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140.016 Investment Policy for Other Postemployment Benefits Plan Trust Fund

Bd. Min. 6-26-12.

  1. Introduction -- The University's Other Postemployment Benefits (OPEB) include the medical, dental, long term disability and various other insurance benefits available to its retirees, former employees and their dependents in amounts and under the conditions described in the University’s respective benefit plans excluding the University’s pension plan.  The OPEB Plan Trust Fund (“the Trust”) was established in 2008 to provide for the full and timely payment of these benefits, with funding provided from contributions made by the University, contributions made by retirees and their dependents, if any, any sums due from insurance contracts entered into by the respective benefit plans, and income from any investments held by the Trust.  The existence of the Trust is not a guarantee that benefits will be provided.  This Investment Policy was established to provide direction to the investment and management of assets within the Trust.
  2. Responsibilities and Authorities -- See CRR 140.010 “Policy for Management and Oversight of Selected University Investment Pools.”
  3. Investment Objectives – The primary objective of the investment of Trust assets is to meet or exceed the investment return assumption used in the calculation of the actuarial accrued liability for postemployment benefits, utilizing a broadly diversified global investment structure.
  4. Authorized Investments --  The Trust shall be invested in externally managed funds, consistent with the guidelines established in CRR 140.011 “Policy for Investment Manager Selection, Monitoring and Retention,” in the following asset sectors: 

    Sectors Target Asset Mix Allowable Range

    Global fixed income



    Global equity



    Absolute return






    Sector allocations shall be monitored on an ongoing basis as changes in market behavior may result in variations from the target asset mix.  Rebalancing of the portfolio shall be considered at least annually, and more often if necessary to maintain allocations within the allowable range.  The need to rebalance shall take into account any logistical issues associated with fully funding a particular asset sector, as well as any tactical decisions to overweight or underweight a particular asset sector based on current market conditions.

    Actual sector allocations shall not fall outside of the allowable ranges, with the exception of violations caused solely by periods of extreme market distress, when it may not be possible or advisable to immediately bring such allocations back to within the allowable ranges.

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