MAY 11, 2018
American Family Headquarters, Madison, Wisconsin
Wisconsin Coalition of Annuitants
27th Annual Conference
May 11, 2018
American Family Headquarters, Madison, Wisconsin
The 27th Annual Conference began with registration and a continental breakfast. There were 86 registered participants, 15 no-shows (71 participants) and 8 guests. The presentations by Jeff Matthias and Governor Martin Schreiber were not recorded. Minutes of the presentations were not taken.
Conference Vice-Chair Jerold Vreeland welcomed the participants, opened the conference and introduced the presenters.
Rick Smirl, Executive Director, SWIB, provided a summary of SWIB.
Performance - The Core Fund and Variable Fund as of December 31, 2017, both exceed their 20 year benchmarks. Stock volatility has been calm but expected to become active in 2018. The S&P 500 has had 23 1% moves in 2018 compared to eight in 2017.
Investment Strategy - Today's trends in return assumptions present challenges. Protecting and growing the WRS means making money, and managing risk while optimizing cost. The WRS is disciplined, balanced and focused on long-term results. Mr. Smirl stated 'finding the Goldilocks zone' requires the right asset allocation. An allocation that doesn't take too much risk, one that doesn't take enough risk, but one that is just right.
Optimizing Costs - SWIB's cost were $.43 per hundred dollar investment compared to the median of $.56 per hundred dollars. SWIB's cost structure resulted in a savings of $110 million annually. Internal management is a savings. Cost to externally manage 38% of assets is 79% of SWIB's total cost.
Looking Forward - SWIB is positioned to meet the challenging financial environment and is optimistic to continue strong investment performance with the WRS remaining financially healthy for the 622,000 participants.
SWIB News - SWIB was honored by industry peers as technology user of the year and team of the year.
CIO David Villa was named Institutional Investor Lifetime Achievement Award winner and private equity senior managing analyst Chris Eckerman was honored by Trusted Insight.
Investing in today's world with thoughts of tomorrow.
Jeffrey Matthias, Portfolio Manager, Madison Investment Advisors has been working in the financial services industry since 1987 and joined Madison Investments in 2011. He earned his B.S. in finance from the University of Wisconsin-Platteville and his MBA in finance from the University of Wisconsin-Whitewater.
The following describes Madison Investments and is not a summary of Mr. Matthias's presentation.
In 2004, Madison Investments sub-advised the first closed-end covered call fund to trade on the New York Stock Exchange. Since then, Madison has been at the forefront of covered call portfolio management, and has maintained a consistent investment philosophy that concentrates on long-term prospects rather than the empty highs of instant gratification.
Madison's dividend income strategy is comprised of approximately 35-55 holdings that have dividend yields above the S&P 500 Index yield. The strategy has a goal of achieving long-term outperformance over a complete market cycle on a risk-adjusted basis. To accomplish this objective the team employs a relative yield strategy.
Relative yield is defined as a stock's dividend yield divided by the market dividend yield. An attractive relative yield candidate is a stock with a relative yield near the high-end of its historical range and a long dividend paying history with a record of dividend increases.
Mr. Matthias highlighted the characteristics of of an investment advisor for individuals and retirees.
Wisconsin Retirement System-Spring 2018 Update
Robert Conlin, Secretary, ETF began with the health of the WRS system - WRS is 100% funded with 99.1% estimated market value and $107.3 billion in assets. It is the ninth largest public pension system. The system has an economic impact on Wisconsin of $5.2 billion dollars. The average retirement age is 61.2 and has slowly increased with the exception of 2011.
Annuity Adjustments - investment returns in 2017 or 16.2% for the car fund and 23.2% for the variable fund. The car annuity it just meant for 2017 is 2.4%. Mr. Conlin shared some of the current values of annuities beginning with retirement in 1993 and reflecting the adjustments and performance up to 2013.
Policy and Legislation - No significant legislation was passed in 2017. The legislative Audit Bureau will be conducting an audit of the Group Insurance Board, ETF and the state group health insurance program. ETF will continue to monitor state and federal legislation that may affect WRS programs.
Whats New - ETF activities, 166,000 calls answered with 28,000 employer calls. $5.2 billion was paid to a annuitants, disability retirement, and separation benefits. There were 24,000 retirement estimates distributed with 13,000 retirement application. Medicare advantage was a major topic for the year with the group insurance board desiring to lower monthly premiums, provide high-quality high value services, and more benefit package choices. ATF is now physically located at 4822 Madison yards way. Members services is on the eighth floor and visitors will need to get parking passes validated for free parking.
Learning, Coping and Surviving as an Alzheimer's Caregiver
Former Wisconsin Gov. Martin J. Schreiber is an award-winning crusader for Alzheimer's caregivers and persons with dementia. Former governor of Wisconsin he has seen his beloved wife, Elaine, gradually transform from the woman who had gracefully entertained in the Executive Residence to one who sometimes no longer recognizes him as her husband. Alzheimer's disease creeps slowly into a person's life but never retreats. Eventually, the individual's memory fails in too many important areas, and someone must keep watch. Round-the-clock care is needed, and that invariably falls to the one who cares most—one's partner. His award winning book My Two Elaines: Learning, Coping, and Surviving as an Alzheimer's Caregiver is the love story of Martin Schreiber and his wife.
Blair Testin Award
WCOA Executive Director Retired