The Chairman’s Perspective

®

Elma Trevino 8/26/2017 Lieutenant Bertha Massie 8/19/2017 Senior Police OfficerRonald Odums 8/12/2017 Senior Police OfficerLaShea Phillips 7/29/2017 Senior Police OfficerOmarr Lewis 7/29/2017 Senior Police OfficerArgentine Davis 7/28/2017 Sergeant Debra Maura 7/27/2017 Senior Police OfficerFelipe Belmarez 7/22/2017 Senior Police OfficerPatrick Spacek 7/15/2017 Sergeant Gail Captain 7/1/2017 Sergeant Manuel Garcia 6/30/2017 Senior Police OfficerMark Janson 6/30/2017 Sergeant Debra Love 6/30/2017 Senior Police OfficerFrancis Lassalle 6/30/2017 Senior Police OfficerJoe Marin 6/24/2017 Senior Police OfficerJeffrey Vershave 6/24/2017 Sergeant Terry Hickerson 6/24/2017 Senior Police Officer

Bart Massengale 6/24/2017 Senior Police OfficerLarry Cooper 6/24/2017 Senior Police OfficerDavid Devora 6/17/2017 Senior Police OfficerBilly Wilburn 6/17/2017 Sergeant Stanley Holmes 6/17/2017 Senior Police OfficerG. Gilford 6/17/2017 Senior Police OfficerEnrique Albarado 6/17/2017 Senior Police OfficerGeorge Alderete 6/17/2017 Sergeant Alfonzo Cross 6/17/2017 Senior Police OfficerL. Bronikowski 6/17/2017 Sergeant Ricardo Calderon 6/17/2017 Sergeant John Barrett 6/17/2017 Senior Police OfficerBennie Conway 6/17/2017 Lieutenant Lee Dees 6/17/2017 Senior Police OfficerJohn Palmer 6/17/2017 Sergeant Anthony Hawkins 6/17/2017 Senior Police OfficerKarl Pederson 6/17/2017 Senior Police Officer

Recently Retired

HPOPS’ NEWSLETTER

INSIDE

Credit Repair

Answers to FAQs

Intestacy- EstateDisposition when dying

without a will

In Remembrance

Investment Summary

H O U STO NP O L I C E

O F F I C E RS ’P E N S I O NS YST E M

VOL. 27

ISSUE 1

OCTOBER 2017

OUR MISSION

• • •

TO RESPONSIBLY

MANAGE THE SYSTEM

IN THE BEST

INTERESTS OF THE

MEMBERS AND

BENEFICIARIES

SO THAT THEY

MAY HAVE PEACE

OF MIND KNOWING

THEIR PENSION

BENEFITS ARE SECURE.

By Terry Bratton, Chairman

I want to thank each officer for the personal sacrifices that were made during the historic flood experienced as a result of Hurricane Har-vey. Being a police officer in the fourth largest city in the United States is at best an ar-duous, and at times, a thank-

less profession that requires the patience of Job, and the Wisdom of Solomon in order to be successful. Combine these attri-butes with the ability to be away from home and family when they need you most, sleeping on the floor at the station, and working 12 hour days in the most difficult of situations - you might be police officer material. No words can express the anxiety, concern, fear of families having to remain to deal with personal issues while their “police officer” needs to serve. Great respect and admiration is given to those who wait behind.It is my understanding that approximately 400 police officers’ homes were flooded as a re-sult of Harvey. I have been unable to ascer-tain the numbers for retirees and survivors but suspect that many suffered as well. Even some of the HPOPS staff themselves experi-enced losses from the flooding waters. A fam-ily member’s house flooded giving me some

