April Board of Trustees Board Meeting Summary

The Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) Board of Trustees convened on April 6-7, 2025, at the PSRS/PEERS offices at 3210 W. Truman Blvd., Jefferson City, Missouri. In attendance were Board members Beth Knes, Dr. Eric Park, Allie Gassmann, Katie Webb, Chuck Bryant, and Dr. Nate Moore. Also present were Executive Director Dearld Snider, Chief Operating Officer Sarah Swoboda, Chief Investment Officer Craig Husting, Chief Counsel Mike Moorefield, Director of Internal Audit Jeff Hyman, Chief Financial Officer Anita Brand, Director of Human Resources Michelle Varcho, Director of Member Services Nicole Hamler, Director of Employer Services Stacie Verslues, Chief Technology Officer Lisa Scheulen, Director of Communications Susan Wood, Chief Information Security Officer Jake Woratzeck, Director of Executive and Board Administration Jennifer Martin, and various other PSRS/PEERS staff members.
Budget and Audit Committee
Sunday, April 6, 2025
Approval of Minutes
The open session minutes from the December 16, 2024, Budget and Audit Committee meeting were approved by unanimous vote.
External Auditor Contract
Ms. Anita Brand from PSRS/PEERS reviewed the most recent Request for Proposals (RFP) for Professional Auditing Services from February 2022. The RFP requested proposals from qualified firms of certified public accountants to audit the Systems' financial statements for each of the fiscal years ending June 30, 2022; June 30, 2023; and June 30, 2024. An option to audit the financial statements for the two subsequent fiscal years was also requested. The Systems also requested proposals to audit the Systems' Schedules of Pension Information for Participating Employers, inclusive of employer allocations, net pension liability, total deferred outflows of resources, total deferred inflows of resources, and total pension expense. The Board of Trustees approved hiring Williams-Keepers for the three years ended June 30, 2024, based off the RFP. Staff recommended extending the Williams-Keepers audit contract for the two optional years included in the February 2022 RFP response. An RFP will be issued after the June 30, 2026, engagements have been completed. The Budget and Audit Committee approved staff's recommendation by unanimous vote.
Preliminary 2025-2026 Budget Discussion
Ms. Anita Brand, Ms. Sarah Swoboda, and Ms. Michelle Varcho, all from PSRS/PEERS, and Mr. Joe Rice, from CBIZ, led a compensation and budget discussion in preparation for the upcoming fiscal year. Ms. Swoboda and Ms. Varcho reviewed the Board of Trustees' compensation strategy by highlighting the purpose, principles, and overall approach of the strategy. As part of the Board of Trustees' compensation strategy, an independent compensation study is conducted at least every three years to ensure the Systems maintain external competitiveness. Mr. Rice presented the results of the compensation study, which included a review of the salary range structure and the overall labor market. Overall, the study results concluded that modest adjustments were necessary to maintain market competitiveness in alignment with the Board's compensation strategy and philosophy. CBIZ commended the Systems' reliance on their compensation strategy. They see the approach as good governance and best practice to keep compensation at or near the market.
Ms. Brand described the annual budgeting process, which begins in the second quarter of each calendar year. The budget includes two broad categories: investment expenses and administrative expenses, inclusive of capital assets.
The annual budget is prepared with consideration of the necessary expenses to ensure the Systems continue to meet their goals and objectives in an efficient and effective manner.
Final detailed budget requests will be presented to the Budget and Audit Committee and the Board of Trustees during the June 2025 meeting.
Public Comment
None
Investments
Alpha Overlay
Mr. John Tuck from the PSRS/PEERS' investment staff provided education on the Alpha Overlay program, focusing on the building blocks of the portfolio. Additionally, Mr. Tuck provided long-term investment results. The five-year annualized return for the Alpha Overlay composite for the period ended December 31, 2024, was 9.6%.
Public Equity and Private Credit Review
Mr. John Tuck, Mr. Dan Case, Mr. Ben Frede, Mr. Travis Allen, Mr. Paul Katzfey, and Mr. Connor Quinn from the PSRS/PEERS' investment staff provided education on the Private Equity program. Additionally, the team provided long-term investment results. The five-year annualized return for the Private Equity composite for the period ended December 31, 2024, was 15.4%, and the 5-year annualized return for the Private Credit composite for the same period was 10.1%.
