPIRO CAP SMALL CAP 782,472,493 4.3% 4,689,601 60

GENEVA CAPITAL 242,038,039 1.3% 1,651,943 68

WASATCH ADV SMALL CAP 249,557,101 1.4% 2,135,728 86

FRONTIER CAP SMALL CAP 219,451,395 1.2% 1,735,269 79

NEUMEIER POMA SMALL CAP 275,646,450 1.5% 1,702,777 62

International Equity 2,938,492,272 16.2% 13,451,143 46 Int'l Large Cap 2,070,222,522 11.4% 7,481,601 36 ALLIANZ INTL 1,029,561,074 5.7% 2,758,356 27

WELLINGTON INTLGR EQ 559,883,664 3.1% 3,121,878 56

CAUSEWAY CAPITAL 480,765,457 2.6% 1,601,368 33

Int'l Small Cap 868,269,750 4.8% 5,969,542 69 EPOCH INTL 387,122 0.0% 12 ‐

WASATCH INTL 332,436,545 1.8% 2,794,884 84

WELLINGTON INTL 264,471,350 1.5% 1,318,905 50

SSGA EMSC 270,113,898 1.5% 1,855,740 69

Real Estate 1,183,641,033 6.5% 10,151,437 86 Core RE 745,249,832 4.1% 6,808,292 91 AEW CORE PROPERTY TRUST 328,387,635 1.8% 3,612,264 110

L&B CORE INCOME 92,993,049 0.5% 743,944 80

HEITMAN AMERICA REAL ESTATE 323,869,149 1.8% 2,452,084 76

Non Core RE 438,391,201 2.4% 3,343,145 76 AMERICAN STRATEGIC VALUE 67,788,069 0.4% 757,881 112

Lyrical‐OTRS Realty Partner IV 64,926,898 0.0% ‐ ‐

DUNE REAL ESTATE III 53,556,119 0.2% 662,051 124

L&B GOLDEN DRILLER 77,955,053 0.1% 280,855 36

GREENOAK US II 37,831,489 0.1% ‐ ‐

LANDMARK REAL ESTATE VII 15,688,588 0.4% 194,888 124

STARWOOD OPPORTUNITY X 21,290,875 0.1% 156,886 74

GREENOAK US III 16,048,840 0.4% 973,903 607

STARWOOD OPPORTUNITY XI 10,377,283 0.1% 212,909 205

HARVEY PARKWAY BUILDING 13,120,000 0.1% 103,773 79

ARTEMIS REAL ESTATE III 7,579,838

HARBERT EUROPEAN REAL ESTATE V 13,784,934

Private Equity 1,605,352,045 8.8% 2,500,000 16 LEGACY LP 13,949,943 0.1% ‐ ‐

FRANKLIN PARK 1,289,222,958 7.1% 2,500,000 19

Private Debt 302,179,144 1.7% 4,109,636 136 PIMCO BRAVO III 136,944,053 0.8% 1,862,439 136

PIMCO BRAVO II 70,577,423 0.4% 959,853 136

PIMCO BRAVO 1,222,833 0.0% 16,631 136

PIMCO COF II 93,434,835 0.5% 1,270,714 136

Grand Total 18,177,861,325 100% 49,656,060 27

Using Market Values as of February 20, 2020Allocation and Investment Manager Fee Estimates

Composites & Accounts Market Value % of fund Annual Est Fee Bps

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Investment Manager Total Market Value # of FirmsNORTHERN TRUST 5,671,848,459 WELLINGTON 1,415,623,283 FRANKLIN PARK 1,303,172,901 MACKAY SHIELDS 1,093,124,159 LORD ABBETT 1,088,838,672 LOOMIS SAYLES 1,081,744,510 ALLIANZ 1,029,561,074 SHAPIRO CAP 782,472,493 HOISINGTON INVESTMENT 776,526,147 WASATCH 581,993,645 CAUSEWAY CAPITAL 480,765,457 HOTCHKIS & WILEY 377,773,030 AEW REAL ESTATE 328,387,635 HEITMAN REAL ESTATE 323,869,149 PIMCO 302,179,144 NEUMEIER POMA 275,646,450 SSGA 270,113,898 GENEVA CAPITAL 242,038,039 FRONTIER 219,466,672 L&B REAL ESTATE 170,948,102 AMERICAN REALTY ADV 67,788,069 ANTHEUS CAPITAL 64,926,898 DUNE REAL ESTATE 63,931,586 GREENOAK REAL ESTATE 53,880,329 STARWOOD CAPITAL 31,668,158 LANDMARK REALTY ADV 15,688,588 HARBERT EUROPEAN REAL ESTATE V 13,784,934 TRS 13,120,000 ANGELO GORDON 11,350,620 FCP Realty 8,485,016 INVESCO 8,232,112 ARTEMIS REAL ESTATE III 7,579,838 ADVISORY RESEARCH 873,731 EPOCH INVESTMENTS 387,122 ARONSON, JOHNSON & ORTIZ 71,821 SAWGRASS 155 Grand Total 18,177,861,893 35

as of February 20, 2020Allocation by Investment Management Firm

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72

M E M O R A N D U M

TO: TRS Board of Trustees

FROM: Tom Spencer, Executive Director

DATE: February 21, 2020

RE: Request for approval of replacing several heat pumps on the 5th floor location where TRS office will be located

--------------------------------------------------------------------------------------------------------------------- During the first year that TRS owned the Harvey Parkway Building, there was a significant flood in the building over a weekend. The culprit? One of the hoses in a heat pump on the 5th floor burst and caused water damage on five floors. We have also had a handful of these heat pumps on other floors fail and they have been replaced.

I asked Price Edwards to have a firm examine all of the heat pumps on the 5th floor and make a recommendation on those that need to be replaced or that have enough years on them to go ahead and get ahead of things and replace them right before we move in.

Price Edwards has received one bid for the cost of 12 heat pumps and their installation for a cost of $63,588.00. We are awaiting further bids and will go with the low bid. Only qualified bidders will be submitting.

Under Chapter One of the Board Policy which is entitled “Legal Authority”, the Board has delegated authority to me as the Executive Director to authorize expenditures on the Harvey Parkway Building for “repair, maintenance, and previously approved capital needs” not to exceed $50,000. I am asking the Board to approve the expenditure of not to exceed $65,000 for the purpose installing the new heat pumps on the 5th floor.

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M E M O R A N D U M




RE: Request for approval of budget expenditures for furniture, equipment and other expenses related to moving the TRS office

-------------------------------------------------------------------------------------------------------------------- When the Board approved of the TRS Budget Work Program for FY 2020 we had reason to believe that this would be the year TRS would be able to move to the Harvey Parkway Building. However, we were not certain of what might need to be acquired to facilitate the move.

The staff is not purchasing all new furniture for the new office. Most of the senior management will be using the same office desks and other furniture that is currently in their offices. One of the only bright spots from the White Star bankruptcy is that we ended up with several very nice office desks that will be re-purposed by the TRS staff. However, some of the furniture here at TRS is older “modular” furniture (sometimes known as cubicles). Much of it was specifically designed for specific work areas. Much of this furniture has cloth exteriors that are great to muffle sound but it also is a dust and potentially an insect magnet. We want to acquire reasonably priced substitutes for a great many of these modular work stations. We will also have the expense of moving our I.T. equipment including new computer cables at the new office and setting up Wi-Fi connections

The staff recommended, and the Board approved of several items in the FY 2020 Budget that could be used for the move and the acquisition of furniture, equipment and I.T. expenses. The first item was “Office Relocation Expense” of $100,000. We believe that this could be used for any of the above expenditures in addition to paying for a moving company to move furniture and equipment to the new office. In the total I.T. professional services budget of $1,054,000 is a total of $500,000 that we had set aside to employ an I.T. consultant to guide us through the process of acquiring new pension administration software. While we have since tentatively decided not to use an outside consultant in favor of issuing an RFP directly to software firms, we have been a bit stymied in securing permission to begin this acquisition. Even if we began that process today, we would not likely enter into a contract and pay a software firm any of these funds before June 30, 2020. We even had $45,000 budgeted for a contract lobbyist but we did not renew that contract.

The above budgeted items are possible sources to fund the acquisition of furniture, equipment and I.T. services related to the move. Here are some estimates of the costs we expect to incur due to the move and the acquisition of furniture and equipment of the new office:

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1. Hiring moving company to move furniture, equipment, files and other property to HarveyParkway, move furniture and equipment to Surplus Property, and move archive-ready files tothe Department of Libraries: $40,000

2. New furniture for Harvey Parkway (desks, modular, chairs, tables & workstations: $70,000

3. OMES cost to provide network cabling, telephone service transfer,servers/connections, and workstation services: $30,000

TOTAL: $140,000

The TRS staff respectfully requests approval to make these expenditures, and execute any necessary state budget documents if necessary.

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Committees

1. Committee assignments and chairs shall be appointed by the Board Chair annually at the

July Board meeting and at such other times as vacancies occur. The Chair’s appointments

shall be set forth on the agenda as a separate item. Alternate members may be appointed

on an as-needed basis by the Chair.

2. All Trustees are encouraged to attend Committee meetings, but only Committee members

may vote.

Charters

The following charters are attached:

1. Audit Committee

2. Investment Committee

3. Governance Committee

Audit Committee Charter

Purpose

The Audit and Risk Management Committee has been established to assist the Teachers’

Retirement System Board in fulfilling its fiduciary oversight responsibilities for the:

1. Internal Audit Process,

2. System of Internal Control,

3. Financial Reporting Process,

4. System of Risk Management,

5. External Audit of the Financial Statements, and

6. Engagements with Other External Firms.

Authority

The Audit Committee shall have the authority to recommend to the Board for action:

1. The appointment of and provision for the compensation of and oversee the work of the

independent certified public accounting firm employed by the Teachers’ Retirement

System to audit the financial statements.

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2. The retention of consultants, experts, independent counsel, and accountants to advise the

Committee on any of its responsibilities or to assist in the conduct of an investigation.

3. Requests to provide oversight of audit and investigation activities of financial, ethical,

and/or fraud matters.

4. All Committee actions must be ratified or adopted by the Board to be effective.

Composition

The Committee shall be composed of a minimum of three (3) members, appointed by the Chair of

the Board.

Meetings

The Committee will meet at least once a year, with authority to convene additional meetings as

determined by the Committee Chair in consultation with the Board Chair.

Responsibilities

The Audit Committee shall have responsibility for the following:

1. Designating at least one member as the “audit committee financial expert,” as defined by

the Securities and Exchange Commission. The member’s knowledge should include an

understanding of generally accepted accounting principles for public pension funds issued

by the Governmental Accounting Standards Board. Per the SEC, The designated person

should have characteristics that are particularly relevant to the functions of the audit

committee, such as: a thorough understanding of the audit committee's oversight role,

expertise in accounting matters as well as understanding of financial statements, and the

ability to ask the right questions to determine whether the agency's financial statements are

complete and accurate. If a financial expert is not available on the Committee, an

experienced professional will be selected to a non-voting position possessing the

aforementioned qualities listed in the Securities Exchange Commission (SEC)’s “Audit

Committee Financial Expert” definition. Candidates for this non-voting position will be

recommended by Oklahoma Teachers’ Retirement System TRS Executive Staff

Management and approved by the Board Chair.

2. Overseeing the reporting and integrity of all financial information reporting.

3. Providing the policy and framework for an effective system of enterprise-wide risk

management, and providing the mechanisms for periodic assessment of the system of risk

management.

4. Overseeing the assessment of internal administrative and accounting controls by both the

external independent financial statement auditor and internal auditors.

5. Ensuring management maintains an effective system of internal controls and provides the

mechanisms for periodic assessment of the system of internal controls.

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6. Overseeing the appointment and work of the Internal Auditor and the work of the Internal

Audit Division.

7. Serving as the primary liaison and providing the appropriate forum for handling all matters

related to audits, examinations, compliance, investigations or inquiries of the Oklahoma

State Auditor and other appropriate State or Federal agencies.

8. Ensuring the independence of the external auditor and approve all auditing, other

attestations services and pre-approve non-audit services performed by an external audit

firm.

9. Reporting to the Board on all activities, findings and recommendations of the Committee.

10. Provide an open avenue of communication between internal audit, the external auditors

and the Committee and Board.

Investment Committee Charter

Purpose

The Investment Committee has been established by the Teachers’ Retirement System Board to

administer all matters relating to the investment of the Fund’s assets and investment management.

The Committee is charged to administer the Fund’s assets for the exclusive purpose of providing

benefits to the participants and their beneficiaries within the system; and to maximize the financial

stability of the Funds in an efficient and cost effective cost-effective manner. The Committee

members will carry out their duties with the care, skill, prudence, and diligence of a prudent person

acting in a similar institutional investment Trustee capacity and strive to follow sound policies and

procedures that enhance good, fair, and open decision making. The Committee’s core objective is

to diversify the investments so as to minimize the risk of loss and to maximize the rate of return,

in accordance with the Board’s overall objective of promoting the best interests for the Teachers’

Retirement System, its Members, retirees, and beneficiaries.

Authority

Legal authority for the Investment Committee is found in Title 70 O.S. §17-106.1 (D) which

provides, in part, that the “committee shall make recommendations to the full Board of Trustees

on all matters related to the choice of custodians and managers of the assets of the System, on the

establishment of investment and fund management guidelines, and in planning future investment

policy. The committee shall have no authority to act on behalf of the Board of Trustees in any

circumstances whatsoever. No recommendation of the committee shall have effect as an action of

the Board of Trustees nor take effect without the approval of the Board of Trustees as provided by

law.”

The Investment Committee shall have the authority to recommend to the Board for action:

1. All matters relating to the investment portfolio including, but not limited to, strategic asset

allocation, any tactical changes to the strategic asset allocation; pursuing new asset

categories, and changes to investment policy.

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2. The engagement of investment advisors, consultants, managers and counsel as necessary;

to assist the Board in carrying out its responsibilities.

3. The Committee will not consider any proposed investment that has not gone through the

System’s due diligence process and been reviewed by the System’s professional staff.


Composition

The Committee shall be composed of a maximum of five (5) members, appointed by the Chair of

the Board.

Meetings

The Committee will meet at least four times a year, with authority to convene additional meetings

as determined by the Committee Chair in consultation with the Board Chair.

Responsibilities

The Investment Committee shall have responsibility for the following:

1. Determining the Fund’s overall investment objectives, risk tolerance and performance

standards in accordance with the Oklahoma Constitution and the Teachers’ Retirement

System statutes and rules Law.

2. Determining the asset allocation of the Fund, including consideration of asset classes and

sub-classes not currently utilized in the Fund.

3. Determining the overall Fund Investment Policy as well as asset class and program

investment policies.

4. Monitoring the performance of the investment portfolio as a whole as well as the

performance of each asset class, including the performance of internal and external

investment managers, and reviewing periodic reports from investment staff as well as

external consultants, advisors, and investment managers

5. Determine Determining appropriate levels of staff delegation with respect to investment

transactions in the various asset classes of the Fund.

6. Determine and ensure Determining and ensuring compliance with the System’s corporate

governance policies in an effort to protect the Teachers’ Retirement System’s assets

through the pursuit of good governance and operational accountability.

7. Determining the relative amount of internal and external investment management.

8. Monitoring the direct and indirect costs of each asset category.

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9. Determining and ensuring compliance with the appropriate reporting standards and time

horizons.

10. Identifying and discussing potential legislation related to investments.

11. Ensuring the that Teachers’ Retirement System’s investments are made in conformance

with applicable investment policies and investment resolutions.

Governance Committee Charter

Purpose

The Governance Committee has been established to assist the Teachers’ Retirement System Board

in fulfilling its fiduciary oversight responsibilities for the administration and adoption of internal

governance principles and policies, and the monitoring thereof, including:

1. A comprehensive internal Ethics Policy

2. The Code of Conduct

3. Trustee Education Policy

4. Travel Expense Policy

5. The Board of Trustees Policy Manual

6. Succession Planning involving the position of Executive Director

Authority

The Governance Committee shall have the authority to recommend to the Board for action:

1. Amendments to, or updates of: the Ethics Policy, the Code of Conduct, the Trustee

Education Policy, the Trustee Travel Expense Policy, and the Board of Trustees Policy

Manual.

2. Requests to provide oversight of investigation activities involving a Board Member

or other person with a contractual relationship to the TRS Board.


Composition

The Committee shall be composed of a minimum of three (3) members, appointed by the Chair of

the Board.

Meetings

The Committee will meet at least four times a year, with authority to convene additional meetings

as determined by the Committee Chair in consultation with the Board Chair.

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Responsibilities

The Governance Committee shall have responsibility for the following:

1. Ensuring and monitoring global compliance with the TRS Ethics Policy, the Code of

Conduct, and Board of Trustees Policy Manual.

2. Provide a yearly review of internal succession planning related to the position of

Executive Director.

3. Provide oversight of investigation activities involving a Board Member or other person

with a contractual relationship to the TRS Board, as delegated by the Board or Board

Chair Chairman.

4. Monitoring whether the Executive Director has sufficient internal organizational

processes and accountabilities.

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What inspires you, inspires us. | eidebailly.com877 W. Main St., Ste. 800 | Boise, ID 83702-5858 | T 208.344.7150 | F 208.344.7435 | EOE

January 27, 2020

To the Board of Trustees Teachers’ Retirement System of Oklahoma Oklahoma City, Oklahoma

We have audited the schedule of employer allocations and totals for the columns titled net pension liability, total deferred outflow of resources, total deferred inflows of resources, and pension expense (specified column totals) included in the accompanying schedule of collective pension amounts (collectively the Schedules) of the Teachers’ Retirement System of Oklahoma (the System) as of June 30, 2019, and have issued our report thereon dated January 27, 2020. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Schedules Audit

As communicated in our letter dated May 2, 2019, our responsibility, as described by professional standards, is to form and express an opinion about whether the Schedules that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the Schedules does not relieve you or management of its respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the Schedules are free of material misstatement. An audit of Schedules includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the System’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the System solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Planned Scope and Timing of the Audit

We conducted our audit consistent with the planned scope and timing we previously communicated to you.

Compliance with All Ethics Requirements Regarding Independence

The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied with all relevant ethical requirements regarding independence.

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Qualitative Aspects of the Entity’s Significant Accounting Practices

Significant Accounting Policies

Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the System is included in the notes to Schedule of Employer Allocations and Collective Pension Amounts. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2019. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates

Accounting estimates are an integral part of the Schedules prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the Schedules and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimate affecting the Schedules is:

Management’s estimate of the total pension liability, deferred outflow of resources, and deferred inflows of resources are based on the actuary calculations. We evaluated the key factors and assumptions used to develop total pension liability, deferred outflow of resources, and deferred inflows of resources estimates and determined that they are reasonable in relation to the Schedules taken as a whole.

Financial Statement Disclosures

Certain Schedule disclosures involve significant judgment and are particularly sensitive because of their significance to the Schedule users.

Significant Difficulties Encountered during the Audit

We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements

For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the Schedules as a whole. There were no uncorrected or corrected misstatements noted.

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Disagreements with Management

For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the System’s Schedules or the auditor’s report. No such disagreements arose during the course of the audit.

Representations Requested from Management

We have requested certain written representations from management that are included in the management representation letter dated January 27, 2020.

Management’s Consultations with Other Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues

In the normal course of our professional association with the System, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the System, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the System’s auditors.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the Schedules.

This report is intended solely for the use of the Board of Trustees and management of the Teachers’ Retirement System of Oklahoma and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Boise, Idaho

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eidebailly.com

Schedule of Employer Allocations and Schedule of Collective Pension Amounts June 30, 2019

Teachers’ Retirement System of Oklahoma

Page 290 of 372

Teachers’ Retirement System of Oklahoma Table of Contents

June 30, 2019

Independent Auditor’s Report ................................................................................................................................... 1

Schedule of Employer Allocations ......................................................................................................................... 3 Schedule of Collective Pension Amounts ............................................................................................................. 19 Notes to Schedule of Employer Allocations and Schedule of Collective Pension Amounts ................................ 20

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Independent Auditor’s Report


Report on Schedule of Employer Allocations and Schedule of Net Pension Amounts by Employer We have audited the accompanying schedule of employer allocations of Teachers’ Retirement System of Oklahoma (the System) as of and for the year ended June 30, 2019 and related notes. We have also audited the totals for the columns titled net pension liability, total deferred outflow of resources, total deferred inflows of resources and plan pension expense (specified column totals) included in the accompanying schedule of collective pension amounts (collectively the Schedules) of the System as of and for the year ended June 30, 2019, and related notes.

Management’s Responsibility for the Schedules Management is responsible for the preparation and fair presentation of the Schedules in accordance with accounting principles generally accepted in the United States of America; this includes design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedules that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express opinions on the schedule of employer allocations and specified column totals included in the schedule of collective pension amounts based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the schedule of employer allocations and specified column totals included in the schedule of collective pension amounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the schedule of employer allocations and specified column totals included in the schedule of collective pension amounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the schedule of employer allocations and specified column totals included in the schedule of collective pension amounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the schedule of employer allocations and specified column totals included in the schedule of collective pension amounts in order to design audit procedures that are appropriate in the

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circumstances, but not for the purpose of expressing an opinion on the effectiveness of System’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the schedule of employer allocations and specified column totals included in the schedule of collective pension amounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions In our opinion, the Schedules referred to above present fairly, in all material respects, the employer allocations and net pension liability, total deferred outflow of resources, total deferred inflows of resources, and plan pension expense for the total of all participating entities for the System as of and for the year ended June 30, 2019, in accordance with accounting principles generally accepted in the United States of America.

Other Matters We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of the System as of and for the year ended June 30, 2019, and our report thereon, dated October 18, 2019, expressed an unmodified opinion on those financial statements.

Restriction on Use Our report is intended solely for the information and use of the System’s management, the System’s Board of Trustee, System employers and their auditors and is not intended to be and should not be used by anyone other than these specified parties.

Boise, Idaho January 27, 2020

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See Notes to Schedule of Employer Allocations and Schedule of Collective Pension Amounts

Teachers’ Retirement System of Oklahoma Schedule of Employer Allocations

As of and for the Year Ended June 30, 2019

Total EmployerEmployer Proportionate

ER Code Employer Name Contributions Allocation14H760 UNIVERSITY OF OKLAHOMA 21,786,129$ * 4.67558550%55H770 OU HEALTH SCIENCES CENTER 17,799,845 * 3.82007736%60H010 OKLAHOMA STATE UNIVERSITY 25,832,420 * 5.54397192%

65,418,395 14.03963477%

01C019 PEAVINE PUBLIC SCHOOLS 74,267 0.01593868%01C022 MARYETTA PUBLIC SCHOOLS 391,867 0.08409971%01C024 ROCKY MOUNTAIN PUBLIC SCHOOLS 132,964 0.02853579%01C028 ZION PUBLIC SCHOOLS 187,215 0.04017881%01C029 DAHLONEGAH PUBLIC SCHOOLS 128,414 0.02755936%01C032 GREASY PUBLIC SCHOOLS 59,317 0.01273010%01I004 WATTS PUBLIC SCHOOLS 126,893 0.02723287%01I011 WESTVILLE PUBLIC SCHOOLS 614,236 0.13182291%01I025 STILWELL PUBLIC SCHOOLS 852,549 0.18296797%01I030 CAVE SPRINGS PUBLIC SCHOOLS 130,048 0.02790995%02I001 BURLINGTON PUBLIC SCHOOLS 146,579 0.03145765%02I046 CHEROKEE PUBLIC SCHOOLS 340,394 0.07305295%02I093 TIMBERLAKE INDEPENDENT SCHOOL 240,161 0.05154157%03C021 HARMONY PUBLIC SCHOOLS 113,579 0.02437553%03C022 LANE PUBLIC SCHOOLS 182,849 0.03924180%03I007 STRINGTOWN PUBLIC SCHOOLS 126,214 0.02708724%03I015 ATOKA PUBLIC SCHOOLS 456,391 0.09794734%03I019 TUSHKA PUBLIC SCHOOLS 226,459 0.04860102%03I026 CANEY PUBLIC SCHOOLS 150,576 0.03231556%04I022 BEAVER PUBLIC SCHOOLS 176,355 0.03784817%04I075 BALKO PUBLIC SCHOOLS 127,063 0.02726946%04I123 FORGAN PUBLIC SCHOOLS 105,197 0.02257656%04I128 TURPIN PUBLIC SCHOOLS 242,537 0.05205151%05I002 MERRITT PUBLIC SCHOOLS 343,325 0.07368207%05I006 ELK CITY PUBLIC SCHOOLS 941,679 0.20209656%05I031 SAYRE PUBLIC SCHOOLS 317,362 0.06810991%05I051 ERICK PUBLIC SCHOOLS 129,675 0.02782992%06I009 OKEENE PUBLIC SCHOOLS 182,171 0.03909628%06I042 WATONGA PUBLIC SCHOOLS 407,215 0.08739364%06I080 GEARY PUBLIC SCHOOLS 214,805 0.04609992%06I105 CANTON PUBLIC SCHOOLS 318,540 0.06836271%07H660 SOUTHEASTERN OKLA STATE UNIV 2,420,944 0.51956598%07I001 SILO PUBLIC SCHOOLS 397,966 0.08540867%07I002 ROCK CREEK PUBLIC SCHOOLS 245,431 0.05267271%07I003 ACHILLE PUBLIC SCHOOLS 178,498 0.03830801%* Excludes contributions for the alternate retirement plan.

