2015 BUSINESS PLAN PRELIMINARY INITIATIVES/GOALS

Transcription

1 2015 BUSINESS PLAN PRELIMINARY INITIATIVES/GOALS 1

2 2015 Business Plan & Budget Process Sept 18, 2014 Preliminary 2015 Initiatives/Goals Presented to Board at Strategic Planning Meeting October 20, Business Plan Presented to Board November 5, 2014 Budget Workshop November 17, 2014 Budget Presented to Board for Approval 2

3 Purpose of Preliminary Initiatives/Goals Preliminary Initiatives/Goals are used by staff to establish initial budget requests Business Plan as approved by the Board in October will be reflected in the proposed budget presented to the Board at the Workshop (for initiatives/goals with a budget impact) 3

4 Executive 1. Begin Administrative Rule creation process (5 year anticipated timeline) 2. Continue investigating Incentive Pay Program for Investment Team 3. Rewrite the OCERS Strategic Plan; consider expanding to five year future outlook 4. Visit 2 California retirement systems for on-site overview Budget Impact: $3, Plan for all OCERS Managers to visit another California pension system as an educational process improvement opportunity: Budget Impact: $2,800 4

5 Executive 6. Continue Investigating Baldrige Performance Excellence Program a. On-site visit of Illinois Municipal Retirement #1 system in CEM, Presently undertaking multi-year program to implement Baldrige Budget Impact: $1, Accompany Investment Staff on local due diligence trips 8. Investigate converting the existing annual Strategic Planning meeting and the Board Educational Forum into a single event that spans two days Budget Impact: $5,000 5

6 Information Technology 9. V3 Implementation Budget Impact: $4,500,000 (for year 5 of 5+ year project-total project budget is $27.6 million) a. Project Management b. Member Document Conversion from LibertyNet to V3 (deferred from 2014) c. Coordinate with Plan Sponsors on Transmittal and Healthcare Deduction Submissions and Training of Employer Self Service and Partner Self Service Portals i. New File Formats ii. Development of Plan Sponsor Processing Guides iii.plan Sponsor Training of Employer Self Service and Partner Self Service Portals iv. Engagement in UAT activities d. Testing (by IT) i. Interface Files (Bank Files, IRS, EDD, etc.) ii. Transmittal Files iii.configuration Setup iv. Security and Access e. Data Conversion f. Data Reconciliation i. Reconciliation to Audit Data conversion ii. Reconciliation to Audit V3 processing (payroll, COLA, etc.) 6

7 Information Technology 9. V3 Implementation (cont.) g. Development of new and translation of existing Business Reports from Pension Gold to V3 for adjunct processes i. Actuarial Extract, CAFR, State Controller Office ii. OCERS by the numbers iii.member Service, Disabilities, and Finance operations h. Development of additional Workflows in V3 i. Development of V3 queries j. Performance Testing of V3 application and Portals k. Penetration Testing of V3 Portals l. Development of new business processing documents for IT activities related to V3 (deferred from 2014) m. IT Support for V3 Data Conversion Activities n. IT Support for V3 Data Cleansing Activities o. IT Support for V3 Testing Activities p. IT Support for V3 Training Activities 7

8 Information Technology 10. Equipment Upgrades & Replacement a. Upgrade Dual Monitor Setups Budget Impact: $30,000 b. Internet Gateway and Guest Wi-Fi services Budget Impact: $10,000 c. Digital Microfiche Reader Budget Impact: $20, OCERS Web site Assist as technical support for Communications (multi-year project) a. Outsource Web site re-design with hosted Content Management Solution Budget Impact: $250,000 8

9 Information Technology 12.OCERS Intranet (multi-year project) a. SharePoint Developer Budget Impact: $115,000 b. Migrate non-member documents from LibertyNet to SharePoint c. Develop Document Library Structure for: i. OCERS Policy Documents ii.ocers Business Process Documents iii.ocers Personnel Documents iv.ocers Training Documents v. OCERS Contracts vi.ocers Public Records Request d. Create Standard Forms, templates, widgets and pages for Departments (i.e., Meetings, calendars, Action Items, etc.) Budget Impact: $20,000 9

