HomeMy WebLinkAboutAgenda Police Pension 021814Agenda
City of Palm Beach Gardens Police Officers'
Pension Fund
MEETING OF FEBRUARY 18, 2014
LOCATION: City Council Chambers'
10500 North Military Trail
Palm Beach Gardens, FL 33410
TIME: 9 AM
1. Call Meeting To Order
2. Roll Call:
• Jay Spencer, Chairman
• David Pierson, Secretary
• Brad Seidensticker, Trustee
• Greg Mull, Trustee
• Marc Glass, Trustee
3. Salem Trust Bank - (Karen Russo & Brad Rinsem)
4. Investment Manager Report - ICC Capital (Steve Stack)
5. Investment Consultant Report - Thistle Asset Consulting (John McCann)
6. Attorney Report - Law Offices of Perry & Jensen (Bonni Jensen)
■ Proposed Fee Increase Letter
■ Memo - IRS Mileage Rate for 2014
7. Administrator Report - Resource Centers (Audrey Ross)
• Ratification of the 2014 Fiduciary Liability Insurance Renewal
• Ratification of the 9/30/2013 Audit Engagement Letter (Cherry Bekaert)
• GRS Supplemental Study Regarding Plan Changes
8. Approval of Minutes
• October 18, 2013 Regular Meeting
9. Disbursements
10. Benefit Approvals
11. Financial Statements
12. Other Business
13. Public Comments
14. Adjourn
Next Meetinn Date:
Friday April 18, 2014 @ 9AM
PLEASE NOTE:
Should any interested party seek to appeal any decision of this Board with respect to any matter considered at such meeting or hearing, s/he
will need a record of the proceedings and for such purpose may need to ensure that a verbatim record of the proceedings is made, which
record includes the testimony and evidence upon which the appeal is to be based.
In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodation to participate in this meeting
should contact the The Pension Resource Center, LLC no later than four days prior to the meeting.
M
N
I MX, UMN
January 13, 2014
Karen Russo
Salem Trust Company
455 Fairway Drive, Suite 103
Deerfield Beach, FL 33441
Dear Karen,
Due to the problems with your system conversion, a few of our mutual clients were unable to receive
their reports in a timely manner and have been forced to hold special meetings as a result.
Consequently, the Boards for the Cooper City General Retirement Plan, the Palm Beach Gardens Police
Pension, and the Bal Harbour Police Pension fund have asked us to write this letter requesting a 33%
refund of your fee for the quarter ended June 30, 2013, and a 100% refund of your fee for the quarter
ended September 30, 2013.
Thank you for your attention to this matter.
Sincerely,
John McCann, CIMA°
Palm Beach Gardens Police Pension Fund
Executive Summary Report
Table of Contents
SECTION
PAGE
Market Snapshot
1
Index Comparisons
2
Compliance Report
3
Total Portfolio Pie Chart
4
Manager Pie Chart
5
Asset Allocation Table
6
Gain/Loss Table
7
Total Ranks Table
8
Manager Ranks
9
Scatterplot Graphs:
Total Fund Graph
11
Rhumbline Equities Graph
12
ICC Fixed income Graph
13
Beta Graph 14
Alpha Graph 15
Beta/ Alpha Table 16
Batting Average Graph 17
Batting Average/R-Squared Table 18
Other Managers' Page 19
Page 2
Index Comparison
December 31, 2013
-10.00
0.00
10.00
20.00
30.00
40.00
50.00
3 Months Last 12 Months Last 3 Years (Annualized)
Re
t
u
r
n
(
%
)
Barclays Gov/Credit Bond Barclays Gov/Credit-Intermediate S&P 500
Russell 1000 Growth Russell 1000 Value Russell 2000 Growth
Russell 2000 Value Russell 3000 MSCI EAFE
10.51%S&P 500
-0.03% BCGC
43.30%R2000G
16.82%R2000G
2.91% BCIGC-2.35%BCGC
1.
2.
3.
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
5.
6.
Page 3
Is the minimum quality rating of the domestic bond investments BBB from Standard & Poor's or BAA from Moody's?
Did the fixed income return, over the trailing 5-year period, rank in the top 40% of the Mobius Broad Fixed Income
Universe? [74th]
Did the total return of the fund over the trailing 3-year period equal or exceed 7.3% (actuarial assumption rate of return)?
[11.18 vs. 7.30]
TOTAL FIXED INCOME
Did the fixed income return, over the trailing 3-year period, exceed the 89% BCGC and 11% Non-US World Gov't Bond?
[3.14 vs. 2.99]
Is the amount invested in any single security less than or equal to 5% of the market value of the total equity portfolio?
Is the amount invested in any single industry less than or equal to 20% of the market value of the total equity portfolio?
Did the fixed income return, over the trailing 5-year period, exceed the BCGC? [4.21 vs. 4.23]
Did the fixed income return, over the trailing 3-year period, rank in the top 40% of the Mobius Broad Fixed Income
Universe? [69th]
Is the amount invested in any single security (with exception of U.S. Government and its agencies) less than or equal to 5%
of the market value of the total fixed income portfolio?
