[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},"mediaId",6484805,"mediaKeyId","5573857-9557092e56e440f5c03ad5ace713aab8","parentId",5573857,"title","Police & Fire Retirement Fund board narrows policy, adopts modest derisking with U.S. bias after Callan presentation","audioSeconds",2801,"startMs",999000,"endMs",3800000,"viewUrl","/Search/View?dp=1&key=5573857-9557092e56e440f5c03ad5ace713aab8&start=999&end=3800","thumbnailUrl","https://assets.pipeline.soar.com/5573857-9557092e56e440f5c03ad5ace713aab8/thumbnail_999000.jpg","articleUrl","/articles/6484805/Lexington-City/Fayette-County/Kentucky/Police-Fire-Retirement-Fund-board-narrows-policy-adopts-modest-derisking-with-US-bias-after-Callan-presentation","mediaUrl","https://secure.pipeline.soar.com/6484805-9531409ba8afa419770c45f061dee4d9/orig.mp4?Expires=1770894893&Signature=UqPvvqCiJRVSxHNfdyEG7VWwpxyKIXI-FjBcHAd7LOXRfZwxd6eNCzVTkHpNjy5rG-X~KFOSHu7vNz8IYejo~hHoKZZr1~yINuIxTX8k8KALEjvdvK-5zdl1R8Ot7BgnehhO9laWYJlnrPuPsmm-Re7qxhnuyxZPVrVHA0-LJI6QEF0wWPqiJFRp-e6JkyWeI8LaXyceza8rhB1k8AO9xFulmriCKCKQ-PQ~vWGH0tVnhRm9t9ZVITkYrwtUKoLbBxvRtMl9VawMdxuCQn181y19kETc1-02s8YtNxok-yYPLeR1SpoZ51zLcKkwJSPJtk5e~65HpU18dRk-rNxJxg__&Key-Pair-Id=KUT5TJCACFTXG","author","Lexington","date","2025-08-13T00:00:00Z","article","The Lexington Fayette Urban County Government Police and Fire Retirement Fund Board on Aug. 13 voted to change its target asset allocation, adopting Callan Associates' recommended Mix 2 with a modest U.S. equity bias after a multi-hour presentation and discussion of asset-liability modelling and manager structure.

The board heard Callan's 2025 asset-liability study and an international-equity structure review delivered by Callan's John Perron and Jim O'Connor. Callan modeled the plan with the fund's current actuarial inputs and projected that the fund, currently about 73% funded, would reach roughly 90% funded over the next decade under the existing policy. Callan recommended a modest increase in core fixed income — on the order of 4 to 5 percentage points — to improve downside protection without materially reducing expected long-term returns.

Why it matters

The fund has more than $1 billion in assets and supports retired and active public-safety employees. Asset-allocation decisions are the largest determinant of the fund's long-term investment performance and risk profile. Callan's models used probabilistic simulations (2,000 draws) and showed that shifting modestly toward fixed income could lower the portfolio's downside outcomes while keeping expected returns near the actuarial assumption.

What Callan told trustees

\"If the board is interested in making a change, we would recommend incrementally increasing the fixed income exposure,\" Callan's John Perron told trustees as he presented the mixes under consideration. Perron explained that rising yields have materially improved expected returns for core fixed income versus the environment covered by the previous 2021 study and that the improvement in bond returns strengthens the case for a measured derisking.

Callan presented three alternative mixes and a current-policy baseline. The board and its investment subcommittee focused on two pragmatically close options: Mix 2 and Mix 2\u0000US (the same allocation with a modest relative overweight to U.S. equities). Callan's simulations showed similar 10-year expected funded-ratio trajectories across those options, with a modest improvement in downside projections for the Mix 2 variants compared with the current policy.

Board discussion and vote

Trustees discussed trade-offs at length. Subcommittee members and trustees characterized the choice as two forks: (1) keep the current policy, or (2) modestly increase core fixed income to reduce downside volatility. Some trustees favored Mix 2 US for historical home-market preference and because it improved downside metrics in Callan's simulations; others were comfortable retaining the current policy.

