Kern County Employees' Retirement Association, Bakersfield, Calif., hired Clifton Group as its first cash overlay manager.
Wurts & Associates, consultant to the $2.8 billion system, expects the program to be fully implemented in eight to 12 weeks.
The board at its Feb. 8 meeting approved a fee reduction agreement with J.P. Morgan Asset Management, which has been managing a $164 million EAFE index-plus equity strategy for the retirement association since November 2003.
The base fee was reduced to 25 basis points from 40 basis points per year. The performance fee hurdle was raised to EAFE plus 125 basis points from EAFE plus 40 basis points. And the maximum annual fee including base and performance fees was reduced to 75 basis points over any 12-month period from 85 basis points.
Given the size of the retirement association's allocation and the firm's past performance, KCERA expects to save $200,000 each year, according to a staff memo to the board. For the period ended Sept. 30, Sept. 30, J.P. Morgan underperformed its benchmark by nearly one percentage point: -14.8% vs. -13.9%, Anne Holdren, executive director, wrote in an e-mailed response to questions.