December Board Meeting Summary

The Budget and Audit Committee of the Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) Board of Trustees convened at 8:30 a.m. Monday, Dec. 15, 2025, at the PSRS/PEERS office at 3210 W. Truman Blvd., Jefferson City, Missouri. The regular session of the Board of Trustees meeting followed at 9:30 a.m. In attendance were Board members Beth Knes, Dr. Eric Park, Allie Gassmann, Katie Webb, Chuck Bryant, Dr. Nate Moore, and Amanda Perschall. Also present were Executive Director Dearld Snider; Chief Operating Officer Sarah Swoboda; Chief Investment Officer Craig Husting; Chief Counsel Mike Moorefield; Chief Financial Officer Brandon Robertson; Director of Human Resources Michelle Varcho; Director of Member Services Nicole Hamler; Director of Employer Services Stacie Verslues; Director of Internal Audit Jeff Hyman; Director of Communications Susan Wood; Chief Information Security Officer Jake Woratzeck; Director of Executive and Board Administration Jennifer Martin; and other PSRS/PEERS staff members.

Budget and Audit Committee

Approval of Minutes

The open session minutes from the June 10, 2025, Budget and Audit Committee meeting were approved by unanimous vote.

Review of the Fiscal Year 2025 Annual Comprehensive Financial Report (ACFR)

Brandon Robertson from PSRS/PEERS reviewed the purpose of the ACFR. The ACFR is an accumulation of all activity conducted by the Systems during the fiscal year and becomes a historical document for current and future users. The ACFR is prepared in compliance with Missouri statutes and with accounting requirements established by the Governmental Accounting Standards Board (GASB). The Government Finance Officers Association (GFOA) also provides guidance on the content of the ACFR. The Systems strive for excellence in reporting and transparency. The ACFR has historically exceeded the GFOA requirements, resulting in receipt of the GFOA's "Certificate of Achievement for Excellence in Financial Reporting." The 2025 ACFR also will be submitted for consideration of this award.

Robertson focused on the ACFR's five sections — Introductory, Financial, Investment, Actuarial, and Statistical — providing a summary of the contents and highlights found in each section. The full report is available at https://www.psrs-peers.org/About-Us.

Robertson also briefly discussed the financial reporting requirements of our participating employers related to the Systems under GASB Statement No. 68. He reviewed the coordination and input required by the Systems, the Systems' auditors (internal and external), the Systems' actuaries (PwC), and employers in meeting these requirements. He then provided detail on the Systems' role in the process, noting that the process is ongoing and that he, Williams Keepers, and the Systems' internal auditors will provide further updates as that process wraps up for fiscal year 2025.

Independent Auditors' Report

Nick Mestres, Kristen Brown, and Zachary Brown from Williams-Keepers, LLC, discussed the June 30, 2025, audit of the Systems. Mestres provided an overview of Williams-Keepers, LLC, and the overall audit engagement with the Systems, including scope and deliverables. Brown provided details on the audit process and indicated that Williams-Keepers, LLC, had issued an unqualified audit opinion on the June 30, 2025, financial statements. She indicated an unqualified audit opinion represents the "highest opinion" available, affirming that the financial statements are fairly presented in all material respects in accordance with U.S. Generally Accepted Accounting Principles, and therefore the financial statements can be relied upon. She also briefly reviewed the audit process, financial statements, and footnotes. The "Audit Communications Letter to the Board of Trustees" was reviewed, and the auditors found no significant deficiencies or material weaknesses in internal controls.

The audit report was approved and recommended for acceptance by unanimous vote by the Budget and Audit Committee.

Public Comment

None

Regular Board Meeting

System Operations

Approval of Minutes

The open session minutes from Nov. 3, 2025, meeting were approved by unanimous vote.

Order of Business

The order of business was approved with no changes.

Best Places to Work Announcement

Chairwoman Knes announced that for the third year in a row, PSRS/PEERS has been named one of Pension & Investments (P&I) Best Places to Work in Money Management. Winners of this year's award were recognized in the Dec. 8 issue of Pensions & Investments magazine. For the second year in a row, the Systems ranked third in the Large Employer Category. This category covers companies with 100 to 499 U.S. employees.

The annual program, run by P&I and Workforce Research Group, recognizes top employers in the money management industry. Rankings are based 80% on employee feedback and 20% on employer responses. It's worth noting that pension systems are rarely included in these awards.

Knes stated: "This award is a testament to the incredible staff here at PSRS/PEERS. On behalf of the Board of Trustees, I congratulate the PSRS/PEERS staff. Their positive attitude and commitment to serving our members make this recognition well deserved. We are proud of their continued excellence."

Other

None

Investment Report

Investment Performance Report (9/30/25)

Craig Husting from PSRS/PEERS and Michael Hall from Russell reviewed the investment performance for the period ended Sept. 30, 2025. The one-year PSRS/PEERS investment return was reported as 10.6%, while the fiscal year return (July 1, 2025, through Sept. 30, 2025) was reported as 3.6%.

Ongoing Investment Activity

Husting and Hall reviewed ongoing investment activities, which included estimated investment performance through Nov. 30, 2025. Husting discussed the current asset allocation of the PSRS/PEERS portfolio and reviewed the long-term strategy and broad portfolio expectations.

