1. North Carolina Local Government Investment Association Conference
OPEB Funding Options Kevin SigRist, NC Department of State Treasurer - Investment Management Division
North Carolina Local Government Investment Association Conference
Thursday July 20, 2017

2. Overview of NCDST - Investment Management Division
As of June 2017, oversees more than $122 billion in assets
$94 billion for North Carolina Retirement Systems (NCRS)
$29 billion for other programs
Internal and external investment management
$48 billion managed internally in fixed income
$75 billion managed through external investment managers and partnerships across equities, real estate, private equity, opportunistic fixed income, inflation sensitive, and multi- strategies
40 member team complemented/supplemented by consultants
Low cost provision of conservative institutional-quality investment services

3. Ancillary Governmental Participant Investment Program (AGPIP)
NCDST maintains AGPIP to invest non-retirement monies for governmental entities.
NCDST has established several investment pools (or “Funds”) to help ensure these investments benefit from low cost professional management.
NCDST internally manages The Short Term Investment Fund (“STIF”)
BlackRock manages a Bond Index Fund (“BIF”) and an Equity Index Fund (“EIF”)

4. Potentially Eligible Fund/Entities
The specific funds listed in N.C.G.S (a), and
Unless a specific statute indicates otherwise:
Any official, board or commission of the State of North Carolina
Any local government of the State of North Carolina
Any other public authority of the State of North Carolina
Any school administrative unit, local ABC board, or community college of the State of North Carolina

5. Short-term Investment Fund (“STIF”)
The STIF invests in highly liquid money market instruments and short to intermediate Treasuries, Agencies, and AAA-rated corporate obligations pursuant to N.C.G.S (c)(1)-(10).
The STIF is designed to preserve capital, provide liquidity, and produce a return consistent with the iMoneyNet First Tier Institutional Money Market Fund Net Index benchmark.
Fund fees and charges have historically been approximately 3 basis points annualized (i.e., 3/10000). Administrative, custody, performance measurement, and reporting charges will be applied to STIF and will not be itemized at the participant level.

7. Bond Index Fund (“BIF”)
The BIF invests in high quality debt securities eligible under N.C.G.S (b)(1)-(6). The BIF maintains a low cost approach to investment grade fixed income assets through a passive strategy.
The BIF is designed to produce a return consistent with the Barclay’s U.S. Aggregate Bond Index benchmark.
Investment Management fees are 2.5 basis points up to $750 million total fund assets and 2 basis points once total fund assets are above $750 million.
Administrative, custody, performance measurement, reporting and other charges will be applied to BIF and will not be itemized at the participant level. NCDST has the authority to assess a separate administrative fee of up to 15 bps to cover its reasonable costs.

8. Bloomberg Barclays U.S. Aggregate Bond Index
Total Return (%)
1 Month
3 Month
YTD
1 Year
3 Year
5 Year
7 Year
10 Year
15 Year
Bloomberg Barclays U.S. Aggregate Bond Index
(0.10)
1.45
2.27
(0.31)
2.48
2.21
3.19
4.48
Note: All data is as of June 30, 2017 and is for illustrative purposes only. Data is not specific to BIF. Historical index returns do not reflect the impact of fees nor should they be relied on to predict future performance.

9. Equity Index Fund (“EIF”)
The EIF invests primarily in US and non-US equity securities eligible under N.C.G.S (b)(8) with the objective of closely approximating the capitalization weighted total return of the markets for global publicly traded equity securities while maintaining a low cost approach.
The EIF is designed to produce a return consistent with the Morgan Stanley Capital International All Country World Index benchmark.
Investment Management fees are 2 basis points.
Administrative, custody, performance measurement, reporting and other charges will be applied to BIF and will not be itemized at the participant level. NCDST has the authority to assess a separate administrative fee of up to 15 bps to cover its reasonable costs.

10. MSCI All Cap World Index
Total Return (%)
1 Month
3 Month
YTD
1 Year
3 Year
5 Year
7 Year
10 Year
15 Year
MSCI All Country World Net Index
0.45
4.27
11.48
18.78
4.82
10.54
10.48
3.71
7.31
Note: All data is as of June 30, 2017 and is for illustrative purposes only. Data is not specific to EIF. Historical index returns do not reflect the impact of fees nor should they be relied on to predict future performance.

11. Important Considerations
Liquidity & Risks: BIF and EIF are less liquid than short-term investments such as STIF. Such liquidity constraints should be taken into consideration when making allocations in the program. BIF and EIF may potentially offer a higher rate of return than traditional short-term portfolios but you must understand that to achieve such performance the BIF and EIF may experience periods of declines in market value and/or principal loss and there is no guarantee of performance.
Asset Allocation: When Participants enroll they designate the allocation of monies across the investment Funds. Participants have the option to allocate across a combination of all three funds and the sole responsibility to periodically rebalance/reallocate.
Please refer to the AGPIP Enrollment Package
for important risk disclosures

12. Deposits and Withdrawals
Once per month, 5 business days prior to the end of the month for the following month
Submit Appendix B: Deposit & Withdrawal Form to and fill out applicable link below
State Agencies initiate deposits and withdrawals via CMCS
Initiate Deposit: In-Without-CMCS.aspx (Local Government Only)
For withdrawals: Wire.pdf (Local Government Only)

13. Enrollment Process
Meet Eligibility Criteria provided in the “Terms of Participation”
Submit Notice of Intent via to
Execute Enrollment Package Acknowledgement Page
Submit Irrevocable Trust documentation for Local Government Other Post- Employment Benefits (OPEB) and/or Law Enforcement Officer Special Separation Allowance (LEOSSA) Trusts
Execute Deposit Agreement & Initial Allocation Form
Complete the Deposit Form
Establish Short Term Investment Fund (STIF) Account
Execute Signature Card for STIF Account
Execute W9
Complete Tax Questionnaire-EIF Only

14. Contact Information
Questions:
Forms and background information can be found at by clicking:
“State and Local Government Finance”
“Ancillary Governmental Participant Investment Program (AGPIP)”
Forms and background information can also be found by typing the following directly into your browser: instructions/Pages/AGPIP.aspx

15. Important Information Related to AGPIP
The furnishing of the information in these slides is not intended to constitute investment advice offering an investment product. NCDST is undertaking their statutory responsibility set out in NCGS
There is no agreement or understanding between NCDST and any Fund participant under which the latter receives advice from NCDST concerning investments which are to be used as a primary basis for the participant’s investment decisions relating to the Funds.
The participant acknowledges that: (1) the Funds have liquidity limitations, volatility of returns, and risk of loss, including the potential for loss of the principal invested; (2) that NCDST is not providing investment advice to the participant; (3) that investing in the Funds is only suitable for participants who are willing to bear the economic risks of the investment; (4) that the participant will carefully review and consider all potential risks and costs before enrolling and investing.
Please refer to the AGPIP Enrollment Package for important risk disclosures