Public Comment
None
Regular Board Meeting
Monday, April 7, 2025
System Operations
Approval of Minutes
The open session minutes from the February 3, 2025, Board meeting were approved by unanimous vote.
Order of Business
The order of business was approved with no changes.
Election of Chair and Vice Chair
Ms. Beth Knes was elected to serve as chair of the Board and Dr. Eric Park as vice-chair of the Board for the period of July 1, 2025, through June 30, 2026. Each was elected by unanimous vote.
Set Interest Credit Rate for June 30, 2026
Each June 30, interest is credited to the accounts of active members at the rate set by the Board of Trustees. If a member requests a refund of their contributions, any accumulated interest is paid as part of this refund. If a member retires from the Systems, the amount of interest credited to the member's account will not affect the retirement benefit calculation. If there is an unused balance in the member's account at the death of the member and any Joint-and-Survivor benefit plan beneficiary, the remainder is paid in a lump sum to the residual beneficiary. Ms. Brand presented information on the current interest rate environment and historical interest rates. Staff recommended the interest rate credited to the accounts of active members decrease from 4% to 3.5% for fiscal year 2025-2026. This rate will be used throughout the fiscal year to facilitate necessary member account corrections and will be used to credit active member accounts on June 30, 2026. The Board of Trustees approved staff's recommendation by unanimous vote.
Set Purchase Interest Rate for Fiscal Year 2026
Ms. Brand presented information to the Board of Trustees on the purchase interest rate. According to Board Regulation (16 CSR 10-4.012 (4)), prior to July 1 each year, the Board of Trustees shall establish a "purchase rate" of interest based on the actuarially assumed rate of return on invested funds of the Retirement Systems. The purchase interest rate shall apply to any amount due for reinstatement of service or for the purchase of service, except as otherwise specified by law. Staff recommended the purchase interest rate be set at the current assumed rate of return of 7.3%. The Board of Trustees approved staff's recommendation by unanimous vote.
Other
Mr. Dearld Snider and Ms. Lisa Scheulen with PSRS/PEERS presented plaques to Molly Eiken and Travis Clines for their dedication and service to PSRS/PEERS. Mr. Clines will retire effective July 1, 2025, and Ms. Eiken will retire effective November 1, 2025.
Investment Report
Ongoing Investment Activity
Mr. Craig Husting from PSRS/PEERS and Mr. Michael Hall from Russell provided a market overview including detailed investment returns for several stock and bond indices for the past five years and the current fiscal year through March 31, 2025. Mr. Husting provided a broad overview of the PSRS/PEERS' portfolio structure, including an estimated asset allocation for PSRS/PEERS as of March 31, 2025. Mr. Husting stated that the PSRS/PEERS preliminary (unaudited) investment return for the fiscal year (July 1, 2024, through March 31, 2025) was approximately 4.8%.
Management Report
Employer Services Update
Ms. Stacie Verslues from PSRS/PEERS gave an update on Employer Services. Ms. Verslues shared how the Employer Services team continues to accomplish their main goals of ensuring accuracy in reporting, educating our employers, providing ongoing enhancements in the Employer Web Portal, and continuing to provide top-level customer service. The team serves as a resource to our partner employers, reviews reported data, and provides ongoing education and support. Ms. Verslues discussed the educational opportunities offered to employers, which include both virtual and in-person training, as well as many retirement reporting resources available on the new employer landing page, Your Reporting Resource. Ms. Verslues presented several ways in which the PSRS/PEERS Employer Services team continues to offer advancements on our Employer Web Portal. Employer Services, along with the PSRS/PEERS information technology team, are continually working to develop tools and resources that will improve processes and increase efficiencies for our employers.
Legislative Update
Mr. Mike Moorefield from PSRS/PEERS and government relations consultant Mr. Doug Nelson presented the April legislative update.
Mr. Moorefield and Mr. Nelson gave the Board an overview of the legislative issues and priorities that they expect the General Assembly to address during the remaining six weeks of the legislative session. Additionally, Mr. Moorefield and Mr. Nelson discussed the state budget and the 31 priority bills they are tracking. Ten of these bills have investment mandates/System Governance language, and another 10 bills have the substitute WAR waiver language that would extend the substitute teaching working-after-retirement waiver to June 30, 2030.