10 Information Technology 13. Implementation of Business Continuity and Disaster Recovery Solution Budget Impact Ranges from $1.68M - $2.35M a. Define and establish overall IT DR solution based on defined Business Requirements, acceptable Risk Assessment and Min/Max Downtime and Recovery time. i. Replication, co-location, backup and recovery, remote access and support Budget Impact: $145,000 - $250,000 b. Acquire and install new hardware Budget Impact: $500,000 c. Implement Emergency Mass Notification System Budget Impact: $60,000 to $100,000 d. Upgrade existing Data Center facilities equipment: (deferred from 2014) i. Replace UPS Unit, water-based fire suppression, central A/C unit for the server room and install Power Generator for Data Center, additional work space and supporting facilities Budget Impact: $975,000 - $1,500,000 e. Create OCERS Business Continuity Plan f. Create OCERS Business Resumption Approach Document for IT (Disaster Recovery Run Book) g. Create BC/DR annual Testing and Review Schedule 10

11 Finance 14. Continue active participation in the implementation of V3, including the dedication of 3-4 full time UAT testers from Finance with the following areas of focus: a. UAT Deployment Prep/Testing b. UAT Training c. UAT d. Parallel (all Finance V3 users) Budget Impact: Included in V3 Total Project Budget in IT Department 11

12 Finance 15. Working together with external auditors and actuary, implement GASB 67 in OCERS 2014 financial statements and assist Plan Sponsors with the implementation of GASB 68 in their FY14/15 financial statements which will include: a. Creation of new RSI schedules in CAFR required by GASB 67 that will be built into 10 years of required information b. Schedule of Change in Net Pension Liability c. Schedule of Contractually Required Contributions d. Schedule of Annual Money Weighted Returns e. Expand or create new footnotes required by GASB 67 in the following areas: f. Plan membership g. Investments h. Components of Net Pension Liability (NPL) i. Sensitivity of NPL to changes in discount rate j. Significant Actuarial Assumptions used to measure Total Pension Liability k. Provide Plan Sponsors with their proportionate share data and supporting schedules to assist them with their required GASB 68 disclosures Budget Impact: $100,000 12

13 Finance 16. Explore the benefits and process of changing OCERS s financial reporting year from a calendar year to a fiscal year that would end on June Prepare and solicit an RFP for the engagement of an independent auditing firm to perform audit related services effective as of the December 31, 2015 (per OCERS policy) 13

14 Finance 18. Participate in the Disaster Recovery/Business Continuity Solution Project 19. Work with Investments to issue an RFP for investment custodial services in 4 th quarter subject to completion of key V3 milestones competing for department staff resources required to undertake the custodian procurement process. 14

15 Administrative Services 20. Migrate contracts and forms from LibertyNet to SharePoint (collaboration with IT as part of Intranet project continued from 2014) 21. Partner with Legal to complete the revision of the Personnel, Policies & Regulations and Employee Handbook (Include working with Fiduciary Counsel continued from 2014) Budget Impact: $60,000 (to be included in fiduciary counsel line item in Board department) 22. Conduct an Employee Opinion Survey 15

16 Administrative Services 23. Implement Electronic Employee Exit Survey (coordination with IT and the Intranet project) 24. Provide OCERS direct employees training session on business ethics (on-site by HR staff) 25. Create internal career ladders in departments where work loads and job responsibilities have indicated a need 16

17 Administrative Services 26. For the 2016 budget process, work with the CEO and Investments to develop an investment analyst retention strategy to enhance OCERS market competitiveness for non-managerial investment professionals when they have acquired highly marketable and transferable experience 27. Implement security enhancements to OCERS headquarters building Budget Impact: $55, Participate in the Disaster Recovery/Business Continuity Solution Project 17

18 Member Services 29. Provide technical support to the Pension Administration Software team through the next phase of the V3 implementation project Pre-UAT testing Builds 4.1 and 4.2 Data Cleansing Training Staff and Plan Sponsors Forms, Documents and Letters User Acceptance Testing Parallel (all Member Services V3 Users) 30. Cross train staff; with a focus on developing desk manuals that integrate business processes to revised functions developed in conjunction with the V3 project 18

19 Member Services 31. Assist Legal with the Administrative Rule creation process (5 year anticipated timeline) 32. Participate in the Business Continuity and Disaster Recovery Solution Project 19

20 Disability 33. Provide technical support to the Pension Administration Software team through the next phase of the V3 implementation project UAT Training Forms, Documents and Letters User Acceptance Testing Parallel (all Disability V3 Users) 34. Create a policy on reexaminations for disability retired members 20

21 Disability 35. Work with the Legal Department as well as a consultant to develop options for improving efficiencies to the disability retirement adjudication process Budget Impact: $40, Assist Legal with the Administrative Rule creation process (5 year anticipated timeline) 21

