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10. Guaranteed investment contract (GIC) with insurance companies rated "A" or <br />better by two of the nationally recognized rating agencies or a comparable <br />nationally recognized statistical rating organization. <br />11. Equity assets, including common stock, preferred stock, and interest-bearing <br />obligations having an option to convert into common stock. <br />VII. MATURITYAND LIQUIDITY <br />The OPEB trust assets shall provide sufficient liquidity to meet the annual funding <br />payment. <br />VIII. PERFORMANCE MEASURES <br />The expected long-term annual rate of return for the portfolio is targeted to be 6%, which <br />is an actuarial assumption, until amended by the OPEB Trust Board. The portfolio will be <br />split into two categories for investment and performance measurement purposes. The <br />first category will include an amount equal to the expected pay-as-you-go payment for <br />the upcoming 12-24 months (short-term portion) and the remainder will be included in <br />the long-term category. <br />The benchmark for investment of these OPEB funds will be based upon a blended, pro - <br />rata portion of the appropriate indices of the funds. <br />VH -L Ix PORTFOLIO COMPOSITION, RIS%AND DIVERSIFICATION <br />The following are the guidelines for investments and limits on security issues, issuers and <br />maturities as established by the OPEB Trust Board. The Investment Advisory <br />Committee, as confirmed by the OPEB Trust Board, shall have the option to further <br />restrict or increase investment percentages from time to time based on market conditions. <br />Assets of the OPEB trust fund shall be invested in a broadly diversified portfolio <br />consisting of equity, debt, and cash equivalents securities. The portfolio shall also be <br />structured in a manner to provide broad diversification within each asset class. Additional <br />contributions may be needed to pay near-term obligations of the OPEB Trust Fund. <br />From time to time, the OPEB Trust Board will adopt asset allocation strategies within the <br />ranges specified below: <br />Short Term Investment Portion up to 100% of the portfolio: <br />Cash and Cash Equivalents, with maturities of 180 days or less <br />Long Term Investment Portion: <br />Equities 0%-60%, consisting of a diversified portfolio of domestic small, mid and <br />large cap equity funds and international equity funds <br />Fixed Income 0%-60% <br />Cash and Cash Equivalents 0%-100% <br />4 105 <br />