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ER Code Employer Name Contributions Allocation07I004 COLBERT PUBLIC SCHOOLS 363,896$ 0.07809687%07I005 CADDO PUBLIC SCHOOLS 275,270 0.05907652%07I040 BENNINGTON PUBLIC SCHOOLS 172,911 0.03710894%07I048 CALERA PUBLIC SCHOOLS 336,819 0.07228565%07I072 DURANT PUBLIC SCHOOLS 1,695,360 0.36384616%07K002 CHOCTAW NATION INTERLOCAL COOP 277,670 0.05959161%08I011 HYDRO‐EAKLY PUBLIC SCHOOLS 230,704 0.04951204%08I012 LOOKEBA‐SICKLES PUBLIC SCHOOLS 113,316 0.02431899%08I020 ANADARKO PUBLIC SCHOOLS 974,394 0.20911765%08I033 CARNEGIE PUBLIC SCHOOLS 274,714 0.05895722%08I056 BOONE‐APACHE SCHOOLS 244,256 0.05242040%08I064 CYRIL PUBLIC SCHOOLS 168,488 0.03615973%08I086 GRACEMONT PUBLIC SCHOOLS 88,169 0.01892231%08I160 CEMENT PUBLIC SCHOOLS 102,855 0.02207395%08I161 HINTON PUBLIC SCHOOLS 286,351 0.06145459%08I167 FORT COBB‐BROXTON SCHOOLS 187,730 0.04028922%08I168 BINGER‐ONEY PUBLIC SCHOOL 200,677 0.04306779%08V002 CADDO‐KIOWA AREA VO‐TECH 507,349 0.10888357%09C029 RIVERSIDE PUBLIC SCHOOLS 87,533 0.01878576%09C031 BANNER PUBLIC SCHOOLS 120,070 0.02576864%09C070 DARLINGTON PUBLIC SCHOOLS 145,648 0.03125794%09C162 MAPLE PUBLIC SCHOOLS 125,904 0.02702067%09H052 REDLANDS COMMUNITY COLLEGE 673,616 0.14456669%09I022 PIEDMONT PUBLIC SCHOOLS 1,440,079 0.30905966%09I027 YUKON PUBLIC SCHOOLS 3,951,378 0.84801691%09I034 EL RENO PUBLIC SCHOOLS 1,433,532 0.30765453%09I057 UNION CITY PUBLIC SCHOOLS 131,534 0.02822890%09I069 MUSTANG PUBLIC SCHOOLS 5,130,978 1.10117430%09I076 CALUMET PUBLIC SCHOOLS 159,831 0.03430189%09V006 CANADIAN VALLEY AREA VO‐TECH 1,598,921 0.34314917%10A606 UNIV CENTER OF SOUTHERN OKLAHOMA 49,628 0.01065088%10C072 ZANEIS PUBLIC SCHOOLS 122,652 0.02632273%10I019 ARDMORE PUBLIC SCHOOLS 1,731,116 0.37152002%10I021 SPRINGER PUBLIC SCHOOLS 156,301 0.03354412%10I027 PLAINVIEW PUBLIC SCHOOLS 724,591 0.15550669%10I032 LONE GROVE PUBLIC SCHOOLS 667,768 0.14331165%10I043 WILSON PUBLIC SCHOOLS 185,230 0.03975272%10I055 HEALDTON PUBLIC SCHOOL 209,148 0.04488577%10I074 FOX PUBLIC SCHOOLS 136,236 0.02923801%10I077 DICKSON PUBLIC SCHOOLS 601,306 0.12904802%

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ER Code Employer Name Contributions Allocation10K001 TRI‐COUNTY INTERLOCAL CO‐OP 97,614$ 0.02094930%10V020 SOUTHERN OKLAHOMA TECH CENTER 591,019 0.12684023%11C010 LOWREY PUBLIC SCHOOLS 88,018 0.01888985%11C014 NORWOOD PUBLIC SCHOOLS 108,670 0.02332200%11C021 WOODALL PUBLIC SCHOOLS 258,049 0.05538060%11C026 SHADY GROVE PUBLIC SCHOOLS 104,950 0.02252367%11C031 PEGGS PUBLIC SCHOOLS 143,356 0.03076600%11C034 GRAND VIEW PUBLIC SCHOOLS 428,229 0.09190357%11C044 BRIGGS PUBLIC SCHOOLS 261,385 0.05609667%11C066 TENKILLER PUBLIC SCHOOLS 228,318 0.04900005%11H485 NORTHEASTERN STATE UNIVERSITY 4,092,650 0.87833566%11I006 KEYS PUBLIC SCHOOLS 452,895 0.09719709%11I016 HULBERT PUBLIC SCHOOLS 319,805 0.06863422%11I035 TAHLEQUAH PUBLIC SCHOOLS 2,005,347 0.43037346%12C021 SWINK PUBLIC SCHOOLS 121,021 0.02597269%12I001 BOSWELL PUBLIC SCHOOLS 187,620 0.04026573%12I002 FORT TOWSON PUBLIC SCHOOLS 183,020 0.03927842%12I004 SOPER PUBLIC SCHOOLS 185,732 0.03986052%12I039 HUGO PUBLIC SCHOOLS 605,785 0.13000926%13I002 BOISE CITY PUBLIC SCHOOLS 155,153 0.03329785%13I010 FELT PUBLIC SCHOOLS 67,456 0.01447691%13I011 KEYES PUBLIC SCHOOLS 41,474 0.00890075%14C016 ROBIN HILL PUBLIC SCHOOLS 140,542 0.03016204%14I002 MOORE PUBLIC SCHOOLS 10,182,550 2.18530718%14I029 NORMAN PUBLIC SCHOOLS 6,757,468 1.45024017%14I040 NOBLE PUBLIC SCHOOLS 1,194,526 0.25636072%14I057 LEXINGTON PUBLIC SCHOOLS 476,386 0.10223861%14I070 LITTLE AXE PUBLIC SCHOOLS 506,268 0.10865177%14V017 MOORE‐NORMAN VO‐TECH SCH 1,733,929 0.37212358%15C004 COTTONWOOD PUBLIC SCHOOLS 114,674 0.02461059%15I001 COALGATE PUBLIC SCHOOLS 496,867 0.10663406%15I002 TUPELO PUBLIC SCHOOLS 155,444 0.03336025%16C048 FLOWER MOUND PUBLIC SCHOOLS 124,003 0.02661255%16C049 BISHOP PUBLIC SCHOOLS 195,675 0.04199433%16H100 CAMERON UNIVERSITY 1,930,752 0.41436446%16I001 CACHE PUBLIC SCHOOLS 981,019 0.21053933%16I002 INDIAHOMA PUBLIC SCHOOLS 100,760 0.02162434%16I003 STERLING PUBLIC SCHOOLS 203,356 0.04364285%16I004 GERONIMO PUBLIC SCHOOLS 143,769 0.03085464%

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ER Code Employer Name Contributions Allocation16I008 LAWTON PUBLIC SCHOOLS 6,807,237$ 1.46092114%16I009 FLETCHER PUBLIC SCHOOLS 197,022 0.04228353%16I016 ELGIN PUBLIC SCHOOLS 864,492 0.18553113%16I132 CHATTANOOGA PUB SCHOOLS 132,493 0.02843474%16V009 GREAT PLAINS TECHNOLOGY CENTER 1,002,382 0.21512411%17I001 WALTERS PUBLIC SCHOOLS 290,348 0.06231244%17I101 TEMPLE PUBLIC SCHOOLS 144,605 0.03103419%17I333 BIG PASTURE PUB SCHOOLS 95,025 0.02039358%18C001 WHITE OAK PUBLIC SCHOOLS 24,588 0.00527693%18I006 KETCHUM PUBLIC SCHOOLS 323,883 0.06950942%18I017 WELCH PUBLIC SCHOOLS 217,441 0.04666555%18I020 BLUEJACKET PUBLIC SCHOOLS 114,471 0.02456690%18I065 VINITA PUBLIC SCHOOLS 762,358 0.16361191%18V011 NORTHEAST AREA VO‐TECH 1,196,956 0.25688227%19C008 LONE STAR PUBLIC SCHOOLS 358,872 0.07701861%19C012 GYPSY PUBLIC SCHOOLS 40,636 0.00872110%19C034 PRETTY WATER PUBLIC SCHOOLS 111,721 0.02397678%19C035 ALLEN‐BOWDEN PUBLIC SCHOOLS 160,519 0.03444949%19I002 BRISTOW PUBLIC SCHOOLS 828,452 0.17779645%19I003 MANNFORD PUBLIC SCHOOLS 719,273 0.15436524%19I005 MOUNDS PUBLIC SCHOOLS 270,816 0.05812072%19I017 OLIVE PUBLIC SCHOOLS 181,903 0.03903868%19I018 KIEFER PUBLIC SCHOOLS 333,724 0.07162148%19I020 OILTON PUBLIC SCHOOLS 130,488 0.02800441%19I021 DEPEW PUBLIC SCHOOLS 163,888 0.03517258%19I031 KELLYVILLE PUBLIC SCHOOLS 362,631 0.07782522%19I033 SAPULPA PUBLIC SCHOOLS 1,790,119 0.38418278%19I039 DRUMRIGHT PUBLIC SCHOOLS 229,466 0.04924632%19V003 CENTRAL OKLAHOMA AREA VO‐TECH 951,547 0.20421424%20H665 SOUTHWESTERN OKLA STATE UNIV 3,008,713 0.64570873%20I005 ARAPAHO‐BUTLER PUBLIC SCHOOLS 232,246 0.04984292%20I007 THOMAS‐FAY‐CUSTER UNIFIED 247,307 0.05307528%20I026 WEATHERFORD PUBLIC SCHOOLS 920,889 0.19763464%20I099 CLINTON PUBLIC SCHOOLS 1,018,010 0.21847814%21C006 CLEORA PUBLIC SCHOOLS 118,958 0.02552998%21C014 LEACH PUBLIC SCHOOLS 64,498 0.01384209%21C030 KENWOOD PUBLIC SCHOOLS 48,986 0.01051308%21C034 MOSELEY PUBLIC SCHOOLS 96,483 0.02070647%21I001 JAY PUBLIC SCHOOLS 820,603 0.17611210%21I002 GROVE PUBLIC SCHOOLS 1,247,734 0.26777997%

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ER Code Employer Name Contributions Allocation21I003 KANSAS PUBLIC SCHOOLS 483,458$ 0.10375642%21I004 COLCORD PUBLIC SCHOOLS 360,643 0.07739865%21I005 OAKS MISSION PUB SCHOOLS 132,706 0.02848040%22I005 VICI PUBLIC SCHOOLS 201,537 0.04325241%22I008 SEILING PUBLIC SCHOOLS 277,303 0.05951272%22I010 TALOGA PUBLIC SCHOOLS 130,220 0.02794691%23I002 FARGO PUBLIC SCHOOLS 158,298 0.03397286%23I003 ARNETT PUBLIC SCHOOLS 140,963 0.03025252%23I042 SHATTUCK PUBLIC SCHOOLS 214,925 0.04612570%24I001 WAUKOMIS PUBLIC SCHOOLS 173,520 0.03723961%24I018 KREMLIN‐HILLSDALE PUB SCHOOLS 144,414 0.03099311%24I042 CHISHOLM PUBLIC SCHOOL 498,126 0.10690428%24I047 GARBER PUBLIC SCHOOLS 197,670 0.04242250%24I056 PIONEER‐PLEASANT VALE SCHOOLS 297,489 0.06384500%24I057 ENID PUBLIC SCHOOLS 3,576,863 0.76764119%24I085 DRUMMOND PUBLIC SCHOOLS 167,542 0.03595662%24I094 COVINGTON‐DOUG PUB SCHS 153,990 0.03304834%24V015 AUTRY TECHNOLOGY CENTER 665,400 0.14280339%25C016 WHITEBEAD PUBLIC SCHOOLS 172,366 0.03699187%25I002 STRATFORD PUBLIC SCHOOLS 337,922 0.07252251%25I005 PAOLI PUBLIC SCHOOLS 141,331 0.03033142%25I007 MAYSVILLE PUBLIC SCHOOLS 154,754 0.03321213%25I009 LINDSAY PUBLIC SCHOOLS 513,181 0.11013531%25I018 PAULS VALLEY PUBLIC SCHOOLS 615,180 0.13202555%25I038 WYNNEWOOD PUBLIC SCHOOLS 307,824 0.06606309%25I072 ELMORE CITY PUBLIC SCHOOLS 248,538 0.05333949%26C037 FRIEND PUBLIC SCHOOLS 94,076 0.02018996%26C096 MIDDLEBERG PUBLIC SCHOOLS 82,490 0.01770351%26C131 PIONEER PUBLIC SCHOOLS 177,370 0.03806598%26H150 UNIVERSITY OF SCIENCES & ARTS 674,498 0.14475597%26I001 CHICKASHA PUBLIC SCHOOLS 1,038,370 0.22284763%26I002 MINCO PUBLIC SCHOOLS 259,664 0.05572718%26I051 NINNEKAH PUBLIC SCHOOLS 246,324 0.05286439%26I056 ALEX PUBLIC SCHOOLS 213,611 0.04584362%26I068 RUSH SPRINGS PUBLIC SCHOOLS 259,792 0.05575478%26I095 BRIDGE CREEK PUBLIC SCHOOLS 608,336 0.13055675%26I097 TUTTLE PUBLIC SCHOOLS 714,070 0.15324856%26I099 VERDEN PUBLIC SCHOOLS 123,813 0.02657179%26I128 AMBER‐POCASSET PUB SCHS 251,092 0.05388770%27I054 MEDFORD PUBLIC SCHOOLS 297,452 0.06383695%

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ER Code Employer Name Contributions Allocation27I090 POND CREEK ‐ HUNTER PUBLIC SCHOOLS 266,788$ 0.05725620%27I095 DEER CREEK‐LAMONT PUB SCHOOLS 136,089 0.02920637%28I001 MANGUM PUBLIC SCHOOLS 396,619 0.08511961%28I003 GRANITE PUBLIC SCHOOLS 147,043 0.03155723%29I066 HOLLIS PUBLIC SCHOOLS 269,684 0.05787767%30I001 LAVERNE PUBLIC SCHOOLS 228,847 0.04911343%30I004 BUFFALO PUBLIC SCHOOLS 151,444 0.03250190%31C010 WHITEFIELD PUBLIC SCHOOLS 75,588 0.01622208%31I013 KINTA PUBLIC SCHOOLS 129,826 0.02786235%31I020 STIGLER PUBLIC SCHOOLS 669,959 0.14378179%31I037 MCCURTAIN PUBLIC SCHOOLS 140,475 0.03014768%31I043 KEOTA PUBLIC SCHOOLS 223,164 0.04789391%32I001 MOSS PUBLIC SCHOOLS 157,923 0.03389239%32I005 WETUMKA PUBLIC SCHOOLS 267,784 0.05746984%32I035 HOLDENVILLE PUBLIC SCHOOLS 526,899 0.11307929%32I048 CALVIN PUBLIC SCHOOLS 115,046 0.02469039%32I054 STUART PUBLIC SCHOOLS 146,719 0.03148780%32V025 WES WATKINS TECHNOLOGY CENTER 211,797 0.04545445%33H041 WESTERN OKLA STATE COLLEGE 483,157 0.10369183%33I001 NAVAJO PUBLIC SCHOOLS 227,877 0.04890544%33I014 DUKE PUBLIC SCHOOLS 82,080 0.01761547%33I018 ALTUS PUBLIC SCHOOLS 1,531,188 0.32861286%33I040 OLUSTEE‐ELDORADO PUBLIC SCHOOLS 136,069 0.02920221%33I054 BLAIR PUBLIC SCHOOLS 114,231 0.02451540%34C003 TERRAL PUBLIC SCHOOL 41,111 0.00882291%34I001 RYAN PUBLIC SCHOOLS 146,844 0.03151452%34I014 RINGLING PUBLIC SCHOOLS 224,000 0.04807339%34I023 WAURIKA PUBLIC SCHOOLS 221,652 0.04756932%35C007 MANNSVILLE PUBLIC SCHOOLS 69,034 0.01481559%35C010 RAVIA PUBLIC SCHOOLS 78,118 0.01676521%35H470 MURRAY STATE COLLEGE 841,819 0.18066534%35I002 MILL CREEK PUBLIC SCHOOLS 85,731 0.01839906%35I020 TISHOMINGO PUBLIC SCHOOLS 448,865 0.09633232%35I029 MILBURN PUBLIC SCHOOLS 103,569 0.02222720%35I035 COLEMAN PUBLIC SCHOOLS 102,677 0.02203586%35I037 WAPANUCKA PUBLIC SCHOOLS 119,231 0.02558849%36C027 PECKHAM PUBLIC SCHOOLS 92,880 0.01993335%36C050 KILDARE PUBLIC SCHOOLS 64,833 0.01391398%36H490 NORTHERN OKLAHOMA COLLEGE 1,382,715 0.29674853%

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ER Code Employer Name Contributions Allocation36H758 UNIVERSITY CENTER AT PONCA CITY 29,567$ 0.00634553%36I045 BLACKWELL PUBLIC SCHOOLS 559,303 0.12003363%36I071 PONCA CITY PUBLIC SCHOOLS 2,080,860 0.44657955%36I087 TONKAWA PUBLIC SCHOOLS 267,742 0.05746083%36I125 NEWKIRK PUBLIC SCHOOLS 377,315 0.08097678%36V013 PIONEER TECHNOLOGY CENTER 559,975 0.12017779%37I002 DOVER PUBLIC SCHOOLS 110,686 0.02375467%37I003 LOMEGA PUBLIC SCHOOLS 142,176 0.03051285%37I007 KINGFISHER PUBLIC SCHOOLS 673,687 0.14458187%37I016 HENNESSEY PUBLIC SCHOOLS 512,772 0.11004748%37I089 CASHION PUBLIC SCHOOLS 277,785 0.05961622%37I105 OKARCHE PUBLIC SCHOOLS 202,815 0.04352682%37V026 CHISHOLM TRAIL TECHNOLOGY CNTR 195,236 0.04190019%38A620 QUARTZ MOUNTAIN 70,839 0.01520297%38I001 HOBART PUBLIC SCHOOLS 378,378 0.08120476%38I002 LONE WOLF PUBLIC SCHOOLS 75,554 0.01621494%38I003 MOUNTAIN VIEW‐GOTEBO SCHOOLS 159,906 0.03431791%38I004 SNYDER PUBLIC SCHOOLS 224,137 0.04810278%39H240 EASTERN OKLAHOMA STATE COLLEGE 885,662 0.19007450%39I001 WILBURTON PUBLIC SCHOOLS 393,060 0.08435570%39I002 RED OAK PUBLIC SCHOOLS 134,637 0.02889491%39I003 BUFFALO VALLEY PUB SCHS 72,284 0.01551314%39I004 PANOLA PUBLIC SCHOOLS 53,444 0.01146974%39V007 KIAMICHI TECHNOLOGY CENTER 1,600,134 0.34340938%40C004 SHADY POINT PUBLIC SCHOOLS 76,745 0.01647047%40C011 MONROE PUBLIC SCHOOLS 57,132 0.01226130%40C014 HODGEN PUBLIC SCHOOLS 154,824 0.03322730%40C039 FANSHAWE PUBLIC SCHOOLS 47,553 0.01020558%40H053 CARL ALBERT STATE COLLEGE 1,045,787 0.22443936%40I002 SPIRO PUBLIC SCHOOLS 487,567 0.10463812%40I003 HEAVENER PUBLIC SCHOOLS 618,917 0.13282753%40I007 POCOLA PUBLIC SCHOOLS 345,526 0.07415428%40I016 LEFLORE PUBLIC SCHOOLS 131,649 0.02825354%40I017 CAMERON PUBLIC SCHOOLS 134,864 0.02894364%40I020 PANAMA PUBLIC SCHOOLS 350,703 0.07526549%40I026 BOKOSHE PUBLIC SCHOOLS 131,877 0.02830247%40I029 POTEAU PUBLIC SCHOOLS 1,125,611 0.24157066%40I049 WISTER PUBLIC SCHOOLS 216,480 0.04645949%40I052 TALIHINA PUBLIC SCHOOLS 355,327 0.07625773%40I062 WHITESBORO PUBLIC SCHOOLS 127,333 0.02732736%

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ER Code Employer Name Contributions Allocation40I067 HOWE PUBLIC SCHOOLS 257,567$ 0.05527729%40I091 ARKOMA PUBLIC SCHOOLS 182,647 0.03919839%41C005 WHITE ROCK PUBLIC SCHOOLS 81,997 0.01759762%41I001 CHANDLER PUBLIC SCHOOLS 478,753 0.10274660%41I003 DAVENPORT PUBLIC SCHOOLS 173,727 0.03728396%41I004 WELLSTON PUBLIC SCHOOLS 263,745 0.05660309%41I054 STROUD PUBLIC SCHOOLS 461,401 0.09902261%41I095 MEEKER PUBLIC SCHOOLS 396,841 0.08516723%41I103 PRAGUE PUBLIC SCHOOLS 432,663 0.09285500%41I105 CARNEY PUBLIC SCHOOLS 108,796 0.02334902%41I134 AGRA PUBLIC SCHOOLS 156,032 0.03348641%42H420 LANGSTON UNIVERSITY 2,255,021 0.48395662%42I001 GUTHRIE PUBLIC SCHOOLS 1,563,320 0.33550873%42I002 CRESCENT PUBLIC SCHOOLS 270,013 0.05794829%42I003 MULHALL‐ORLANDO PUBLIC SCHOOLS 155,668 0.03340831%42I014 COYLE PUBLIC SCHOOLS 160,025 0.03434351%43C003 GREENVILLE PUBLIC SCHOOLS 61,773 0.01325721%43I004 THACKERVILLE PUB SCHOOLS 154,244 0.03310276%43I005 TURNER PUBLIC SCHOOLS 179,968 0.03862337%43I016 MARIETTA PUBLIC SCHOOLS 551,274 0.11831050%44I001 RINGWOOD PUBLIC SCHOOLS 162,761 0.03493067%44I004 ALINE CLEO PUBLIC SCHOOLS 98,999 0.02124653%44I084 FAIRVIEW PUBLIC SCHOOLS 396,943 0.08518910%44I092 CIMARRON PUBLIC SCHOOL 132,769 0.02849405%45I002 MADILL PUBLIC SCHOOLS 806,517 0.17308908%45I003 KINGSTON PUBLIC SCHOOLS 638,231 0.13697260%46C035 WICKLIFFE PUBLIC SCHOOLS 64,560 0.01385546%46C043 OSAGE PUBLIC SCHOOLS 60,583 0.01300186%46I001 PRYOR PUBLIC SCHOOLS 1,712,710 0.36756966%46I002 ADAIR PUBLIC SCHOOL 498,502 0.10698500%46I016 SALINA PUBLIC SCHOOLS 396,942 0.08518883%46I017 LOCUST GROVE PUB SCHOOLS 803,296 0.17239780%46I032 CHOUTEAU‐MAZIE PUBLIC SCHOOLS 496,387 0.10653115%47I001 NEWCASTLE PUBLIC SCHOOLS 820,590 0.17610917%47I002 DIBBLE PUBLIC SCHOOLS 250,588 0.05377943%47I005 WASHINGTON PUBLIC SCHOOLS 400,585 0.08597084%47I010 WAYNE PUBLIC SCHOOLS 264,423 0.05674868%47I015 PURCELL PUBLIC SCHOOLS 626,967 0.13455521%47I029 BLANCHARD PUBLIC SCHOOLS 862,105 0.18501883%

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ER Code Employer Name Contributions Allocation47V008 MID‐AMERICA AREA VO‐TECH 572,281$ 0.12281888%48C001 FOREST GROVE PUBLIC SCHOOLS 143,911 0.03088506%48C009 LUKFATA PUBLIC SCHOOLS 180,471 0.03873139%48C023 GLOVER PUBLIC SCHOOLS 35,718 0.00766553%48C037 DENISON PUBLIC SCHOOLS 138,804 0.02978922%48C072 HOLLY CREEK PUB SCHOOLS 132,858 0.02851310%48I005 IDABEL PUBLIC SCHOOLS 641,268 0.13762445%48I006 HAWORTH PUBLIC SCHOOLS 282,337 0.06059327%48I011 VALLIANT PUBLIC SCHOOLS 399,453 0.08572789%48I013 EAGLETOWN PUBLIC SCHOOLS 118,798 0.02549551%48I014 SMITHVILLE PUBLIC SCHOOLS 203,287 0.04362811%48I039 WRIGHT CITY PUB SCHOOLS 269,799 0.05790236%48I071 BATTIEST PUBLIC SCHOOLS 169,971 0.03647796%48I074 BROKEN BOW PUBLIC SCHOOLS 815,030 0.17491597%49C003 RYAL PUBLIC SCHOOLS 54,866 0.01177489%49C016 STIDHAM PUBLIC SCHOOLS 63,695 0.01366972%49I001 EUFAULA PUBLIC SCHOOLS 650,465 0.13959818%49I019 CHECOTAH PUBLIC SCHOOLS 689,119 0.14789382%49I027 MIDWAY PUBLIC SCHOOLS 120,498 0.02586049%49I064 HANNA PUBLIC SCHOOLS 70,861 0.01520773%50I001 SULPHUR PUBLIC SCHOOLS 732,136 0.15712584%50I010 DAVIS PUBLIC SCHOOLS 472,758 0.10146006%51C009 WAINWRIGHT PUBLIC SCHOOLS 57,521 0.01234471%51H165 CONNORS STATE COLLEGE 631,048 0.13543097%51I002 HASKELL PUBLIC SCHOOLS 406,142 0.08716326%51I003 FORT GIBSON PUB SCHOOLS 915,754 0.19653260%51I006 WEBBERS FALLS PUBLIC SCHOOLS 151,978 0.03261641%51I008 OKTAHA PUBLIC SCHOOLS 372,693 0.07998482%51I020 MUSKOGEE PUBLIC SCHOOLS 2,936,371 0.63018316%51I029 HILLDALE PUBLIC SCHOOL 799,830 0.17165392%51I046 BRAGGS PUBLIC SCHOOLS 79,190 0.01699514%51I074 WARNER PUBLIC SCHOOLS 400,909 0.08604025%51I088 PORUM PUBLIC SCHOOLS 252,118 0.05410784%51V004 INDIAN CAPITOL AREA VO‐TECH 927,814 0.19912097%52I001 PERRY PUBLIC SCHOOLS 459,815 0.09868232%52I002 BILLINGS PUBLIC SCHOOLS 73,245 0.01571935%52I004 FRONTIER PUBLIC SCHOOL 368,637 0.07911428%52I006 MORRISON PUBLIC SCHOOLS 266,125 0.05711384%53I003 OKLAHOMA UNION SCHOOL 275,603 0.05914802%