Palm Beach Gardens Police Pension Fund
Compliance Report
December 31, 2013
YES NO
Did the equity return, over the trailing 3-year period, exceed the 38.4% S&P 500, 15.4% S&P 400, 15.4% S&P 600, 15.4%
R1000G index and 15.4% EAFE? [15.33 vs. 15.38]
Did the equity return, over the trailing 5-year period, exceed the 38.4% S&P 500, 15.4% S&P 400, 15.4% S&P 600, 15.4%
R1000G index and 15.4% EAFE? [19.48 vs. 18.79]
Did the equity return, over the trailing 3-year period, rank in the top 40% of the Mobius 38.4% Broad Large Cap, 15.4%
Mid Cap, 15.4% Small Cap, 15.4% Broad Large Cap Growth and 15.4% International Universe? [9th]
Did the equity return, over the trailing 5-year period, rank in the top 40% of the Mobius 38.4% Broad Large Cap, 15.4%
Mid Cap, 15.4% Small Cap, 15.4% Broad Large Cap Growth and 15.4% International Universe? [11th]
TOTAL FUND
Did the total return, over the trailing 3-year period, exceed the policy, which is comprised of 25% S&P500, 10% S&P400,
10% S&P600, 10% R1000G, 10% EAFE, 29% BCGC , 4% Non US $ World Gov. Bond & 2% RE? [11.18 vs. 11.26]
TOTAL EQUITY
Did the total return, over the trailing 3-year period, rank in the top 40% of the Universe comprised of 25% Mobius Broad
Large Core, 10% Mid Cap, 10% Small Cap, 10% Broad Large Cap Growth, 10% International Equity, 29% Broad Fixed, 4%
International Fixed Income & 2% NCREIF? [46th]
1.
J. Andrew Richey's shares were purchased by ICC existing shareholders.
2.
No
3.
Vittorio Fratta, CFA, assistant portfolio left ICC to pursue other carrer opportunities.
4.
ICC lost roughly 8% of its total AUM.
5.
ICC gained roughly 4% of its total AUM.
6.
No
7.
No
8.
No
9.
0%
10.
No
11.
Steve Stack, CCO/COO
Page 3a
Manager Compliance Questionnaire
December 31, 2013
Have there been any changes in your organization? Have you undergone any change in ownership or control?
Are you invested in any unhedged and/or levereged derivatives?
What percentage of equity is international? The
manager must immediately notify the Board and the Consultant when the international exposure reaches ten percent (10%). An explanation
will be needed as to why the manager is changing their discipline. (This does not apply to managers that are 100% international equity and to
those that have been previously given permission by the board and the consultant)
Are you invested in any companies on the SBA's website? (Please review list of scrutinized companies on the following website:
http://www.sbafla.com/fsb/Home/ProtectingFloridasInvestmentAct/tabid/751/Default.aspx
Name of person completing this form (please include company name)?
Have there been any changes in your investment philosophy?
Have there been any changes in your staff of investment professionals?
Have you lost a substantial amount of business (amount of percentage of assets under management)?
Have you gained a substantial amount of business (amount of percentage of assets under management)?
Have there been any new investigations begun by any state or federal government or their agencies, or any charges filed, with regard to any
division or unit of your company, and in particular anyone who directly or indirectly performs services for this client? Please provide details
(if there is any doubt, please err on the side of providing too much information).
For managers, with fixed income portfolios that we monitor, are you currently invested in commercial mortgage backed securities (CMBS)? (If
yes, please give % of fixed portfolio)
1.
We have not experienced any organiazational or ownership changes during 4th QTR 2013.
2.
No.
3.
No.
4.
No.
5.
No.
6.
None.
7.
For our Core Bond Pooled Index Fund, the % of commercial mortgage backed securities was 2.52% as of December 31, 2013.
8.
No.
9.
Not Applicable.
10.
No.
11.
Sarah Duncan, RhumbLine Advisers
Page 3b
Manager Compliance Questionnaire
December 31, 2013
Have there been any changes in your organization? Have you undergone any change in ownership or control?
Are you invested in any unhedged and/or levereged derivatives?
What percentage of equity is international?
The manager must immediately notify the Board and the Consultant when the international exposure reaches ten percent (10%). An
explanation will be needed as to why the manager is changing their discipline. (This does not apply to managers that are 100%
international equity and to those that have been previously given permission by the board and the consultant)
Are you invested in any companies on the SBA's website? (Please review list of scrutinized companies on the following website:
http://www.sbafla.com/fsb/Home/ProtectingFloridasInvestmentAct/tabid/751/Default.aspx
Name of person completing this form (please include company name)?
Have there been any changes in your investment philosophy?
Have there been any changes in your staff of investment professionals?
Have you lost a substantial amount of business (amount of percentage of assets under management)?
Have you gained a substantial amount of business (amount of percentage of assets under management)?
Have there been any new investigations begun by any state or federal government or their agencies, or any charges filed, with regard to
any division or unit of your company, and in particular anyone who directly or indirectly performs services for this client? Please provide
details (if there is any doubt, please err on the side of providing too much information).
