EXHIBIT 1: INVESTMENT POLICY STATEMENT.PDF

CITY OF SPRINGFIELD POLICE OFFICERS'

AND FIRE FIGHTERS' RETIREMENT SYSTEM

INVESTMENT POLICY STATEMENT

January 11, 2023

I. INTRODUCTION & PURPOSE

This Investment Policy Statement (“IPS”) is established by the Board of Trustees of the City of Springfield Police Officers' and Fire Fighters' Retirement System (”Board”) to set forth the investment policy and guidelines for the management of the investable assets of the City of Springfield Police Officers' and Fire Fighters' Retirement Fund (“Fund”), a defined benefit pension fund. The Fund was established to provide retirement benefits to the Police Officers and Fire Fighters employed by the City of Springfield (“City”) and their beneficiaries. The City of Springfield has delegated the authority to supervise, manage and monitor the Fund to the Board.

This IPS serves to:

A. Define the purpose of the Fund including the broad investment philosophy, goals, policies, and specific objectives that govern the management of all assets;

B. Outline the duties and responsibilities of all involved parties;

C. Articulate guidelines, limitations, and strategies for diversification, acceptable levels of risk, expectations concerning return and liquidity, and the procedures for monitoring and control;

D. Provide criteria against which investment results will be measured;

E. Serve as a reference document to guide ongoing oversight.

The Board is responsible for the establishing the IPS and may amend it from time to time with approval of the City’s City Council. The IPS is intended to allow sufficient flexibility to address changes in capital market conditions and objectives of the Fund.

II. STATEMENT OF RESPONSIBILITIES

The following parties associated with the oversight of the Fund shall discharge their respective responsibilities in accordance with all applicable laws, regulations, and fiduciary standards, including: (1) acting in the sole interest of the Fund; (2) using the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and of like aims; and (3) diversifying the Fund’s investments, taking into account risk of loss and opportunity for gain, changing market conditions, the Fund’s liquidity needs, projected short- and long-term returns, and the overall objectives of the Fund. The responsibilities below are not meant to be exhaustive as each party is bound by the City of Springfield Code and/or the specific guidelines laid out in their respective service contracts.

EXHIBIT 1

A. Board of Trustees

1. Establish and periodically review this IPS to ensure compliance and appropriateness, and as necessary, making appropriate changes.

2. Review Fund objectives and approving strategic asset allocation (“SAA”) target(s) and allowable ranges.

3. Establish appropriate benchmarks and review and monitor the performance of the Fund and investment strategies through analysis, written reports and periodic meetings.

4. Provide final approval for manager selections.

5. Select and monitor the performance of external service providers.

6. Establish ad-hoc committees, as needed, and monitor their activities.

B. Fund Administrator

1. Support the Board, with the assistance of the investment consultant, in the approval of the SAA.

2. Facilitate meetings between the Board and any external service providers.

3. Evaluate and manage the relationships with external service providers to the

Fund to ensure that they are providing all the necessary assistance as set forth in their service contracts.

4. Assist internal parties in the administration of the Fund, as needed.

C. Investment Consultant

1. Assist the Board in the development and periodic review of the IPS, including providing consultative advice on the SAA and allowable ranges.

2. Conduct due diligence on Managers (as defined below) and make hiring and firing recommendations to the Board with respect to Managers.

3. Monitor the performance of the Fund and all Managers for compliance with this IPS.

4. Provide a written report of Fund performance, Fund activity and Fund fees to the Board at least quarterly.

5. Communicate matters of investment policy, asset allocation, and Manager selection and performance to the Board in a timely manner.

6. Provide the Board with investment education as needed.

7. Attend meetings of the Board quarterly and ad-hoc meetings as needed.

D. Investment Manager (“Manager”)

1. Per 2-459(b) of City Code, the Board will ensure that each Manager is registered as investment advisors with the United States Securities and Exchange Commission.