A board member moved to adopt Mix 2 with the U.S. bias; Tommy Puckett seconded. The motion carried on a voice vote with one recorded dissent: Officer Jennings voted no. The meeting transcript records the result as \"That motion passes,\" with Officer Jennings the only trustee recorded as opposed.

Amendment and next steps: manager searches and subcommittee review

Commissioner Hensley proposed an amendment asking that the board adopt direction to move toward Mix 2 but remit manager selection and final percentage allocations to the investment subcommittee; the subcommittee would bring recommended managers and final allocations back to the full board for approval. Hensley said: \"I would like to make an amendment that we move the direction of mixed 2 without allocation, that the selection of the managers move into the subcommittee for a recommendation to the full board, and we consider the percentage allocations at the same time as we're considering the recommendations for the managers.\" The amendment was seconded and approved by the board.

Callan gave trustees a practical timeline: an external manager search and internal winnowing typically takes about 6–8 weeks, with the expectation that the subcommittee would return recommended candidates and proposed allocations for board consideration at the board's November meeting. Callan also said existing managers such as Acadian had indicated they were receptive to an expanded mandate to include emerging markets if the board chose that route.

Other manager-structure points

Callan and trustees discussed the international equity sleeve. Trustees and consultants agreed that Bailey Gifford and the board's emerging-markets manager (identified in the presentation as \"Cap Guardian\" / Capital Guardian) had underperformed in recent periods and that restructuring the international sleeve had merit. Callan proposed two structural alternatives: replace the two underperforming satellites and broaden the core manager's mandate, or replace the satellites and split the remainder into complementary growth and value active mandates. The subcommittee agreed that a change was needed and will vet candidate managers as part of the search.

Quotes

\"If the board is interested in making a change, we would recommend incrementally increasing the fixed income exposure,\" —John Perron, Callan Associates.

\"I would like to make an amendment that we move the direction of mixed 2 without allocation, that the selection of the managers move into the subcommittee for a recommendation to the full board,\" —Commissioner Hensley (amendment as stated at the meeting).

Key clarifications and figures from the meeting

- Funded status (mid‑2025): about 73% (actuarial inputs provided by Cavanaugh MacDonald Consulting).
- Actuarial investment return assumption cited in the presentation: 7.0%.
- Reported investment account market value (treasurer's figure reported earlier in the meeting): $1,023,230,229.84.
- Callan's 10‑year projection with current policy: projected funded ratio rising toward ~90% on average; simulations show a range of outcomes in stressed scenarios and modest downside improvement under the Mix 2 variants.
- Manager search timeline: Callan indicated 6–8 weeks for manager search and internal review, with trustee voting expected in November.

Ending

Trustees adopted the policy direction to incrementally increase core fixed income and to tilt the equity sleeve modestly toward U.S. equities; they directed the investment subcommittee to run a manager search, select candidate managers, and return recommended allocations to the full board for a final vote. Trustees heard Callan's recommendation and asked staff and the subcommittee to return with manager candidates and allocation details at the November meeting.","mediaType","Video","parentTitle","Lexington - Police & Fire Pension Board Meeting","oneSentenceSummary","After a detailed asset-liability study from Callan, the Lexington Police & Fire Retirement Fund Board voted Aug. 13 to adopt Callan's Mix 2 with a U.S. equity bias — increasing core fixed income modestly to reduce downside risk — and referred manager selection and final allocations to the investment subcommittee for recommendation.","taxTitle","Lexington City, Fayette County, Kentucky","taxId",5707,"location","headline","","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":68,"_72":73,"_74":73},6484810,"Police & Fire Retirement Fund board approves routine benefit actions, accepts treasurer's report",160,250000,410000,"/Search/View?dp=1&key=5573857-9557092e56e440f5c03ad5ace713aab8&start=250&end=410","https://assets.pipeline.soar.com/5573857-9557092e56e440f5c03ad5ace713aab8/thumbnail_250000.jpg","/articles/6484810/Lexington-City/Fayette-County/Kentucky/Police-Fire-Retirement-Fund-board-approves-routine-benefit-actions-accepts-treasurers-report","https://secure.pipeline.soar.com/6484810-5232733ccc528151bd5de8d6c990c008/orig.mp4?Expires=1770894893&Signature=ojJGvpjmDCIF9JxywXeIqr0ssiTohkFwq-eZv8SyvBUD8oSN5zwef028BfvGcZL0VIo7zWkqs6p~1IU2a5uXmSkOSY3EKGulSCuGxCQvUd7lwj7X-pEure-459HTb~xnqab5DM1We2Xgzr3zl1orlyxIDHmgeGocCvhLp~8etA5PMqX7YbLlLFBJv6Ck95UKMNSArtgGGiOFuADcobDpgy6eefnlAUJ0NzGT4IPy5Jvq3m3D0hZoIVw~Gdi~c5~NUcK91jHpHL8jD5HP-46zouUa3oXNYHcnv2WL2SRcheMuZ83cLyCISIre1eYnhVl0KxzcjMdPyqA1zjpUVbh9Qw__&Key-Pair-Id=KUT5TJCACFTXG","The Lexington Fayette Urban County Government Police and Fire Retirement Fund Board on Aug. 13 approved a series of routine administrative items, including retirements, widow's annuities, disbursements and minutes, and accepted the monthly treasurer's report.