experience of how devastating the loss is. After the events of the last two weeks, I have been asked how prepared the pension system is to deal with catastrophic events. We think that HPOPS is positioned to survive these events. The computer systems are backed-up both in-ternally as well as externally at two different lo-cations outside of Houston that are “hardened.” Even if the HPOPS building were to be de-stroyed, the staff could manage the functions of the plan, like paying pensions to retirees, main-taining the website, retiring officers, etc., at any location. All that is needed is an internet capable laptop computer. Additionally, the banks and investment managers that HPOPS does business with are also prepared with disaster recovery plans and multiple external co-location facilities.Periodically, HPOPS goes through disaster re-covery exercises to assess the plan’s readiness. Additionally, after actual events like Harvey, the plan’s functioning is internally reviewed for weaknesses and missteps. HPOPS feels very confident that the plan does and will remain op-erational throughout any disaster. HPOPS re-mains committed to the members and extends any informational assistance to any member and/or family. We are all indeed, Houston Strong! You are all in my daily prayers. God Bless.

Houston Police officers’ Pension system

602 Sawyer, Suite 300Houston, Texas 77007

(713) 869-87341 (800) 874-0454

fax (713) 869-7657

www.hpops.orginfo@hpops.org

Board of trustees

Terry A. Bratton CHAIRMAN

George GuerreroVICE CHAIRMAN

J. Larry DossSECRETARY

Michael J. NewsomeTRUSTEE

Dwayne ReadyTRUSTEE

Kelly DoweCITY TREASURER

Don A. SandersMAYOR’S REPRESENTATIVE

• • •executive director

John E. Lawson

2 HPOPS’ NEWSLETTER

There are unscrupulous companies out there who offer to eliminate all or at least some of your debt. You have probably heard their ads on the radio. For an upfront fee, they will magically make your debt disappear. Does it

sound too good to be true?Then you have firms who want to charge you for cleaning up your credit report. That is the subject of this article. For years we have seen reports that make it clear that customers aren’t always getting the level of services they were expecting from credit repair firms. With that in mind, the Consumer Financial Protection Bureau (CFPB) has just released the following state-ment:“Today we are taking action to shut down a company (Prime Marketing Holdings, LLC) that de-ceived consumers into paying for credit repair services that did not live up to the company’s prom-ises,” said CFPB Director Richard Cordray. “We remain committed to taking action against companies that mis-lead consumers into paying illegal fees with false promises.”The following was found in a CFPB blog writ-ten by Desmond Brown.

Repairing your credit history after a setback can feel overwhelming. Unfortunately, that’s why some credit repair companies use con-fusing and misleading messaging to target anxious consumers who are just trying to get their financial lives back on track.

Over the past several months, more than half of the people who submitted complaints with the CFPB about credit repair use the terms “fraud or scam” to describe their complaints. Many people don’t know the full set of protec-tions they have or understand the laws that govern credit repair companies. These com-panies must follow numerous federal laws, including the Credit Repair Organizations Act and often the Telemarketing Sales Rule, both of which forbid credit repair organizations

from using deceptive practices and from ac-cepting up-front fees.If you see advertisements or receive offers to fix your credit, look out for these red flags:•They demand payment upfront: The com-pany wants you to pay before it provides any services. Under the Credit Repair Organiza-tions Act, credit repair companies can’t re-quest or receive payment until they’ve com-pleted the services they’ve promised. Some companies will structure monthly payment plans to avoid this requirement, and you should know that no form of upfront payment is legal. A simple rule to follow is “Don’t pay upfront.” If the company uses telemarketing such that the Telemarketing Sales Rule ap-plies, the company may not request or receive fees until it has provided you with a credit report generated more than six months after the promised results that shows the results.•It sounds too good to be true: The com-pany tells you it can get rid of the negative credit information in your credit report in a

short period, even if that informa-tion is accurate and current. Also, if they promise a specific increase in your credit score or guarantee a certain result. No one can guar-antee this. It simply takes time to repair your credit file.

