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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 4 findings
F1
Page 40
The commission recapture rate for the SCERS directed brokerage program should be evaluated annually.
F2
Page 40
Although intended as a trial target during the first year of the directed brokerage program, a 20% international target for money managers of the SCERS directed brokerage program is substantially less than that acceptable to money managers.
F3
Page 40
It does not appear that SCERS is receiving monthly money manager reports of commissions independently of reports supplied by State Street Bank.
F4
Page 40
SCERS Board and management have not made regular reviews of directed brokerage issues or surveyed best practices in the industry. This has resulted in SCERS not achieving the significant savings available through a directed brokerage arrangement.
Recommendations 4
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R1Page 40The Board of Retirement should adopt a policy requiring SCERS to review annually the commission recapture percentage for securities, ensuring that the plan maintains best practices in the industry.
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R2Page 40SCERS should readjust the international target for money managers upward to 30% if possible, but to not less than 25%.
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R3Page 40In order to maintain a proper audit trail and enable the reconciliation of variances, SCERS should direct its money managers to supply monthly reports of all commissions generated in a portfolio that identifies directed commissions.
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R4Page 40The Board of Retirement should direct its Chief Investment Officer to begin a practice of periodic attendance at directed brokerage conferences and seminars, and follow up such attendance with in-service workshops for the Board and SCERS management.