Page 302 of 372


Teachers’ Retirement System of OklahomaSchedule of Employer Allocations



ER Code Employer Name Contributions Allocation53I040 NOWATA PUBLIC SCHOOLS 420,805$ 0.09031029%53I051 SOUTH COFFEYVILLE SCHOOL 116,808 0.02506860%54C029 BEARDEN PUBLIC SCHOOLS 64,868 0.01392155%54I002 MASON PUBLIC SCHOOLS 166,782 0.03579350%54I014 PADEN PUBLIC SCHOOLS 123,311 0.02646417%54I026 OKEMAH PUBLIC SCHOOLS 466,730 0.10016634%54I031 WELEETKA PUBLIC SCHOOLS 279,287 0.05993855%54I054 GRAHAM‐DUSTIN PUBLIC SCHOOLS 118,242 0.02537616%55A090 OFFICE OF MGT. AND ENTERPRISE SERVICES 28,772 0.00617485%55A131 DEPARTMENT OF CORRECTIONS 184,632 0.03962432%55A265 DEPARTMENT OF EDUCATION 2,768,146 0.59408003%55A275 OFFICE OF EDUC QUALITY/ACCOUNTABILITY 50,959 0.01093651%55A563 BOARD OF PRIVATE VOC SCHOOLS 12,690 0.00272336%55A605 BOARD OF REGENTS FOR HIGHER ED 1,438,803 0.30878580%55A610 REGIONAL UNIVERSITY SYSTEM OF OK 53,725 0.01153012%55A618 OKLAHOMA STUDENT LOAN AUTH 473,872 0.10169906%55A629 OKLA SCHOOL OF SCIENCE & MATH 349,204 0.07494379%55A715 TEACHERS RETIREMENT SYSTEM 300,693 0.06453258%55A803 STATEWIDE VIRTUAL CHT SCHOOL BOARD 31,212 0.00669841%55A805 DEPT OF REHABILITATION SERVICE 414,012 0.08885239%55A901 INDEPENDENCE CHRTR MIDL SCHOOL 124,617 0.02674442%55A903 WESTERN VILLAGE CHARTER SCHOOL 130,599 0.02802833%55A907 HARDING CHARTR PREP HIGHSCHOOL 184,936 0.03968959%55A909 KIPP REACH COLLEGE PREP SCHOOL 255,837 0.05490583%55C029 OAKDALE PUBLIC SCHOOLS 331,011 0.07103928%55C074 CRUTCHO PUBLIC SCHOOLS 195,836 0.04202899%55C986 THA ACADEMY OF SEMINOLE 33,074 0.00709820%55E010 HARDING FINE ARTS CENTER 141,762 0.03042400%55G007 JOHN REX CHARTER ELEM SCHOOL 226,809 0.04867626%55H056 ROSE STATE COLLEGE 2,182,018 0.46828927%55H120 UNIVERSITY OF CENTRAL OKLAHOMA 8,461,068 1.81585487%55H633 OKLA CITY COMMUNITY COLLEGE 2,944,555 0.63193967%55I001 PUTNAM CITY PUBLIC SCHOOLS 8,860,105 1.90149330%55I003 LUTHER PUBLIC SCHOOLS 322,480 0.06920845%55I004 CHOCTAW/NICOMA PARK SCHOOLS 2,548,057 0.54684607%55I006 DEER CREEK PUBLIC SCHOOLS 2,305,657 0.49482375%55I007 HARRAH PUBLIC SCHOOLS 853,902 0.18325834%55I009 JONES PUBLIC SCHOOLS 372,205 0.07988006%55I012 EDMOND PUBLIC SCHOOLS 11,360,133 2.43803177%

Page 303 of 372





ER Code Employer Name Contributions Allocation55I037 MILLWOOD PUBLIC SCHOOLS 351,427$ 0.07542087%55I041 WESTERN HEIGHTS PUBLIC SCHOOLS 1,826,403 0.39196969%55I052 MID‐DEL PUBLIC SCHOOLS 7,742,511 1.66164320%55I053 CROOKED OAK PUBLIC SCHOOLS 689,608 0.14799888%55I088 BETHANY PUBLIC SCHOOLS 744,346 0.15974633%55I089 OKLAHOMA CITY PUBLIC SCHOOLS 21,298,869 4.57101307%55J001 OKLAHOMA YOUTH ACADEMY CHT SCHOOL 221,580 0.04755389%55J003 LE MONDE INTERNATIONAL SCHOOL 52,995 0.01137343%55V021 FRANCIS TUTTLE TECHNOLOGY CNTR 2,503,398 0.53726165%55V022 METRO TECH 1,699,261 0.36468344%55V023 EASTERN OKLAHOMA CO TECH CENTR 428,821 0.09203046%55Z001 EPIC CHARTER 3,378,871 0.72514938%56C011 TWIN HILLS PUBLIC SCHOOLS 181,982 0.03905573%56I001 OKMULGEE PUBLIC SCHOOLS 791,519 0.16987032%56I002 HENRYETTA PUBLIC SCHOOLS 566,932 0.12167101%56I003 MORRIS PUBLIC SCHOOLS 420,069 0.09015217%56I004 BEGGS PUBLIC SCHOOLS 493,720 0.10595869%56I005 PRESTON PUBLIC SCHOOLS 227,606 0.04884727%56I006 SCHULTER PUBLIC SCHOOLS 88,546 0.01900316%56I007 WILSON PUBLIC SCHOOLS 137,281 0.02946223%56I008 DEWAR PUBLIC SCHOOLS 217,231 0.04662062%56V028 GREEN COUNTRY TECHNOLOGY CTR 203,561 0.04368675%57C003 OSAGE HILLS PUBLIC SCHOOLS 66,861 0.01434926%57C007 BOWRING PUBLIC SCHOOLS 50,016 0.01073417%57C035 AVANT PUBLIC SCHOOLS 56,411 0.01210647%57C052 ANDERSON PUBLIC SCHOOLS 153,893 0.03302753%57C077 MCCORD PUBLIC SCHOOLS 143,564 0.03081067%57I002 PAWHUSKA PUBLIC SCHOOLS 382,854 0.08216545%57I011 SHIDLER PUBLIC SCHOOLS 124,181 0.02665095%57I029 BARNSDALL PUBLIC SCHOOLS 178,365 0.03827948%57I030 WYNONA PUBLIC SCHOOLS 56,886 0.01220841%57I038 HOMINY PUBLIC SCHOOLS 304,777 0.06540914%57I050 PRUE PUBLIC SCHOOLS 107,509 0.02307290%57I090 WOODLAND PUBLIC SCHOOL 226,532 0.04861681%57K001 OSAGE COUNTY INTERLOCAL COOP 205,915 0.04419199%58C010 TURKEY FORD PUBLIC SCHOOLS 61,210 0.01313643%58H480 NORTHEASTERN OKLA A&M COLLEGE 833,655 0.17891316%58I001 WYANDOTTE PUBLIC SCHOOLS 387,842 0.08323588%58I014 QUAPAW PUBLIC SCHOOLS 322,496 0.06921186%58I018 COMMERCE PUBLIC SCHOOLS 473,920 0.10170935%

Page 304 of 372





ER Code Employer Name Contributions Allocation58I023 MIAMI PUBLIC SCHOOLS 1,382,538$ 0.29671061%58I026 AFTON PUBLIC SCHOOLS 278,579 0.05978676%58I031 FAIRLAND PUBLIC SCHOOLS 286,241 0.06143107%59C002 JENNINGS PUBLIC SCHOOLS 95,047 0.02039827%59I001 PAWNEE PUBLIC SCHOOLS 356,840 0.07658256%59I006 CLEVELAND PUBLIC SCHOOLS 801,752 0.17206643%60A800 CAREER TECH 1,574,432 0.33789350%60C104 OAK GROVE PUBLIC SCHOOLS 66,866 0.01435025%60I003 RIPLEY PUBLIC SCHOOLS 219,986 0.04721177%60I016 STILLWATER PUBLIC SCHOOLS 2,693,318 0.57802095%60I056 PERKINS TRYON PUBLIC SCHOOLS 620,946 0.13326307%60I067 CUSHING PUBLIC SCHOOLS 810,874 0.17402400%60I101 GLENCOE PUBLIC SCHOOLS 151,241 0.03245838%60I103 YALE PUBLIC SCHOOLS 200,770 0.04308788%60K001 FIVE STAR INTERLOCAL COOP 291,001 0.06245264%60V016 MERIDIAN TECHNOLOGY CENTER 748,452 0.16062754%61C009 KREBS PUBLIC SCHOOLS 155,801 0.03343691%61C029 FRINK‐CHAMBERS PUBLIC SCHOOLS 201,821 0.04331332%61C056 TANNEHILL PUBLIC SCHOOLS 85,078 0.01825894%61C088 HAYWOOD PUBLIC SCHOOLS 104,900 0.02251299%61E020 CARLTON LANDING ACADEMY 35,506 0.00761997%61I001 HARTSHORNE PUBLIC SCHOOLS 481,943 0.10343114%61I002 CANADIAN PUBLIC SCHOOLS 211,611 0.04541455%61I011 HAILEYVILLE PUBLIC SCHOOLS 156,709 0.03363172%61I014 KIOWA PUBLIC SCHOOLS 248,165 0.05325939%61I017 QUINTON PUBLIC SCHOOLS 254,873 0.05469914%61I025 INDIANOLA PUBLIC SCHOOLS 132,541 0.02844493%61I028 CROWDER PUBLIC SCHOOLS 207,908 0.04461985%61I030 SAVANNA PUBLIC SCHOOLS 194,267 0.04169228%61I063 PITTSBURG PUBLIC SCHOOLS 81,358 0.01746058%61I080 MCALESTER PUBLIC SCHOOLS 1,658,015 0.35583145%62H230 EAST CENTRAL STATE UNIVERSITY 2,219,195 0.47626790%62I001 ALLEN PUBLIC SCHOOLS 259,521 0.05569667%62I009 VANOSS PUBLIC SCHOOLS 268,932 0.05771622%62I016 BYNG PUBLIC SCHOOLS 984,800 0.21135082%62I019 ADA PUBLIC SCHOOLS 1,482,899 0.31824925%62I024 LATTA PUBLIC SCHOOLS 401,341 0.08613294%62I030 STONEWALL PUBLIC SCHOOLS 260,063 0.05581298%62I037 ROFF PUBLIC SCHOOLS 183,171 0.03931086%62V014 PONTOTOC TECHNOLOGY CENTER 296,859 0.06370978%

Page 305 of 372





ER Code Employer Name Contributions Allocation63C027 GROVE PUBLIC SCHOOLS 221,487$ 0.04753395%63C029 PLEASANT GROVE PUBLIC SCHOOLS 133,507 0.02865224%63C032 SOUTH ROCK CREEK PUBLIC SCHOOL 187,900 0.04032578%63I001 MCLOUD PUBLIC SCHOOLS 776,240 0.16659125%63I002 DALE PUBLIC SCHOOLS 330,060 0.07083510%63I003 BETHEL PUBLIC SCHOOLS 592,737 0.12720911%63I004 MACOMB PUBLIC SCHOOLS 170,600 0.03661297%63I005 EARLSBORO PUBLIC SCHOOLS 134,740 0.02891690%63I010 NORTH ROCK CREEK IND SCHOOL DIST 327,193 0.07021986%63I092 TECUMSEH PUBLIC SCHOOLS 920,607 0.19757410%63I093 SHAWNEE PUBLIC SCHOOLS 1,854,690 0.39804056%63I112 ASHER PUBLIC SCHOOL 126,920 0.02723872%63I115 WANETTE PUBLIC SCHOOLS 94,174 0.02021090%63I117 MAUD PUBLIC SCHOOLS 143,862 0.03087465%63V005 GORDON COOPER TECHNOLOGY CTR 690,638 0.14821993%64C002 ALBION PUBLIC SCHOOLS 35,726 0.00766728%64C004 TUSKAHOMA PUBLIC SCHOOLS 51,375 0.01102569%64C015 NASHOBA PUBLIC SCHOOLS 45,807 0.00983078%64I001 RATTAN PUBLIC SCHOOLS 248,964 0.05343096%64I010 CLAYTON PUBLIC SCHOOLS 206,645 0.04434862%64I013 ANTLERS PUBLIC SCHOOLS 441,787 0.09481322%64I022 MOYERS PUBLIC SCHOOLS 113,655 0.02439181%65I003 LEEDEY PUBLIC SCHOOLS 163,577 0.03510576%65I006 REYDON PUBLIC SCHOOLS 118,873 0.02551175%65I007 CHEYENNE PUBLIC SCHOOLS 253,198 0.05433958%65I015 SWEETWATER PUBLIC SCHOOL 155,661 0.03340692%65I066 HAMMON PUBLIC SCHOOLS 204,243 0.04383328%66C009 JUSTUS‐TIAWAH PUBLIC SCHOOLS 228,755 0.04909371%66H461 ROGERS STATE UNIVERSITY 1,343,082 0.28824270%66I001 CLAREMORE PUBLIC SCHOOLS 1,493,229 0.32046635%66I002 CATOOSA PUBLIC SCHOOLS 919,131 0.19725732%66I003 CHELSEA PUBLIC SCHOOLS 405,665 0.08706107%66I004 OOLOGAH TALALA PUBLIC SCHOOLS 825,973 0.17726448%66I005 INOLA PUBLIC SCHOOLS 578,832 0.12422479%66I006 SEQUOYAH PUBLIC SCHOOLS 543,134 0.11656350%66I007 FOYIL PUBLIC SCHOOLS 274,284 0.05886497%66I008 VERDIGRIS PUBLIC SCHOOL 576,257 0.12367216%67C054 JUSTICE PUBLIC SCHOOLS 127,100 0.02727725%67H055 SEMINOLE STATE COLLEGE 860,649 0.18470634%67I001 SEMINOLE PUBLIC SCHOOLS 863,378 0.18529220%67I002 WEWOKA PUBLIC SCHOOLS 482,810 0.10361738%

Page 306 of 372





ER Code Employer Name Contributions Allocation67I003 BOWLEGS PUBLIC SCHOOLS 109,464$ 0.02349245%67I004 KONAWA PUBLIC SCHOOLS 357,188 0.07665709%67I006 NEW LIMA PUBLIC SCHOOLS 143,895 0.03088183%67I007 VARNUM PUBLIC SCHOOLS 117,328 0.02518009%67I010 SASAKWA PUBLIC SCHOOLS 115,510 0.02479004%67I014 STROTHER PUBLIC SCHOOLS 197,840 0.04245901%67I015 BUTNER PUBLIC SCHOOLS 121,474 0.02606999%68C001 LIBERTY PUBLIC SCHOOLS 169,919 0.03646692%68C035 MARBLE CITY PUBLIC SCHOOLS 65,220 0.01399700%68C036 BRUSHY PUBLIC SCHOOLS 133,134 0.02857226%68C050 BELFONTE PUBLIC SCHOOLS 120,962 0.02595993%68C068 MOFFETT PUBLIC SCHOOLS 195,628 0.04198427%68I001 SALLISAW PUBLIC SCHOOLS 871,518 0.18703905%68I002 VIAN PUBLIC SCHOOLS 480,042 0.10302329%68I003 MULDROW PUBLIC SCHOOLS 719,083 0.15432442%68I004 GANS PUBLIC SCHOOLS 203,553 0.04368508%68I005 ROLAND PUBLIC SCHOOLS 502,456 0.10783364%68I006 GORE PUBLIC SCHOOLS 266,193 0.05712846%68I007 CENTRAL PUBLIC SCHOOLS 241,998 0.05193584%69C082 GRANDVIEW PUBLIC SCHOOLS 51,792 0.01111514%69I001 DUNCAN PUBLIC SCHOOLS 1,405,182 0.30157028%69I002 COMANCHE PUBLIC SCHOOLS 405,572 0.08704095%69I003 MARLOW PUBLIC SCHOOLS 628,690 0.13492492%69I015 VELMA ALMA PUBLIC SCHOOLS 222,077 0.04766065%69I021 EMPIRE PUBLIC SCHOOLS 220,351 0.04729021%69I034 CENTRAL HIGH PUBLIC SCHOOLS 173,038 0.03713613%69I042 BRAY‐DOYLE PUBLIC SCHOOLS 211,173 0.04532051%69V019 RED RIVER AREA VOTECH SCHOOL 362,464 0.07778938%70C009 OPTIMA PUBLIC SCHOOLS 41,151 0.00883146%70C080 STRAIGHT PUBLIC SCHOOLS 33,453 0.00717945%70H530 OKLAHOMA PANHANDLE STATE UNIV 629,216 0.13503790%70I001 YARBROUGH PUBLIC SCHOOLS 56,309 0.01208466%70I008 GUYMON PUBLIC SCHOOLS 1,300,019 0.27900099%70I015 HARDESTY PUBLIC SCHOOLS 65,874 0.01413741%70I023 HOOKER PUBLIC SCHOOLS 300,889 0.06457476%70I053 TYRONE PUBLIC SCHOOLS 92,961 0.01995055%70I060 GOODWELL PUBLIC SCHOOLS 116,199 0.02493776%70I061 TEXHOMA PUBLIC SCHOOLS 135,706 0.02912432%71C009 DAVIDSON PUBLIC SCHOOLS 39,193 0.00841132%71I008 TIPTON PUBLIC SCHOOLS 153,211 0.03288113%

Page 307 of 372





ER Code Employer Name Contributions Allocation71I158 FREDERICK PUBLIC SCHOOLS 431,683$ 0.09264482%71I249 GRANDFIELD PUBLIC SCHOOLS 121,046 0.02597812%72A801 STREET SCHOOL 130,781 0.02806730%72A902 DEBORAH BROWN COMMUNITY SCHOOL 22,514 0.00483177%72A904 TULSA SCHOOL OF ARTS AND SCIENCES 156,347 0.03355410%72C015 KEYSTONE PUBLIC SCHOOLS 151,455 0.03250431%72E005 KIPP TULSA COLLEGE PREP 183,252 0.03932819%72H750 TULSA COMMUNITY COLLEGE 5,547,605 1.19058780%72I001 TULSA PUBLIC SCHOOLS 17,009,964 3.65055858%72I002 SAND SPRINGS PUBLIC SCHOOLS 2,155,707 0.46264260%72I003 BROKEN ARROW PUBLIC SCHOOLS 7,831,480 1.68073704%72I004 BIXBY PUBLIC SCHOOLS 2,474,712 0.53110521%72I005 JENKS PUBLIC SCHOOLS 5,718,147 1.22718831%72I006 COLLINSVILLE PUBLIC SCHOOLS 1,115,753 0.23945501%72I007 SKIATOOK PUBLIC SCHOOLS 985,693 0.21154245%72I008 SPERRY PUBLIC SCHOOLS 453,905 0.09741390%72I009 UNION PUBLIC SCHOOLS 7,247,984 1.55551133%72I010 BERRYHILL PUBLIC SCHOOLS 500,491 0.10741193%72I011 OWASSO PUBLIC SCHOOLS 3,813,042 0.81832812%72I013 GLENPOOL PUBLIC SCHOOLS 1,184,387 0.25418469%72I014 LIBERTY PUBLIC SCHOOLS 237,416 0.05095261%72V018 TULSA TECHNOLOGY CENTER 4,175,632 0.89614472%73I001 OKAY PUBLIC SCHOOLS 205,438 0.04408960%73I017 COWETA PUBLIC SCHOOLS 1,273,783 0.27337037%73I019 WAGONER PUBLIC SCHOOLS 1,021,791 0.21928951%73I365 PORTER CONSOLIDATED SCHOOLS 273,779 0.05875657%74I004 COPAN PUBLIC SCHOOLS 117,537 0.02522489%74I007 DEWEY PUBLIC SCHOOLS 500,208 0.10735106%74I018 CANEY VALLEY PUBLIC SCHOOLS 362,720 0.07784442%74I030 BARTLESVILLE PUBLIC SCHOOLS 2,467,956 0.52965541%74V001 TRI COUNTY AREA VOTECH 561,429 0.12048987%75I001 SENTINEL PUBLIC SCHOOLS 187,363 0.04021056%75I010 BURNS FLAT‐DILL CITY SCHOOL 289,831 0.06220146%75I011 CANUTE PUBLIC SCHOOLS 185,274 0.03976230%75I078 CORDELL PUBLIC SCHOOLS 361,660 0.07761692%75V012 WESTERN TECHNOLOGY CENTER 598,262 0.12839472%75V027 SOUTHWEST TECHNOLOGY CENTER 232,472 0.04989146%76H505 NORTHWESTERN OKLA STATE UNIV 1,367,903 0.29356973%76I001 ALVA PUBLIC SCHOOLS 623,565 0.13382510%76I003 WAYNOKA PUBLIC SCHOOLS 171,604 0.03682850%

Page 308 of 372





ER Code Employer Name Contributions Allocation76I006 FREEDOM PUBLIC SCHOOLS 90,821$ 0.01949143%76V010 NORTHWEST TECHNOLOGY CENTER 361,284 0.07753616%77I001 WOODWARD PUBLIC SCHOOLS 1,222,493 0.26236278%77I002 MOORELAND PUBLIC SCHOOLS 253,189 0.05433772%77I003 SHARON MUTUAL PUBLIC SCHOOLS 143,588 0.03081574%77I005 FORT SUPPLY PUBLIC SCHOOLS 89,231 0.01915023%77V024 HIGH PLAINS TECHNOLOGY CENTER 336,208 0.07215458%Total Remaining Employers 400,536,710 85.96036523%

Total Employer Contributions 465,955,105$ 100.00000000%

Page 309 of 372

See Notes to

Sched

ule of Employ

er Allo

catio

ns and

Sched

ule of Collective Pe

nsion Am

ounts

Teache

rs’ R

etire

men

t System of O

klah

oma

Sche

dule of C

ollective Pe

nsion Am

ounts

As of a

nd fo

r the

Yea

r End

ed Ju

ne 30, 201

9

June

30, 201

9 Ne

t Pe

nsion Lia

bility

Chan

ges o

f Assumptions

Diffe

rences

Betw

een

Expe

cted

and

Ac

tual

Expe

rience

Net D

ifferen

ce

Betw

een

Projected an

d Ac

tual

Investmen

t Earnings on

Pension Plan

Investmen

ts

Total D

eferred

Outflow

s of

Resources

Exclu

ding

Employ

er

Specific A

mou

nts*

Chan

ges o

f Assumptions

Diffe

rences

Betw

een

Expe

cted

and

Ac

tual Expe

rience

Total D

eferred

Inflo

ws of

Resources

Exclu

ding

Em

ploy

er

Specific

Amou

nts*

Plan

Pen

sion

Expe

nse

All Employ

ers

6,61

7,99

9,60

9$

347,45

8,79

7$

339,72

7,24

0$

44,883

,104

$

732,06

9,14

1$

223,34

3,69

9$

283,60

0,88

5$

506,94

4,58

4$

892,87

5,55

9$

Deferred

Inflo

ws o

f Resou

rces

Deffe

rred

Outflo

ws o

f Resou

rces

* Em

ployer spe

cific amou

nts that are exclude

d from

this sched

ule are the chan

ges in propo

rtion, differen

ces be

tween em

ployer con

tributions and

propo

rtiona

te sha

re of con

tributions, a

nd employer

contrib

utions sub

sequ

ent to the mea

suremen

t date

Page

310

of 3

72

Teachers’ Retirement System of Oklahoma Notes to Schedule of Employer Allocations and Schedule of Collective Pension Amounts

June 30, 2019

Note 1 ‐ Nature of Entity

The following brief description of the Teachers’ Retirement System of Oklahoma (the System) is provided for general information purposes only. The plan’s benefits are established and amended by State Statute and participants should refer to Title 70 of the Oklahoma Statutes, 2011, Sections 17‐101 through 121, as amended.

The System was established as of July 1, 1943 for the purpose of providing retirement allowances and other specified benefits for qualified persons employed by state‐supported educational institutions. The System is a part of the State of Oklahoma financial reporting entity, which is combined with other similar funds to comprise the fiduciary‐pension trust funds of the State of Oklahoma (the State). The System administers a cost‐sharing multiple‐employer pension plan which is a defined benefit pension plan (the Plan), as well as a tax‐deferred defined contribution plan.