•They can’t answer questions: The company representative can’t explain the specifics of the services they are offering you or the total cost for those services. Asking a few simple questions can help you determine if you are dealing with a reputable organization.•They hold back or provide misinforma-tion: The company doesn’t inform you of your rights, including your right to obtain a written contract outlining the details of your arrangement, as well as having the ability to cancel your contract with the company within three business days. The company does not disclose the full cost of its services, and/or the company suggests that you should not (or cannot) contact any of the nationwide credit reporting companies directly (you can).•They ask you to misrepresent informa-tion: The company suggests that you try to invent a “new” credit identity – resulting in a new credit report – by applying for an Em-ployer Identification Number instead of your Social Security number. That’s a problem.

By Richard Gable, CFP

Credit Repair

HPOPS’ NEWSLETTER 3

Know your rightsDon’t pay a company upfront. According to the Telemarket-ing Sales Rule, it’s illegal for a telemarketing or sales com-pany to charge you for credit repair services unless it has been six months since the company achieved the promised results and the company has proven to you that it achieved those results. You also have additional contract cancella-tion rights if you put money into a dedicated account at the request of the credit repair company – you can withdraw from these services at any time without penalty, including receiving all funds put into the account (minus permissible fees). The credit repair company is required to comply with your request within seven business days.Under the Fair Credit Reporting Act, you have a legal right to dispute credit history errors yourself for free. You don’t have to pay a credit repair company to do it for you. The

first step is to get your free annual credit report from one or more of the three nationwide credit-reporting companies to identify any errors. See the following link:https://www.consumerfinance.gov/consumer-tools/cred-it-reports-and-scores/ Check out CFPB’s information on how to correct inaccura-cies on your credit reports, including sample dispute letters and contact information for each of the three nationwide credit-reporting companies. You can also go online to any of the credit reporting companies’ websites and dispute er-rors. If you think you might be the victim of a credit repair scam or if you’ve had other issues with a credit repair com-pany, you can submit a complaint to the CFPB. https://www.consumerfinance.gov/complaint/ rgable@hpops.org

Answers to Frequently Asked QuestionsWhat is the deadline to request a PROP distribution? PROP distribution requests may be submitted as early as one-year prior to the distribution date and as late as the 5th of the month in which the distribution is to occur/commence. Requests received after the 5th will be rejected in accordance with the PROP Policy.

-Requests may be completed on the HPOPS website, www.hpops.org, before midnight on the 5th

-Requests may be emailed to info@hpops.org or faxed to 713-869-7657 before midnight on the 5th -Mailed requests must be postmarked on or before the 5th

-Requests brought to the HPOPS office must be dropped off before 5:00 pm on the 5th

Where’s my PROP distribution? If you request a PROP distribution, for example, for December 31, the funds remain at HPOPS and your PROP account re-ceives interest on the requested amount through the end of the day on December 31. The Northern Trust distributes the funds on December 31 via ACH (Automated Clearing House). It can take up to 2 additional business days for the funds to be received and processed by your bank or financial institution.I have planned a cruise to celebrate my retirement. Can I complete my retirement paperwork in advance? (also ap-plies to refunds) Unfortunately the answer is “No”. HPOPS must wait for your final pay and contribution information from the City of Hous-ton to calculate your monthly pension and finalize your DROP account, if applicable. Usually, an officer’s last day will be on the Friday of a pay period end week. He/she will not receive their final paycheck until the following Friday. HPOPS receives information regarding this final check after the close of business that same day. The following Monday, HPOPS staff will begin calculating benefits, generating forms and contacting members to schedule appointments. Appointments will be scheduled for later that week or early the following week.If you will not be available for an appointment during the time frame specified above, you may want to complete the entire process via the HPOPS website. If this better suits your needs, then log on to www.hpops.org and REQUEST RETIREMENT from the Benefits page. This should be done as soon as you determine your retirement date, and in lieu of calling HPOPS for a retirement letter. Requesting retirement online will automatically produce the letter required by Employee Services and Payroll. I am applying for a loan and need a letter verifying my benefits. What do I need to do? Log on to our website at www.hpops.org and highlight RESOURCES, then click on INFORMATION REQUEST. Choose MORT-GAGE LETTER then click SUBMIT. Wait about 15 seconds and a box will appear at the bottom of the screen. Choose OPEN to view and PRINT the letter. If you are not computer savvy, send a signed, written request for a benefit verification letter to our office. Mail: 602 Sawyer St, Ste 300 Houston ,TX 77007 Email: info@hpops.org Fax: 713-869-7657