Global Investment Performance Standards (GIPS®)

Husting reported on the Global Investment Performance Standards, which are ethical standards for calculating and presenting investment performance based on principles of fair representation and full disclosure. PSRS/PEERS provides the GIPS Asset Owner Report for the Total Plan fiscal year performance to the Board of Trustees on an annual basis. An independent third-party verification is also conducted and reported with the GIPS Asset Owner Report to the Board of Trustees.

Investment Beliefs

The Systems adopted Investment Beliefs in 2015. Husting and Hall stated that Hall had worked with the Board and senior staff to re-underwrite the current Investment Beliefs. A summary of the discussions with staff and Board were presented. Husting and Hall recommended two additions to the current Investment Beliefs. Following discussion, the proposed Beliefs were approved by unanimous vote.

Public Equity Review

Jessica Wilbers and Dan Lane from the PSRS/PEERS investment staff reviewed the Systems' public equity portfolio, including program objectives, guidelines, and long-term results. The five-year annualized return for the U.S. Equity composite for the period ended Sept. 30, 2025, was 14.9%. The five-year annualized return for the Non-U.S. Equity composite for the period ended Sept. 30, 2025, was 13.2%.

Real Estate Annual Review

Seth Marcus and Kathryn Finneran from Townsend (the Systems' real estate consultant), presented several items to the Board, including a real estate market overview and details of the PSRS/PEERS real estate portfolio. Townsend reported that the PSRS/PEERS' real estate portfolio had produced an annualized return of 6.3% (net of all fees) for the five-year period ended June 30, 2025.

Accounting Report

Independent Auditors' Report

Brandon Robertson noted that the full Board was present for the earlier presentation of the ACFR to the Budget and Audit committee, during which the Committee voted to approve the audit report for review and approval of the full Board.

Mestres from Williams-Keepers, LLC, briefly reviewed the reports and opinions reached during the fiscal 2025 audit of the Systems as previously shared with the Budget and Audit Committee.

The audit report was approved as recommended by the Budget and Audit Committee by unanimous vote.

Management Report

Approve Audit Committee to Certify Petitions for Election

The Board voted unanimously to delegate to PSRS/PEERS staff (executive director) the task of organizing the audit committee composition, time to meet, etc. The audit committee will be comprised of representatives from various education associations.

Change June 8 Board Meeting to June 15

The Board voted unanimously to change the June 8, 2026, board meeting to June 15, 2026.

LEAD Group Recognition

Sarah Swoboda from PSRS/PEERS recognized the Leadership Exploration and Development (LEAD) class of 2025. The LEAD program is a 12-month program provided by the Missouri Training Institute and PSRS/PEERS management team. The areas of focus are communication skills in a leadership role, how to become an effective leader, how to navigate stress and burnout as a leader, and the art of positive attitude. Swoboda presented each participant with a graduation certificate.

Legislative Update

Doug Nelson, external government relations consultant, and Mike Moorefield from PSRS/PEERS, presented the December legislative update.

Moorefield and Nelson provided an update on the upcoming 2026 legislative session and potential themes and priority legislation the General Assembly will consider. Moorefield and Nelson also discussed how the 2026 elections could impact legislative activity.

Finally, Moorefield discussed bills of interest to PSRS/PEERS, highlighting legislation that could impact the Systems' investment activity and working after retirement provisions.

Key Accomplishments

Sarah Swoboda reviewed key accomplishments since the November board meeting.

Swoboda shared that the Systems successfully migrated the Sitefinity CMS from on-premises infrastructure to Microsoft Azure Cloud. This will reduce licensing fees and maintenance workload.

Swoboda also highlighted the migration of over 8,500 human resource files from SharePoint to Oracle Fusion. As part of the migration process, HR conducted an audit of all personnel files and created compliance trackers and checklists. She also talked about the implementation of the Talent Management Module in Oracle Fusion, which will improve recruitment, onboarding/offboarding, and workflow efficiencies.

Swoboda next mentioned to the Board that the banking contracts were renewed for Central Bank and J.P. Morgan. She also noted that the Systems were again recognized for meeting and exceeding the Public Pension Coordinating Council's (PPCC) standards for both funding and administration. PSRS has received the award every year since 2004, and PEERS has received the award every year since 2005.

Lastly, Swoboda reported to the Board the implementation of remote deposit automation, allowing checks to be deposited digitally, increasing efficiency. She reminded the board about the introduction of the Trustee Tidbits newsletter. This monthly communication is intended to improve transparency and stakeholder engagement.

CPI-U Update

Dearld Snider reviewed the COLA policy that was set by the Board of Trustees at their Nov. 3, 2017, meeting. According to the policy, COLAs may be granted based on the CPI-U as follows:

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 time 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 0.69% through Sept. 30, 2025. The October CPI-U was not released on Nov. 13, 2025, due to the federal government shutdown. The CPI-U for November 2025 is scheduled to be released on Dec. 18, 2025.

Public Comment

None

Other

None

Closed Session

The Board went into closed session at 12:23 p.m.

Adjournment

The Board adjourned at 1:38 p.m.

This summary is not the 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.