For managers, with fixed income portfolios that we monitor, are you currently invested in commercial mortgage backed securities
(CMBS)? (If yes, please give % of fixed portfolio)
Fixed Income
25%
Palm Beach Gardens Police Pension Fund
Total Assets
December 31, 2013
Real F,state C'a.al/
■ Equities ■ Fixed Income ■ Real Estate Lshj
quities
70%
Page 4
Palm Beach Gardens Police Pension Fund
Total Assets
December 31, 2013
r%'r FiYod A---,:--- V —11
Intl. Bonds
2%
ICC Lg. Grc
13%
ine S&P500
?7%
:humbline S&P400
11%
8% 12%
■Rhumbline S&P500 ■Rhumbline S&P400 ■Rhumbline S&P600 OIntl. Equity ■ICC Lg. Growth ■Intl. Bonds ■ICC Fixed OAmerican Realty
CIlistle wt Crolmultitig
Page 5
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2013
Manager
Equities
Fixed Income
Real Estate
Cash
Total
% of Total
Rhumbline S&P500
$18,064,000
$0
$0
$0
$18,064,000
26.6%
of
Rhumbline S&P400
$7,602,000
$0
$0
$0
$7,602,000
11.2%
10.0�
Rhumbline S&P600
$8,016,000
$0
$0
$0
$8,016,000
11.8%
10.0%
Intl. Equity
$5,406,000
$0
$0
$0
$5,406,000
8.0%
10.01
ICC Lg. Growth
$8,761,000
$0
$0
$0
$8,761,000
12.9%
10.0%
Intl. Bonds
$0
$1,509,000
$0
$0
$1,509,000
2.2%
4.0%
ICC Fixed
$0
$15,459,000
$0
$1,166,000
$16,625,000
24.5%
?Q. 0
American Realty
$0
$0
$1,981,000
$0
$1,981,000
2.9%
. O(T
Total
$47,849,000
$16,968,000
$1,981,000
$1,166,000
$67,964,000
100.0%
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
100.0
- - - - - - - - - - - - - - - - - - - -
% of Total
70.4%
25.0%
2.9%
1.7%
100.0%
Target %
65.0%
33.0%
2.0%
0.0%
100.0%
C',11Wk Asut LungultingW
Page 6
Por olio
Total Fund
Total Equities
ICC Large Growth
Rhumbline S&P 500
Rhumbline S&P 400
Rhumbline S&P 600
International Equity
International Bonds
ICC Fixed Income
Real Estate
------------------------------
�hT�tic
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2013
Last Qtr. MV Net Flows
$63,580,000
$43,022,000
$7,337,000
$16,350,000
$7,021,000
$7,297,000
$5,016,000
$1,502,000
$15,488,000
$1,672,000
--------------------
$18,000
$554,000
$527,000
$0
$0
$0
$0
$0
-$29,000
$240,000
----------------
Inv GO This Qtr. MV
$4,366,000
$67,964,000
$4,273,000
$47,849,000
$896,000
$8,761,000
$1,714,000
$18,064,000
$582,000
$7,602,000
$719,000
$8,016,000
$389,000
$5,406,000
$7,000
$1,509,000
$1,000
$15,459,000
$69,000
------------------------------------------
$1,981,000
Page 7
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2013
Current Fiscal Year
uarter FYTD One Year Three Years Five Years 2013 2012 2011 2010 2009
TOTAL FUND (Net of Fees)[Inception 3-31-19921
Return
6.87%
6.87%
20.89%
11.18 %
13.53 %
14.53%
18.63 %
0.22 %
10.09 %
5.62%
Ranking (*)
14
14
55
46
73
79
86
34
38
6
Policy Return
5.97 %
5.97 %
19.79 %
11.26 %
13.96 %
14.21 %
19.60 %
1.76 %
10.82 %
1.64 %
Policy Ranking (*)
64
64
79
41
59
85
70
5
a
54
TOTAL EQUITIES(Net of Fees)[Inception 6-30-2000]
Return
9.85%
9.85%
34.14%
15.33 %
19.48%
24.43%
28.59%
-2.62 %
12.36%
-1.00%
Ranking (***)
11
11
13
9
11
25
8
51
15
20
Policy Return (38.4 % S&P500,
15.4%S&P400, 15.4%S&P600,
15.4 % R1000G, 15.4 % EAFE)
9.32 %
9.32%
32.71 %
15.38 %
18.79 %
23.27%
27.80 %
-0.50 %
11.44 %
-4.36 %
Policy Ranking (***)
39
39
37
8
28
49
21
11
29
71
TOTAL FIXED INCOME(Net of Fees)[Inception 3-31-1994](International Fixed Inception 9-30-2010)
Return 0.03% 0.03% -2.94 % 3.14% 4.21 % -2.93 % 5.83% 4.78 % 7.63 % 11.10 %
Ranking (Broad Fixed) 69 69 69 69 74 75 71 14 45 53
Policy Return (89 % BCAB and 11 %
Non -US World Gov't Bond) -0.26 % -0.26 % -2.30 % 2.99 % 4.23 % -2.12 % 4.98 % 5.21 % 7.79 % 11.19 %
Policy Ranking (Broad Fixed) 82 82 59 71 74 61 76 10 44 53