2. Pursuant to 2-459 of the Code the Board may delegate investment decisions to investment managers, provided that any investments made by the managers are consistent with and in accordance with the current IPS that has been approved by the Board and City Council.

3. Abide by the terms of any contract entered between the Board and the Manager.

E. Custodian

1. The City’s Director of Finance shall be the treasurer and custodian of all money, securities, and other property of the Fund, subject to the control and direction of the Board. As prescribed by the Board, the Director shall keep separate books and complete accounts of the Fund.

2. The Director of Finance shall assist the Board in developing an investment policy statement and approve investments made pursuant to the IPS.

3. The Director of Finance shall recommend to the Board one or more third party custodian for the possession and custody of some or all of the retirement fund which is not in the possession and custody of any other investment or Manager.

4. Third party Custodians shall act in accordance with relevant custody agreements.

III. INVESTMENT OBJECTIVES AND RISK TOLERANCE

The Board is committed to: (1) preserving the capital of the Fund; (2) attaining an investment return that meets and/or exceeds the actuarial determined rate over the long-term; (3) maintaining sufficient diversification; and (4) complying with applicable law.

The Fund shall be managed in a prudent manner recognizing risk and return trade-offs.

Accordingly, consistent with safety of principal over complete business/investment cycles, investments shall be chosen to maximize the return on invested assets based on the defined level of risk, which has been established based on an acceptable level of investment return volatility. The level of absolute risk is a result of the weights to asset classes as defined in Appendix A and the Managers selected to implement those mandates.

The Investment Objectives will be for the Fund, exclusive of contributions or withdrawals, to meet the actuarial determined rate over the long run and earn, through a combination of investment income and capital appreciation, a rate of return (time-weighted total return) that meets and/or exceeds the benchmarks established. Total percentage of overall Fund investments into the asset classes of Equities, Fixed Income, and Alternative Investments (as defined in Part V below) shall fall within the allowed ranges in Appendix A. Over the long-term, the Fund is expected to meet or exceed the Long-Term Strategic Asset Allocation, a custom index made up of the indices presented in Appendix B weighted by the corresponding Target Allocations. In the short to intermediate period, the Fund is expected to meet or exceed the Intermediate-Term Strategic Asset Allocation as presented in Appendix B.

Fund cash flows will be monitored on a regular basis by the Board and sufficient liquidity shall be maintained to fund benefit payments and other Fund expenses.

IV. STRATEGIC ASSET ALLOCATION AND REBALANCING

The Board retains ultimate responsibility and authority to establish the SAA and allowable ranges for the Fund. The SAA, reflected in Appendix B, is purposely set at a broad level with respect to the asset classes, to allow the Board, with the assistance of the Investment Consultant, to seek relative opportunities within each category. Asset classes and included categories are defined in the subsequent section.

The Board will revisit the SAA periodically to ensure appropriateness. The Board, with advice from the Investment Consultant and Managers, will be responsible for rebalancing the asset allocation periodically to remain within the allowable ranges. If market fluctuations cause the Fund’s asset allocations to fall outside the ranges set forth on Appendix A or B, the Investment Consultant will notify the Board of the variance and make a recommendation to bring the assets back within policy ranges within a reasonable time. The Board acknowledges that given the less liquid nature of the alternative assets, such variances may occur naturally and may require a period for remedy. Furthermore, there is recognition that implementation of a new policy immediately is impossible especially for alternative assets, as such implementation grace periods are anticipated.

V. ASSET CLASS DEFINITIONS

A. Equities include publicly traded securities issued across all markets, including (but not limited to) the United States and other developed countries, as well as emerging and frontier countries. Sub-allocations may include country- or sector-specific strategies, as well as those identified by specific style or market capitalization factors. Allowable securities include common stocks, structured notes on market indices, convertible notes and bonds, convertible and non-convertible preferred stocks, American Depository Receipts (ADRS), and covered calls.

