Trustees hear October performance report and debate private-market allocations in target-date funds

At a Norwalk City pension board meeting, an investment presenter reviewed October results and trustees discussed manager-level performance, recent fee changes and the prospect of introducing private-market allocations into target-date funds offered to plan participants.

The presenter said broad markets were strong in October, with "S and P 500 gained 2.3% in October," and noted MSCI Emerging Markets led monthly returns while the fund grew "by about $3,000,000 on a net basis" after benefit payments. Manager-level variation was highlighted: some small-cap managers lagged benchmark Russell indexes while other strategies—PIMCO’s all‑asset positions and select emerging-market holdings—contributed to returns.

Trustees and consultants discussed the role of fees and whether cutting fees is a durable response to underperformance. One manager announced a fee reduction from 75 basis points to 65 basis points effective Jan. 1; trustees noted fee cuts may help but are not a long-term strategy in themselves.

A substantive discussion followed on target-date funds and the trend among providers to add limited private-market exposure (private equity, private credit, real estate). Presenters cautioned about fiduciary risk, liquidity constraints and potential gating arrangements; they noted that, to date, the plan had not adopted private-market allocations within its target-date lineup. The board asked staff to monitor developments and consider manager presentations in upcoming meetings.

Trustees also received updates on the defined contribution plan, reported at about $28,000,000 in assets, and the OPAC plan, reported near $160,000,000. The meeting closed after scheduling and routine items.