VLCT Employment and Benefits (VERB) Trust, Inc.
Board of Directors Special Meeting
August 27, 2020
Via Telephone and GoToMeeting
Directors present: Carrie Johnson, Kathleen Ramsay, Todd Odit and Chris Hoyt
VLCT staff present: Maura Carroll, Joe Damiata, Jeremiah Breer and Kelley Avery
Vice President Carrie Johnson ran the meeting in President Bill Shepeluk’s absence. The meeting was called to order at 11:02 a.m.
Upon motion (Ramsay/Hoyt), duly adopted, the board voted unanimously to approve the agenda.
Jeremiah Breer explained that staff has been consulting with Dan Smereck of Strategic Asset Alliance (SAA) regarding the Trust’s investment portfolio. As a result of these discussions, staff is recommending that the board reduce the risk assets in the portfolio in light of the Trust’s cash flow needs, which have risen due to increased claims expenses. This is a time sensitive decision since it would be best to make these changes before the risk asset market values decline.
The investment portfolio contains approximately $834 thousand in risk assets. This consists of about $672 thousand in equities and roughly $161 thousand in high-yield fixed-income securities. Options include either selling all risk assets in the portfolio or selling the $672 thousand in US equity funds and retaining the $161 thousand in a high-yield fixed income fund. Staff projects the latter option would provide enough cash to meet the Trust’s needs through the end of 2020. However, this transaction will put the portfolio out of compliance with the current VERB Trust Investment Policy which requires a target asset allocation of 25% risk assets and 75% fixed income.
Staff is requesting a waiver from the board of the risk asset allocation requirements in the investment policy in order to make this transaction. If the board accepts this request, SAA will present a revised policy to the Joint Investment Committee at its meeting on September 4th based on these recommendations.
Upon motion (Ramsay/Odit), duly adopted, the board voted unanimously to approve staff recommendations to waive the risk asset allocation requirements in the investment policy and to sell the $672 thousand in equities and retain the $161 thousand in high yield securities in the investment portfolio.
Upon motion (Ramsay/Hoyt), duly adopted, the board voted unanimously to adjourn the meeting (11:06 a.m.).