* 25 % Broad Large Cap Core, 10 % Mid Cap, 10 % Small Cap, 10 % Broad Large Growth, 10 % International, 4 % Intl. Bond, 29 % Broad Fixed & 2 % RE
** 25 % S&P500, 10 % S&P400, 10 % S&P600, 10 % R1000G, 10 % EAFE, 4 % Intl. Bond, 29 % BCAB & 2 % NCREIF
*** 38.4 % Broad Large Cap Core, 15.4 % Mid Cap, 15.4 % Small Cap, 15.4 % Broad Large Cap Growth, 15.4 % International
Gold indicates equal to or beat the index, or in upper 40 % of universe
Red indicates bottom 40 % of universe
T11istte Asset T811 11ltittg
Page 8
Current Fiscal Year
Quarter FYTD One Year Three Years Five Years 2013 2012 2011 2010 2009
10.48%10.48%32.29%16.18%17.95%19.31%30.17%1.19%10.21%-6.49%
Ranking (Br.Large Cap Core)34 34 52 28 40 66 21 20 29 55
10.51%10.51%32.39%16.18%17.94%19.34%30.20%1.15%10.16%-6.91%
Policy Ranking (Br.Large Cap Core)30 30 50 28 41 66 20 20 30 62
8.28%8.28%33.36%15.74%21.95%27.56%28.90%-1.17%17.77%-2.77%
67 67 56 36 25 46 28 26 12 100
8.33%8.33%33.50%15.64%21.89%27.68%28.54%-1.28%17.78%-3.10%
66 66 55 37 26 44 30 27 12 100
9.85%9.85%41.21%18.40%21.29%31.40%33.27%0.21%14.14%-10.54%
Ranking (Broad Small Cap)25 25 24 14 39 39 18 26 37 86
9.83%9.83%41.32%18.42%21.37%31.52%33.35%0.21%14.21%-10.61%
Policy Ranking (Broad Small Cap)25 25 24 14 38 37 18 26 36 86
11.65%11.65%39.99%15.36%22.22%28.72%27.52%-6.48%14.62%15.30%
Ranking (Broad Large Cap Growth)16 16 7 53 12 1 55 94 8 1
10.44%10.44%33.49%16.45%20.39%19.27%29.18%3.78%12.65%-1.85%
48 48 55 30 27 73 40 14 20 35
7.76%7.76%25.22%9.59%15.31%23.71%19.38%-11.11%9.09%2.30%
17 17 18 16 20 28 20 50 32 48
5.75%5.75%23.29%8.66%12.96%24.29%14.33%-8.94%3.71%3.79%
58 58 26 25 43 24 68 25 65 39
Page 9
Return
Policy (R1000G)
Policy (S&P 600)
Ranking (Broad Mid Cap)
ICC LARGE CAP GROWTH EQUITY PORTFOLIO(Inception 9-30-2007)
Return
Policy Ranking (Broad Mid Cap)
INTERNATIONAL EQUITY(Inception 9-30-2006)
Return
Ranking (International Equity)
Policy (MSCI EAFE)
Return
Gold indicates equal to or beat the index, or in upper 40% of universe
Policy (S&P 400)
Red indicates bottom 40% of universe
Policy Ranking (Broad Large Cap
Growth)
Policy Ranking (International
Equity)
Return
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2013
RHUMBLINE S&P 500 EQUITY PORTFOLIO(Inception 6-30-2000)
RHUMBLINE S&P 400 EQUITY PORTFOLIO(Inception 12-31-2002)
Policy(S&P500)
RHUMBLINE S&P 600 EQUITY PORTFOLIO(Inception 10-31-2003)
Palm Beach Gardens Police Pension Fund
Performance Evaluation Summary
December 31, 2013
Current Fiscal Year
uarter FYTD One Year Three Years Five Years 2013 2012 2011 2010 2009
ICC FIXED INCOME PORTFOLIO (Inception 3-31-1994)
Return
-0.02%
-0.02%
-2.82 %
3.20 %
4.20 %
-2.54 %
6.07%
5.66%
8.10 %
11.96%
Ranking (Broad Fixed)
72
72
67
68
75
69
69
8
42
46
Policy(BCAB)
-0.14%
-0.14%
-2.02%
3.27%
4.45%
-1.68%
5.16%
5.29%
8.17%
10.56%
Policy Ranking (Broad Fixed)
78
78
55
66
72
53
75
9
41
57
INTERNATIONAL FIXED INCOME PORTFOLIO (Inception 9-30-2010)
Two Years
Three Years
Return
0.47%
0.47%
-4.04%
2.74%
2.33%
-2.82%
7.89%
0.33 %
n/a
n/a
Policy (Non -US World Bond)
-1.24 %
-1.24 %
-4.57%
-1.58 %
0.62 %
-5.65 %
3.46 %
4.14 %
n/a
n/a
AMERICAN REALTY PORTFOLIO(Inception 6-30-2012)
Inception
Return
3.62 %
3.62 %
12.62%
11.53%
n/a
11.10 %
n/a
n/a
n/a
n/a
Policy (NCREIF)
NA
NA
8.25 %
8.87 %
n/a
11.00 %
n/a
n/a
n/a
n/a
NA=Not Available Gold indicates equal to or beat the index, or in upper 40 % of universe
Red indicates bottom 40 % of universe
�h,Wk. ref rmul#tng ot
Page 10
December 31, 2013
EXPLANATION OF RISK/REWARD SCATTERPLOT GRAPHS
The crossing lines represent the 5-year return (horizontal line) and 5-year standard deviation or
volatility or risk (vertical line) of the index against which the Fund is being measured.