The supervisory authority for the management and operation of the System is a 14‐member board of trustees, which acts as a fiduciary for investment of the funds and the application of plan interpretations. The board of trustees is comprised of six appointees from the Governor’s Office, two appointees by the Senate Pro Tempore, two appointees by the House Speaker and three Ex Officio positions. Out of the six appointees from the Governor’s Office, one must be a Higher Education representative, one is a nonclassified optional personnel, and the remaining four must work in the public or private funds management, banking, law or accounting field. Out of the two Senate Pro Tempore’s as well as the House Speaker’s appointees, one must be an active classroom teacher while the other be a retired member of Teachers’ Retirement System of Oklahoma. The Ex Officio trustees are the State Superintendent, the Office of Management and Enterprise Services Director and the Career‐Tech Director or their designee.

Defined Benefit Pension Plan

Oklahoma teachers and other certified employees of common schools, faculty and administrators in public colleges and universities, and administrative personnel of state educational boards and employees of agencies must join the Plan. Membership is optional for all other regular employees of public educational institutions who work at least 20 hours per week. Additional information regarding Plan provisions can be found in the System’s comprehensive annual financial report, which can be accessed as described in Note 7.

Note 2 ‐ Summary of Significant Accounting Policies

The Schedule of Employer Allocations and the Schedule of Collective Pension Amounts (the Schedules) for the Plan were prepared in accordance with the following significant accounting policies.

Nature of the Schedules

The purpose of these Schedules is to provide employers information for their financial statements. The Schedules provide each employer with the basis used to determine their proportionate share of the net pension liability, deferred outflows and inflows of resources, and pension expense as of and for the year ended June 30, 2019. Deferred outflows and inflows of resources, and pension expense include: each employer’s proportionate

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June 30, 2019

share of plan level amounts such as differences between expected and actual experience, the net difference between projected and actual investment earnings on pension plan investments and changes in assumptions.

The Schedule of Collective Pension Amounts represents collective amounts for the Plan. This Schedule excludes employer‐specific deferral amounts that may need to be recognized to comply with governmental accounting standards. Specifically, this schedule excludes deferral amounts arising from the changes in employer proportion, differences between employer contributions and proportionate share of contributions and employer contributions subsequent to the measurement date.

Measurement Focus and Basis of Accounting

Financial transactions are recorded using the economic resources measurement focus and the accrual basis of accounting. Employer contributions are recognized as revenue when due pursuant to statutory or contractual requirements.

Use of Estimates

The preparation of the Schedules in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts for the net pension liability, deferred outflow of resources and deferred inflow of resources, and changes therein, and disclosures. Actual results could differ from those estimates and differences could be material.

Basis of the Allocation

In determining the proportionate share of the net pension liability and corresponding employer pension amounts for a cost‐sharing plan, the basis should be consistent with the manner in which contributions are made to the Plan, excluding those to separately finance specific liabilities of an individual employer.

The System has determined that each employer’s proportionate share will be determined based on the employer’s contribution to the Plan as a percentage of the total contribution to the Plan by all employers. However, an additional adjustment will be made to the allocation to account for the comprehensive universities’ short‐term obligation to pay a 2.5 percent funding surcharge associated with the Alternate Retirement Plan (ARP). Specifically, the allocation has been determined as follows:

The present value of the remaining initial funding surcharge contributions expected to be made by thecomprehensive universities is determined. The number of remaining payments is based on the mostrecent assessment of the initial funding surcharge as outlined in the “Agreement of UnderstandingEntered into Among OSU, OU and OTRS”.

The present value of the remaining initial funding surcharge contributions is subtracted from thecollective net pension liability.

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The remaining net pension liability is then allocated to all employers, including the comprehensiveuniversities, in proportion to the employer’s contributions paid on participating employees (i.e., payrollcontributions).

Finally, the present value of the remaining initial funding surcharge contributions is added back to thenet pension liability allocated to each of the comprehensive universities in the prior step.

In addition to its proportionate share of the collective net pension liability and collective pension expense, each comprehensive university that participates in the ARP has been allocated the following liability and expense as of and for the year ended June 30, 2019:

ARP Pension ARP PensionER Code Employer Name (Comprehensive Universities) Liability Expense

14H760 University of Oklahoma ‐$ 82,660$ 55H770 OU Health Sciences Center ‐ 251,150 60H010 Oklahoma State University ‐ 284,773

‐$ 618,583$

During fiscal year 2019 the universities made payments to fully fund the ARP Pension Liability.

Contributions are reported using the accrual basis of accounting. The fiscal year 2019 employer contribution total used as the denominator for the allocation calculation in the schedule of employer allocations can be reconciled to the System’s CAFR for the fiscal year ended June 30, 2019, as follows:

Contributions from employers and matching funds per System's CAFR 474,131,518$ Less ARP contributions (8,107,838) Refunds and other adjustments (68,575)

Contributions per schedule of employer allocations 465,955,105$

Note 3 ‐ Net Pension Liability

The net pension liability (NPL) is the portion of the actuarial present value of projected benefit payments related to past periods. The NPL for the employers is based on the allocation percentages from the Schedule of Employer Allocations.

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June 30, 2019

The net pension liability for fiscal year 2019 is calculated as set forth below in the following table:

Net pension liability ‐ Beginning July 1, 2018 6,051,383,202$ Total pension expense 893,494,142 Change in deferred outflow of resources 165,455,649 Change in deferred inflow of resources 325,499,684 Defined benefit plan employer contributions (includes ARP contributions) (446,161,917) State contributions (343,701,556) State matching funds (27,969,595)

Net pension liability ‐ per Schedule of Collective Pension Amounts 6,617,999,609$

The components of the net pension liability at June 30, 2019 were as follows:

Total pension liability 23,269,907,920$ Plan fiduciary net position (16,651,908,311)

Net pension liability per Schedule of Collective Pension Amounts 6,617,999,609$

Plan fiduciary net position as a percentage of total pension liability 71.56%

Sensitivity of the net pension liability to changes in the discount rate – The following presents the net pension liability of the Plan’s employers calculated using the discount rate of 7.50% as well as what the employers’ liability would be if it were calculated using a discount rate that is 1‐percentage point lower or 1‐percentage point higher than the current rate:

1% Decrease Current Discount 1% Decrease(6.50%) Rate (7.50%) (8.50%)

Employer's net pension liability 9,325,484,333$ 6,617,999,609$ 4,353,054,177$

The total pension liability as of June 30, 2019, was determined based on an actuarial valuation prepared as of June 30, 2019 using the following actuarial assumptions:

Actuarial Cost Method—Entry Age Normal Inflation—2.50 percent Future Ad Hoc Cost‐of‐living Increases‐None Salary Increases—Composed of 3.25 percent wage inflation, including 2.50 percent price inflation, plus a

service related component ranging from 0.00 percent to 8.00 percent based on the years of service. Investment Rate of Return – 7.50 percent Retirement Age— Experience‐based table of rates based on age, service, and gender. Adopted by the

Board in May 2015 in conjunction with the five‐year experience study for the period ending June 30,2014.

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Mortality Rates after Retirement— Males: RP‐2000 Combined Healthy mortality table for males withWhite Collar Adjustments. Generational mortality improvements in accordance with Scale BB from thetable’s base year of 2000. Females: GRS Southwest Region Teacher Mortality Table, scaled at105%. Generational mortality improvements in accordance with Scale BB from the table’s base year of2012.

Mortality Rates for Active Members—RP‐2000 Employee Mortality tables, with male rates multiplied by60% and female rates multiplied by 50%.

Note 4 ‐ Average Expected Remaining Service Life

The average expected remaining service life of the Plan is determined by taking the calculated total future service years of the Plan divided by the number of people in the Plan including retirees. The total future service years of the Plan are determined using the mortality, termination, retirement and disability assumptions associated with the Plan. The average expected service life of the Plan equals 5.33 years as of the valuation date.

Note 5 ‐ Types of Deferred Outflows and Inflows of Resources

Deferred outflows of resources are the consumption of net position that is applicable to future reporting periods. Deferred inflows of resources are the acquisition of net position that is applicable to future reporting periods.

Difference Between Expected and Actual Experience

The actuary uses assumptions such as future salary increases and inflation to develop what they expect to be the experience of the Plan. Each year the difference between the expected experience and the actual experience is amortized over the average expected remaining service life of the Plan.

Net Difference Between Projected and Actual Investment Earnings

The actuary uses the Plan’s long‐ term rate of return to project investment earnings net of investment expenses. The difference between the expected and the actual investment earnings is deferred and amortized over five years.

Changes in Assumptions

The impact of changes in assumptions used by the actuary is amortized over the average expected remaining service life of the Plan.

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Amortization

The amortization of deferred outflows and inflows at June 30, 2019 is as follows:

Total

2020 212,444,146$ 2021 (151,628,607) 2022 (15,984,970) 2023 154,402,536 2024 25,891,452

225,124,557$

Note 6 ‐ Pension Expense

Pension expense includes amounts for service cost (the Normal Cost under Entry Age Normal for the year), interest on the total pension liability, changes in the benefit structure, recognition of increases/decreases in liability due to actual versus expected experience, actuarial assumption changes, and investment gains/losses on the fair value of assets. The actual experience and assumption change impacts are recognized over the average expected remaining service life of the Plan membership as of the measurement date.

The collective pension expense for fiscal year 2019 is calculated as set forth below in the following table:

Service cost 444,005,366$ Interest on total pension liability 1,628,247,388 Member contributions (325,766,148) Projected earnings on plan investments (1,200,433,605) Administrative expense 5,194,983 Recognition of beginning deferred outflows (inflows) due to liabilities 77,179,893 Recognition of beginning deferred outflows (inflows) due to assets 265,066,265

893,494,142 Reconciling items:

ARP expense (618,583)

Allocated pension expense per schedule of pension amounts by employer 892,875,559$

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Note 7 ‐ Access to the Teachers’ Retirement System of Oklahoma Comprehensive Annual Financial Report (CAFR) and Actuarial Valuations

The Teachers’ Retirement System of Oklahoma’s June 30, 2019 CAFR and actuarial valuation can be found at the website below.

https://www.ok.gov/TRS/Publications/index.html

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January 27, 2020


We have audited the schedule of employer allocations and totals for the columns titled net other postemployment benefit (OPEB) liability (asset), total deferred outflows of resources, total deferred inflows of resources, and OPEB expense (expense offset) (specified column totals) included in the accompanying schedule of collective OPEB amounts (collectively the Schedules) of the Teachers’ Retirement System of Oklahoma (the System) as of and for the year ended June 30, 2019, and have issued our report thereon dated January 27, 2020. Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Schedules Audit

As communicated in our letter dated May 2, 2019, our responsibility, as described by professional standards, is to form and express opinions about whether the Schedules that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the Schedules does not relieve you or management of its respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the Schedules are free of material misstatement. An audit of Schedules includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing opinions on the effectiveness of the System’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the System solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

Planned Scope and Timing of the Audit

We conducted our audit consistent with the planned scope and timing we previously communicated to you.

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Compliance with All Ethics Requirements Regarding Independence

The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied with all relevant ethical requirements regarding independence.

Qualitative Aspects of the Entity’s Significant Accounting Practices

Significant Accounting Policies

Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the System is included in the notes to Schedule of Employer Allocations and Schedule of Collective OPEB Amounts. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2019. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates

Accounting estimates are an integral part of the Schedules prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the Schedules and because of the possibility that future events affecting them may differ markedly from management’s current judgments. The most sensitive accounting estimate affecting the Schedules is:

Management’s estimate of the total OPEB liability (asset) and deferred inflows of resources are based on the actuary calculations. We evaluated the key factors and assumptions used to develop total OPEB liability (asset), deferred outflow of resources, and deferred inflows of resources estimates and determined that they are reasonable in relation to the Schedules taken as a whole.

Schedules Disclosures

Certain Schedule disclosures involve significant judgment and are particularly sensitive because of their significance to the Schedules’ users.

Significant Difficulties Encountered during the Audit

We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements

For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the Schedules as a whole. There were no uncorrected or corrected misstatements noted.

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Disagreements with Management

For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the System’s Schedules or the auditor’s report. No such disagreements arose during the course of the audit.

Representations Requested from Management

We have requested certain written representations from management that are included in the management representation letter dated January 27, 2020.

Management’s Consultations with Other Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues

In the normal course of our professional association with the System, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating and regulatory conditions affecting the System, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the System’s auditors.

Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the Schedules.

This report is intended solely for the information and use of the Board of Trustees and management of the Teachers’ Retirement System of Oklahoma and is not intended to be and should not be used by anyone other than these specified parties.

Very truly yours,

Boise, Idaho

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eidebailly.com

Schedule of Employer Allocations and Collective Other Postemployment Benefit Amounts June 30, 2019

Teachers’ Retirement System of Oklahoma

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Teachers’ Retirement System of Oklahoma Table of Contents

June 30, 2019

Independent Auditor’s Report ................................................................................................................................... 1

Schedule of Employer Allocations ......................................................................................................................... 3 Schedule of Collective OPEB Amounts ................................................................................................................. 19 Notes to Schedule of Employer Allocations and Schedule of Collective OPEB Amounts .................................... 20

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Independent Auditor’s Report


Report on Schedule of Allocations and Schedule of Net Other Postemployment Benefit (OPEB) Amounts by Employer We have audited the accompanying schedule of employer allocations of the Teachers’ Retirement System of Oklahoma (the System) as of and for the year ended June 30, 2019 and related notes. We have also audited the totals for the columns titled net OPEB liability (asset), total deferred outflows of resources, total deferred inflows of resources and plan OPEB expense (expense offset) (specified column totals) included in the accompanying schedule of collective OPEB amounts (collectively the Schedules) of the System as of and for the year ended June 30, 2019.

Management’s Responsibility for the Schedules Management is responsible for the preparation and fair presentation of the Schedules in accordance with accounting principles generally accepted in the United States of America; this includes design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Schedules that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express opinions on the schedule of employer allocations and specified column totals included in the schedule of collective OPEB amounts based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the schedule of employer allocations and specified column totals included in the schedule of collective OPEB amounts are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the schedule of employer allocations and specified column totals included in the schedule of collective OPEB amounts. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the schedule of employer allocations and specified column totals included in the schedule of collective OPEB amounts, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the System’s preparation and fair presentation of the schedule of employer allocations and specified column totals included in the schedule of collective OPEB amounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of System’s

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internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the schedule of employer allocations and specified column totals included in the schedule of collective OPEB amounts.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions In our opinion, the Schedules referred to above present fairly, in all material respects, the employer allocations and net OPEB liability (asset), total deferred outflows of resources, total deferred inflows of resources, and plan OPEB expense (expense offset) for the total of all participating entities for the System as of and for the year ended June 30, 2019, in accordance with accounting principles generally accepted in the United States of America.

Other Matters We have audited, in accordance with auditing standards generally accepted in the United States of America, the financial statements of the System as of and for the year ended June 30, 2019, and our report thereon, dated October 18, 2019, expressed an unmodified opinion on those financial statements.

Restriction on Use Our report is intended solely for the information and use of the System’s management, the System Board of Trustees, System employers and their auditors and is not intended to be and should not be used by anyone other than these specified parties.

Boise, Idaho January 27, 2020

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See Notes to Schedule of Employer Allocations and Schedule of Collective OPEB Amounts




ER Code Employer Name Contributions Allocation14H760 UNIVERSITY OF OKLAHOMA 41,040$ * 4.67558550%55H770 OU HEALTH SCIENCES CENTER 33,531 * 3.82007736%60H010 OKLAHOMA STATE UNIVERSITY 48,663 * 5.54397192%

123,234 14.03963477%

01C019 PEAVINE PUBLIC SCHOOLS 140 0.01593868%01C022 MARYETTA PUBLIC SCHOOLS 738 0.08409971%01C024 ROCKY MOUNTAIN PUBLIC SCHOOLS 250 0.02853579%01C028 ZION PUBLIC SCHOOLS 353 0.04017881%01C029 DAHLONEGAH PUBLIC SCHOOLS 242 0.02755936%01C032 GREASY PUBLIC SCHOOLS 112 0.01273010%01I004 WATTS PUBLIC SCHOOLS 239 0.02723287%01I011 WESTVILLE PUBLIC SCHOOLS 1,157 0.13182291%01I025 STILWELL PUBLIC SCHOOLS 1,606 0.18296797%01I030 CAVE SPRINGS PUBLIC SCHOOLS 245 0.02790995%02I001 BURLINGTON PUBLIC SCHOOLS 276 0.03145765%02I046 CHEROKEE PUBLIC SCHOOLS 641 0.07305295%02I093 TIMBERLAKE INDEPENDENT SCHOOL 452 0.05154157%03C021 HARMONY PUBLIC SCHOOLS 214 0.02437553%03C022 LANE PUBLIC SCHOOLS 344 0.03924180%03I007 STRINGTOWN PUBLIC SCHOOLS 238 0.02708724%03I015 ATOKA PUBLIC SCHOOLS 860 0.09794734%03I019 TUSHKA PUBLIC SCHOOLS 427 0.04860102%03I026 CANEY PUBLIC SCHOOLS 284 0.03231556%04I022 BEAVER PUBLIC SCHOOLS 332 0.03784817%04I075 BALKO PUBLIC SCHOOLS 239 0.02726946%04I123 FORGAN PUBLIC SCHOOLS 198 0.02257656%04I128 TURPIN PUBLIC SCHOOLS 457 0.05205151%05I002 MERRITT PUBLIC SCHOOLS 647 0.07368207%05I006 ELK CITY PUBLIC SCHOOLS 1,774 0.20209656%05I031 SAYRE PUBLIC SCHOOLS 598 0.06810991%05I051 ERICK PUBLIC SCHOOLS 244 0.02782992%06I009 OKEENE PUBLIC SCHOOLS 343 0.03909628%06I042 WATONGA PUBLIC SCHOOLS 767 0.08739364%06I080 GEARY PUBLIC SCHOOLS 405 0.04609992%06I105 CANTON PUBLIC SCHOOLS 600 0.06836271%07H660 SOUTHEASTERN OKLA STATE UNIV 4,561 0.51956598%07I001 SILO PUBLIC SCHOOLS 750 0.08540867%07I002 ROCK CREEK PUBLIC SCHOOLS 462 0.05267271%07I003 ACHILLE PUBLIC SCHOOLS 336 0.03830801%* Excludes contributions from the alternate retirement plan

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ER Code Employer Name Contributions Allocation07I004 COLBERT PUBLIC SCHOOLS 686$ 0.07809687%07I005 CADDO PUBLIC SCHOOLS 519 0.05907652%07I040 BENNINGTON PUBLIC SCHOOLS 326 0.03710894%07I048 CALERA PUBLIC SCHOOLS 634 0.07228565%07I072 DURANT PUBLIC SCHOOLS 3,194 0.36384616%07K002 CHOCTAW NATION INTERLOCAL COOP 523 0.05959161%08I011 HYDRO-EAKLY PUBLIC SCHOOLS 435 0.04951204%08I012 LOOKEBA-SICKLES PUBLIC SCHOOLS 213 0.02431899%08I020 ANADARKO PUBLIC SCHOOLS 1,836 0.20911765%08I033 CARNEGIE PUBLIC SCHOOLS 518 0.05895722%08I056 BOONE-APACHE SCHOOLS 460 0.05242040%08I064 CYRIL PUBLIC SCHOOLS 317 0.03615973%08I086 GRACEMONT PUBLIC SCHOOLS 166 0.01892231%08I160 CEMENT PUBLIC SCHOOLS 194 0.02207395%08I161 HINTON PUBLIC SCHOOLS 539 0.06145459%08I167 FORT COBB-BROXTON SCHOOLS 354 0.04028922%08I168 BINGER-ONEY PUBLIC SCHOOL 378 0.04306779%08V002 CADDO-KIOWA AREA VO-TECH 956 0.10888357%09C029 RIVERSIDE PUBLIC SCHOOLS 165 0.01878576%09C031 BANNER PUBLIC SCHOOLS 226 0.02576864%09C070 DARLINGTON PUBLIC SCHOOLS 274 0.03125794%09C162 MAPLE PUBLIC SCHOOLS 237 0.02702067%09H052 REDLANDS COMMUNITY COLLEGE 1,269 0.14456669%09I022 PIEDMONT PUBLIC SCHOOLS 2,713 0.30905966%09I027 YUKON PUBLIC SCHOOLS 7,444 0.84801691%09I034 EL RENO PUBLIC SCHOOLS 2,700 0.30765453%09I057 UNION CITY PUBLIC SCHOOLS 248 0.02822890%09I069 MUSTANG PUBLIC SCHOOLS 9,666 1.10117430%09I076 CALUMET PUBLIC SCHOOLS 301 0.03430189%09V006 CANADIAN VALLEY AREA VO-TECH 3,012 0.34314917%10A606 UNIV CENTER OF SOUTHERN OKLAHOMA 93 0.01065088%10C072 ZANEIS PUBLIC SCHOOLS 231 0.02632273%10I019 ARDMORE PUBLIC SCHOOLS 3,261 0.37152002%10I021 SPRINGER PUBLIC SCHOOLS 294 0.03354412%10I027 PLAINVIEW PUBLIC SCHOOLS 1,365 0.15550669%10I032 LONE GROVE PUBLIC SCHOOLS 1,258 0.14331165%10I043 WILSON PUBLIC SCHOOLS 349 0.03975272%10I055 HEALDTON PUBLIC SCHOOL 394 0.04488577%10I074 FOX PUBLIC SCHOOLS 257 0.02923801%10I077 DICKSON PUBLIC SCHOOLS 1,133 0.12904802%

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ER Code Employer Name Contributions Allocation10K001 TRI-COUNTY INTERLOCAL CO-OP 184$ 0.02094930%10V020 SOUTHERN OKLAHOMA TECH CENTER 1,113 0.12684023%11C010 LOWREY PUBLIC SCHOOLS 166 0.01888985%11C014 NORWOOD PUBLIC SCHOOLS 205 0.02332200%11C021 WOODALL PUBLIC SCHOOLS 486 0.05538060%11C026 SHADY GROVE PUBLIC SCHOOLS 198 0.02252367%11C031 PEGGS PUBLIC SCHOOLS 270 0.03076600%11C034 GRAND VIEW PUBLIC SCHOOLS 807 0.09190357%11C044 BRIGGS PUBLIC SCHOOLS 492 0.05609667%11C066 TENKILLER PUBLIC SCHOOLS 430 0.04900005%11H485 NORTHEASTERN STATE UNIVERSITY 7,710 0.87833566%11I006 KEYS PUBLIC SCHOOLS 853 0.09719709%11I016 HULBERT PUBLIC SCHOOLS 602 0.06863422%11I035 TAHLEQUAH PUBLIC SCHOOLS 3,778 0.43037346%12C021 SWINK PUBLIC SCHOOLS 228 0.02597269%12I001 BOSWELL PUBLIC SCHOOLS 353 0.04026573%12I002 FORT TOWSON PUBLIC SCHOOLS 345 0.03927842%12I004 SOPER PUBLIC SCHOOLS 350 0.03986052%12I039 HUGO PUBLIC SCHOOLS 1,141 0.13000926%13I002 BOISE CITY PUBLIC SCHOOLS 292 0.03329785%13I010 FELT PUBLIC SCHOOLS 127 0.01447691%13I011 KEYES PUBLIC SCHOOLS 78 0.00890075%14C016 ROBIN HILL PUBLIC SCHOOLS 265 0.03016204%14I002 MOORE PUBLIC SCHOOLS 19,182 2.18530718%14I029 NORMAN PUBLIC SCHOOLS 12,730 1.45024017%14I040 NOBLE PUBLIC SCHOOLS 2,250 0.25636072%14I057 LEXINGTON PUBLIC SCHOOLS 897 0.10223861%14I070 LITTLE AXE PUBLIC SCHOOLS 954 0.10865177%14V017 MOORE-NORMAN VO-TECH SCH 3,266 0.37212358%15C004 COTTONWOOD PUBLIC SCHOOLS 216 0.02461059%15I001 COALGATE PUBLIC SCHOOLS 936 0.10663406%15I002 TUPELO PUBLIC SCHOOLS 293 0.03336025%16C048 FLOWER MOUND PUBLIC SCHOOLS 234 0.02661255%16C049 BISHOP PUBLIC SCHOOLS 369 0.04199433%16H100 CAMERON UNIVERSITY 3,637 0.41436446%16I001 CACHE PUBLIC SCHOOLS 1,848 0.21053933%16I002 INDIAHOMA PUBLIC SCHOOLS 190 0.02162434%16I003 STERLING PUBLIC SCHOOLS 383 0.04364285%16I004 GERONIMO PUBLIC SCHOOLS 271 0.03085464%

