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HomeMy WebLinkAboutMinutes Fire Pension 090913PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD September 9, 2013 A meeting of the Board of Trustees was called to order at 9:04AM at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chairman Scott Baur, Administrator Mark Joyce, Vice Chair (arrived 9:08AM) Audrey Ross Administrator Tom Murphy, Secretary Troy Brown, Investment Consultant Ed Morejon Pedro Herrera, Attorney Martin Cohen Jeff Detwiller, Investment Manager PUBLIC COMMENTS N/A MINUTES The Board reviewed the minutes of the regular meeting held on August 7, 2013. A motion was made by Tom Murphy to approve the minutes of the August 7, 2013 regular meeting as amended. The motion was seconded by Ed Morejon and carried 4-0. INVESTMENT MANAGER REPORT: GARCIA, HAMILTON & ASSOCIATES (JEFF DETWILLER) Mr. Detwiller introduced himself to the board and stated that he is the fixed income manager for this fund. He reviewed Garcia, Hamilton & Associates’ (GHA) philosophy and commented that that “Their goal is to outperform the benchmark, net of fees, over a full market cycle using a high quality strategy with less risk and low turnover”. Mr. Detwiller explained that it has been a tough market recently and it has been driven by the Feds; also the Treasury rates have risen as well. He reviewed the plans performance for the quarter ending June 30, 2013 and stated that they were negative, but slightly ahead of the index at -1.7% versus -1.8%. For the fiscal year to date they are in the same position at -0.1% versus the index at -1.5%. Mr. Detwiller explained that not owning enough Treasuries during the quarter contributed to their underperformance, but since the quarter ended they have bought another 6% into Treasuries. The Trustees discussed the underperformance and Mr. Detwiller noted that the plans average maturity and duration is shorter compared to the index, and he commented that he will also continue to buy more into Treasuries and will hopefully outperform the index next quarter. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY BROWN) Mr. Brown stated that as of August 31, 2013 the fund is up 1.8% for the quarter and for the fiscal year to date they are well ahead of their assumed rate of return at 11.6%. Although, Mr. Brown did have a recommendation to move $190K from the Fiduciary Management Investment account to the plans receipt and disbursement (R&D) account so that the R&D account remains funded without having to sell off anything. 2 A motion was made by Ed Morejon to authorize and approve the transfer of $190K from the Fiduciary Management Investment Account to the plans receipt and disbursement account per the recommended by the Plans Investment Consultant. The motion was seconded by Martin Cohen and carried 5-0. Mr. Brown stated that the American Realty and the Intercontinental addendums have been executed for the next capital call. The plan will be allocating an additional $750K to each manager. He commented that he will determine where to take the funds from at the time of the capital call so that he can see what asset class is over weighted at that time. There is an enter queue for both funds. Mr. Brown explained that he had the managers sign the revised investment policy guidelines (IPG) as well as their revised addendums too. He stated that he will send a copy the completed document to the Division of Retirement for their approval. Mr. Herrera commented that he did review the revised IPG in advance and that he had no objection to them. A motion was made by Tom Murphy to adopt the revised addendums for Agincourt and Garcia Hamilton and Associates. The motion was seconded by Mark Joyce and carried 5-0. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera stated that the police board received a letter from the City regarding the merging of the Police and Fire board with the FRS. He explained that as long as one member remains in the current plan, then the plan would still receive their Chapter 175/185 money. New members would have the option of going into the FRS or to stay in the current plan. Mr. Herrera explained that the plan sponsor (the City) would still remain liable for paying their contributions each year. He noted that he will update the board on this situation as more information becomes available. ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. The Trustees had a lengthy discussion on the Foster & Foster invoices and had some questions pertaining to certain charges regarding the DROP accounting and COLA calculations. The Trustees asked Ms. Ross to get clarification from the Actuary on those specific charges before they are paid. A motion was made by Ed Morejon to approve the disbursements that were presented by the Administrator with the exception of the items on the Foster & Foster invoice for a total $350. The motion was seconded by Tom Murphy and carried 5-0. BENEFIT APPROVALS The Board reviewed the applications for distribution of DROP & Share accounts (partial withdrawals) for Peter Bergel. A motion was made by Tom Murphy to approve the applications for distributions of DROP and Share accounts for Peter Bergel. The motion was seconded by Mark Joyce and carried 5-0. 3 OLD BUSINESS Mr. Herrera noted that he sent out the RFP for the self directed DROP and share accounts to about 6 different service providers. He noted that he received back one response from Nationwide Financial, and they are extremely expensive. The Trustees had a very lengthy discussion on their other options and alternatives at this time. Mr. Brown presented that board with an example of a self directed option that another one of his clients uses. Basically the members would have the opportunity to join one of the existing mutual funds that are already held in the portfolio, or Mr. Brown can come up with a couple of “self directed account” options, but he noted that it would be a separate service agreement with Bogdahn. The Trustees continued their discussion on the different investment options and Mr. Herrera stated that he would recommend at this time for the board to form some kind of overview committee to work on this project and come up with a plan of action. Mr. Morejon stated that he will get the Ms. Ross and Mr. Baur in between meetings to come up with a plan of action and will report back to the board at the next meeting. NEW BUSINESS The Trustees discussed the DROP accounting and how the interest is being posted to the members account. Mr. Baur stated that the average daily balance should be used when they are calculating the interest, but Mr. Morejon commented that the Actuary is calculating the interest based off the average balance in the account at the end of the quarter. The Trustees directed Ms. Ross to notify the Actuary that they should be calculating the interest off the average daily balance, instead of the average quarterly balance. There being no further business, the meeting adjourned at 12:16 PM. Respectfully submitted, Tom Murphy, Secretary