Each point represents the Fund's 5-year return (vertically) and standard deviation or volatility
(horizontally), relative to the index. If a point is in the southwest quadrant, for example, the 5-year
return of the Fund has been less than (below) the index line, and the 5-year standard deviation
(volatility) has also been less than (to the left of) the index line.
There are four points, one for each of the last four quarters. The earliest one is the smallest and the
quarter just ended being the largest. Each point shows the 5-year relative position of the Fund
versus the index for that quarter. The movement of the points shows the trend, or direction, over
time.
As noted in the graph, the best place to be is the northwest quadrant (less risk and a higher return);
the worst place to be is the southeast quadrant (more risk and a lower return).
E1i�tir Awl (follollin
Palm Beach Gardens Police Pension Fund
Total Fund Trailing 5-Years
(versus 25% S&P500, 10% S&P400, 10% S&P600, 10% R1000G, 10% EAFE, 4% Non -US World Bond, 29% BCGC, 2% RE)
3
December 31, 2013
Good
Aggressive
•
Conservative
Bad
-3 0
Risk (Difference in Standard Deviations)
• 12/31/2013 4 913012013 ❑ 613012013 ♦ 313112013 I
M
W ' Ilide wt 6115111ting
Page 11
3
Palm Beach Gardens Police Pension Fund
Total Equity Trailing 5-Years
(versus 38.4% S&P 500, 15.4% S&P 400, 15.4% S&P 600, 15.4% R1000G & 15.4% Intl. )
December 31, 2013
Good
Aggressive
Conservative
Bad
-3 0
Risk (Difference in Standard Deviations)
• 12/31/2013 0913012013 0613012013 ♦ 313112013 I
3
Lhistlr Autt cuttoullinq
Page 12
3
Palm Beach Gardens Police Pension Fund
Total Fixed Income 5-Year Trailing
(versus 89% BCGC, 11 % Non -US World Gov't Bond)
December 31, 2013
Good
Aggressive
AL
El
Conservative
Bad
-3 0
Risk (Difference in Standard Deviations)
12/31/2013 0913012013 0613012013 ♦ 313112013 I
04
(? fli�tty .kgrt ��1rP llftitll�+ i
3
Page 13
Dec-13
Sep-13
Jun-13
Mar-13
Palm Beach Gardens Police Pension Fund
Beta: Trailing 5-Year Risk (or Inception ifLess)
December 31, 2013
0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 1.10 1.20
■ Total Fund ❑ Large Cap ❑ Mid Cap ❑ Small Cap ■ Total Fixed ❑ International ■ Large Growth
W 0ltistle Asset Grnnsniting W Page 14
Palm Beach Gardens Police Pension Fund
Alpha: Trailing 5-Year Reward (or Inception ifLess)
December 31, 2013
TOTAL FUND & INDIVIDUAL MANAGERS
12.0
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
Dec-13 Sep-13 Jun-13 Mar-13
■ Total Fund ❑ Large Cap ❑ Mid Cap ❑ Small Cap ® Total Fixed ❑ International ■ Large Growth
►iill�t�P5�faIII�tlri Page 15
Palm Beach Gardens Police Pension Fund
Alpha & Beta: 5-Years Trailing (or Inception if Less)
December 31, 2013
BETA
Current
Policy
Dec-13
Sep-13fun-13
Mar-13
Total Fund
*
0.89
0.86
0.88
0.88
Managers, Fixed Income
Total Fixed
BCAB
0.88
0.83
0.91
0.88
Managers, Equities
Large Cap
S&P500
1.00
0.99
0.99
0.99
Mid Cap
S&P400
1.00
0.99
0.99
0.99
Small Cap
S&P600
0.99
0.99
0.99
0.99
International
EAFE
0.37
0.37
0.41
0.41
Large Growth
R1000G
1.13
1.06
1.08
1.10
Real Estate
NCREIF
-0.35
ALPHA
Total Fund
1.08%
1.56%
0.90%
0.99%
Managers, Fixed Income
Total Fixed
BCAB
0.50%
0.74%
-0.13%
0.36%
Managers, Equities
Large Cap
S&P500
0.090/0
0.17 %
0.19 %
0.19 %
Mid Cap
S&P400
0.14%
0.21 %
0.20%
0.21 %
Small Cap
S&P600
0.07%
0.06%
-0.07%
0.04%
International
EAFE
10.48%
5.41%
1.16%
1.11%
Large Growth
R1000G
-0.83%
2.42 %
1.05 %
1.51 %
Real Estate
NCREIF