HERE – and, then -- CRASH! BANG! – GONE!!It can happen that quickly and that unexpectedly! That’s why it is so important to have an estate plan! I know that the phrase “estate planning” sounds like something that goes on behind high gates at the end of a long driveway. However, estate plans are not just for the very rich. Besides, most HPOPS members are probably richer than they realize. But, even if you own no more than a TV set and a 1985 Ford pickup truck, you should have a plan for making sure that what-ever you do own goes to whom you want it to go as quickly and economically as possible. An estate plan is simply a legal, written document – or set of documents – that provides for the distribution of your estate (or property) when you die. Your estate is made up of everything you own at the time of your death, such as a house, car, furniture, jewelry, savings accounts, insurance policies, stocks, and bonds, and could even include property your estate acquires after you die such as mineral royalties or dividends. Some of this property, such as insurance poli-cies and retirement benefits, will pass automatically to named beneficiaries via beneficiary forms outside of any court administration. Bank accounts can also be titled to pass automatically to named beneficiaries outside of any will ad-ministration if properly titled. As of 2015, even real estate can pass outside of estate administration through the Texas Revocable Transfer on Death Deed. However these non-probate procedures are not a good fit for everyone depending on a particular person’s wishes. Moreover, if minor children or people with special considerations are involved, more in-volved planning is often necessary, which is more appropriately accomplished by a will. For instance, if you have minor children, a will is the only way to name a guardian for them should you pass away. If you and your spouse should both die “intestate” – without a will – the state of Texas and its social service agencies decide who will raise your children. That, in itself, is a compelling reason to have a will. Section 201 of the Texas Estate Code, provides a list of persons who will receive your property if you die intestate in Texas. Generally, in Texas, if you die, and have no will and are not survived by a spouse: (1) Your estate will pass to your children and their descendants;(2) But, if, at the time of death, you have no children nor any of their descendants surviving you, then your property will pass to your father and mother in equal portions;(3) However, if you are survived only by your father or mother, then your estate will be divided into two equal portions, one of which will pass to your surviving parent, and the other shall pass to your brothers and sisters, and their descen-dants; (4) If you have no brothers and sisters, your entire estate will be inherited by your surviving mother or father; (5) If you are not survived by your father nor mother, then your entire estate will pass to your brothers and sisters, and to their descendants;(6) If, when you die, you are not survived by any of the above named kindred, then your estate will be divided into two parts, one of which shall pass to the paternal and to the maternal kindred in the following order: To your grandfather and grandmother in equal portions, but if only one these be living, then your estate shall be divided into two equal parts, one of which shall go to such survivor, and the other shall go to the descendant or descendants of such deceased grandparent. If there be no such descendants, then the whole estate shall be inherited by their descendants, and so on without end, passing in a like manner to the nearest lineal ancestors and their descendants.

Fun fact: Texas does not have what is commonly referred to as a “laughing heir” statute. This means that an intestate estate will never pass to the State of Texas or some government agency.