B. Alternative Investments generally includes, but is not limited to:

1. Hedge Funds – active management strategies that serve as a diversifier to traditional long-only investments (e.g., public equities and fixed income) as well as private markets investments (e.g., private equity and credit, etc.);

2. Private Markets –limited partnership interests in funds investing in the equity or debt structure of non-publicly traded companies. These interests are typically of an illiquid nature, requiring multi-year lock-ups of capital;

3. Real Assets includes publicly traded funds and/or limited partnership interests in funds investing in tangible and intangible hard assets (e.g., real estate, infrastructure, natural resources, commodities, etc.). This category is intended to include open-end as well as closed end strategies that may involve illiquidity and lock-ups similar to private-equity style investments.

C. Fixed Income Assets, and more specifically, core fixed income includes investment-grade domestic fixed income management style typified by the Bloomberg Barclays Aggregate Bond Index. Allowable securities include U.S.

Government and agency securities, corporate notes and bonds, mortgage-backed securities, preferred stock, below investment grade, and debt issuances of foreign governments and corporations. Core plus fixed income management styles which allow for some tactical exposures to below investment grade, foreign, and/or varying durations. Return-seeking fixed income refers to specific exposures to foreign, high yield, related multi-asset fixed income strategies exhibiting potential volatility materially greater than the Core category.

Investments in this segment may potentially be below investment-grade.

Allowable securities include all those previously listed as well as specifically high yield, bank loans, foreign and emerging market debt denominated in both hard and local currencies, and structured credit. Cash & Equivalents, which includes Treasury bills, money market funds, commercial paper, bankers’ acceptances and certificates of deposit, are also considered Fixed Income Assets.

VI. INVESTMENT GUIDELINES

Each Manager must have in place detailed investment guidelines appropriate to their mandate and role in this portfolio. The Board, with the assistance of the Investment Consultant, will be responsible for establishing guidelines for Managers of separately managed accounts.

A. Managers of commingled trusts, mutual funds, partnerships and commingled funds will be subject to the guidelines set forth in their prospectus or offering memorandum, which the Investment Consultant will evaluate in their selection and monitoring efforts to ensure appropriateness for the Fund.

When entering into agreements with Managers, the Board will endeavor to ensure that such contracts contain terms providing, generally, for the following:

B. Proxies: Each Manager shall have the sole and exclusive right, unless specifically directed by the Board with respect to a particular issue or holding, to vote any and all proxies solicited in connection with the securities held by the Fund under their management and shall vote proxies in a manner consistent with their fiduciary responsibility in the best interest of the Fund and its participants and beneficiaries. Each Manager shall keep records with respect to its voting decisions and promptly submit a report summarizing votes cast to the Board and/or Investment Consultant when requested, if not otherwise periodically provided.

C. Trading and Execution: As fiduciaries, Managers shall have a duty of “best execution” to seek the most favorable terms reasonably available under the circumstances. Best execution is not necessarily the lowest possible commission cost, but rather the best qualitative execution, including commission rates, execution capability, financial responsibility and responsiveness to the Fund and Investment Consultant.

Allowances:

A. Investment vehicles allowed include mutual funds, ETFs, ETNs, commingled funds, limited partnerships, separate accounts, and such institutional vehicles of a related nature. Investment types within each vehicle may include individual stocks, sovereign and agency bonds and notes, corporate bonds, real estate, and commodities.

VII. PERFORMANCE MONITORING AND EVALUATION

A. Reporting: Quarterly performance reports will be provided to the Board by the Investment Consultant and will include investment performance of the total Fund as well as asset class components and Managers. The Fund will use this information to evaluate the extent to which investment results are consistent with the objectives, goals and guidelines set forth in this statement. Monthly performance reports may also be provided as preliminary assessments of investment returns for the total Fund as well as the investment strategies capable of providing monthly valuations.

B. Portfolio Benchmarks: The Policy Benchmarks provided in Appendix B are designed to track the SAA of Total Fund and may be revised periodically as/when the SAA is revised. To the extent any revisions to Appendix B will lead to investments to exceed the allowable ranges in Appendix A, then such changes will need to be approved by City Council before becoming effective.