14.59%
* 25 % S&P 500, 10 % S&P400, 10 % S&P600, 10 %
R1000G, 10 % SAFE, 4 % Non -US World Gov't Bond, 29 % BCAB, 2 % RE
W1 Auct T0116111fllllo i
Page 16
100
90
80
70
60
50
40
30
20
10
0
Palm Beach Gardens Police Pension Fund
Batting Average: 5--Years Trailing (or Inception ifLess)
December 31, 2013
TOTAL FUND & INDIVIDUAL MANAGERS
Dec-13 Sep-13 Jun-13 Mar-13
■ Total Fund ❑ Large Cap ❑ Mid Cap ❑ Small Cap ■ Total Fixed ■ International ■ Large Growth
(;hitle��ef �unrtltin�
Page 17
Palm Beach Gardens Police Pension Fund
Batting Average: 5--Years Trailing (or Inception ifLess)
December 31, 2013
BATTING A VERAGE
Current
Policy
Dec-13
Sep-13fun-13
Mar-13
Total Fund
30.00
30.00
30.00
35.00
Managers, Fixed Income
Total Fixed
BCAB
55.00
50.00
50.00
55.00
Managers, Equities
Large Cap
S&P500
45.00
50.00
55.00
60.00
Mid Cap
S&P400
55.00
60.00
60.00
60.00
Small Cap
S&P600
30.00
30.00
30.00
35.00
International
EAFE
60.00
55.00
55.00
55.00
Large Growth
R1000G
50.00
50.00
50.00
55.00
Real Estate
NCREIF
50.00
40.00
40.00
R-SQUARED
Total Fund
0.98
0.98
0.98
0.98
Managers, Fixed Income
Total Fixed
BCAB
0.81
0.84
0.77
0.74
Managers, Equities
Large Cap
S&P500
1.00
1.00
1.00
1.00
Mid Cap
S&P400
1.00
1.00
1.00
1.00
Small Cap
S&P600
1.00
1.00
1.00
1.00
International
EAFE
0.21
0.22
0.28
0.28
Large Growth
R1000G
0.93
0.92
0.92
0.92
Real Estate
NCREIF
0.38
0.44
0.44
25 % S&P 500, 10 % S&P4001 10 % S&P600, 10 % R1000G, 10 % EAFE, 4 % Non -US
World Gov't Bond,
29 % BCAB, 2 % RE
1''Ilide Awt T011511ttiq W Page 18
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Advanced Investment Partners - Large Cap - Gross Size 11.60 11.60 38.50 17.85 18.69 8.87
Atlanta Capital Management Co., LLC - High Quality Growth Plus - Gross Size 12.20 12.20 31.28 14.26 18.84 7.77
ICC Capital Management, Inc - Core Value - Gross Size 10.17 10.17 33.18 13.46 16.26 7.49
Logan Capital Management - Large Core 60/40 - Gross Size 11.21 11.21 30.96 16.10 21.00 9.91
Madison Investment Advisors, Inc. - Large Cap Equity (Instl) - Gross Size 10.00 10.00 30.52 15.03 17.79 7.27
Rhumbline Advisers Corporation - Russell 1000 Index Fund - Gross Size 10.20 10.20 33.01 15.61 18.25 7.68
Valley Forge Asset Management - Large Cap Core - Gross Size 8.62 8.62 21.45 11.60 12.57 7.57
Russell 1000 10.23 10.23 33.11 16.30 18.59 7.78
S&P 500 10.51 10.51 32.39 16.18 17.94 7.41
Dana Investment Management - Large Growth - Gross Size 11.00 11.00 35.03 16.61 18.72 9.37
Denver Investment Advisors, LLC - Growth - Gross Size 10.71 10.71 34.30 16.23 20.84 8.53
Garcia Hamilton & Associates - Quality Growth - Gross Size 10.91 10.91 28.27 13.16 17.94 6.84
ICC Capital Management, Inc - Large Cap Growth Equity - Gross Size 10.96 10.96 36.73 14.42 21.14 7.56
Logan Capital Management - Large Cap Growth - Gross Size 12.15 12.15 37.16 14.02 23.42 9.23
Montag & Caldwell, Inc. - Large Cap Growth - Gross Size 10.99 10.99 28.92 15.22 17.00 8.30
Polen Capital Management - Large Cap Growth - Gross Size 11.54 11.54 23.88 14.98 19.70 9.35
Rhumbline Advisers Corporation - Russell 1000 Growth Index Fund - Gross Size 10.36 10.36 33.35 16.43 20.40 7.87
Sawgrass Asset Management, LLC - Large Cap Growth Equity - Gross Size 11.21 11.21 35.53 19.18 19.22 8.22
Silvant Capital - Select LCG Stock - Grosss Size 11.91 11.91 32.60 12.77 17.03 8.01
Russell 1000 Growth 10.44 10.44 33.48 16.45 20.39 7.83
S&P 500/Citigroup Growth 11.15 11.15 32.75 16.77 19.24 7.69