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ER Code Employer Name Contributions Allocation16I008 LAWTON PUBLIC SCHOOLS 12,823$ 1.46092114%16I009 FLETCHER PUBLIC SCHOOLS 371 0.04228353%16I016 ELGIN PUBLIC SCHOOLS 1,629 0.18553113%16I132 CHATTANOOGA PUB SCHOOLS 250 0.02843474%16V009 GREAT PLAINS TECHNOLOGY CENTER 1,888 0.21512411%17I001 WALTERS PUBLIC SCHOOLS 547 0.06231244%17I101 TEMPLE PUBLIC SCHOOLS 272 0.03103419%17I333 BIG PASTURE PUB SCHOOLS 179 0.02039358%18C001 WHITE OAK PUBLIC SCHOOLS 46 0.00527693%18I006 KETCHUM PUBLIC SCHOOLS 610 0.06950942%18I017 WELCH PUBLIC SCHOOLS 410 0.04666555%18I020 BLUEJACKET PUBLIC SCHOOLS 216 0.02456690%18I065 VINITA PUBLIC SCHOOLS 1,436 0.16361191%18V011 NORTHEAST AREA VO-TECH 2,255 0.25688227%19C008 LONE STAR PUBLIC SCHOOLS 676 0.07701861%19C012 GYPSY PUBLIC SCHOOLS 77 0.00872110%19C034 PRETTY WATER PUBLIC SCHOOLS 210 0.02397678%19C035 ALLEN-BOWDEN PUBLIC SCHOOLS 302 0.03444949%19I002 BRISTOW PUBLIC SCHOOLS 1,561 0.17779645%19I003 MANNFORD PUBLIC SCHOOLS 1,355 0.15436524%19I005 MOUNDS PUBLIC SCHOOLS 510 0.05812072%19I017 OLIVE PUBLIC SCHOOLS 343 0.03903868%19I018 KIEFER PUBLIC SCHOOLS 629 0.07162148%19I020 OILTON PUBLIC SCHOOLS 246 0.02800441%19I021 DEPEW PUBLIC SCHOOLS 309 0.03517258%19I031 KELLYVILLE PUBLIC SCHOOLS 683 0.07782522%19I033 SAPULPA PUBLIC SCHOOLS 3,372 0.38418278%19I039 DRUMRIGHT PUBLIC SCHOOLS 432 0.04924632%19V003 CENTRAL OKLAHOMA AREA VO-TECH 1,793 0.20421424%20H665 SOUTHWESTERN OKLA STATE UNIV 5,668 0.64570873%20I005 ARAPAHO-BUTLER PUBLIC SCHOOLS 438 0.04984292%20I007 THOMAS-FAY-CUSTER UNIFIED 466 0.05307528%20I026 WEATHERFORD PUBLIC SCHOOLS 1,735 0.19763464%20I099 CLINTON PUBLIC SCHOOLS 1,918 0.21847814%21C006 CLEORA PUBLIC SCHOOLS 224 0.02552998%21C014 LEACH PUBLIC SCHOOLS 122 0.01384209%21C030 KENWOOD PUBLIC SCHOOLS 92 0.01051308%21C034 MOSELEY PUBLIC SCHOOLS 182 0.02070647%21I001 JAY PUBLIC SCHOOLS 1,546 0.17611210%21I002 GROVE PUBLIC SCHOOLS 2,350 0.26777997%

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ER Code Employer Name Contributions Allocation21I003 KANSAS PUBLIC SCHOOLS 911$ 0.10375642%21I004 COLCORD PUBLIC SCHOOLS 679 0.07739865%21I005 OAKS MISSION PUB SCHOOLS 250 0.02848040%22I005 VICI PUBLIC SCHOOLS 380 0.04325241%22I008 SEILING PUBLIC SCHOOLS 522 0.05951272%22I010 TALOGA PUBLIC SCHOOLS 245 0.02794691%23I002 FARGO PUBLIC SCHOOLS 298 0.03397286%23I003 ARNETT PUBLIC SCHOOLS 266 0.03025252%23I042 SHATTUCK PUBLIC SCHOOLS 405 0.04612570%24I001 WAUKOMIS PUBLIC SCHOOLS 327 0.03723961%24I018 KREMLIN-HILLSDALE PUB SCHOOLS 272 0.03099311%24I042 CHISHOLM PUBLIC SCHOOL 938 0.10690428%24I047 GARBER PUBLIC SCHOOLS 372 0.04242250%24I056 PIONEER-PLEASANT VALE SCHOOLS 560 0.06384500%24I057 ENID PUBLIC SCHOOLS 6,738 0.76764119%24I085 DRUMMOND PUBLIC SCHOOLS 316 0.03595662%24I094 COVINGTON-DOUG PUB SCHS 290 0.03304834%24V015 AUTRY TECHNOLOGY CENTER 1,253 0.14280339%25C016 WHITEBEAD PUBLIC SCHOOLS 325 0.03699187%25I002 STRATFORD PUBLIC SCHOOLS 637 0.07252251%25I005 PAOLI PUBLIC SCHOOLS 266 0.03033142%25I007 MAYSVILLE PUBLIC SCHOOLS 292 0.03321213%25I009 LINDSAY PUBLIC SCHOOLS 967 0.11013531%25I018 PAULS VALLEY PUBLIC SCHOOLS 1,159 0.13202555%25I038 WYNNEWOOD PUBLIC SCHOOLS 580 0.06606309%25I072 ELMORE CITY PUBLIC SCHOOLS 468 0.05333949%26C037 FRIEND PUBLIC SCHOOLS 177 0.02018996%26C096 MIDDLEBERG PUBLIC SCHOOLS 155 0.01770351%26C131 PIONEER PUBLIC SCHOOLS 334 0.03806598%26H150 UNIVERSITY OF SCIENCES & ARTS 1,271 0.14475597%26I001 CHICKASHA PUBLIC SCHOOLS 1,956 0.22284763%26I002 MINCO PUBLIC SCHOOLS 489 0.05572718%26I051 NINNEKAH PUBLIC SCHOOLS 464 0.05286439%26I056 ALEX PUBLIC SCHOOLS 402 0.04584362%26I068 RUSH SPRINGS PUBLIC SCHOOLS 489 0.05575478%26I095 BRIDGE CREEK PUBLIC SCHOOLS 1,146 0.13055675%26I097 TUTTLE PUBLIC SCHOOLS 1,345 0.15324856%26I099 VERDEN PUBLIC SCHOOLS 233 0.02657179%26I128 AMBER-POCASSET PUB SCHS 473 0.05388770%27I054 MEDFORD PUBLIC SCHOOLS 560 0.06383695%

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ER Code Employer Name Contributions Allocation27I090 POND CREEK - HUNTER PUBLIC SCHOOLS 503$ 0.05725620%27I095 DEER CREEK-LAMONT PUB SCHOOLS 256 0.02920637%28I001 MANGUM PUBLIC SCHOOLS 747 0.08511961%28I003 GRANITE PUBLIC SCHOOLS 277 0.03155723%29I066 HOLLIS PUBLIC SCHOOLS 508 0.05787767%30I001 LAVERNE PUBLIC SCHOOLS 431 0.04911343%30I004 BUFFALO PUBLIC SCHOOLS 285 0.03250190%31C010 WHITEFIELD PUBLIC SCHOOLS 142 0.01622208%31I013 KINTA PUBLIC SCHOOLS 245 0.02786235%31I020 STIGLER PUBLIC SCHOOLS 1,262 0.14378179%31I037 MCCURTAIN PUBLIC SCHOOLS 265 0.03014768%31I043 KEOTA PUBLIC SCHOOLS 420 0.04789391%32I001 MOSS PUBLIC SCHOOLS 297 0.03389239%32I005 WETUMKA PUBLIC SCHOOLS 504 0.05746984%32I035 HOLDENVILLE PUBLIC SCHOOLS 993 0.11307929%32I048 CALVIN PUBLIC SCHOOLS 217 0.02469039%32I054 STUART PUBLIC SCHOOLS 276 0.03148780%32V025 WES WATKINS TECHNOLOGY CENTER 399 0.04545445%33H041 WESTERN OKLA STATE COLLEGE 910 0.10369183%33I001 NAVAJO PUBLIC SCHOOLS 429 0.04890544%33I014 DUKE PUBLIC SCHOOLS 155 0.01761547%33I018 ALTUS PUBLIC SCHOOLS 2,884 0.32861286%33I040 OLUSTEE-ELDORADO PUBLIC SCHOOLS 256 0.02920221%33I054 BLAIR PUBLIC SCHOOLS 215 0.02451540%34C003 TERRAL PUBLIC SCHOOL 77 0.00882291%34I001 RYAN PUBLIC SCHOOLS 277 0.03151452%34I014 RINGLING PUBLIC SCHOOLS 422 0.04807339%34I023 WAURIKA PUBLIC SCHOOLS 418 0.04756932%35C007 MANNSVILLE PUBLIC SCHOOLS 130 0.01481559%35C010 RAVIA PUBLIC SCHOOLS 147 0.01676521%35H470 MURRAY STATE COLLEGE 1,586 0.18066534%35I002 MILL CREEK PUBLIC SCHOOLS 161 0.01839906%35I020 TISHOMINGO PUBLIC SCHOOLS 846 0.09633232%35I029 MILBURN PUBLIC SCHOOLS 195 0.02222720%35I035 COLEMAN PUBLIC SCHOOLS 193 0.02203586%35I037 WAPANUCKA PUBLIC SCHOOLS 225 0.02558849%36C027 PECKHAM PUBLIC SCHOOLS 175 0.01993335%36C050 KILDARE PUBLIC SCHOOLS 122 0.01391398%36H490 NORTHERN OKLAHOMA COLLEGE 2,605 0.29674853%

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ER Code Employer Name Contributions Allocation36H758 UNIVERSITY CENTER AT PONCA CITY 56$ 0.00634553%36I045 BLACKWELL PUBLIC SCHOOLS 1,054 0.12003363%36I071 PONCA CITY PUBLIC SCHOOLS 3,920 0.44657955%36I087 TONKAWA PUBLIC SCHOOLS 504 0.05746083%36I125 NEWKIRK PUBLIC SCHOOLS 711 0.08097678%36V013 PIONEER TECHNOLOGY CENTER 1,055 0.12017779%37I002 DOVER PUBLIC SCHOOLS 209 0.02375467%37I003 LOMEGA PUBLIC SCHOOLS 268 0.03051285%37I007 KINGFISHER PUBLIC SCHOOLS 1,269 0.14458187%37I016 HENNESSEY PUBLIC SCHOOLS 966 0.11004748%37I089 CASHION PUBLIC SCHOOLS 523 0.05961622%37I105 OKARCHE PUBLIC SCHOOLS 382 0.04352682%37V026 CHISHOLM TRAIL TECHNOLOGY CNTR 368 0.04190019%38A620 QUARTZ MOUNTAIN 133 0.01520297%38I001 HOBART PUBLIC SCHOOLS 713 0.08120476%38I002 LONE WOLF PUBLIC SCHOOLS 142 0.01621494%38I003 MOUNTAIN VIEW-GOTEBO SCHOOLS 301 0.03431791%38I004 SNYDER PUBLIC SCHOOLS 422 0.04810278%39H240 EASTERN OKLAHOMA STATE COLLEGE 1,668 0.19007450%39I001 WILBURTON PUBLIC SCHOOLS 740 0.08435570%39I002 RED OAK PUBLIC SCHOOLS 254 0.02889491%39I003 BUFFALO VALLEY PUB SCHS 136 0.01551314%39I004 PANOLA PUBLIC SCHOOLS 101 0.01146974%39V007 KIAMICHI TECHNOLOGY CENTER 3,014 0.34340938%40C004 SHADY POINT PUBLIC SCHOOLS 145 0.01647047%40C011 MONROE PUBLIC SCHOOLS 108 0.01226130%40C014 HODGEN PUBLIC SCHOOLS 292 0.03322730%40C039 FANSHAWE PUBLIC SCHOOLS 90 0.01020558%40H053 CARL ALBERT STATE COLLEGE 1,970 0.22443936%40I002 SPIRO PUBLIC SCHOOLS 918 0.10463812%40I003 HEAVENER PUBLIC SCHOOLS 1,166 0.13282753%40I007 POCOLA PUBLIC SCHOOLS 651 0.07415428%40I016 LEFLORE PUBLIC SCHOOLS 248 0.02825354%40I017 CAMERON PUBLIC SCHOOLS 254 0.02894364%40I020 PANAMA PUBLIC SCHOOLS 661 0.07526549%40I026 BOKOSHE PUBLIC SCHOOLS 248 0.02830247%40I029 POTEAU PUBLIC SCHOOLS 2,120 0.24157066%40I049 WISTER PUBLIC SCHOOLS 408 0.04645949%40I052 TALIHINA PUBLIC SCHOOLS 669 0.07625773%40I062 WHITESBORO PUBLIC SCHOOLS 240 0.02732736%

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ER Code Employer Name Contributions Allocation40I067 HOWE PUBLIC SCHOOLS 485$ 0.05527729%40I091 ARKOMA PUBLIC SCHOOLS 344 0.03919839%41C005 WHITE ROCK PUBLIC SCHOOLS 154 0.01759762%41I001 CHANDLER PUBLIC SCHOOLS 902 0.10274660%41I003 DAVENPORT PUBLIC SCHOOLS 327 0.03728396%41I004 WELLSTON PUBLIC SCHOOLS 497 0.05660309%41I054 STROUD PUBLIC SCHOOLS 869 0.09902261%41I095 MEEKER PUBLIC SCHOOLS 748 0.08516723%41I103 PRAGUE PUBLIC SCHOOLS 815 0.09285500%41I105 CARNEY PUBLIC SCHOOLS 205 0.02334902%41I134 AGRA PUBLIC SCHOOLS 294 0.03348641%42H420 LANGSTON UNIVERSITY 4,248 0.48395662%42I001 GUTHRIE PUBLIC SCHOOLS 2,945 0.33550873%42I002 CRESCENT PUBLIC SCHOOLS 509 0.05794829%42I003 MULHALL-ORLANDO PUBLIC SCHOOLS 293 0.03340831%42I014 COYLE PUBLIC SCHOOLS 301 0.03434351%43C003 GREENVILLE PUBLIC SCHOOLS 116 0.01325721%43I004 THACKERVILLE PUB SCHOOLS 291 0.03310276%43I005 TURNER PUBLIC SCHOOLS 339 0.03862337%43I016 MARIETTA PUBLIC SCHOOLS 1,038 0.11831050%44I001 RINGWOOD PUBLIC SCHOOLS 307 0.03493067%44I004 ALINE CLEO PUBLIC SCHOOLS 186 0.02124653%44I084 FAIRVIEW PUBLIC SCHOOLS 748 0.08518910%44I092 CIMARRON PUBLIC SCHOOL 250 0.02849405%45I002 MADILL PUBLIC SCHOOLS 1,519 0.17308908%45I003 KINGSTON PUBLIC SCHOOLS 1,202 0.13697260%46C035 WICKLIFFE PUBLIC SCHOOLS 122 0.01385546%46C043 OSAGE PUBLIC SCHOOLS 114 0.01300186%46I001 PRYOR PUBLIC SCHOOLS 3,226 0.36756966%46I002 ADAIR PUBLIC SCHOOL 939 0.10698500%46I016 SALINA PUBLIC SCHOOLS 748 0.08518883%46I017 LOCUST GROVE PUB SCHOOLS 1,513 0.17239780%46I032 CHOUTEAU-MAZIE PUBLIC SCHOOLS 935 0.10653115%47I001 NEWCASTLE PUBLIC SCHOOLS 1,546 0.17610917%47I002 DIBBLE PUBLIC SCHOOLS 472 0.05377943%47I005 WASHINGTON PUBLIC SCHOOLS 755 0.08597084%47I010 WAYNE PUBLIC SCHOOLS 498 0.05674868%47I015 PURCELL PUBLIC SCHOOLS 1,181 0.13455521%47I029 BLANCHARD PUBLIC SCHOOLS 1,624 0.18501883%

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ER Code Employer Name Contributions Allocation47V008 MID-AMERICA AREA VO-TECH 1,078$ 0.12281888%48C001 FOREST GROVE PUBLIC SCHOOLS 271 0.03088506%48C009 LUKFATA PUBLIC SCHOOLS 340 0.03873139%48C023 GLOVER PUBLIC SCHOOLS 67 0.00766553%48C037 DENISON PUBLIC SCHOOLS 261 0.02978922%48C072 HOLLY CREEK PUB SCHOOLS 250 0.02851310%48I005 IDABEL PUBLIC SCHOOLS 1,208 0.13762445%48I006 HAWORTH PUBLIC SCHOOLS 532 0.06059327%48I011 VALLIANT PUBLIC SCHOOLS 752 0.08572789%48I013 EAGLETOWN PUBLIC SCHOOLS 224 0.02549551%48I014 SMITHVILLE PUBLIC SCHOOLS 383 0.04362811%48I039 WRIGHT CITY PUB SCHOOLS 508 0.05790236%48I071 BATTIEST PUBLIC SCHOOLS 320 0.03647796%48I074 BROKEN BOW PUBLIC SCHOOLS 1,535 0.17491597%49C003 RYAL PUBLIC SCHOOLS 103 0.01177489%49C016 STIDHAM PUBLIC SCHOOLS 120 0.01366972%49I001 EUFAULA PUBLIC SCHOOLS 1,225 0.13959818%49I019 CHECOTAH PUBLIC SCHOOLS 1,298 0.14789382%49I027 MIDWAY PUBLIC SCHOOLS 227 0.02586049%49I064 HANNA PUBLIC SCHOOLS 133 0.01520773%50I001 SULPHUR PUBLIC SCHOOLS 1,379 0.15712584%50I010 DAVIS PUBLIC SCHOOLS 891 0.10146006%51C009 WAINWRIGHT PUBLIC SCHOOLS 108 0.01234471%51H165 CONNORS STATE COLLEGE 1,189 0.13543097%51I002 HASKELL PUBLIC SCHOOLS 765 0.08716326%51I003 FORT GIBSON PUB SCHOOLS 1,725 0.19653260%51I006 WEBBERS FALLS PUBLIC SCHOOLS 286 0.03261641%51I008 OKTAHA PUBLIC SCHOOLS 702 0.07998482%51I020 MUSKOGEE PUBLIC SCHOOLS 5,532 0.63018316%51I029 HILLDALE PUBLIC SCHOOL 1,507 0.17165392%51I046 BRAGGS PUBLIC SCHOOLS 149 0.01699514%51I074 WARNER PUBLIC SCHOOLS 755 0.08604025%51I088 PORUM PUBLIC SCHOOLS 475 0.05410784%51V004 INDIAN CAPITOL AREA VO-TECH 1,748 0.19912097%52I001 PERRY PUBLIC SCHOOLS 866 0.09868232%52I002 BILLINGS PUBLIC SCHOOLS 138 0.01571935%52I004 FRONTIER PUBLIC SCHOOL 694 0.07911428%52I006 MORRISON PUBLIC SCHOOLS 501 0.05711384%53I003 OKLAHOMA UNION SCHOOL 519 0.05914802%

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Teachers’ Retirement System of OklahomaSchedule of Employer Allocations



ER Code Employer Name Contributions Allocation53I040 NOWATA PUBLIC SCHOOLS 793$ 0.09031029%53I051 SOUTH COFFEYVILLE SCHOOL 220 0.02506860%54C029 BEARDEN PUBLIC SCHOOLS 122 0.01392155%54I002 MASON PUBLIC SCHOOLS 314 0.03579350%54I014 PADEN PUBLIC SCHOOLS 232 0.02646417%54I026 OKEMAH PUBLIC SCHOOLS 879 0.10016634%54I031 WELEETKA PUBLIC SCHOOLS 526 0.05993855%54I054 GRAHAM-DUSTIN PUBLIC SCHOOLS 223 0.02537616%55A090 OFFICE OF MGT AND ENTERPRISE SERVICES 54 0.00617485%55A131 DEPARTMENT OF CORRECTIONS 348 0.03962432%55A265 DEPARTMENT OF EDUCATION 5,215 0.59408003%55A275 OFFICE OF EDUC QUALITY/ACCOUNTABILITY 96 0.01093651%55A563 BOARD OF PRIVATE VOC SCHOOLS 24 0.00272336%55A605 BOARD OF REGENTS FOR HIGHER ED 2,710 0.30878580%55A610 REGIONAL UNIVERSITY SYSTEM OF OK 101 0.01153012%55A618 OKLAHOMA STUDENT LOAN AUTH 893 0.10169906%55A629 OKLA SCHOOL OF SCIENCE & MATH 658 0.07494379%55A715 TEACHERS RETIREMENT SYSTEM 566 0.06453258%55A803 STATEWIDE VIRTUAL CHT SCHOOL BOARD 59 0.00669841%55A805 DEPT OF REHABILITATION SERVICE 780 0.08885239%55A901 INDEPENDENCE CHRTR MIDL SCHOOL 235 0.02674442%55A903 WESTERN VILLAGE CHARTER SCHOOL 246 0.02802833%55A907 HARDING CHARTR PREP HIGHSCHOOL 348 0.03968959%55A909 KIPP REACH COLLEGE PREP SCHOOL 482 0.05490583%55C029 OAKDALE PUBLIC SCHOOLS 624 0.07103928%55C074 CRUTCHO PUBLIC SCHOOLS 369 0.04202899%55C986 THA ACADEMY OF SEMINOLE 62 0.00709820%55E010 HARDING FINE ARTS CENTER 267 0.03042400%55G007 JOHN REX CHARTER ELEM SCHOOL 427 0.04867626%55H056 ROSE STATE COLLEGE 4,110 0.46828927%55H120 UNIVERSITY OF CENTRAL OKLAHOMA 15,939 1.81585487%55H633 OKLA CITY COMMUNITY COLLEGE 5,547 0.63193967%55I001 PUTNAM CITY PUBLIC SCHOOLS 16,691 1.90149330%55I003 LUTHER PUBLIC SCHOOLS 607 0.06920845%55I004 CHOCTAW/NICOMA PARK SCHOOLS 4,800 0.54684607%55I006 DEER CREEK PUBLIC SCHOOLS 4,343 0.49482375%55I007 HARRAH PUBLIC SCHOOLS 1,609 0.18325834%55I009 JONES PUBLIC SCHOOLS 701 0.07988006%55I012 EDMOND PUBLIC SCHOOLS 21,400 2.43803177%

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ER Code Employer Name Contributions Allocation55I037 MILLWOOD PUBLIC SCHOOLS 662$ 0.07542087%55I041 WESTERN HEIGHTS PUBLIC SCHOOLS 3,441 0.39196969%55I052 MID-DEL PUBLIC SCHOOLS 14,585 1.66164320%55I053 CROOKED OAK PUBLIC SCHOOLS 1,299 0.14799888%55I088 BETHANY PUBLIC SCHOOLS 1,402 0.15974633%55I089 OKLAHOMA CITY PUBLIC SCHOOLS 40,123 4.57101307%55J001 OKLAHOMA YOUTH ACADEMY CHT SCHOOL 417 0.04755389%55J003 LE MONDE INTERNATIONAL SCHOOL 100 0.01137343%55V021 FRANCIS TUTTLE TECHNOLOGY CNTR 4,716 0.53726165%55V022 METRO TECH 3,201 0.36468344%55V023 EASTERN OKLAHOMA CO TECH CENTR 808 0.09203046%55Z001 EPIC CHARTER 6,365 0.72514938%56C011 TWIN HILLS PUBLIC SCHOOLS 343 0.03905573%56I001 OKMULGEE PUBLIC SCHOOLS 1,491 0.16987032%56I002 HENRYETTA PUBLIC SCHOOLS 1,068 0.12167101%56I003 MORRIS PUBLIC SCHOOLS 791 0.09015217%56I004 BEGGS PUBLIC SCHOOLS 930 0.10595869%56I005 PRESTON PUBLIC SCHOOLS 429 0.04884727%56I006 SCHULTER PUBLIC SCHOOLS 167 0.01900316%56I007 WILSON PUBLIC SCHOOLS 259 0.02946223%56I008 DEWAR PUBLIC SCHOOLS 409 0.04662062%56V028 GREEN COUNTRY TECHNOLOGY CTR 383 0.04368675%57C003 OSAGE HILLS PUBLIC SCHOOLS 126 0.01434926%57C007 BOWRING PUBLIC SCHOOLS 94 0.01073417%57C035 AVANT PUBLIC SCHOOLS 106 0.01210647%57C052 ANDERSON PUBLIC SCHOOLS 290 0.03302753%57C077 MCCORD PUBLIC SCHOOLS 270 0.03081067%57I002 PAWHUSKA PUBLIC SCHOOLS 721 0.08216545%57I011 SHIDLER PUBLIC SCHOOLS 234 0.02665095%57I029 BARNSDALL PUBLIC SCHOOLS 336 0.03827948%57I030 WYNONA PUBLIC SCHOOLS 107 0.01220841%57I038 HOMINY PUBLIC SCHOOLS 574 0.06540914%57I050 PRUE PUBLIC SCHOOLS 203 0.02307290%57I090 WOODLAND PUBLIC SCHOOL 427 0.04861681%57K001 OSAGE COUNTY INTERLOCAL COOP 388 0.04419199%58C010 TURKEY FORD PUBLIC SCHOOLS 115 0.01313643%58H480 NORTHEASTERN OKLA A&M COLLEGE 1,570 0.17891316%58I001 WYANDOTTE PUBLIC SCHOOLS 731 0.08323588%58I014 QUAPAW PUBLIC SCHOOLS 608 0.06921186%58I018 COMMERCE PUBLIC SCHOOLS 893 0.10170935%

