1. Parochial Employees’ Retirement System 2014 Administrative Training

2. Investment Overview PERS Asset Allocation Investment Performance Current Economic Conditions Outlook

3. What is “asset allocation”? Asset allocation is a process that determines the appropriate mix of stocks, bonds, real estate, hedge funds, etc. we should own PERS Chief Investment Officer and consultant evaluate the global capital markets and economic conditions to determine the best asset mix for the plan A robust asset allocation process helps us ensure the plan assets grow enough to keep pace with the plan liabilities

4. PERS Asset Allocation 8/31/2014 Total Equity (stocks)62.8% Total Fixed Income29.1% Total Alternatives 8.1%

5. PERS Equity Allocation 8/31/14 Equity Large Cap Domestic26.8% Mid Cap Domestic 4.8% Small Cap Domestic 6.8% International Developed18.0% Emerging Market 6.4% Total Equity62.8%

6. PERS Fixed Income Allocation 8/31/14 Fixed Income Multi Sector Debt16.2% Emerging Market Debt 4.1% Investment Grade Domestic 0.9% Private Placements 6.0% Senior Bank Loans 1.9% Total Fixed Income29.1%

7. PERS Alternatives Allocation 8/31/14 Alternatives Real Estate3.7% Timber0.7% Hedge Funds3.3% Private Equity0.4% Total Alternatives8.1%

8. Investment Performance Plan A Plan B 2009+20.82% +20.85% 2010+15.24% +15.26% 2011 -0.66% -0.66% 2012 +15.63% +15.87% 2013 +18.67% +18.22% 2014 (thru 9/31)* +4.00% +4.00%

9. Current Economic Conditions Low Interest Rates European Economic Woes Middle East Concerns/Violence Russian Sanctions

10. Treasury Yields 9/31/07 9/26/12 10/3/14 3 months3.800.110.01 6 months4.080.140.04 2 years3.990.260.57 5 years4.250.631.76 10 years4.591.632.47 30 years4.872.803.15

11. Summary  Outlook  Questions???