The measures were presented during the board's regular meeting at which trustees also heard an extended presentation from Callan Associates about the fund's asset-liability study and international-equity structure (see separate story). The board handled the routine administrative items by voice vote; formal tallies were not given on the record for most items.

Board action highlights

- Motion to rearrange the agenda to move Callan presentations to the end: moved by Commissioner Hensley; seconded by Commissioner Armstrong; approved by voice vote. No roll-call tally recorded.

- Treasurer's report: trustees were told the payroll accrual made June effectively a three-payroll month and that no transfer would be executed for June; the next transfer to cover payroll was described as expected in September to cover July and August. The treasurer reported an investment account balance of $1,023,230,229.84 (compared with $1,014,440,445.36 the previous month). The board voted to accept the balance; the approval was by voice vote and the transfer letter was expected to be considered the following month.

- Minutes: The board approved the minutes from the July meeting by voice vote.

- New-business benefit approvals: The board approved the following by voice vote:
- Military time credit for Jackson Damron (motion to approve moved and seconded during the meeting).
- Widow's annuities for Lyda Rogers and Leslie Christman (motion moved and seconded).
- Disbursements for August (approved by voice vote).

- Service retirements (approved by voice vote):
- Officer Christopher Buzzard, Division of Police, service retirement effective Aug. 8, 2025.
- Officer Adam Raider (Rader), Division of Police, service retirement effective Aug. 9, 2025.
- Firefighter Eddie Raymond, Division of Fire, service retirement effective Aug. 9, 2025.

- Disabilities: The board voted to approve the disability recommendation for Jacob Webster (Division of Police); the medical reports had been completed and distributed and trustees approved setting the appropriate rate.

- Tributes: The board recorded tributes to four recently deceased department members—Frederick Rogers (Division of Police, died 07/13/2025), Jeff Cornett (Division of Police, died 07/22/2025), Dan Daniel Vincent (Division of Fire, died 07/25/2025) and Robert Christman (Division of Fire, died 07/27/2025). Tributes were offered by multiple board members and department representatives; this agenda item was ceremonial and not a formal vote.

What trustees said and next steps

Board discussion on the routine items was brief and largely procedural. Trustees asked for the same balance report at the next meeting and thanked retiring members and the families of the deceased for their service. The treasurer indicated the payroll accrual will be handled in the September transfer that will cover July and August payrolls.

Votes at a glance: most items were approved by voice vote; explicit roll-call tallies were not provided in the meeting transcript for the routine benefit items.

Ending

The board completed these administrative and benefit approvals during the morning portion of its meeting and proceeded to a longer presentation on the asset-liability study and manager structure. The board adjourned after the full agenda was completed.","At its Aug. 13, 2025 meeting, the Lexington Fayette Urban County Police and Fire Retirement Fund Board approved routine retirements, widow's annuities, disbursements and minutes and accepted the treasurer's report; the board recorded several voice votes and one recorded dissent on a later investment motion.","actionData","errors"]

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Police & Fire Retirement Fund board narrows policy, adopts modest derisking with U.S. bias after Callan presentation

Police & Fire Retirement Fund board approves routine benefit actions, accepts treasurer's report