Johns Hopkins University
Faculty Budget Advisory Committee
Summary of October 9, 2019 Meeting
RETIREMENT PLANS INVESTMENT COMMITTEE UPDATE
Ms. Heidi Conway—Vice President of Human Resources, Dr. Jon Links—Vice Provost and Chief Risk Officer, and Ms. Meredith Stewart—Executive Director of Human Resources provided an update on the work of the Retirement Plans Investment Committee (RPIC), a group formed in April 2018 to act solely in the interests of participants and beneficiaries as fiduciaries of the three JHU 403(b) plans. Dr. Greg Duffee, Professor of Economics at the Krieger School and FBAC member, has recently joined the RPIC. CAPTRUST, a third-party expert investment consultant and co-fiduciary, was retained to support the RPIC’s activities and to provide advice and recommendations to the RPIC.
The RPIC is focusing its work on reviewing the recordkeeping structure and investment menu for the 403(b) plans. The three JHU 403(b) plans currently have three active recordkeepers accepting employee contributions, several “frozen” recordkeepers no longer accepting contributions, and an investment menu with more than 400 available investment choices. In recent years, there have been changes in best practices concerning the structure of retirement plan recordkeepers and investment menus.
Two advisory workgroups have been created to consider changes to the 403(b) retirement plans: (1) Recordkeeper Advisory Workgroup – to evaluate the plans’ recordkeepers and recordkeeping structure and make recommendations regarding potential changes, including whether JHU should move to a single or dual recordkeeper structure and (2) Investment Menu Advisory Workgroup – to evaluate the plans’ investment menu and make recommendations regarding the type and number of available asset classes and investment funds.
Advisory workgroups will make recommendations to the RPIC for final approval by June 2020. The intention is to make this an iterative process, with draft recommendations to be presented to key groups of participants throughout this fiscal year. Implementation will begin shortly after decisions are finalized and is expected to take approximately one year. An extensive campus outreach campaign is underway with discussions scheduled at various campus group meetings and a website is being created to help get the word out about the work underway. See slide presentation document included with this meeting summary for more details on the update from the RPIC.
CONCUR IMPLEMENTATION
Mr. Brian Smith—Chief Procurement Officer and Ms. Amy Page—Director of Travel and Expense Programs briefed the Committee on the implementation of the Concur travel and expense solution. As part of the Administrative Excellence Initiative, the current phase of procurement transformation is focusing on the use of systems and technology to reduce administrative burden. The current state expense processing method, SAP Trip, falls short of meeting JHU’s needs in several aspects, most notably that it is burdensome and very time-consuming for end users.
Concur was chosen as the expense and travel processing solution because of its many advantages. Concur connects to the current managed travel programs and allows for reconciliations through a single user platform. The solution delivers integrated, user-friendly tools, including mobile capability. Adoption at more than 300 other universities has been largely positive. Concur allows for custom and visible status workflow, minimizing the burden on faculty. It also has safety features with integrated messaging and connects into the University’s safety/security provider.
Concur is being implemented in waves, with the first wave rolled out for Johns Hopkins Health System and IT@Hopkins on September 26, 2019. All JHU/JHHS business areas are scheduled to be live with Concur within a year.
FINANCE UPDATE
Ms. Helene Grady—VP for Planning & Budget and Mr. Scott Jonas—Controller presented highlights of the University’s FY19 preliminary year-end results. The University ended the year with a GAAP operating surplus of $133 million, a margin of 2.1% and $71 million favorable to the budgeted result. After adjusting for FY18 and FY19 significant/one-time items, FY19 GAAP surplus was essentially level with the FY18 result, at an adjusted margin of 1.6%. Ms. Grady and Mr. Jonas briefed the Committee on drivers of School of Medicine and School of Advanced International Studies results, both of which finished the year worse than their FY19 budgeted margins, but with a particular focus on the nature of the challenges at the School of Medicine. Several divisions that exceeded budget were also highlighted – Applied Physics Laboratory, Bloomberg School of Public Health, Homewood Student Affairs, University Administration and Other Administration.
The balance sheet was strengthened in FY19, with the biggest impact being an increase in investments resulting from the $1.8 billion Bloomberg gift for student financial aid.
Mr. Bob McLean—VP of Facilities and Real Estate reported that several projects were approved to proceed by Trustees:
Mr. McLean also reported on the announcement related to the planned conversion of the Blackstone Apartments to a hotel and provided brief updates on the status of planning efforts for 555 Pennsylvania Avenue and the SNF Agora Institute building.