22 Communications 37. Lead the redesign of the new OCERS Web site while working with IT for technical support Budget Impact: included in IT budget 38. Utilize video production and editing resources to create training videos related to the V3 project 39. Train Communications staff on V3; with specific focus on content management of the Member Self Service (MSS) and Employer Self Service (ESS) portals 40. Participate in the Business Continuity and Disaster Recovery Solution Project 22

23 Internal Audit 41. Perform audit of data conversion from PensionGold to V3. Audit would include use of consultant to assist with testing Budget Impact: $112, Use audit software to analyze pension administration data for risk assessment; audit would involve use of data analysis consultant Budget Impact: $20, Work with other retirement systems to explore joint audits; would likely involve audit of investment manager fees (cost will include travel to site) Budget Impact: $5,000 23

24 Legal 44. Begin Administrative Rule creation process working in collaboration with Member Services and Disability (5 year anticipated timeline) 45. Partner with Administrative Services to complete the revision of the Personnel, Policies & Regulations and Employee Handbook (includes working with outside fiduciary counsel continuation from 2014) 24

25 Legal 46. Review and update the existing OCERS template for domestic relations orders, and work with IT toward including a fillable electronic form on OCERS website 47. Issue a request for information for an international securities fraud monitoring firm 48. Issue a request for proposal for additional hearing officers 25

26 Legal 49. Assist the Board in the external fiduciary counsel selection process pursuant to a request for proposal 50. Work with the Governance Committee and Board toward: a. Finalizing rules of parliamentary procedure for Board/Committee meetings b. Implementing Hewitt Ennis Knupp (HEK) recommendations from HEK s governance review 51. Provide technical support to the Pension Administration Solution implementation team 26

27 Investments 52. Further strengthen portfolio risk management functions and evaluate the concept of conducting asset allocation based on risk factors 53. Evaluate asset class benchmarks to ensure appropriate fit 54. Formally evaluate smart beta strategies as an alternative to capitalization-weighted equity indices (if interest is shown at October 2014 education session). 55. Conduct pacing studies for direct lending, private equity, real estate and real return to ensure appropriate level of allocation 27

28 Investments 56. In the midyear 2015 Fee Report, continue to evaluate investments related costs to improve net of fee returns 57. Continue trustee education in relevant aspects of asset allocation, risk and the various asset classes 58. Establish ongoing annual on-site staff due diligence reviews of 75% of all investment managers, with a program to review all managers on site every 18 months 59. Begin development of a 10-year vision of OCERS portfolio size, structure, governance, staffing and advisory configuration. Include research on characteristics of 5-8 $25 billion pension plans 28

29 Investments 60.Initiate development of a 10-year plan for private equity that replaces or reduces reliance on fund of funds managers by building or recruiting highly experienced and specialized internal staff expertise. Explore alternative feasibility of a jointly-outsourced deputy CIO for private equity 61.Complete by the end of 1Q15 all research necessary to formalize and implement an equity tail risk management strategy, at least as a contingency or future strategy 62.Complete by the end of 1Q15 all research necessary to implement a macro strategy to manage foreign currency risk exposure in our international portfolio allocations 29

30 Investments 63. Present to the Investment Committee in 2H2015 a strategy for opportunistic investment, including possible co-investment with other public funds, after discussion in 1H2015 with other California pension professionals and the NEPC comparableclient network 64. For the 2016 budget process, work with the CEO and Human Resources; develop an investment analyst retention strategy to enhance OCERS market competitiveness for non-managerial investment professionals when they have acquired highly marketable and transferable experience 30

31 Investments 65. Formally review late-cycle market and recession risks and strategies twice in Include this topic in board education sessions or afternoon Committee strategy sessions 66. Conduct a study session or educational session on inflation, inflation risks and alternative portfolio strategies, in 1H Prior to the 2016 budget process, explore and formally articulate alternative strategies for fee and cost reduction and collaborative due diligence through multi-plan cooperatives and/or collectively outsourced senior professional employees 31

32 Investments 68. By 4Q15 develop and present to Committee a macro portfolio re-risking strategy that would reduce fees paid for alternative investments 69. Work with Finance to issue an RFP for investment custodial services in 4Q15, subject to completion of key V3 milestones competing for Finance department staff resources required to undertake the custodian procurement process. Identify investment-related performance incentive metrics (with symmetrical penalties) to include in the RFP by 3Q14 32

33 Investments 70. Review the charter of the Manager Monitoring Subcommittee with the board in 2H15 to make formal recommendations to the Committee and Board regarding manager watch and /or replacement 71. Collaborate with other plans during 1H15 to explore providing advanced-level investment education for trustees 33

34 2015 Initiatives/Goals QUESTIONS?? 34