If you die intestate, leaving a spouse, the rules are more complicated because the estate is composed of both separate and community property. If you die leaving behind both a spouse and children:(1) Your separate personal property (such as clothing, jewelry, guns, cash you acquired prior to marriage or via gift or inherited) will be divided one-third to your surviving spouse and two-thirds equally split between your surviving

Intestacy - Estate Disposition When Dying Without a Will

4 HPOPS’ NEWSLETTER

children. (2) Your separate real property (such as a house you bought prior to marriage or acquired via gift or inherited) will be divided so that your surviving spouse gets a one-third life estate and your surviving children equally split the remainder subject to the surviving spouse’s life estate. (3) Your community property will pass:

a. Completely to your surviving spouse as long as all of your descendants (children, grandchildren, etc.) are also de-scendants of your surviving spouse.

b. All to your descendants if you have descendants that aren’t also descendants of your surviving spouse (step-chil-dren or step-grandchildren). In this scenario, the surviving spouse is really just keeping the one-half of the communi-ty property that she owned all along. The surviving spouse will additionally have the right to reside in the community property homestead for the rest of her life, but upon its sale, half would be given to the decedent’s children.

If you die leaving behind only a spouse but no children:(1) All of your separate personal property will pass to your surviving spouse.

(2) One-half of your separate real property will pass to your surviving spouse and the other one-half will pass in a similar fashion as outlined above to your parents or siblings if living except that if you have no parents or siblings or descendants of siblings then all of it goes to your surviving spouse.(3) All of your community property will pass to your surviving spouse. I suppose the above distribution might suit you just fine. However, it seems to me that there is a possibility that the in-law you don’t care for could get some of your estate. Even worse is the fact that a good chunk of your estate might be given to your children creating a hardship on your surviving spouse. If your first thought after reading the above intestate distribution was, “This all sounds terribly confusing,” don’t fret. Although the intestate distribution outlined above appears complicated it doesn’t have to be. A will and beneficiary docu-ments allow you to create your own property distribution so that none of the confusing and unwanted rules above ap-ply. Your HPOPS trustees have provided you a FREE estate planning service, to help you plan now for those unexpected events, and even for those expected, but not wished for, events. (For example, a mentally or physically disabling event.) To perhaps say this another way, a Will takes care of your property when you die; and, a Durable Power of Attorney takes care of your property while you’re alive, and unable to make decisions for yourself.Why not take advantage of this free service? If you have a computer, go to the HPOPS website and pull up the “Will Fact Sheet”, complete it (either on line or by hard copy) and send it to HPOPS. If you don’t have a computer, simply call the HPOPS office at (713) 869-8734, and ask for a copy of the “Will Fact Sheet”. You can then complete the Will Fact Sheet and mail it into HPOPS at 602 Sawyer, Suite 300, Houston, Texas 77007. Either way, an HPOPS attorney will review your completed “Will Fact Sheet” and then call you by telephone to make ar-rangements for an appointment with you and your spouse to further discuss with both of you how you would like to dis-pose of your estate upon your death and who you would like to take care of your estate in the event of mental incapacity. What are you waiting for?

HPOPS’ NEWSLETTER 5

Current Number of

Active Officers 5,170

Current Number of

Retired Officers 3,493

Current Number of Survivors

661

Oldest Active Officer

70

Oldest Retired Officer

93

Average Age at

Retirement 57

Average Years of

Service at Retirement

32

Number of Members Retired in

FY 2017 387

Retirement Statistics – The following data is based on Fiscal Year information July 1, 2016 to June 30, 2017 Current

Number of Active

Officers

Current Number of

Retired Officers

Current Number of Survivors

Oldest Active Officer

Oldest Retired Officer

Average Age at

Retirement

Average Years of

Service at Retirement

Number of Members Retired in

2017

5,170 3,493 661 70 93 57 32 387

Retirement Statistics - The following data is based on Fiscal Year information July 1, 2016 - June 30, 2017

6 HPOPS’ NEWSLETTER

2017 Annual Trustee Election Pursuant to Article 6243g-4, the Houston Police Officers’ Pension System must hold a Trustee election each year. Beginning Monday, October 9, 2017 at 8:00 a.m. and ending with the close of business on Friday, October 20, 2017 at 5:00 p.m., HPOPS will be accepting applications from those members interested in filing for candidacy in the 2017 Trustee election. Members inter-ested in filing must be eligible to run for election in accordance with the provisions of Article 6243g-4. The position currently held by Terry Bratton (Retired Member Position #5) and Dwayne Ready (Active Position #2 )will be on this year’s ballot. The three-year term of office for these positions will extend from January 2018 through December 2020. Candidates should be prepared to complete the application form at the Pension System Office, located at 602 Sawyer, Suite 300, Houston, TX, 77007, during normal business hours within the above stated filing period. Questions concerning the election should be directed to the Pension System Office at 713-869-8734.