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ER Code Employer Name Contributions Allocation58I023 MIAMI PUBLIC SCHOOLS 2,604$ 0.29671061%58I026 AFTON PUBLIC SCHOOLS 525 0.05978676%58I031 FAIRLAND PUBLIC SCHOOLS 539 0.06143107%59C002 JENNINGS PUBLIC SCHOOLS 179 0.02039827%59I001 PAWNEE PUBLIC SCHOOLS 672 0.07658256%59I006 CLEVELAND PUBLIC SCHOOLS 1,510 0.17206643%60A800 CAREER TECH 2,966 0.33789350%60C104 OAK GROVE PUBLIC SCHOOLS 126 0.01435025%60I003 RIPLEY PUBLIC SCHOOLS 414 0.04721177%60I016 STILLWATER PUBLIC SCHOOLS 5,074 0.57802095%60I056 PERKINS TRYON PUBLIC SCHOOLS 1,170 0.13326307%60I067 CUSHING PUBLIC SCHOOLS 1,528 0.17402400%60I101 GLENCOE PUBLIC SCHOOLS 285 0.03245838%60I103 YALE PUBLIC SCHOOLS 378 0.04308788%60K001 FIVE STAR INTERLOCAL COOP 548 0.06245264%60V016 MERIDIAN TECHNOLOGY CENTER 1,410 0.16062754%61C009 KREBS PUBLIC SCHOOLS 293 0.03343691%61C029 FRINK-CHAMBERS PUBLIC SCHOOLS 380 0.04331332%61C056 TANNEHILL PUBLIC SCHOOLS 160 0.01825894%61C088 HAYWOOD PUBLIC SCHOOLS 198 0.02251299%61E020 CARLTON LANDING ACADEMY 67 0.00761997%61I001 HARTSHORNE PUBLIC SCHOOLS 908 0.10343114%61I002 CANADIAN PUBLIC SCHOOLS 399 0.04541455%61I011 HAILEYVILLE PUBLIC SCHOOLS 295 0.03363172%61I014 KIOWA PUBLIC SCHOOLS 467 0.05325939%61I017 QUINTON PUBLIC SCHOOLS 480 0.05469914%61I025 INDIANOLA PUBLIC SCHOOLS 250 0.02844493%61I028 CROWDER PUBLIC SCHOOLS 392 0.04461985%61I030 SAVANNA PUBLIC SCHOOLS 366 0.04169228%61I063 PITTSBURG PUBLIC SCHOOLS 153 0.01746058%61I080 MCALESTER PUBLIC SCHOOLS 3,123 0.35583145%62H230 EAST CENTRAL STATE UNIVERSITY 4,180 0.47626790%62I001 ALLEN PUBLIC SCHOOLS 489 0.05569667%62I009 VANOSS PUBLIC SCHOOLS 507 0.05771622%62I016 BYNG PUBLIC SCHOOLS 1,855 0.21135082%62I019 ADA PUBLIC SCHOOLS 2,793 0.31824925%62I024 LATTA PUBLIC SCHOOLS 756 0.08613294%62I030 STONEWALL PUBLIC SCHOOLS 490 0.05581298%62I037 ROFF PUBLIC SCHOOLS 345 0.03931086%62V014 PONTOTOC TECHNOLOGY CENTER 559 0.06370978%

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ER Code Employer Name Contributions Allocation63C027 GROVE PUBLIC SCHOOLS 417$ 0.04753395%63C029 PLEASANT GROVE PUBLIC SCHOOLS 251 0.02865224%63C032 SOUTH ROCK CREEK PUBLIC SCHOOL 354 0.04032578%63I001 MCLOUD PUBLIC SCHOOLS 1,462 0.16659125%63I002 DALE PUBLIC SCHOOLS 622 0.07083510%63I003 BETHEL PUBLIC SCHOOLS 1,117 0.12720911%63I004 MACOMB PUBLIC SCHOOLS 321 0.03661297%63I005 EARLSBORO PUBLIC SCHOOLS 254 0.02891690%63I010 NORTH ROCK CREEK IND SCHOOL DIST 616 0.07021986%63I092 TECUMSEH PUBLIC SCHOOLS 1,734 0.19757410%63I093 SHAWNEE PUBLIC SCHOOLS 3,494 0.39804056%63I112 ASHER PUBLIC SCHOOL 239 0.02723872%63I115 WANETTE PUBLIC SCHOOLS 177 0.02021090%63I117 MAUD PUBLIC SCHOOLS 271 0.03087465%63V005 GORDON COOPER TECHNOLOGY CTR 1,301 0.14821993%64C002 ALBION PUBLIC SCHOOLS 67 0.00766728%64C004 TUSKAHOMA PUBLIC SCHOOLS 97 0.01102569%64C015 NASHOBA PUBLIC SCHOOLS 86 0.00983078%64I001 RATTAN PUBLIC SCHOOLS 469 0.05343096%64I010 CLAYTON PUBLIC SCHOOLS 389 0.04434862%64I013 ANTLERS PUBLIC SCHOOLS 832 0.09481322%64I022 MOYERS PUBLIC SCHOOLS 214 0.02439181%65I003 LEEDEY PUBLIC SCHOOLS 308 0.03510576%65I006 REYDON PUBLIC SCHOOLS 224 0.02551175%65I007 CHEYENNE PUBLIC SCHOOLS 477 0.05433958%65I015 SWEETWATER PUBLIC SCHOOL 293 0.03340692%65I066 HAMMON PUBLIC SCHOOLS 385 0.04383328%66C009 JUSTUS-TIAWAH PUBLIC SCHOOLS 431 0.04909371%66H461 ROGERS STATE UNIVERSITY 2,530 0.28824270%66I001 CLAREMORE PUBLIC SCHOOLS 2,813 0.32046635%66I002 CATOOSA PUBLIC SCHOOLS 1,731 0.19725732%66I003 CHELSEA PUBLIC SCHOOLS 764 0.08706107%66I004 OOLOGAH TALALA PUBLIC SCHOOLS 1,556 0.17726448%66I005 INOLA PUBLIC SCHOOLS 1,090 0.12422479%66I006 SEQUOYAH PUBLIC SCHOOLS 1,023 0.11656350%66I007 FOYIL PUBLIC SCHOOLS 517 0.05886497%66I008 VERDIGRIS PUBLIC SCHOOL 1,086 0.12367216%67C054 JUSTICE PUBLIC SCHOOLS 239 0.02727725%67H055 SEMINOLE STATE COLLEGE 1,621 0.18470634%67I001 SEMINOLE PUBLIC SCHOOLS 1,626 0.18529220%67I002 WEWOKA PUBLIC SCHOOLS 910 0.10361738%

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ER Code Employer Name Contributions Allocation67I003 BOWLEGS PUBLIC SCHOOLS 206$ 0.02349245%67I004 KONAWA PUBLIC SCHOOLS 673 0.07665709%67I006 NEW LIMA PUBLIC SCHOOLS 271 0.03088183%67I007 VARNUM PUBLIC SCHOOLS 221 0.02518009%67I010 SASAKWA PUBLIC SCHOOLS 218 0.02479004%67I014 STROTHER PUBLIC SCHOOLS 373 0.04245901%67I015 BUTNER PUBLIC SCHOOLS 229 0.02606999%68C001 LIBERTY PUBLIC SCHOOLS 320 0.03646692%68C035 MARBLE CITY PUBLIC SCHOOLS 123 0.01399700%68C036 BRUSHY PUBLIC SCHOOLS 251 0.02857226%68C050 BELFONTE PUBLIC SCHOOLS 228 0.02595993%68C068 MOFFETT PUBLIC SCHOOLS 369 0.04198427%68I001 SALLISAW PUBLIC SCHOOLS 1,642 0.18703905%68I002 VIAN PUBLIC SCHOOLS 904 0.10302329%68I003 MULDROW PUBLIC SCHOOLS 1,355 0.15432442%68I004 GANS PUBLIC SCHOOLS 383 0.04368508%68I005 ROLAND PUBLIC SCHOOLS 947 0.10783364%68I006 GORE PUBLIC SCHOOLS 501 0.05712846%68I007 CENTRAL PUBLIC SCHOOLS 456 0.05193584%69C082 GRANDVIEW PUBLIC SCHOOLS 98 0.01111514%69I001 DUNCAN PUBLIC SCHOOLS 2,647 0.30157028%69I002 COMANCHE PUBLIC SCHOOLS 764 0.08704095%69I003 MARLOW PUBLIC SCHOOLS 1,184 0.13492492%69I015 VELMA ALMA PUBLIC SCHOOLS 418 0.04766065%69I021 EMPIRE PUBLIC SCHOOLS 415 0.04729021%69I034 CENTRAL HIGH PUBLIC SCHOOLS 326 0.03713613%69I042 BRAY-DOYLE PUBLIC SCHOOLS 398 0.04532051%69V019 RED RIVER AREA VOTECH SCHOOL 683 0.07778938%70C009 OPTIMA PUBLIC SCHOOLS 78 0.00883146%70C080 STRAIGHT PUBLIC SCHOOLS 63 0.00717945%70H530 OKLAHOMA PANHANDLE STATE UNIV 1,185 0.13503790%70I001 YARBROUGH PUBLIC SCHOOLS 106 0.01208466%70I008 GUYMON PUBLIC SCHOOLS 2,449 0.27900099%70I015 HARDESTY PUBLIC SCHOOLS 124 0.01413741%70I023 HOOKER PUBLIC SCHOOLS 567 0.06457476%70I053 TYRONE PUBLIC SCHOOLS 175 0.01995055%70I060 GOODWELL PUBLIC SCHOOLS 219 0.02493776%70I061 TEXHOMA PUBLIC SCHOOLS 256 0.02912432%71C009 DAVIDSON PUBLIC SCHOOLS 74 0.00841132%71I008 TIPTON PUBLIC SCHOOLS 289 0.03288113%

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ER Code Employer Name Contributions Allocation71I158 FREDERICK PUBLIC SCHOOLS 813$ 0.09264482%71I249 GRANDFIELD PUBLIC SCHOOLS 228 0.02597812%72A801 STREET SCHOOL 246 0.02806730%72A902 DEBORAH BROWN COMMUNITY SCHOOL 42 0.00483177%72A904 TULSA SCHOOL OF ARTS AND SCIENCES 295 0.03355410%72C015 KEYSTONE PUBLIC SCHOOLS 285 0.03250431%72E005 KIPP TULSA COLLEGE PREP 345 0.03932819%72H750 TULSA COMMUNITY COLLEGE 10,451 1.19058780%72I001 TULSA PUBLIC SCHOOLS 32,043 3.65055858%72I002 SAND SPRINGS PUBLIC SCHOOLS 4,061 0.46264260%72I003 BROKEN ARROW PUBLIC SCHOOLS 14,753 1.68073704%72I004 BIXBY PUBLIC SCHOOLS 4,662 0.53110521%72I005 JENKS PUBLIC SCHOOLS 10,772 1.22718831%72I006 COLLINSVILLE PUBLIC SCHOOLS 2,102 0.23945501%72I007 SKIATOOK PUBLIC SCHOOLS 1,857 0.21154245%72I008 SPERRY PUBLIC SCHOOLS 855 0.09741390%72I009 UNION PUBLIC SCHOOLS 13,654 1.55551133%72I010 BERRYHILL PUBLIC SCHOOLS 943 0.10741193%72I011 OWASSO PUBLIC SCHOOLS 7,183 0.81832812%72I013 GLENPOOL PUBLIC SCHOOLS 2,231 0.25418469%72I014 LIBERTY PUBLIC SCHOOLS 447 0.05095261%72V018 TULSA TECHNOLOGY CENTER 7,866 0.89614472%73I001 OKAY PUBLIC SCHOOLS 387 0.04408960%73I017 COWETA PUBLIC SCHOOLS 2,400 0.27337037%73I019 WAGONER PUBLIC SCHOOLS 1,925 0.21928951%73I365 PORTER CONSOLIDATED SCHOOLS 516 0.05875657%74I004 COPAN PUBLIC SCHOOLS 221 0.02522489%74I007 DEWEY PUBLIC SCHOOLS 942 0.10735106%74I018 CANEY VALLEY PUBLIC SCHOOLS 683 0.07784442%74I030 BARTLESVILLE PUBLIC SCHOOLS 4,649 0.52965541%74V001 TRI COUNTY AREA VOTECH 1,058 0.12048987%75I001 SENTINEL PUBLIC SCHOOLS 353 0.04021056%75I010 BURNS FLAT‐DILL CITY SCHOOL 546 0.06220146%75I011 CANUTE PUBLIC SCHOOLS 349 0.03976230%75I078 CORDELL PUBLIC SCHOOLS 681 0.07761692%75V012 WESTERN TECHNOLOGY CENTER 1,127 0.12839472%75V027 SOUTHWEST TECHNOLOGY CENTER 438 0.04989146%76H505 NORTHWESTERN OKLA STATE UNIV 2,577 0.29356973%76I001 ALVA PUBLIC SCHOOLS 1,175 0.13382510%76I003 WAYNOKA PUBLIC SCHOOLS 323 0.03682850%

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ER Code Employer Name Contributions Allocation76I006 FREEDOM PUBLIC SCHOOLS 171$ 0.01949143%76V010 NORTHWEST TECHNOLOGY CENTER 681 0.07753616%77I001 WOODWARD PUBLIC SCHOOLS 2,303 0.26236278%77I002 MOORELAND PUBLIC SCHOOLS 477 0.05433772%77I003 SHARON MUTUAL PUBLIC SCHOOLS 270 0.03081574%77I005 FORT SUPPLY PUBLIC SCHOOLS 168 0.01915023%77V024 HIGH PLAINS TECHNOLOGY CENTER 633 0.07215458%Total Remaining Employers 754,527 85.96036523%

Total Employer Contributions 877,761$ 100.00000000%

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Teachers’ Retirement System of Oklahoma Schedule of Collective OPEB Amounts


June 30, 2019 Net OPEB

Liability (Asset)

Net Difference Between Projected

and Actual Investments

Earnings on OPEB Plan Investments

Differences Between

Expected and Actual

Experience

Total Deferred Inflows of Resources Excluding Employer Specific

Amounts*

OPEB Expense (Expense Offset)

All Employers (61,832,557)$ 8,871,916$ 22,600,507$ 31,472,423$ (9,639,095)$

* Employer specific amounts that are excluded from this schedule are the changes in proportion, differences

between employer contributions and proportionate share of contributions, and employer contributions

subsequent to the measurement date.

Deferred Inflows of Resources

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Teachers’ Retirement System of Oklahoma Notes to Schedule of Employer Allocations and Schedule of Collective OPEB Amounts

June 30, 2019

Note 1 ‐ Nature of Entity

The following brief description of the Teachers’ Retirement System of Oklahoma (the System) is provided for general information purposes only. The System’s benefits are established and amended by State Statute and participants should refer to Title 70 of the Oklahoma Statutes, 2011, Sections 17‐101 through 121, as amended.

The System was established as of July 1, 1943 for the purpose of providing retirement allowances and other specified benefits for qualified persons employed by state‐supported educational institutions. The System is a part of the State of Oklahoma financial reporting entity, which is combined with other similar funds to comprise the fiduciary‐pension and other postemployment benefit (OPEB) trust funds of the State of Oklahoma (the State). The System administers this cost‐sharing multiple‐employer benefit plan other than pensions (the Plan).

The supervisory authority for the management and operation of the System is a 14‐member board of trustees, which acts as a fiduciary for investment of the funds and the application of plan interpretations. The board of trustees is comprised of six appointees from the Governor’s Office, two appointees by the Senate Pro Tempore, two appointees by the House Speaker and three Ex Officio positions. Out of the six appointees from the Governor’s Office, one must be a Higher Education representative, one is a nonclassified optional personnel, and the remaining four must work in the public or private funds management, banking, law or accounting field. Out of the two Senate Pro Tempore’s as well as the House Speaker’s appointees, one must be an active classroom teacher while the other be a retired member of Teachers’ Retirement System of Oklahoma. The Ex Officio trustees are the State Superintendent, the Office of Management and Enterprise Services Director and the Career‐Tech Director or their designee.

OPEB Plan

Oklahoma teachers and other certified employees of common schools, faculty and administrators in public colleges and universities, and administrative personnel of state educational boards and employees of agencies must join the Plan. Membership is optional for all other regular employees of public educational institutions who work at least 20 hours per week. Additional information regarding Plan provisions can be found in the System’s comprehensive annual financial report, which can be accessed as described in Note 7.

Note 2 ‐ Summary of Significant Accounting Policies

The Schedule of Employer Allocations and the Schedule of Collective OPEB Amounts (the Schedules) for the Plan were prepared in accordance with the following significant accounting policies.

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June 30, 2019

Nature of the Schedules

The purpose of these Schedules is to provide employers information for their financial statements. The Schedules provide each employer with the basis used to determine their proportionate share of the net OPEB liability (asset), deferred outflows and inflows of resources, and OPEB expense (expense offset) as of and for the year ended June 30, 2019. Deferred outflows and inflows of resources, and OPEB expense (expense offset) include: each employer’s proportionate share of plan level amounts such as differences between expected and actual experience, the net difference between projected and actual investment earnings on OPEB plan investments and changes in assumptions.

The Schedule of Collective OPEB Amounts represents collective amounts for the Plan. This Schedule excludes employer‐specific deferral amounts that may need to be recognized to comply with governmental accounting standards. Specifically, this schedule excludes deferral amounts arising from the changes in employer proportion, differences between employer contributions and proportionate share of contributions, and employer contributions subsequent to the measurement date.

Measurement Focus and Basis of Accounting

Financial transactions are recorded using the economic resources measurement focus and the accrual basis of accounting. Employer contributions are recognized as revenue when due pursuant to statutory or contractual requirements.

Use of Estimates

The preparation of the Schedules in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts for the net OPEB liability (asset) and deferred inflows of resources, and changes therein, and disclosures. Actual results could differ from those estimates and differences could be material.

Basis of the Allocation

In determining the proportionate share of the net OPEB liability (asset) and corresponding employer OPEB amounts for a cost‐sharing plan, the basis should be consistent with the manner in which contributions are made to the Plan, excluding those to separately finance specific liabilities of an individual employer. Contributions on the schedule of employer allocations are presented under a cash basis of accounting.

The System has determined that each employer’s proportionate share will be determined based on the employer’s contribution to the Plan as a percentage of the total contribution to the Plan by all employers.

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June 30, 2019

Note 3 ‐ OPEB Liability (Asset)

The OPEB liability (asset) is the portion of the actuarial present value of projected benefit payments related to past periods. The OPEB liability (asset) for the employers is based on the allocation percentages from the Schedule of Employer Allocations.

The net OPEB liability (asset) for fiscal year 2019 is calculated as set forth below in the following table:

Net OPEB liability (asset) ‐ Beginning July 1, 2018 (64,625,470)$ Total OPEB expense offset (9,639,095) Change in deferred inflow of resources 13,309,769 OPEB employer contributions (877,761)

Net OPEB liability (asset) ‐ Ending June 30, 2019 (61,832,557)$

The components of the net OPEB liability (asset) at June 30, 2019, were as follows:

Total OPEB liability (asset) 410,294,941$ Plan fiduciary net position (472,127,498)

Net OPEB liability (asset) per Schedule of Collective OPEB amounts (61,832,557)$

Plan fiduciary net position as a percentage of total OPEB liability (asset) 115.07%

Sensitivity of the OPEB liability (asset) to changes in the discount rate – The following presents the OPEB liability (asset) of the Plan’s employers calculated using the discount rate of 7.50% as well as what the employers’ liability (asset) would be if it were calculated using a discount rate that is 1‐percentage point lower or 1‐percentage point higher than the current rate:

1% Decrease Current Discount 1% Increase(6.50%) Rate (7.50%) (8.50%)

Employer's OPEB liability (asset) (20,719,727)$ (61,832,557)$ (96,960,750)$

The total OPEB liability (asset) as of June 30, 2019, was determined based on an actuarial valuation prepared as of June 30, 2019, using the following actuarial assumptions:

Actuarial Cost Method—Entry Age Normal. Inflation—2.50 percent. Future Ad Hoc Cost‐of‐living Increases‐None. Salary Increases—Composed of 3.25 percent wage inflation, including 2.50 percent price inflation, plus a

service‐related component ranging from 0.00 percent to 8.00 percent based on years of service.

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June 30, 2019

Investment Rate of Return – 7.50 percent. Retirement Age— Experience‐based table of rates based on age, service, and gender. Adopted by the

Board in May 2015 in conjunction with the fiver year experience study for the period ending June 30,2014.

Mortality Rates after Retirement — Males: RP‐2000 Combined Healthy mortality table for males withWhite Collar Adjustments with fully generational projection by Scale BB from the tale’s base year of2000. Females: GRS Southwest Region Teacher Mortality Table scaled at 105%. Generational mortalityimprovements in accordance with Scale BB from the table’s base year of 2012.

Mortality Rates for Active Members‐RP ‐2000 Employee Mortality tables, with male rates multiplied by60% and female rates multiplied by 50%.

Note 4 ‐ Average Expected Remaining Service Life

The average expected remaining service life of the Plan is determined by taking the calculated total future service years of the Plan divided by the number of people in the Plan including retirees. The total future service years of the Plan are determined using the mortality, termination, retirement and disability assumptions associated with the Plan. The average expected service life of the Plan equals 6.3 years as of the valuation date.

Note 5 ‐ Types of Deferred Outflows and Inflows of Resources

Deferred outflows of resources are the consumption of net position that is applicable to future reporting periods. Deferred inflows of resources are the acquisition of net position that is applicable to future reporting periods.

Difference Between Expected and Actual Experience

The actuary uses assumptions such as future salary increases and inflation to develop what they expect to be the experience of the Plan. Each year the difference between the expected experience and the actual experience is amortized over the average expected remaining service life of the Plan.

Net Difference Between Projected and Actual Investment Earnings

The actuary uses the Plan’s long‐term rate of return to project investment earnings net of investment expenses. The difference between the expected and the actual investment earnings is deferred and amortized over five years.

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June 30, 2019

Amortization

The amortization of deferred inflows at June 30, 2019, is as follows:

DeferredInflows

2020 (11,155,059)$ 2021 (11,155,057) 2022 (5,040,021) 2023 (1,602,888) 2024 (2,045,841) Thereafter (473,557)

(31,472,423)$

Note 6 ‐ OPEB Expense (Expense Offset)

OPEB expense (expense offset) includes amounts for service cost (the normal cost under entry age normal for the year), interest on the total OPEB liability (asset), changes in the benefit structure, recognition of increases/decreases in liability (asset) due to actual versus expected experience, actuarial assumption changes, and investment gains/losses on the fair value of assets. The actual experience and assumption change impacts are recognized over the average expected remaining service life of the Plan membership as of the measurement date.

The collective OPEB expense (expense offset) for fiscal year 2019 is calculated as set forth below in the following table:

Service cost 6,160,629$ Interest on total OPEB liability (asset) 30,349,537 Projected earnings on plan investments (34,998,191) Administrative expense 3,987 Recognition of deferred outflows (inflows) due to liabilities (5,352,765) Recognition of deferred outflows (inflows) due to assets (5,802,292)

Allocated OPEB expense (expense offset) per schedule of OPEB amounts by employer (9,639,095)$

Page 346 of 372

25


June 30, 2019

Note 7 ‐ Access to the Teachers’ Retirement System of Oklahoma Comprehensive Annual Financial Report (CAFR) and Actuarial Valuations

The Teachers’ Retirement System of Oklahoma’s June 30, 2019 CAFR and Actuarial Valuation can be located at the website below:

https://www.ok.gov/TRS/Publications/index.html

Page 347 of 372

M E M O R A N D U M


FROM: Tom Spencer, Executive Director and Sarah Green, General Counsel


RE: Federal & Grant Matching Contribution Rate for FY 2021 --------------------------------------------------------------------------------------------------------------------

Every year the Board of Trustees of the Teachers’ Retirement System must review and possibly adjust the “Federal and Grant Matching” contribution rate. Under title 70 Oklahoma Statutes § 17-108 the Board must establish the rate by April 1 and the rate is effective for the next fiscalyear beginning July 1. Each local school district, state college or any other state agency whoseemployees are members of the Teachers’ Retirement System must pay the contribution rate whensalaries are paid by federal funds or externally sponsored agreements such as grants, contracts,and cooperative agreements. Under federal guidelines, in order for pension contributions to beeligible for payment with federal funds, the rates established must be “actuarially” based. In theFY 2019 Actuarial Valuation prepared by the actuarial firm for the Board, and adopted by theBoard, the Actuarial Determined Employer Contribution (ADEC) is 17.0%. The averageemployer contribution rate is 9.3% leaving 7.7% to ensure that contributions received on federalcontracts or grants are equal to the ADEC. Therefore, the positions funded with federal moneyneed to equal this same contribution rate of 7.7%. For the year beginning July 1, 2020 werecommend that the Board of Trustees vote to establish the Federal and Grant Matching rate of7.7% of the employee’s compensation.

The employer’s contribution rate remains at 9.5% for common education, Career Tech, two-year colleges, and state agencies that have TRS members. The employer contribution rate for comprehensive universities and the state’s four-year regional universities also remains at 8.55%. Lastly, the employee contribution has also not changed and is 7% of total compensation.

Page 348 of 372

Board Procurement Policy

A. Custodian Banks, Investment Managers, Investment Consultants, and Actuaries

Legal Authority

Title 74 O.S. Section 85.7(A)(3)(a) provides:

Contracts for master custodian banks or trust companies, investment managers, investment consultants,

and actuaries for the state retirement systems…and other professional services as defined in Section 803

of Title 18 of the Oklahoma Statutes shall be exempt from competitive bidding procedures of this section

and requisition requirements of Section 85.4 of this title.

Procurement Information Memorandum (Number 09-01) provides:

In order to provide agencies greater flexibility in the management of their purchasing processes

the following guidance is provided.

e. Agencies with approved internal procedures and a Certified Procurement Officer may

process the acquisitions for Contracts for master custodian banks or trust companies, investment

managers, investment consultants, and actuaries for the state retirement systems, which are exempt

from competitive bidding, for unlimited dollar amounts, without submission of a requisition to the

State Purchasing Director.

f. In accordance with Title 74 O.S. §85.7(A)(3)(c), state agencies shall notify the State

Purchasing Director, by submission of form DCS-FORM-CP-091, Report of Exemptions from

Competitive Bidding, within 15 days of completion of an acquisition of professional services under

this policy.

Title 70 O.S. Section 17-106 provides:

(17) The Board of Trustees shall retain an actuarial firm that shall be technical advisors of the

Board of Trustees on matters regarding the operation of funds created by the provisions of this act

and shall perform such other duties as are required in connection therewith.

Title 70 O.S. Section 17-106.1 provides:

E. The Board of Trustees may retain qualified investment managers to provide for the investment

of the monies of the System. The investment managers shall be chosen by a solicitation of

proposals on a competitive bid basis pursuant to standards set by the Board of Trustees.