External Auditor Contract
Ms. Anita Brand reviewed the most recent Request for Proposals (RFP) for Professional Auditing Services from February 2022. The RFP requested proposals from qualified firms of certified public accountants to audit the Systems' financial statements for each of the fiscal years ending June 30, 2022; June 30, 2023; and June 30, 2024. An option to audit the financial statements for the two subsequent fiscal years was also requested. The Systems also requested proposals to audit the Systems' Schedules of Pension Information for Participating Employers, inclusive of employer allocations, net pension liability, total deferred outflows of resources, total deferred inflows of resources, and total pension expense. The Board of Trustees approved hiring Williams-Keepers for the three years ended June 30, 2024, based off the RFP. Staff recommended extending the Williams-Keepers audit contract for the two optional years included in the February 2022 RFP response, which was unanimously approved by the Budget and Audit Committee. The Board of Trustees approved the Budget and Audit Committee's recommendation by unanimous vote.
Key Accomplishments
Ms. Sarah Swoboda and Ms. Anita Brand reviewed key accomplishments since the February Board Meeting.
Ms. Swoboda discussed the Resource for School Administrators web page that's now available on our website. This new page provides school administrators with documents and videos that they can use to educate their staffs on the benefits of PSRS/PEERS.
Ms. Swoboda also talked about the new Your Reporting Resource web page. This new page serves as a one-stop, online resource for all things employer reporting., including employer reporting newsletters, training information, webinars, and materials from employer conferences.
Ms. Swoboda next discussed the newly designed internal Human Resources Communications Site. The new site was designed keeping the most frequent needs and questions asked by employees in mind. It's very user friendly and brings together information relevant to employment at PSRS/PEERS in a well-organized, easy-to-navigate site. Ms. Swoboda also reported to the Board about the completion of the 2025 Compensation Study. A compensation study is conducted every three years, which is important in order to attract and retain staff.
Lastly, Ms. Brand covered PitchBook. This is a cloud-based research and analytics resource that is used by our investments team. PitchBook provides additional information on General Partners, private portfolio companies, benchmarking, and analysis on a large universe of private investments.
CPI-U Update
Mr. Dearld Snider reviewed the COLA policy that was set by the Board of Trustees at their November 3, 2017, meeting. According to the policy, COLAs may be granted based on the CPI-U as follows:
CPI-U | COLA per Board-Approved Funding Policy |
---|---|
Less than 0.0% | 0.0% |
0.0%-2.0% | 0.0% when CPI-U is cumulatively below 2.0% |
0.0%-2.0% | 2.0% when CPI-U cumulatively reaches 2.0% or more* |
2.0%-5.0% | 2.0% when the CPI-U is at least 2.0%, but less than 5.0% |
5.0% or more | 5.0% |
*resets cumulative calculation after a COLA is provided |
Mr. Snider explained that the Consumer Price Index for Urban Consumers (CPI-U) is calculated by the Bureau of Labor Statistics (BLS). The CPI-U is the measure of the change in prices of goods and services purchased by urban consumers between any two time periods. PSRS/PEERS' regulation requires that the period for the CPI-U calculation used in the determination of a COLA be from June to June. Based on the values provided by the BLS, the CPI-U is up 1.56% through February 28, 2025. The CPI-U for March 31, 2025, will be released April 10, 2025.
Index Values | |||
---|---|---|---|
June 2024 | 314.175 | Month | To-Date |
July 2024 | 314.540 | 0.12% | 0.12% |
August 2024 | 314.796 | 0.08% | 0.20% |
September 2024 | 315.301 | 0.16% | 0.36% |
October 2024 | 315.664 | 0.12% | 0.47% |
November 2024 | 315.493 | -0.05% | 0.42% |
December 2024 | 315.605 | 0.04% | 0.46% |
January 2025 | 317.671 | 0.65% | 1.11% |
February 2025 | 319.082 | 0.44% | 1.56% |
March 2025 | |||
April 2025 | |||
May 2025 | |||
June 2025 |
Public Comment
None
Other
None
Closed Session
The Board went into closed session at 9:46 a.m.
Adjournment
The Board adjourned at 12:54 p.m.
This summary is not official minutes of the PSRS/PEERS Board of Trustees meeting. The official minutes will be approved at the next PSRS/PEERS Board of Trustees meeting and will be posted to our website at that time.