Rhumbline Large Cap(FYE)10.48 10.48 32.29 16.18 17.95 7.52
Rhumbline Mid Cap(FYE)8.28 8.28 33.36 15.74 21.95 10.47
Rhumbline Small Cap(FYE)9.85 9.85 41.21 18.40 21.29 10.74
International Equity(FYE)7.76 7.76 25.22 9.59 15.31 n/a
ICC Large Growth(FYE)11.65 11.65 39.99 15.36 22.22 n/a
Page 19
Performance of Other Managers
December 31, 2013
CORE EQUITY
GROWTH EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
BRC Investment Management Large Cap Value - Gross Size 10.43 10.43 33.19 17.88 18.55 11.36
Buckhead Capital Management - Value Equity - Low P/E - Gross Size 9.08 9.08 28.87 13.85 14.81 6.52
Ceredex Value Ad Large Cap Value 9.75 9.75 35.28 16.28 18.69 9.76
Eagle Asset Management - Value - Institutional - Gross Size 9.55 9.55 39.85 16.01 17.49 8.91
Earnest Partners - Large Cap Value - Gross Size 10.38 10.38 31.96 12.07 17.21 8.05
ICC Capital Management, Inc - Core Value - Gross Size 10.17 10.17 33.18 13.46 16.26 7.49
Missouri Valley Partners - Large Cap Value - Gross Size 9.08 9.08 31.57 15.10 15.05 6.21
Rhumbline Advisers Corporation - Russell 1000 Value Index Fund - Gross Size 10.02 10.02 32.54 16.06 16.7 7.65
The Boston Company Asset Mgmt., LLC - US Large Cap Value Equity Management 11.34 11.34 39.15 16.25 18.07 9.73
RBC Global Asset Management, Inc. - Large Cap Value - Gross Size 9.29 9.29 29.43 15.87 16.14 8.79
RNC Genter Capital - Dividend Income Equity - Gross Size 8.55 8.55 28.08 15.79 16.51 9.03
Westwood Management Corporation - LargeCap Equity - Gross Size 9.20 9.20 30.70 15.15 14.73 9.21
Russell 1000 Value 10.01 10.01 32.53 16.06 16.67 7.58
S&P 500/Citigroup Value 9.83 9.83 31.99 15.62 16.61 7.03
Amalgamated Bank - LongView 400 MidCap Index Fund - Gross Size 9.38 9.38 34.75 15.99 22.11 10.46
Batterymarch Financial Mgmt., Inc. - US Mid Cap Russell - Gross Size 9.78 9.78 37.82 16.83 21.41 10.36
Chicago Equity Partners, LLC - Mid Cap Core Equity - Gross Size 9.41 9.41 35.36 18.20 24.05 9.92
Rhumbline Advisers Corporation - S&P 400 Index Fund - Gross Size 8.28 8.28 33.38 15.64 21.88 10.00
Robeco Investment Management, Inc. - BPAM Mid Cap Value Equity - Gross Size 11.63 11.63 41.04 19.76 24.94 13.56
Russell Midcap 8.39 8.39 34.76 15.88 22.36 10.22
S&P Midcap 400 8.33 8.33 33.50 15.64 21.89 10.36
Advanced Investment Partners 11.16 11.16 43.29 21.68 25.17 12.03
AtlantaCapital Management - High Quality SMID - Gross Size 9.50 9.50 37.64 19.29 23.67
Eagle Asset Management - SMID Core - Institutional - Gross Size 10.13 10.13 35.27 14.10 18.67 11.42
Earnest Partners - SMID Core - Gross Size 9.72 9.72 32.93 15.95 23.14
Kayne AndersonRudnick - SMID Core - Gross Size 9.03 9.03 31.60 15.81 19.56 8.66
New Amsterdam Partners - SMID Active Equity - Gross Size 8.90 8.90 44.18 23.20 24.11 13.38
Westwood Management Corporation - SMID Cap Equity - Gross Size 8.62 8.62 35.08 15.08 21.39 15.22
Russell 2500 8.66 8.66 36.80 16.28 21.77 9.81
Rhumbline Large Cap(FYE)10.48 10.48 32.29 16.18 17.95 7.52
Rhumbline Mid Cap(FYE)8.28 8.28 33.36 15.74 21.95 10.47
Rhumbline Small Cap(FYE)9.85 9.85 41.21 18.40 21.29 10.74
International Equity(FYE)7.76 7.76 25.22 9.59 15.31 n/a
ICC Large Growth(FYE)11.65 11.65 39.99 15.36 22.22 n/a
Page 20
Performance of Other Managers
December 31, 2013
VALUE EQUITY
MID-CAP EQUITY
SMID-CAP EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Advanced Investment Partners - AllCap - Gross Size 12.00 12.00 37.18 19.10 19.47 8.30
BuckheadCaptial Management - All Cap - Gross Size 9.12 9.12 28.18 13.01 14.16 7.42