F. Funds and revenues for investment by the investment managers or the Board of Trustees shall

be placed with a custodian selected by the Board of Trustees. The custodian shall be a bank or trust

company offering pension fund master trustee and master custodial services. The custodian shall

be chosen by a solicitation of proposals on a competitive bid basis pursuant to standards set by

the Board of Trustees.

Policy

The Board may retain the following vendors through a competitive bid process approved

by the Board of Trustees – with the contract awards being exempt from the competitive bid

standards set forth in the Oklahoma Central Purchasing Act at Title 74 O.S. §§ 85.1 et. seq.:

Page 349 of 372

https://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=66969


https://omes.ok.gov/legal/statutes/74/85-4

▪ Custodian Banks

▪ Investment Managers1

▪ Investment Consultants

▪ Actuaries

It is the policy of the Board to select each of the vendors on a competitive bid basis subject to the

following standards:

1. The Board shall approve all Requests For Proposals (RFPs) issued by the System for these

vendors. The RFP should be written in such a way that it is appropriately tailored to the

needs of TRS considering both the size and complexity of the System as well as the goals

the System is seeking to accomplish through the responding vendor.

2. Respondents to a proposal shall comply with the procedures and conform to the standards

set forth in the RFP. Failure to do so will result in disqualification from selection.

3. The issuance of an RFP does not commit the Board to award a contract. The Board reserves

the right to accept or reject any or all proposals received, to negotiate with any and all

qualified vendors, and to cancel in part or in its entirety a solicitation if it is in the best

interests of the System to do so.

4. The Board shall award contracts to the most suitable vendor at a specified time and place

which shall be open to the public pursuant to the Oklahoma Open Meetings Act.

5. Unless otherwise requested by the Board, proposals shall initially be evaluated by the

appropriate TRS staff, as designated by the Executive Director, who shall prepare an

evaluation report to identify one or more potential finalists which shall be presented to the

Board at an Open Meeting. This evaluation shall include independent scoring of each

vendor along with reference checks, if applicable, though the scoring results need not be

presented in the final evaluation report.

6. Following presentation by the Executive Staff, the Board may vote to take any of the

following action:

a. Select a vendor subject to successful contract negotiation,

b. Reject the finalist recommendations from the Executive Staff and review all vendor

submissions to select finalists,

c. Award a contract to one or more vendors based on the Board’s review of all vendor

submissions,

d. Move to conduct due diligence on finalists recommended by either the Executive Staff

or the Board to include:

i. Interviews of finalists,

ii. Due diligence trips, if necessary,

iii. Any other due diligence deemed necessary prior to the selection of a vendor.

1 See the TRS Investment Policy Statement for the Request for Proposal Policy pertaining to the selection of

investment managers.

Page 350 of 372

7. Ultimately, the Board may vote to award the contract(s) to one or more vendor(s) or reject

all proposals received.

8. TRS’s Business Manager or one member of the Executive Staff shall be designated as the

sole contact for responding vendors during the RFP process. No other member of the staff,

Board, or Investment Consultant shall knowingly communicate concerning any matter that

is material to the selection process with any party having a direct financial interest in the

award of the contract, an officer or employee of that party, or a placement agent retained

or employed by that party, unless the communication is part of the process expressly

described in the RFP or part of any Board meeting prior to the award of the contract. Any

vendor who knowingly participates in a communication that is prohibited by this

subsection shall be disqualified from the contract award.

B. Other Professional Services

Legal Authority

Title 74 O.S. Section 85.7(A)(3)(a) provides:

Contracts for master custodian banks or trust companies, investment managers, investment consultants,

and actuaries for the state retirement systems…and other professional services as defined in Section 803

of Title 18 of the Oklahoma Statutes shall be exempt from competitive bidding procedures of this section

and requisition requirements of Section 85.4 of this title.

“Professional service” includes the professional service rendered by physicians, attorneys

(including Administrative Law Judges), and certified public accountants. See 18 O.S. §803.

Procurement Information Memorandum (Number 09-01) provides:

In order to provide agencies greater flexibility in the management of their purchasing processes

the following guidance is provided. a. Effective January 13, 2009, agencies with approved internal procedures and a Certified

Procurement Officer may process the acquisitions for professional services as defined in Section 803

of Title 18 of the Oklahoma Statutes, which are exempt from competitive bidding, for unlimited dollar

amounts, without submission of a requisition to the State Purchasing Director. The contractor must be

providing solely the services for which they are licensed…The status of the license of the professional

should be confirmed prior to contracting or any renewal of an existing contract. The license should be

both current and in good standing.

b. Agencies are encouraged to conduct negotiations on contract costs or to conduct

solicitations, as may be appropriate.


(14) …When requested by the Board of Trustees, the Attorney General of the state also shall render

legal services to the Board of Trustees. In addition to the above, the Board of Trustees may employ

hearing examiners to conduct administrative grievance hearings under the provisions of the

Administrative Procedures Act.

Page 351 of 372



https://omes.ok.gov/legal/statutes/74/85-4

(16) The Board of Trustees shall designate a Medical Board to be composed of three physicians

not eligible to participate in the retirement system. The physicians so appointed by the Board of

Trustees shall be legally qualified to practice medicine in Oklahoma or the state in which they

reside and shall be physicians of good standing in the medical profession. The Board of Trustees

may have more than one Medical Board and each Board shall have the same duties and authority

under the statutes. If required, other physicians may be employed to report on special cases.


It shall be the duty of the State Auditor and Inspector to audit annually the funds, accounts and

assets of the Teachers' Retirement System.

Policy

The Board may retain the following vendors with the contract awards being exempt from

the competitive bid standards set forth in the Oklahoma Central Purchasing Act at Title 74 O.S.

§§ 85.1 et. seq.:

▪ Medical Board Members/Physicians

▪ Attorneys (Attorney General, Administrative Law Judges)

▪ Certified Public Accountants2

It is the policy of the Board to make appointments or award contracts to these positions in a prudent

manner and solely for the services for which the professional is licensed. A competitive bid process

is not required but may be undertaken to fill a position if, in the Board’s opinion, it is in the best

interest of the System to do so.

2 The Board will cooperate with the State Auditor and Inspector’s office to select, through a competitive bid process,

an auditor to audit annually the funds, accounts, and assets of the Teachers’ Retirement System.

Page 352 of 372

M E M O R A N D U M




RE: Staff Comments on legislation in 2020

---------------------------------------------------------------------------------------------------------------------

The following is a summary of relevant bills that have been filed for the 2020 session. In the

“staff comment” section under each bill is the position the staff intends to take absent a contrary

direction and vote of the Board. There will be an item on the agenda for the board meeting under

which these bills can be discussed. If any board member would like the Board to take a position

on a particular bill, such a motion would be in order under that agenda item as well.

Bills Impacting Benefits or TRS Administration

HOUSE BILLS

HB 1090 (Rep. Osburn; Sen. Montgomery) This is a holdover bill that would allow members

of TRS to purchase service credit. The bill amends OPLAAA ostensibly so the Legislature can

consider the service credit purchase aspect of the bill. This bill amends certain service purchases

by those members who have service teaching in the Peace Corps, or other public schools. This

bill limits the purchase to “active” members. It lifts the current cap of 5 years on such purchased

service as well as most other limitations. It changes the cost of purchase to actuarial cost as

opposed to paying contributions plus interest. The credit can be purchased if the member is not

already getting retirement credit from these years. Staff comments: Monitor. The staff has been

working with both authors since last session on possible modifications to the bill. There is a lot

of interest at eliminating any impediment to the recruitment of teachers. Status: Filed in 2019.

Holdover.

HB 1307 (Rep. Meredith) Holdover Bill. A 2% COLA bill for all state pension systems with

fiscal impact that never made it out of committee in 2019, and wasn’t forwarded to the

Legislative Actuary. Position/Staff comments: Monitor. Status: Assigned to House Banking,

Fin. Serv. & Pensions in 2019. After the committee deadline in 2019, there was a proposed

committee substitute filed that was sent to the Legislative Actuary. The bill had been

changed from a COLA bill to a bill that would potentially transfer police officers at every

institution of Higher Education from TRS to the Oklahoma Laws Enforcement Retirement

System. Under this bill TRS would transfer the employee and employer contributions plus

an unspecified amount of interest to OLERS. TRS was just provided a report on Friday,

February 21, 2020 from the Legislative Actuary that it would cost OLERS several million

dollars.

HB 2304 (Rep. Frix; Sen. Pemberton) This is one of two COLA bills that was referred to the

Legislative Actuary in 2019 to study the fiscal impact during the interim. It may be considered

Page 353 of 372

during the 2020 Legislative Session. Filed as an 8% COLA for the retirees of all State pension

systems, a committee substitute with a 2% COLA passed out of the Senate Retirement and

Insurance Committee for referral to the Legislative Actuary. The bill filed in 2019 purported to

have an exception to take the COLA granted out of the provisions of the Oklahoma Pension

Legislation Actuarial Analysis Act (“OPLAAA”). The current version of the bill has no such

exception. If passed retirees receiving benefits as of December 31, 2018, would presumably get a

2% COLA upon the effective date of the bill. Staff position & comments: Oppose if

unfunded. Support if funded. The price tag on a 2% COLA is $250 million. There is no

indication that the authors or others intend to fund the cost of the COLA but that could change.

Status: Referred to the Senate Retirement & Insurance Committee on 4/9/19. The bill was

then referred to the Legislative Actuary on 4/11/19. The Legislative Actuary informed the

Legislature in November of 2019 that the cost of a 2% COLA for TRS was $256,785,500.

The bill is technically still in the Senate for consideration.

HB 2485 (Rep. McCall) An amended version of this bill would grant 4% COLAs in all of the

state retirement systems. The Rules Committee voted to send the bill to the Legislative Actuary

for a determination of the fiscal impact of the bill. It was discussed in an interim study a few

months ago. The bill can be heard in the 2020 session. Staff position & comments: Oppose if

unfunded. Support if funded. The price tag on a 4% COLA is $500 million. There is no

indication that the authors or others intend to fund the cost of the COLA but that could change.

Status: Assigned to House Rules Committee on 2/5/19. The House Rules Committee

adopted a committee substitute on 5/2/2019 with the 4% COLA language. It was then

forwarded to the Legislative Actuary on the same day. The Legislative Actuary informed

the Legislature that the cost of a 4% COLA for TRS was $513,571,000. This bill has yet to

be heard in the full House.

HB 3006 (Rep. Meredith) A 4% COLA for all state pension systems. The bill language doesn’t

attempt to exempt itself from OPLAAA and has already been designated a “fiscal impact bill.”

As such it should not be heard. Staff position & comments: Opposed if unfunded. If passed

the price tag on a 4% COLA would be in excess of $500 million. Probably dead on arrival.

Status: Assigned to the House Banking, Fin. Serv. & Pensions committee 2/4/20.

HB 3497 (Rep. Albright) A 5% COLA for all state pension systems. The bill language doesn’t

attempt to exempt itself from OPLAAA and has already been designated a “fiscal impact bill.”

As such it should not be heard. Staff position & comments: Opposed if unfunded. If passed

the price tag on a 5% COLA would be in excess of $625 million. Probably dead on arrival.

Status: Assigned to the House Rules committee 2/4/20.

HB 3589 (Rep. Roberts, Dustin) This is currently a shell bill called the "Oklahoma Public

Pension Systems Service Crediting Policy Act of 2020." Staff position & comments: Monitor.

Just a shell bill now but worth keeping an eye on. Status: Assigned to the House Rules

committee 2/4/20.

HB 3599 (Rep. Roberts, Dustin) This bill would eliminate TRS’ ability to apply the “federal

and grant matching contributions” to non-federally funded positions that are funded from private

sources. Staff position & comments: Opposed. This bill reduces revenue to TRS. The purpose

Page 354 of 372

of the federal and grant matching contributions is so the pension cost of every position

participating in TRS is fully funded. Under the bill, privately funded positions would only pay

employee and employer contributions, and TRS would not collect the additional matching

contribution rate currently set at 7.7%. Status: Assigned to the House Rules committee 2/4/20. It

is on the Rules Committee agenda for February 25, 2020 at 10:30.

HB 3720 (Rep. Davis) This bill would create a new and lower retirement age for those

becoming members on or after November 1, 2020 and under the age of 30, to a “30 year and out”

rule. All members in this class could retire after serving for 30 years. So a member who is 22 at

date of hire could retire at age 52. Currently the same 22 year old would come under the Rule of

90, minimum age 65. That person would need to work for 38 years before receiving a pension. A

29 year old joining under existing law needs to work for 31 years to be eligible for retirement.

The bill would also completely repeal 70 O.S. §17-116.10 which has several restrictions on TRS

retirees’ ability to return to work. Currently all retirees have to wait a minimum of 60 days to

come back to work in any capacity. The repeal would instantly make TRS out of compliance

under the IRS Code and regulations. It would further remove any income restrictions to what

retirees could earn in retirement. This would have significant cost to TRS as every member who

is eligible to retire could continue working at full pay and receive their full pension. The bill has

already been designated a “fiscal impact bill.” As such it should not be heard. Staff position &

comments: Opposed. In 2015 a similar bill that would have raised salary caps in the first 3 years

of retirement to around $66,000, would have cost to the System around $169 million. Having no

limit would certainly cost even more. Probably dead on arrival. Status: Assigned to the House

Banking, Fin. Serv. & Pensions committee 2/4/20.

HB 3940 (Rep. Lepak) This is currently a shell bill called the Oklahoma Teachers' Retirement

System Amendments Act of 2020." Staff position & comments: Monitor. Just a shell bill now

but worth keeping an eye on. Status: Assigned to the House Banking, Fin. Serv. & Pensions

committee 2/4/20.

HB 3994 (Rep. Wright) This bill would modify the post-retirement salary limitations in 70 O.S.

§17-116.10 when retirees return to work. It would raise the current restriction on earnings for

retirees under the age of 62, from $15,000 (or Social Security maximum which is about $17 K)

to $25,000. This could have some cost to TRS as some retirees may decide to come back to work

at the higher salary maximum. The bill has been designated a “non-fiscal impact bill” because

the bill exempts itself from OPLAAA. Staff position & comments: Monitor & Possibly

Oppose. Our actuary wrote us a letter with an estimate of a $23 million fiscal impact. Status: It

was heard in the House Banking, Fin. Serv. & Pensions committee on 2/19/20. The fiscal impact

was discussed at the committee meeting. The author said it was a “work in progress” and would

likely “strike title” on the House floor. It passed unanimously. TRS staff will continue to discuss

this bill with Rep. Wright and see if he would support SB 1445 and let this die.

HB 4029 (Rep. McCall) This bill would modify the post-retirement salary limitations in 70 O.S.

§17-116.10 when retirees return to work. It would prohibit retirees from returning to work for a

full year after retirements, but then repeals all salary limitations for those retirees who come back

to work. It also makes the minimum salary schedule applicable to retirees returning to work. An

Page 355 of 372

amendment to the bill was approved by the House Rules Committee that local school districts

could bargain on the salaries for these returning retirees. The cost to TRS is unknown. The bill

has been designated a “non-fiscal impact bill” because the bill exempts itself from OPLAAA.

Staff position & comments: Monitor & Possibly Oppose. In 2015 a bill that would have raised

salary caps in the first 3 years of retirement to around $66,000, would have cost to the System

around $169 million. The one-year prohibition from retirees returning to work could lower the

cost to TRS potentially. Status: Passed as amended in the House Rules Committee on

Tuesday, Feb. 11.

HB 4030 (Rep. McCall) This is currently a shell bill called the "Teachers' Retirement System

Service Crediting Policy Act of 2020." Staff position & comments: Monitor. Just a shell bill

now but worth keeping an eye on. Status: Assigned to the House Rules Committee on 2/4/20.

SENATE BILLS

SB 1396 (Sen. Stanley) The bill would also completely remove the income restrictions

applicable to retirees who return to work. This would have significant cost to TRS as every

member who was eligible to retire could continue working at full pay and receive their full

pension. The bill has already been designated a “fiscal impact bill.” As such it should not be

heard. Staff position & comments: Opposed. In 2015 a similar bill that would have raised

salary caps in the first 3 years of retirement to around $66,000, would have cost to the System

around $169 million. Having not limit would certainly cost even more. Status: Assigned to the

Senate Retirement & Insurance Committee on 2/6/20.

SB 1445 (Sen. Stanley) This bill lifts earnings caps for a 3-year period beginning July 1, 2020

for retired TRS members who were retired as of July 1, 2019 and have not worked since

retirement. These retirees may come back to work as classroom teachers after being retired for

one year. Similar legislation was passed in 2017, but only applied to retired classroom teachers.

Under this bill administrators and really any retired member who retired on July 1, 2019 or

before, could start working as a classroom teacher as of July 1, 2020. Position/Staff comments:

Neutral to support. Because of the one-year layoff for a retiree to come back with no cap, we

don’t believe there will be any fiscal impact. Our actuaries see very little fiscal impact.

Status: The bill will be heard in the Senate Retirement & Insurance Committee on

February 24, 2020.

SB 1513 (Sen. Sharp) This bill would apportion several state revenue sources into the

“Oklahoma Cost of Living Adjustment Revenue Revolving Fund” that is earmarked to pay the

cost for potential COLAs. It would include one-third of the alcoholic beverage excise tax, one-

third of the gross receipts tax levied on a variety of beverages served at certain places, additional

cigarette taxes over what TRS receives now, additional other tobacco taxes, and 50% of the

medical marijuana taxes currently going to common education. Position/Staff comments:

Generally supportive. The author is trying to find revenue to pay the cost of COLAs granted to

TRS retirees. Status: Assigned to Senate Finance Committee on 2/6/20.

SB 1817 (Sen. Sharp) This bill is similar to SB 1513 that apportions several state revenue

sources into the “Oklahoma Cost of Living Adjustment Revenue Revolving Fund.” However this

Page 356 of 372

bill would make the revenue raised be available for all of the state retirement systems.

Position/Staff comments: Generally supportive. The author is trying to find revenue to pay the

cost of COLAs granted to all retirees of the State pension systems. There would be wider support

for this bill. Status: Assigned to the House Rules Committee on 2/5/20.

HOLDOVER BILLS (Most Likely Dead)

HB 2398 (Rep. Canaday) An 8% COLA bill for all state pension systems with fiscal impact that

never made it out of committee in 2019, and wasn’t forwarded to the Legislative Actuary.

Position/Staff comments: Monitor. Status: Assigned to House Banking, Fin. Serv. & Pensions

in 2019.

HB 2486 (Rep. McCall) Identical shell bill to HB 2485 Staff position & comments: Monitor.

Just a shell bill that will probably disappear since HB 2485 is alive for this session. Status:

Assigned to House Rules Committee on 2/5/19.

HB 2488 (Rep. McCall) This bill would make the State minimum salary schedule applicable to

retirees who return to work. Staff position & comments: Monitor. Current law provides that

the minimum salary schedule for teachers doesn’t apply to TRS retirees who return to work for a

TRS employer. We assume the purpose of this language in the current statute is to consider the

fact that the teacher is receiving a retirement benefit in addition to the teacher’s salary. If this bill

passes, any teacher who returns subject to TRS post-retirement salary limits, the minimum salary

schedule will apply. The concern is whether this conflicts with TRS post-retirement salary

limits, and which language would control. Status: Assigned to the House Common Ed.

Committee on 2/5/19.

HB 2537 (Rep. Blancett) A shell bill that creates the “Retirement Savings Account Program

Act of 2019.” Staff position & comments: Monitor. Just a shell bill now but worth keeping an

eye on. Status: Assigned to House Rules Committee 2/5/19.

SB 352 (Sen. Pemberton) – Same as HB 2304 (Rep. Frix) This bill relates to the Oklahoma

Pension Legislation Actuarial Analysis Act & modifies it. It takes the COLA granted by this bill

outside of OPLAAA. It also authorizes an 8% COLA to TRS retirees who were receiving

benefits as of November 30, 2019, effective November 1, 2020. Staff position & comments:

Opposed if unfunded. The price tag on an 8% COLA last year was $850 million, and would

have lowered our funded ratio between 2%-3%. Status: Filed.

SB 488 (Sen. Standridge) – This bill would make a bill granting benefits of any kind, but which

won’t decrease the funded ratio of the affected system below 80%, and make it a “nonfiscal”

retirement bill under the Oklahoma Pension Legislation Actuarial Analysis Act. The bill also

provides for COLAs to be granted in 2020 and every 5 years thereafter, based on the CPI-W after

performing a Qualified Sensitivity Analysis with an actuary that shows the system will still be

100% funded within 40 years. Staff position & comments: Opposed if unfunded. There is no

additional funding provided to pay any cost. Status: Filed.

Page 357 of 372

SB 686 (Sen. Pugh) This bill would amend the Oklahoma Pension Legislation Actuarial

Analysis Act (“OPLAAA”) to permit pension stipends or COLAs without complying with

OPLAAA, if the actuarial effect of passing the bill would not reduce the pension system’s

funded ratio below 90%. Staff position & comments: Monitor. This bill would have no effect

on TRS . . . yet. Status: Assigned to the Senate Retirement & Insurance Committee 2/5/19

SB 697 (Sen. Smalley) This bill permits TRS retirees who go to work for the State Department

of Education on or after November 1, 2020, to remain members subject to Return to Work

restrictions, or join the Oklahoma Public Employees Retirement System. Staff position &

comments: Neutral. Much better than HB 1246 that would exempt TRS retirees completely

from salary restrictions. Status: Assigned to the Senate Retirement & Insurance Committee

2/5/19. HB 1246 from last session was identical to this bill and passed in 2019. No reason this

should be active in 2020.

SB 850 (Sen. Weaver) This bill would give a 7% COLA to TRS retirees who are retired as of

June 30, 2020 and still receiving benefits as of July 1, 2020, However it has an odd provision

that states that these retirees “shall receive a seven percent (7%) increase in the benefits

beginning in July 2008.” This is either a typo or a retroactive increase. Opposed if unfunded.

The price tag on an 8% COLA last year was $850 million so a 7% will still be costly. An 8%

COLA last year would have lowered our funded ratio between 2%-3% so this is in the same

range. Status: Assigned to the Senate Retirement & Insur. Comm. On 2/7/19.

SB 941 (Sen. Pemberton) – This bill would give a stipend to TRS retirees similar to the one

given in 2018 under HB 1340. Since TRS’ funded ratio is between 60% and 80%, it will be 2%

of the gross benefit or $1,000 whichever is less. It would only go to those who have been retired

at least 5 years as of October 1, 2019. Staff position & comments: Monitor. This stipend would

have less impact on TRS than many of the COLA bills that have been introduced. Status: Filed.

Bills Impacting Other Retirement Systems

HB 3291 (Rep. Taylor) This bill affects the Police Pension System. It would change ability of

some municipalities to employ members of a certain age. It is a non-fiscal bill under OPLAAA.

Staff position & comments: Monitor. We would not oppose bills that are only applicable to

another pension system unless our funding sources were jeopardized. Status: Assigned to the

Banking, Fin. Serv. & Pensions committee 2/4/20. Re-assigned to the House Rules

Committee on 2/17/20.

HB 3330 (Rep. Perryman) This bill affects the Police Pension System. It would provide for a

100% disability if the injury was from a violent act against the member of the System. It is

attempting to exempt itself from OPLAAA. Staff position & comments: Monitor. We would

not oppose bills that are only applicable to another pension system unless our funding sources

were jeopardized. Status: Passed out of the Banking, Fin. Serv. & Pensions committee on

2/19/20.

HB 3938 (Rep. Lepak) This is currently a shell bill called the “Oklahoma Uniform Retirement

System for Justices and Judges Amendments Act of 2020." Staff position & comments:

Page 358 of 372

Monitor. This will be used as a vehicle to amend the URSJJ law due to a federal tax

change. Status: Re-assigned to the Bnking, Fin.Serv. Comm. On 2/20/20.

HB 3939 (Rep. Lepak) This is currently a shell bill called the “Oklahoma Public Employees

Retirement System Amendments Act of 2020." Staff position & comments: Monitor. This will

be used as a vehicle to amend the URSJJ law due to a federal tax change. Status: Status: Re-

assigned to the Bnking, Fin.Serv. Comm. On 2/20/20.

HB 4128 (Rep. Roberts, Sean) This bill would amend the general felony forfeiture bill to be

triggered by getting a deferred sentence in a felony case. It would also provide that the person

losing their office and pension pay for the election to elect his or her successor. Staff position &

comments: Monitor. This bill may or may not apply to TRS but staff would have no objection

to its passage. Status: Assigned to the Rules committee 2/4/20.

HB 4129 (Rep. Roberts, Sean) This bill would give COLAs to members of the Firefighters

System. It is a series of 1.1% annual increases from 2021 to 2030. It doesn’t attempt to exempt

itself from OPLAAA and has been deemed a bill with fiscal impact by the Legislative Actuary.

Staff position & comments: Monitor. We would not oppose bills that are only applicable to

another pension system unless our funding sources were jeopardized. Status: Assigned to the

Rules committee 2/4/20.

HB 4137 (Rep. Moore) This bill would raise the health insurance monthly subsidy for OPERS

retirees from $105 to $350 per month. It doesn’t attempt to exempt itself from OPLAAA and has

been deemed a bill with fiscal impact by the Legislative Actuary. Staff position & comments:

Monitor. We would not oppose bills that are only applicable to another pension system unless

our funding sources were jeopardized. In this case the bill could easily be amended to affect the

TRS monthly health insurance subsidy. Status: Laid over in the Banking, Fin. Serv. &

Pensions committee on 2/19/20.

