Indiana Sheriffs: Protecting Your Pension in Changing Times

August 2020

In Indiana, our county sheriffs protect our communities and enforce our laws, and we are deeply grateful for the safety and security that sheriffs and their deputies provide. The duties of our sheriffs are broad and complex, and among those is the very important responsibility to oversee the pension plans for the sheriff and merit deputies.

Between our 50 years of investment management experience as a firm, and our professionals who have more than 35 years of direct experience managing investment strategies for county sheriff benefit plans here in Indiana, we are well positioned to help protect your pension plan now and in the years ahead— just as we already do for more than one-third of Indiana’s sheriffs.

It has always been important to ensure your pension is properly managed. Pensions are critical to maintaining the standard of living you and your deputies have earned and deserve after so many years of honorable service. And now, in 2020, it’s even more important to make sure your pension is managed appropriately.

First, most pension plans are now being subjected to a higher level of review by the State. Second, the extreme volatility of the investment market this year has reinforced the need for experienced advisors and modern policies to guide your investment decisions.

Increased Oversight Is Coming

In the past, the Indiana State Board of Accounts (SBOA) focused on reviewing only the largest 15 county plans. But that’s changing. The 77 remaining counties will now be required to provide significantly more information than in the past.

The SBOA intended for this new reporting to start in 2020 but, given the circumstances surrounding the COVID-19 pandemic, the SBOA has delayed this requirement to 2021. Despite this, we have already begun assisting a number of sheriffs with detailed requests from auditors.

Whether it’s now, a few months from now, or next year, new requirements are coming. So it’s best to be prepared for the day that the SBOA begins its reviews.

Managing Through Market Volatility

The pandemic and the related shutdowns have resulted in significant market volatility, and some sheriffs may find that their plans were not prepared for the downturn in the market. As one of the largest registered independent advisory firms in Indiana, our team has diligently advised on more than $2 billion in assets for our clients, including those for our sheriff clients across the state. While there are new aspects to the pandemic, we have helped our clients maneuver through extreme market volatility for decades.

Some sheriffs may find that they need to seek additional funding from their County Council, which could be more difficult than usual given the lower tax revenues that we anticipate being collected due to the economic downturn caused by the pandemic. Should you find that such a request is necessary, we can help demonstrate that the plan is managed by investment professionals who are doing what should be done to protect and grow the pension.

The Role of a Strong Co-Fiduciary

Fortunately, sheriffs don’t have to manage these complex challenges alone. With Goelzer as your co-fiduciary, you have the direct support of our defined-benefit plan experts. We work closely with you to ensure that the appropriate investment plan and governance processes are in place, and we join you at merit board meetings so that things go smoothly— from making sure merit board meetings are scheduled, to taking and retaining the proper notes and records, to addressing specific questions about the investment strategies and plan performance, and much more.

We believe that a written investment policy is particularly important so that all observers see that there is a documented process that guides the investment decisions during planning, portfolio implementation, and ongoing review.

A well-crafted investment policy will fulfill the following objectives:

• • Define the objective to meet the plan’s obligations to current and future participants

• • Clearly state the roles and responsibilities of all parties involved

• • Invest all funds in a diversified manner and maintain an appropriate asset allocation

• • Achieve a return that is commensurate with the objective of the plan

• • Maintain sufficient liquidity in the plan to pay current obligations

• • Manage risk by defining eligible investments and outlining prohibited investments

• • Control and monitor plan costs

We help craft the investment policy statement so that the long-term investment strategy stays on course, regardless of the market environment. So, for example, when the stock market declines, the plan is rebalanced to help improve long-term results. We believe this is essential, and this is a key part of the services we provide to all sheriffs.

As You Serve Hoosiers, We Serve You

At Goelzer, we are deeply committed to the Indiana law enforcement community, as demonstrated by the 31 sheriffs we serve and our ongoing support and involvement with the Indiana Sheriffs’ Association. We advise on some of the largest and the smallest sheriff plans, and we welcome the opportunity to assist all Indiana sheriffs, regardless of plan size. If you would like to talk about your pension plan to see if we can help you identify ways to improve, please do not hesitate to contact us.

With over $2 billion in assets under advisement and 50 years in operations, Goelzer Investment Management is a leading, truly independent investment firm offering custom‐tailored portfolio management and investment consulting to institutional and high-net-worth individuals. Goelzer has clients in 35 U.S. states. Our client list includes foundations and endowments, pension and profit‐sharing plans, corporate accounts, retirement plans, charitable trusts, and private investors.