Alvin L. Allbritton 9/19/2016 M

Donald J. McWilliams 9/19/2016 M

Milton W. Wilson 9/29/2016 M

Daniel E. Morrison Jr 10/2/2016 M

Elizabeth Hollingshead 10/14/2016 S

Jerry W. Lineberry 10/17/2016 M

Ruben G. Davis Jr 10/18/2016 M

Donna J. Peck 10/18/2016 M

George J. Sanders 11/2/2016 M

Willie M. Webber 11/2/2016 S

Beryl C. Barrett 11/4/2016 M

Frederick W. Carroll 11/4/2016 M

Mildred Inez Rollins 11/5/2016 S

Luther E. Sorelle 11/8/2016 M

Carl R.Owens 11/16/2016 M

Abel R. Cavazos Jr 11/17/2016 M

Wayne E. Bethune 11/28/2016 M

William J. Watt 12/1/2016 M

Michael Brandon Wright 12/3/2016 M

Kenneth L. McBurnett 12/9/2016 M

Kirk A. Munden 12/12/2016 M

Frank E. Martinez 12/13/2016 M

Elmer C. Tyler 12/19/2016 M

Carl C. Gilbert Jr 12/26/2016 M

Glen Matthews 1/1/2017 M

Brenda F. Donovan 1/1/2017 S

Norbert L. LeBlanc 1/2/2017 M

James A. Jenkins 1/4/2017 M

James E. Kmiec 1/4/2017 M

John H. Eaton 1/11/2017 M

Betty M. Maddox 1/15/2017 S

Karl L. House 1/18/2017 M

Floyd S. Brewton 1/19/2017 M

George R. Neal 1/19/2017 M

Charles H. Rudolph 1/21/2017 M

Jerry T. Carr 1/22/2017 M

Robert W. Robinson 1/25/2017 M

Kenneth B. Montgomery 1/31/2017 M

Thomas A. Smola 2/1/2017 M

Billy Majors 2/7/2017 M

Lawrence J. Trepagnier 2/11/2017 M

Mildred E. Holley 2/16/2017 S

Jorge A. Gomez 2/17/2017 M

Donnie E. White 2/18/2017 M

Betty J. Maughmer 2/22/2017 S

Maria I. Beeman 2/28/2017 S

Donald I. Baker 3/4/2017 M

James L. Byrd 3/6/2017 M

Jerry W. Carpenter 3/8/2017 M

Jerry B. Robbins 3/11/2017 M

Charles M. Leonard Jr 3/15/2017 M

Trang Thor Nguyen-Lanau 3/31/2017 M

Kenneth C. Ross 3/31/2017 M

R. H. Bielstein 4/2/2017 M

Collie J. Mangano Jr 4/8/2017 M

Harold L. Hannah Jr 4/12/2017 M

James E. Goodman 4/19/2017 M

Floyd Lavern Williams 4/19/2017 M

Jerri L. Atkinson 4/29/2017 S

Don B. Alexander 5/2/2017 M

Joy U. Anderson 5/3/2017 S

Tommie L. Hastings 5/5/2017 M

Robert L. Sieckmann Jr 5/12/2017 M

Gene Sheppard 5/14/2017 M

Otha M. Kirkpatrick 5/21/2017 S

Dorothy Davidek 5/25/2017 S

David C. Richardson 5/31/2017 M

Jerald D. Liles 6/3/2017 M

Frances Ann Kennedy 6/4/2017 S

Stephen G. Copeland 6/5/2017 M

V. H. Schultea Jr 6/8/2017 M

Anna L. Matthias 6/9/2017 S

Amie L. Renk 6/19/2017 S

David E. Hagler 6/23/2017 M

John C. Vaughn 7/2/2017 M

Mary C. Scotton 7/7/2017 S

Daniel P. Fike 7/8/2017 M

James A. Babb 7/11/2017 M

James C. Tatum 7/13/2017 M

Russell Clayton Grimes 7/28/2017 M

Sharon M. Matthews 8/7/2017 S

Ivill F. Cook 8/8/2017 S

Larry H. Williams 8/9/2017 M

Chloe Ann Schultea 8/15/2017 S

Sherman J. Hicks 8/16/2017 M

Edilia Gonzales 8/16/2017 S

E Gladys Greenwood 8/23/2017 S

Brian T. Surginer 8/25/2017 M

Steve A. Perez 8/27/2017 M

James N. Flagg 8/27/2017 M

Bonnie L. Montero 09/08/2017 M

M - Member S - Survivor

In Remembrance

We recently completed our 2017 fiscal year (ending June 30) and we should be able to publish our finalized investment rate of return for the year in the near-term. Right now, it looks like our return will be somewhere around 16.0 percent for the fiscal year or possibly a little higher. We are still waiting on the final re-turns on some of our more illiquid and hard-to-value investments, such as real estate, which is the normal course of things for the end of the fiscal year. Once the return on those investments are finalized, we should have a firm number for the year.

