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Pension Funds

Travel limitation will hurt fund, San Antonio chairman says

San Antonio's attempt to stem what a city spokesman called an "abuse of travel" by trustees of the $3.2 billion San Antonio Fire & Police Pension Fund is impairing trustees' abilities to fulfill their fiduciary duties, the pension fund's chairman said.

As part of city policy, active city employees who are also pension fund trustees are granted administrative leave to fulfill their fiduciary duties to the pension fund.

However, following revelations last month that some of the trustees who are active police officers and firefighters were traveling extensively for their pension fund duties, the city's police and fire chiefs restricted the amount of time active employees/trustees could travel on city time for pension fund duties to 40 hours per fiscal year. Previously, there was no limit.

In an emailed statement earlier this week, J.T. Trevino, the pension fund's chairman and an active firefighter, said "the new (travel) policy has already prevented (trustees) from conducting due diligence on potential investments and, if it remains in place, it will ultimately harm the fund's performance."

For instance, the pension fund postponed a global macro hedge fund search that it started in January because of the new travel policy and a need to put due diligence visits on hold, recently released board meeting minutes indicated.

In a Thursday email, city spokesman Jeff Coyle said Mr. Trevino traveled 33 times in three years on city time, which included multiple trips to Key West, Fla.; La Jolla, Calif.; Las Vegas; Los Angeles; New York; London; and Hong Kong. Another trustee/active police officer traveled 42 times in three years, Mr. Coyle said.

The employees' leave "often required their shifts to be backfilled by other ... (personnel), resulting in unnecessary expense to the city and San Antonio taxpayers," Mr. Coyle said.

Mr. Coyle referred to the employees' leave as "a clear abuse of travel."

Joe Gimenez, a spokesman for the pension fund, said in a telephone interview Friday that all of the trips the trustees took were intended to fulfill their fiduciary duties with respect to evaluating investments and keeping up to date on current developments.

Mr. Gimenez added the pension fund, which returned 14.75% in calendar year 2017, has been "successful because of what it is doing (and) travel is certainly part of that."

Good investment selection and strong benefits planning also have contributed to the pension fund's success, Mr. Gimenez said. The pension fund's funded status is 89%.

Mr. Coyle noted active city employees/trustees may use their own time to travel in excess of the 40-hour limit. The city also permits active workers/trustees to take administrative leave to attend board meetings and state-mandated training, which is not included in the 40-hour limit.