Board Report, August 2023

OP&F provides guidance to employers

OP&F is providing guidance to employers on two subjects that have resulted in many questions recently. First is general guidance to employers on the pensionability of retention bonuses, signing bonuses, and hazard payments that have been funded by federal or state grants such as the American Rescue Plan Act (ARPA).

To be considered pensionable, a payment must meet the statutory definition of “salary.” Ohio Revised Code Section 742.01 (L)(1) defines “salary” as “all compensation, wages, and other earnings paid to an employee by reason of employment, but without regard to whether compensation, wages, or other earnings are treated as deferred income for federal income tax purposes.” Retention bonuses, signing bonuses, and hazard pay are compensation paid to an employee by reason of employment; therefore, they meet the definition of “salary.”

If you are paying a retention bonus or signing bonus to an employee, please code the payment on the payroll report as earnings Type 8 (Lump Sum Additional Allowable Salary). If you are making a hazard payment, such as a payment for interacting with the public during the Covid-19 pandemic, please code the payment on the payroll report as earnings Type D (Stress/Hazard Pay).

Platoon system information

Some firefighter bargaining units have discussed a change to the platoon system hours-on, and hours-off. Ohio law requires 45 hours per week on any platoon schedule. Ohio Administrative Code (742-5-03) states that: For a platoon system (i.e., twenty-four hours then followed by forty-eight hours off), a member has been compensated for working (including paid leave) a minimum of forty-five hours for each week included in any normal monthly payroll reporting period.

Therefore, the platoon system with 24 hours on, 72 hours off for firefighters does not result in a full-time schedule and jeopardizes OP&F membership. Trustee Deal asked us to review that rule for discussion at our September meeting, as the new schedule is being discussed as a way to increase recruitment.

Charity Champions check presented to FOP Foundation

On Monday, Aug. 21, a check was presented to the Fraternal Order of Police Foundation, Lodge 9 for $7,500, raised with donations from OP&F employees, our Charity Champions. The money is designated to assist the families of Columbus police officers who were recently severely injured in the line of duty.

In a remembrance to 9/11, on Saturday, Sept. 9, at 9 a.m., OP&F will host a flag raising ceremony in Memorial Park, adjacent to our headquarters at 140 E. Town Street in downtown Columbus. Boy Scout Troop 295 will conduct the ceremony.

PORTFOLIO UPDATE

As of 8/30: $17.2 billion

End of July: $17.5 billion

End of June: $17.4 billion

Board of Trustees Committee Notes

(Motions voted on by the Board are listed separately)

DISABILITY: The Committee conducted its scheduled reviews and appeal hearings. The Committee also received the Disability Experience Report for the first half of 2023.

INVESTMENT: In addition to a review and discussion of the investment portfolio, real estate consultant Townsend discussed the real estate and real assets performance and portfolio reviews for periods ending March 31, 2023. Wilshire, OP&F’s general investment consultant, presented an investment performance report for periods ending June 30, 2023, as well as the Private Equity and Private Credit Program analysis for periods ending March 31, 2023.

Motions:

At its August 2023 meeting, the OP&F Board of Trustees approved the following motions:

The Board approved the recommendation from Townsend to commit up to $75 million to Alterra IOS Venture Fund III. Motion passed by unanimous vote. (Investment Committee).

The Board approved Townsend’s rating recommendation for OP&F’s 2023 Real Estate Open-End Fund review. Motion passed by unanimous vote. (Investment Committee).

The Board approved staff and Aksia’s recommendation to commit up to $50 million to Barings North America Private Loan Fund III. Motion passed by unanimous vote. (Investment Committee).

The Board approved staff and Wilshire’s recommended investment manager guidelines for Parametric Commodity Strategy portfolio. Motion passed by unanimous vote. (Investment Committee).

The Board approved staff and Wilshire’s investment manager rating recommendations for Harvest Capital Advisors, Westwood Partners, Tortoise Capital Advisors, Macquarie Investment Management Investment Management, MacKay Shields Opportunistic High Yield, Neuberger Berman, Barings, Bridgewater Global Macro and Bridgewater TIPS mandate. Motion passed by unanimous vote. (Investment Committee).

The Board approved staff rating recommendations for OP&F’s private markets managers. Motion passed by unanimous vote. (Investment Committee).

The Board approved the following from the Disability Committee. Motions passed by unanimous vote:

• Approved one Death Benefit Fund case and disapproved one Death Benefit case.
• Approved 25 Initial Determinations of Disability, postponed one Reconsideration Hearing for re-exam, and one reconsideration case remained the same.
• Approved five appeal hearings.
• Approved the Disability Reporting Waivers list.

NEXT BOARD OF TRUSTEES MEETINGS: Sept. 26-27, 2023