What was driving our overall portfolio investment return this year of course was public equity, both in the US and globally as we realized investment returns in excess of 20 percent in both categories. The fact that the global markets performed in line with US markets was a big boost for HPOPS as compared to fiscal 2016 when non-US markets significantly under-performed those in the US. Actually, the fact that the US equity markets have produced better performance than their non-US markets recently has been a drag on our returns for several years now so this change was certainly welcome. We always strive to have a well-diversified portfolio and we also don’t make significant market timing bets, so we have maintained our non-US equity allocation through this difficult period although with perfect hind-sight we certainly would have taken a different route.None of our other asset classes could keep up with the strong performance in the public equity markets this year, but our Illiquid Alternatives category still produced attractive returns in the mid-teens. HPOPS has a diversified portfolio of private equity, real estate and energy that all performed well this year with energy leading the way as it bounced back from last year’s poor performance. All three categories produced posi-tive returns in the double-digits.In the credit markets, where we have allocations to both public and private credit strategies, markets re-sponded to the same positive economic and financial tailwinds that drove returns in public equity. Expand-ing economies throughout most of the world along with continued central bank support have created a very positive environment for credit strategies and fortunately we were in position to take advantage of it. These conditions resulted in positive double-digit returns for our credit strategies, which is in contrast to the negative returns in this space in the prior year. We have a second category of alternative investments which includes both hedge funds and risk parity strat-egies. This category produced the proverbial “mixed bag” of investment returns as some strategies produced fifteen-plus percentage returns, one strategy just broke even, while other strategies were right in the middle of the two. This resulted in a combined rate of return for the category of approximately eight and one-half percent on the year. The strong performers were helped by successful interest rate and currency strategies while our break-even strategy took the wrong side of those same interest rate and currency trades.

During the year, we started taking some profits from our best performing positions and we are using this capital to build a position in fixed income. In the cur-rent interest rate environment, the return prospects for fixed income are admittedly quite low but inevi-tably the equity markets will experience a downturn and our fixed income positions will hopefully provide a cushion when this occurs. That is a brief summary of the year’s activity. Our an-nual report with significantly more detail should be published sometime in the fourth quarter and you will be able to find it in the Publications section of our website at www.hpops.org.

I���������

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

2013 2014 2015 2016 2017

Historical Pension SystemReturns by Fiscal Year

HPOPS’ NEWSLETTER 7