Bills Impacting TRS and Other State Agencies

House Bills

HB 3637 (Rep. O’Donnell) – This bill is a shell bill entitled the “Attorney General Act of

2020.” Staff position & comments: Monitor. Waiting to see what this really is about. Status:

Assigned to the Rules Committee 2/4/20.

HB 3638 (Rep. O’Donnell) – This bill is a shell bill entitled the “Attorney General Legal

Reform Act of 2020.” Staff position & comments: Monitor. Waiting to see what this really is

about. Status: Assigned to the Rules Committee 2/4/20.

HB 3802 (Rep. Frix) – This bill is a shell bill entitled the “Government Efficiency Act." Staff

position & comments: Monitor. Waiting to see what this really is about. Status: Assigned to

the Rules Committee 2/4/20.

Page 359 of 372

HB 4025 (Rep. McCall) – This bill amends a bill under the recently enacted “LOFT”

legislation. LOFT is the Legislative Office of Fiscal Transparency.” This bill would add a section

that requires all state agencies to provide on request “raw datasets” to that office. That office

must adopt policies dealing with the format and file layout of such data. Staff position &

comments: Monitor. We have no objection sharing certain data with LOFT since its mandate is

oversight. We would take issue with personal data or other confidential data to be provided.

Status: Passed out of the Rules committee 2/4/20.

HB 4128 (Rep. Roberts, Sean) – This bill amends the felony forfeiture statute applying to state

and county officers and employees found at 51 O.S. §24.1. TRS has its own forfeiture statute,

but the general statute “may” have application to TRS members who are state officers or

employees as opposed to local school districts. The bill appears to provide for a forfeited pension

even for deferred sentences received. Staff position & comments: Monitor. Not 100% clear

how this will apply to TRS, if at all. However, TRS has several state officers and state employees

as members. Status: Filed.

Senate Bills

SB 1422 (Sen. Thompson) This is a massive bill (105 pages) that makes many amendments to

the State Central Purchasing Act. It appears to require all agencies to use OMES purchasing staff

with the exception noted if an agency can do it more efficiently (cheaper). A specific change in

the bills reads, “the Chief Information Officer shall have the authority to designate certain

information technology telecommunication contracts for state agencies as statewide contracts

and mandatory statewide contracts and may negotiate consolidation contracts, enterprise

agreements and high technology system contracts in lieu of or in conjunction with competitive

bidding procedures to reduce acquisition cost.” Staff position & comments: Monitor. As with

many bills there are good, bad and unknown aspects of the bill. Status: Filed.

Page 360 of 372

CLIENT SERVICES PERFORMANCE METRICS THROUGH JANUARY 2020

0

200

400

600

800

1000

1200

1400

1600

Num

ber o

f Req

uest

sESTIMATE REQUESTS THROUGH JANUARY 2020

New Requests Completed Outstanding Avg. time to complete = 20.77 Hrs.

Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20

Num

ber o

f Cal

ls

INCOMING CALLS SERVED THROUGH TRS MAIN NUMBER

Total Incoming Answered Routed Abandoned

82%

17%

1%

INFORMATION CENTER PERFORMANCE JANUARY 2020

TOTAL CALLS QUEUED THROUGH THE OTRS

MAIN LINE : 7574

TOTAL E-MAILS RECEIVED THROUGH OTRS WEB LINK:

520

PORTAL CLIENTSWITH CONFIRMED PINs:

8109

INCOMINGE-MAILS: 392

TOTAL E-MAILS RECEIVED THROUGH OTRS WEB LINK:

520

1276 Calls Routed Through Menu Options.

6199 Calls Answered. Average Speed of Answer: 14 seconds.Target Speed: 20 Seconds

99 Callers Abandoned in Queue. Average Abandon Time: 6 seconds.

CONFIRMED PORTAL PINs12/31/2019: 31,725January 2020 + 549 Total Confirmed: 32,274

INCOMINGE-MAILS: 375

Page 361 of 372

Count Benefit Total

Average

Benefit

Average Years

of Service

Average

Age

Disability 2 $2,790.47 $1,395.24 20.75 56.50

Normal 94 $158,128.55 $1,682.22 19.58 64.32

Total 96 $160,919.02 $1,676.24 19.60 64.16

195 ($261,781.49) $1,342.47 23.00 81.30

Monthly Retirement Status Report

From 2/1/2020 to 2/29/2020

New Retirements

Terminated Annuities

Page 362 of 372

HR STATUS REPORT 2/26/2020

HR STATUS REPORT

New Hires (January 2020):

n/a

Resignations/Terminations/Retirements (January 2020):

n/a

Promotions/Transfers/Salary Adjustments/Changes (January 2020):

n/a

EMPLOYEE RECOGNITION LUNCHEON

An Employee Recognition Luncheon was held 1/29/2020.

MISCELLANEOUS PAYMENTS

Severance Payments:

n/a

NEW HIRES, RESIGNATIONS, RETIREMENTS OR OTHER CHANGES PENDING

Recruiting for Client Services Manager – Information Center

Resignation of a Retirement Planning Consultant – Information Center (Mar 2020 report)

Page 363 of 372

Employer ReportingAnalysis of Employee and Employer Contributions Received

0 0 01

24

7

0

5

10

15

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June TOTAL

Number of Delinquent Reports FY20

$0.0

0

$0.0

0

$0.0

0

$19,

654.

02 $272

,681

.22

$436

,775

.21 $7

29,1

10.4

5

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000


Estimated Delinquent Funds FY20

$56,

958,

732.

55

$45,

855,

983.

88

$55,

179,

306.

98

$67,

184,

000.

42

$71,

776,

342.

78

$73,

927,

982.

84

$370

,882

,349

.45

$73,

502,

636.

71

$44,

353,

794.

21

$58,

242,

609.

53

$72,

420,

868.

63

$70,

184,

017.

85

$76,

404,

948.

80

$395

,108

,875

.73

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000


Comparison of Contributions ReceivedFor Five Months Ended December 31, 2018 and December 30, 2019

2019 2020

Page 364 of 372

CURRENT ASSETS:

Cash Not Available For Investment ($3,023,650.50)

Equities (At Market Value) 13,284,272,362.18

Fixed Income (At Market Value) 4,030,290,387.75

Short-Term Investment Account 548,151,249.98

Due From/(To) Broker (228,411,541.45)

Accounts Receivable Installment Payments 1,065,676.61

Prepaid Retirement Benefits 96,373,914.34

Accrued Income 62,246,018.32

Total Current Assets 17,790,964,417.23

CAPITAL ASSETS:

Office Furniture and Equipment 5,265,742.65

Accumulated Depreciation (846,219.00)

TOTAL ASSETS $17,795,383,940.88

CURRENT LIABILITIES:

Teachers' Savings Fund $5,649,240,720.27

Retirement Benefit Fund 11,181,983,493.96

Interest Fund 885,292,118.66

Expense Fund 17,731,851.49

Suspense Fund 55,679,720.53

Total Current Liabilities 17,789,927,904.91

TRS Capital Investment 5,456,035.97

TOTAL LIABILITIES AND CAPITAL INVESTMENT $17,795,383,940.88

BALANCE SHEET

JANUARY 31, 2020

Page 365 of 372

Year to Date Year to Date % Change

(FY 2020) (FY 2019)

Balance of Cash and Investments

Net Position, Beginning of Year $17,105,220,217.46 $16,584,571,799.91

RECEIPTS:

Members' Deposits 168,731,373.36 159,441,653.81 5.83%

Employer Contributions 253,904,227.89 243,265,819.92 4.37%

State Credits 18,665,490.66 14,856,164.50 25.64%

Reimbursed Administrative 2,233.00 3,605.09 -38.06%

Matching Funds from Schools 16,049,693.30 15,286,041.08 5.00%

Lottery Revenue 2,567,726.99 2,996,514.00 -14.31%

Cigarette Sales Tax Revenue 840,991.26 780,116.60 7.80%

Dedicated Revenue 203,514,445.63 191,597,909.31 6.22%

Total Retirement Receipts 664,276,182.09 628,227,824.31 5.74%

Interest Income (Fixed Income and Short-Term) 110,916,343.48 108,855,107.41 1.89%

Dividend Income 103,189,973.13 116,028,925.18 -11.07%

Net Realized Gain/(Loss) 470,210,489.62 150,168,747.97 213.12%

Net Unrealized Gain/(Loss) 218,198,441.34 (547,144,782.56) 139.88%

Investment Operations Income:

Class Action Lawsuit Proceeds 58,587.44 189,233.57 -69.04%

Other Income 17,980.15 (4,151,272.44) 100.43%

Securities Lending Income 3,654,633.40 3,848,304.75 -5.03%

Total Investment Income 906,246,448.56 (172,205,736.12) 626.26%

TOTAL RECEIPTS 1,570,522,630.65 456,022,088.19 244.40%

DISBURSEMENTS:

Retirement Benefits 801,813,384.98 802,477,841.94 -0.08%

Insurance Premiums Paid for Retirees 21,401,074.87 21,176,190.24 1.06%

Death Benefits 12,671,153.19 11,831,972.41 7.09%

Withdrawals of Accounts 23,988,053.72 25,713,626.88 -6.71%

Total Benefit Payments 859,873,666.76 861,199,631.47 -0.15%

Administrative Expense:

General Operations 3,137,306.53 3,215,344.15 -2.43%

Investment Expense 21,767,457.59 24,399,700.63 -10.79%

Total Administrative Expenses 24,904,764.12 27,615,044.78 -9.81%

TOTAL DISBURSEMENTS 884,778,430.88 888,814,676.25 -0.45%

NET INCREASE/(NET DECREASE) 685,744,199.77 (432,792,588.06) 258.45%

Balance of Cash and Investments, January 31 $17,790,964,417.23 $16,151,779,211.85

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

FOR THE SEVEN MONTHS ENDED JANUARY 31

Page 366 of 372

FY-2019 YTD FY-2020 YTDActual Actual Increase Increase

Expenditures Expenditures (Decrease) (Decrease)Object of Expenditure 1/31/2019 1/31/2020 Amount Percentage

Personnel ServicesSalary and Longevity Pay Expenses 1,460,246 1,513,366 53,120 3.6%Taxes, Benefits, and Other Expenses 702,795 726,665 23,870 3.4%

Subtotal Personnel Services 2,163,041 2,240,031 76,990 3.6%Professional Services

Investment Consultant Expenses 469,448 580,238 110,790 23.6%Investment Manager Alternatives Expense 0 125,000 125,000 0.0%Investment Custodian Expenses 7,000 0 (7,000) 0.0%Pension Commission Expenses 12,856 13,115 259 2.0%

Subtotal Investment Expenses 489,304 718,353 229,049 46.8%Legal Services - Special Projects 24,708 17,628 (7,080) -28.7%Legal Services - Attorney General 0 0 0 0.0%Administrative Hearings 0 0 0 0.0%Auditing Services 143,504 98,977 (44,527) -31.0%Actuarial Services 37,557 42,300 4,743 12.6%Medical Hearings 4,500 4,500 0 0.0%Communications Firm 0 0 0 0.0%Contract Lobbyist 22,500 0 (22,500) 0.0%Disability Retirement Management 0 0 0 0.0%Miscellaneous Services 19,025 11,125 (7,900) -41.5%

Subtotal Professional Services 251,794 174,530 (77,264) -30.7%Total Professional Services 741,098 892,883 151,785 20.5%

Travel and Per Diem ExpensesNon-Employee Travel Expenses 7,621 6,712 (909) -11.9%Employee Training 9,556 8,238 (1,318) -13.8%Employee Travel Expenses 14,099 10,733 (3,366) -23.9%

Subtotal Travel and Per Diem Expenses 31,276 25,683 (5,593) -17.9%Administrative Expenses

Postage 122,295 96,749 (25,546) -20.9%Printing and Binding Contracts 11,950 14,072 2,122 17.8%Informational Services 9,194 12,136 2,942 32.0%Rent and Maintenance 81,732 102,188 20,456 25.0%Office Supplies 11,725 12,089 364 3.1%Equipment 0 0 0 0.0%Office Relocation 0 0 0 0.0%Miscellaneous Administrative Expenses 22,781 16,554 (6,227) -27.3%

Subtotal Administrative Expenses 259,677 253,788 (5,890) -2.3%Data Processing Expenses

Professional Services 260,821 255,476 (5,345) -2.0%Telecommunication Services 3,315 4,134 819 24.7%Rent and Maintenance 2,064 3,856 1,792 86.8%Office Supplies 461 119 (342) -74.2%Equipment - Telecommunications 38,755 26,228 (12,527) -32.3%Informational Services 0 0 0 0.0%

Subtotal Data Processing Expenses 305,416 289,813 (15,603) -5.1%

Total Expenses 3,500,508 3,702,198 201,689 5.8%Total Investment Expenses Only 489,304 718,353 229,049 46.8%Total Data Processing Expenses Only 305,416 289,813 (15,603) -5.1%Total except Investment & Data Processing Expenses 2,705,788 2,694,032 (11,757) -0.4%

Wednesday, February 26, 2020

SCHEDULE IComparison of Actual Expenditures Fiscal Year 2019 and Fiscal Year 2020

7 Months Ended January 31, 2020

Page 367 of 372

7 Months 7 Months Over OverFY-2020 YTD FY-2020 YTD (Under) (Under)

Object of Expenditure Budget Actual Amount PercentagePersonnel Services

Salary and Longevity Pay Expenses 1,613,487 1,513,366 (100,121) -6.2%Taxes, Benefits, and Other Expenses 825,037 726,665 (98,372) -11.9%

Subtotal Personnel Services 2,438,524 2,240,031 (198,493) -8.1%Professional Services

Investment Consultant Expenses 691,942 676,944 (14,998) -2.2%Investment Manager Alternatives Expense 291,669 125,000 (166,669) -57.1%Investment Custodian Expenses 21,000 0 (21,000) 0.0%Pension Commission Expenses 35,000 13,115 (21,885) -62.5%

Subtotal Investment Expenses 1,039,611 815,059 (224,552) -21.6%Legal Services - Special Projects 58,335 17,628 (40,707) -69.8%Legal Services - Attorney General 4,375 0 (4,375) 0.0%Administrative Hearings 3,750 0 (3,750) 0.0%Auditing Services 268,204 98,977 (169,227) -63.1%Actuarial Services 68,600 42,300 (26,300) -38.3%Medical Hearings 8,750 4,500 (4,250) -48.6%Communications Firm 29,169 0 (29,169) 0.0%Contract Lobbyist 26,250 0 (26,250) 0.0%Disability Retirement Management 29,169 0 (29,169) 0.0%Miscellaneous Services 16,790 11,125 (5,665) -33.7%

Subtotal Professional Services 513,392 174,530 (338,862) -66.0%Total Professional Services 1,553,003 989,589 (563,414) -36.3%

Travel and Per Diem ExpensesNon-Employee Travel Expenses 25,300 6,712 (18,588) -73.5%Employee Training 15,809 8,238 (7,571) -47.9%Employee Travel Expenses 17,660 10,733 (6,927) -39.2%

Subtotal Travel and Per Diem Expenses 58,769 25,683 (33,086) -56.3%Administrative Expenses

Postage 114,000 96,749 (17,251) -15.1%Printing and Binding Contracts 51,166 14,072 (37,095) -72.5%Informational Services 9,791 12,136 2,345 24.0%Rent and Maintenance 97,766 102,188 4,422 4.5%Office Supplies 18,135 12,089 (6,046) -33.3%Equipment 7,000 0 (7,000) 0.0%Office Relocation 100,000 0 (100,000) 0.0%Miscellaneous Administrative Expenses 39,135 16,554 (22,581) -57.7%

Subtotal Administrative Expenses 436,993 253,788 (183,206) -41.9%Data Processing Expenses

Professional Services 614,839 255,476 (359,363) -58.4%Telecommunication Services 17,886 4,134 (13,752) -76.9%Rent and Maintenance 18,900 3,856 (15,044) -79.6%Office Supplies 3,956 119 (3,837) -97.0%Equipment - Telecommunications 30,925 26,228 (4,697) -15.2%Informational Services 2,460 0 (2,460) 0.0%

Subtotal Data Processing Expenses 688,966 289,813 (396,693) -57.6%

Total Expenses 5,176,255 3,798,904 (1,374,891) -26.6%Total Investment Expenses Only 1,039,611 815,059 (224,552) -21.6%Total Data Processing Expenses Only 688,966 289,813 (396,693) -57.6%Total except Investment and Data Processing Expenses 3,447,678 2,694,032 (753,647) -21.9%

Wednesday, February 26, 2020

SCHEDULE IIComparison of FY2020 Budget to Actual Expenses

7 Months Ended January 31, 2020 Year to Date Comparison

Page 368 of 372

Travel of Employees

Director of Client Services Retirement presentation - Elk City, OK 116.00$ 116.00

Communications

AT&T Wireless, OneNet phone service charges 1,696.71 Bancfirst Remote deposit scanner service charges - December 18.68 Cox Communications Cable charges - December 49.58 eCapitol Subscription 2,800.00 JP Morgan Chase Bank, NA Account analysis bank fees 696.00Office of Management and Enterprise Services Server, disk storage, scanning & network support 15,822.88Thomson West Legal information services subscription 287.24

21,371.09

Contingency, Maintenance, Insurance, Rent, Etc.

Amazon Marketplace Office/kitchen supplies 91.83 Department of Libraries Records storage: November 478.50 Ethics Commission TRS lobbyist registration 300.00 Imagenet Consulting LLC Desktop printer maintenance and usage: November 511.19 NASRA - (Nat'l. Assoc. of State Retirement Admin.) Annual membership renewal - Executive Director 4,110.00 Office of Management and Enterprise Services Office rent - January 2020 13,195.27 Oklahoma Assoc. of Procurement Professionals Membership dues - Business Manager 40.00 Oklahoma Bar Association Annual dues - General Counsel 290.00 Public Pension Financial Forum (P2F2) Membership Renewal: Assistant CFO 200.00 Oklahoma State Treasurer Unclaimed Property services 10/1 - 12/31/2019 750.00 SHI International Corp. Adobe Pro licenses 1,921.00 Standley Systems, LLC Copier Leases - October - December 4,656.28 Tulsa Technology Center Retirement seminar refreshments and venue 1,409.00

27,953.07

CLAIMS FOR AUTHORIZED EXPENDITURESJANUARY 31, 2020

Page 369 of 372

Professional Services, Workers Comp Insurance

Gabriel, Roeder, Smith, & Co. Actuarial services - December 5,716.67$ ICE Miller Legal fees -November 935.85 J. P. Livingston, MD Medical Board - January 300.00 MY Consulting Inc. ALICE/Client server development - December 24,382.50 Office of Management and Enterprise Services Interagency mail/postage/printing 8,153.32 Peyton Osborne, MD Medical Board - January 300.00 Phillips Murrah, PC Services rendered - AEW Core Property Trust, AG Realty Value Fund 5,325.00 Stinnett & Associates LLC Internal Audit services: December 1,667.50 The Meadows Document destruction 320.62

47,101.46

Investment Expenditures

Andco Investment Consulting svcs. - December 96,706.34 Meketa Investment Group Private market admin. svcs. - November - December 50,000.00

146,706.34

Salaries and Fringe Benefits

Salaries Administrative department 43,846.63 Salaries Finance/Accounting department 36,658.15Salaries Client Services department 98,504.19Salaries Investment department 22,073.41Salaries IT department 6,940.51Longevity Payroll 250.00Excess Benefit Allowance 1,594.01FICA/MQFE Social Security and Medicare 16,070.25Oklahoma State Deferred Savings Incentive Plan Savings incentive plan and administrative fee 1,023.84Oklahoma Group Insurance Employee health, dental, and life 42,772.06Teachers' Retirement System of Oklahoma Employees' retirement contributions 44,556.64

314,289.69

Grand Total 557,537.65$

JANUARY 31, 2020CLAIMS FOR AUTHORIZED EXPENDITURES

Page 370 of 372

Deputy Executive Director of Operations Report

February 2020 Board Meeting

1. Progress is being made with the upgrade project of the 8 servers for the Pension Administration

System. OMES has completed their part and now My Consulting Group is configuring the

pension administration software.

2. TRS provided the first file to the Treasurer for unclaimed property which will be made available

to the public in March. We have received one claim from an internal match made by the

Treasurer.

3. ALICE enhancements last month were mostly for correcting defects. Some new features are

added as deemed necessary, especially in areas of automation. We are now generating letters

automatically each month and able to process 170 letters within a day, to notify members when

their account has become Closed 5-year status so they have the opportunity to withdraw or roll-

over their funds. Previously this was a manual process with multiple steps done over a long

period of time.

4. OMES performed their first scheduled site visit in January for network connectivity to the new

building and provided a preliminary statement of work for cabling, network configuration,

telephony and workstation moves. There will be another site visit once the floor plans are

finalized.

5. OMES and My Consulting Group have outstanding items in progress regarding the cybersecurity

audit. We continue to monitor the progress and request updates. Some of the tasks for My

Consulting Group are dependent on OMES. We have asked OMES for an update.

Page 371 of 372

GENERAL COUNSEL REPORT FEBRUARY 2020 SARAH GREEN

1. Securities Litigation

a. Action in Motion to Dismiss phase. Briefing cycle completed 11.8.19.

b. Still awaiting scheduling of oral arguments.

2. White Star Bankruptcy

a. TRS (as landlord) has asserted a claim of approximately $168,955 in prepetition

debt owed by White Star.

b. We filed a claim for post-petition debt totaling $$1,337,537.04 (12 months of rent

at $111,461.42).

3. Harvey Parkway Building

c. Arcadia Capital – currently occupying 9,075 sq. ft. of space on the 4th floor – would

now like to move to the 6th floor and occupy 12,044 sq. ft. of space as of 4.1.20.

We are currently in lease negotiations but nearing finalization.

d. Our property manager responded to an RFP from the Dept. of Tourism for 25,000

sq. ft. of space.

4. Misc.

a. American Realty Advisors

b. Ghost – We have officially retained a communications firm. We are under

contract with Ghost for communications services beginning March 1, 2020, thru June

30, 2020. Negotiated 4 additional renewals costing approximately $50,000 annually.

c. Eide Bailly – We negotiated a final contract with Eide Bailly as our External

Auditor beginning July 1, 2020, subject to 4 additional annual renewals. We

have negotiated a slight fee reduction from the proposal of $502,100 to $494,800

(savings of $7,300) over the 5-year period.

d. AG Opinion – Federal/External Grant Matching – AG Opinion expected anytime

between late March to May.

Page 372 of 372

M E M O R A N D U M

TO: The Board of Trustees of TRS



RE: Monthly Report for January 22, 2020 through February 24, 2020 -------------------------------------------------------------------------------------------------------------------- Here are a few of the highlights of my activities since my last report at the January Board meeting.

1. Investments (Office Building)a. Tenants - Contango (the purchaser of White Star’s assets) and Intensity Midstream are newtenants that came to us last month. Contango is considering expanding in the building. We’vehad interest from other tenants in the remaining space. We are closer to a lease with ArcadiaCapital on the 6th floor for more space than they had on the 4th floor. They might want toremainder of the 6th floor.b. TRS space – We have a presumptive final space plan on 5th floor with demolition of some ofthe older parts of that floor. We need to get our space plan and lease (with ourselves) approvedby OMES.c. Fitness Center – There is a high likelihood that we could keep the fitness center open for ourtenants. Apparently several of the tenant staff have indicated that they really want to have accessto it and will pay. We are negotiating a possible acquisition of the equipment that is there whichappears to be of very good quality.d. What’s Left? A lot – Bids to do the construction work, paint and carpet are in the near future.Possible acquisition of some new furniture and equipment. OMES I.T. will be installing cabling,ports and WiFi equipment. We will be building out the conference room on the first floor thatwill be a shared space for all tenants. And finally a moving company will be selected to bring thefurniture, equipment and files from our current office.

2. Legislation – I won’t repeat my Legislative Report. I have attended many committee meetingsalong with many legislator meetings. I met with a group of three (3) Tulsa legislators who are allformer educators. I went over my legislation list and they want to be helpful. I have had toconsult with our actuary on a few of the pending pieces of legislation.

3. Communications – We have entered into a contract with a communications firm calledGhost. It is up to a 5 year contract. We interviewed many good firms but we think this firm willbe the best fit. The highest priority is our online presence on our website, Facebook and othersocial media. But they will also improve our publications like the newsletter, PAFR & CAFR, aswell as online educational material. A kickoff meeting with the firm is scheduled next week.

4. HR/Personnel – Kim has already reported on this but I did my mid-year reviews with my fourdirect reports. We also will need to replace two long-time staffers who are retiring. We intend to“double fill” these positions so that the incumbents can train their successors if necessary. We

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2

have had a slow drip (thankfully) of the Baby Boomers leaving, but it may start to pick up over the next year or three.

5. Internal Audit (Stinnett)a. Cyber Security - The new head of the I.T. section of OMES was promoted to be the head ofall of OMES. Unfortunately the progress on audit responses has slowed to a crawl.b. Outstanding Items on Past – Stinnett sent a relatively short list of items that were stilloutstanding from prior audits. We have responded to all of those and I’m sure there will be areport on this in April.c. Governance Audit – Stinnett started a “Governance” Audit a week or so ago. The idea is toreview how staff make decisions and the necessary review that takes place. It will also includeBoard governance as well.

6. Miscellaneous – We entered into a contract several months ago with the State Treasurer’soffice so that we could give that office the names of members and past members with whomwe’ve lost contact and are holding contribution balances or who are eligible for a pension. Wegot our first claim earlier this month and are in contact with the claimant.

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