LACERA has established the following roles and responsibilities to oversee and administer the functions necessary to accomplish our investment objectives.
Board of Investments
The Board of Investments has nine trustees. Their responsibility is to prudently invest and manage the fund to provide benefits to members and their beneficiaries.
The Board is responsible for ensuring that LACERA employees administer fund investments at a reasonable cost while preserving the quality of investments. The Board oversees all aspects of the program in compliance with the Investment Policy Statement, applicable federal and state laws, and regulations for government pension plans.
The Board and its officers and employees discharge their duties by:
- Acting solely in the interest of, and for the exclusive purposes of providing benefits to, participants and their beneficiaries, while minimizing employer contributions and defraying reasonable expenses of administering the system;
- Exercising the care, skill, prudence, and diligence under the prevailing circumstances that a prudent person acting in a like capacity and familiar with the matters would use in the conduct of a similar enterprise with like aims;
- Diversifying the investments of the system to minimize the risk of loss and maximize the rate of return, unless under the circumstances it is clearly prudent not to do so.
The Board may request information and recommendations from staff and investment consultants, and may also delegate specific authorities to the Chief Investment Officer.
There are four Board of Investment committees, which make recommendations to the Board on investment actions related to their area of focus:
- Corporate Governance
- Equity: Public/Private
- Credit and Risk Mitigation
- Real Assets
Assigned staff members and investment consultants inform and make recommendations to the committees on investment program matters.
Chief Investment Officer and Investment Staff
The Chief Investment Officer (CIO) and investment staff assist the Board in performing its fiduciary duty.
The CIO has primary responsibility for implementing the Board’s investment decisions. Internal investment staff members report to the CIO, who in turn reports to the CEO, but the CIO is authorized to interact with and communicate directly with the Board regarding all investment-related matters.
The CIO and staff assist with the following:
- Managing the portfolio according to the Board’s policies
- Advising and informing the Board about investments
- Developing and reviewing investment policies and procedures
- Overseeing operational aspects of the fund
- Reporting on the progress of the fund in meeting its investment objectives
- Monitoring and reporting to the Board on the performance of the fund relative to the appropriate benchmarks
Chief Counsel and Legal Staff
The Legal Division advises the Board, CEO, CIO, and staff on investment-related legal matters, including negotiating and preparing contracts and individual transactions, and providing other legal advice to protect LACERA’s interests, including its status as a tax-exempt government plan.
Third Party Service Providers
LACERA also engages external service providers to implement its investment program, subject to the terms and conditions of LACERA’s established policies and procedures. Such providers are expected to serve as fiduciaries to the fund and must abide by LACERA’s Code of Ethical Conduct.
The Board’s general investment consultant provides advice and recommendations to the Board or committee(s) regarding LACERA’s strategic objectives, risks, oversight, and implementation of investment objectives.
General and specialized consultants provide advice and recommendations regarding strategic asset allocation, portfolio implementation, and oversight of the fund to the Board, CIO, and staff.
Investment consultants must report economic interests and conflicts in accordance with California law and LACERA policy, including the Code of Ethical Conduct and, in certain cases, filing of Fair Political Practices Commission Form 700s—Statement of Economic Interests).
The custodian bank is responsible for the safekeeping of fund assets and maintaining the fund’s official accounting book of record, including the ongoing pricing and valuation of all assets, collection of income generated by those assets, any corporate action notification, and performance calculation.
The bank cooperates with and provides assistance to staff and investment managers in the reconciliation process and any other duties designated by LACERA. LACERA’s investment office works with LACERA’s accounting division to manage the custodial relationship.
Investment managers are contracted by the Board for specific investments and report to LACERA on performance in adherence to established guidelines and agreements. LACERA staff members and consultants present the investment managers’ performance to the Board in accordance with established monitoring and oversight procedures.
Investment managers must report economic interests and conflicts in accordance with California law and LACERA policy, including the Code of Ethical Conduct and, in certain cases, filing of Form 700s—Statement of Economic Interests, and must enforce their own diversity, ethics, and sexual harassment policies.
Other Third Party Service Providers
Additional third party service providers may be retained in order to perform other duties to assist in the administration of the fund, and are selected by the Request for Proposal process.