C. Manager Benchmarks: The Board, with the assistance of the Investment Consultant, will establish appropriate benchmarks for each Manager according to their style and intended role in the portfolio. The Investment Consultant will be responsible for tracking Manager benchmark deviations relative to Policy Index and ensuring the tracking risk is appropriate and intended and will provide necessary attribution and education to the Board, as needed.

D. Monitoring:

1. The Investment Consultant has the responsibility to monitor the activities of all Managers. The Board will monitor external third-party service providers such as the Administrator and Board Secretary.

2. The Board and the Consultant have responsibility to monitor the overall risk of the Fund as well as the performance and risk taken by Managers.

Additionally, the Investment Consultant shall monitor all Managers’ personnel, strategy, research capabilities, organizational and business matters, and other qualitative factors that may impact their ability to achieve the desired investment results.

3. The Board has the authority to terminate a Manager for any reason including failure to adhere to their mandate or guidelines, unacceptable performance or risk exposures, significant qualitative changes, or simply a preference for a different Manager.

VIII. Adoption of Policy

This statement of investment policy, has been approved and executed by the Trustees on this _____ day of ____________, 20__.

[City of Springfield Police Officers’ and Fire Firefighters’ Retirement System – President]

Appendix A: Policy Targets and Allowable Ranges

Asset Class Policy Target Weight Allowable Ranges

U.S. Equity

Non-U.S. Equity

Public Equity 40% 30 – 50%

Infrastructure

Real Estate

Private Credit

Private Equity

Alternative Investments 14% 0 – 40%

Multi-Asset Credit

Core Fixed Income

Public Fixed Income 46% 20 – 60%

Total Allocation 100%

Appendix B: Strategic Targets & Benchmarks

Asset Class

Intermediate-

Term Strategic

Target Weight

Long-Term

Strategic Target

Weight

Long-Term

Strategic Target

Ranges

Benchmark

U.S. Equity Adjusted

Annually for

Private Equity

24% 19 – 29% Russell 3000 Index

Non-U.S. Equity 16% 11 – 21% MSCI ACWI ex. U.S.

Index (net)

Private Equity Actual 0% 0 – 10% MSCI All Country

World Index (net)

Equity 40% 40% 30 – 50% MSCI All Country

World Index (net)

Infrastructure

Adjusted

Annually for

Private Real

Estate

3.5% 0 – 10% S&P Global

Infrastructure Index

Real Estate Actual 3.5% 0 – 10% NCREIF ODCE Index

Real Assets 7% 7% 0 – 17%

Multi-Asset Credit

Adjusted

Annually for

Private Credit

6% 0 – 11% Custom Benchmark

Private Credit Actual 7% 0 – 20% Credit Suisse

Leveraged Loans

Return-Seeking Credit 13% 13% 0 – 20%

Core Fixed Income 40% 40% 20 – 60% Bloomberg Barclays

U.S. Aggregate Index

Risk-Reducing Fixed Income 40% 40% 20 – 60%

Total Allocation 100% 100%

The Board acknowledges that given the less liquid nature of the Fund’s legacy alternative investments, implementation of the Long-Term Policy cannot be accomplished immediately. A portion of the Fund’s legacy alternative investments are committed to private equity, private real estate and private credit. Because of the nature of these investments, the amount and timing of the cash flows in these asset classes cannot be controlled by the Board. Accordingly, at present time, the actual allocation to private equity, private real estate and private credit are above their respective long-term targets. To adjust for this, the excess in the target allocation to private equity will be sourced from public equity (U.S. equity and non-U.S. equity), the excess in the target allocation to private real estate will be sourced from public infrastructure, and the excess in the target allocation to private credit will be sourced from multi-asset credit. Once the actual allocations for private equity, private real estate and private credit reach their long-term targets, the Total Fund benchmark will use the Long-Term Target Weight to each asset class.