Montgomery County Public Schools Retirement System Trust

Board of Investment Trustees

Selection Process

Background
Montgomery County Public Schools maintains a defined benefit retirement plan—Montgomery County
Public Schools Employees’ Retirement and Pension Systems (Plan)—for its eligible employees. The
Montgomery County Public Schools Retirement System Trust (Trust) was established to hold, invest, and
administer the assets of the Plan for the exclusive benefit of participants and beneficiaries of the Plan. The
Board of Education of Montgomery County appoints members to the Board of Investment Trustees, which
oversees the Trust. The Board of Investment Trustees does not have oversight of the Plan structure,
including the benefits set forth in the Plan.

Trustee Responsibilities
The Board of Investment Trustees, with the assistance of the investment staff and retained investment
consultant(s), is responsible for determining how the assets of the Trust are invested. These responsibilities
include maintaining and reviewing an investment policy statement, setting the asset allocation for the
investment portfolio, and selecting investment managers and third-party service providers. Trustees also
consider a number of factors in their decisions, including general economic conditions, inflation/deflation,
the role that each investment plays in the portfolio, the expected total risk-adjusted return of investments,
liquidity needs, capital protection, and diversification of investments.

Trustee Candidates/Evaluation
Trustee candidates are identified from the pool of investment talent in our region. Staff conducts interviews
and reference checks of all potential trustees. Candidates are evaluated on their ability to carry out the
responsibilities described above in addition to their knowledge of various investment strategies to which the
portfolio has or could potentially have exposure. In recent years, the Trust has expanded its holdings to
include more complex strategies to enhance the probability of achieving the expected actuarial rate of
return. This evolution of the portfolio has made having a breadth of Trustees with an understanding of
portfolio theory, asset allocation, investment risk analysis, and different asset classes more critical to the
Trust’s long-term success. Additionally, in an effort to maintain balance on the Board of Investment
Trustees, Trustee candidates are evaluated based on their areas of expertise, such as public equity, fixed
income, credit, private equity, private credit, hedge funds, real estate, infrastructure, regulations, law, and
risk management.

After all factors are taken into account and relevant background and reference checks are made, Staff
present a recommendation to the Superintendent of Schools, who will make a recommendation to the Board
of Education.

January 2021