Chartwell Investment Partners - Premium Yield Equity - Gross Size 8.98 8.98 28.90 15.41 17.47 7.59
HGK Asset Management - All Cap - Gross Size 10.16 10.16 34.02 15.68 16.97 8.86
ICC Capital Management, Inc - Multi-Cap Eq. - Gross Size 7.58 7.58 20.58 7.24 14.95 10.57
Intrepid Capital Management, Inc. - Intrepid Multi-Cap Equity - Gross Size 3.94 3.94 18.10 10.07 15.97 9.00
Oak Ridge Investments, LLC - All-Cap - Gross Size 7.94 7.94 36.04 15.64 18.64 9.26
Russell 3000 10.10 10.10 33.55 16.24 18.71 7.88
Dow Jones Wilshire 5000 (Full Cap)10.11 10.11 33.09 15.98 18.59 7.98
Atlanta Capital Management Co., LLC - High Quality Small Cap - Gross Size 10.81 10.81 42.31 20.77 23.06 13.68
BuckheadCaptial Management - Small Cap Value - Gross Size 11.65 11.65 40.03 13.52 17.91 8.83
Ceredex - Value Ad Small Cap Value - Gross Size 9.84 9.84 36.36 16.32 23.03 13.16
DePrince, Race, Zollo, Inc. - Small Cap Value - Gross Size 9.84 9.84 33.67 15.99 23.53 10.71
Eagle Asset Management - Small Cap Core - Institutional - Gross Size 9.29 9.29 34.14 14.68 18.58 10.86
GW Capital, Inc. - Small Cap Value Equity - Gross Size 8.48 8.48 32.86 15.12 21.46 14.22
Intrepid Capital Management, Inc. - Intrepid Small Cap - Gross Size 4.18 4.18 13.79 9.02 15.82 11.15
Kayne Anderson Rudnick Invst. - Small Cap - Gross Size 7.36 7.36 30.09 17.63 21.86 11.71
Missouri Valley Partners 12.11 12.11 42.68 20.50 27.83 10.24
Sawgrass Asset Management, LLC - Small Cap Growth Equity - Gross Size 10.07 10.07 42.99 18.62 18.89 6.21
Silvant Capital - Small Cap Growth - Gross Size 8.99 8.99 46.28 19.84 23.59 10.06
Russell 2000 8.72 8.72 38.82 15.67 20.08 9.07
S&P SmallCap 600 9.83 9.83 41.31 18.42 21.37 10.65
American Realty Advisors - Core Equity Real Estate-Sep. Accts. - Gross Size 3.39 12.25 12.25 13.29 0.19 6.00
Intercontinental - US REIF - Gross Size 3.62 18.04 18.04 15.75 -0.80
JPMorgan Asset Management - Strategic Property Fund - Gross Size 4.15 14.95 14.95 15.12 2.17 8.29
Principal Global - Real Estate Core - Gross Size 2.91 13.35 13.35 15.27 1.11 6.89
Dow Jones Wilshire REIT Index -3.03 5.28 5.28 12.49 5.56 9.43
NCREIF Property Index 2.59 11.00 11.00 12.67 3.35 8.66
Altrinsic Global Advisors - International Equity - Gross Size 4.82 4.82 20.25 7.06 12.11 7.54
DePrince, Race, Zollo, Inc. - International Equity - Gross Size 5.13 5.13 16.41 4.39 13.98 7.63
Harding Loevner - International Equity - Gross Size 4.76 4.76 16.00 8.48 16.84 9.98
Harding Loevner - Emerging Mkts. Equity - Gross Size 4.77 4.77 5.66 3.40 17.88 13.95
ICC Capital Management, Inc - International ADR Equity - Gross Size 7.50 7.50 23.34 8.99 14.20 6.99
INVESCO - International EM Equity - Gross Size 1.59 1.59 -0.62 -7.23 12.30
OFI Institutional Asset Mgmt. - Emerging Mkts.Equity - Gross Size 3.97 3.97 9.76 3.70 21.50
The Boston Company Asset Mgmt., LLC - International Core Equity Management 8.89 8.89 29.77 12.02 14.90 8.31
Thornburg Investment Mgmt. - International Equity - Gross Size 4.52 4.52 16.81 6.24 13.02 9.71
WHV - WHV International Equity - Gross Size 6.53 6.53 14.58 3.98 16.68 13.66
MSCI EAFE 5.75 5.75 23.29 8.66 12.96 7.39
MSCI EMERGING MARKETS 1.86 1.86 -2.27 -1.74 15.15 11.52
Rhumbline Large Cap(FYE)10.48 10.48 32.29 16.18 17.95 7.52
Rhumbline Mid Cap(FYE)8.28 8.28 33.36 15.74 21.95 10.47
Rhumbline Small Cap(FYE)9.85 9.85 41.21 18.40 21.29 10.74
International Equity(FYE)7.76 7.76 25.22 9.59 15.31 n/a
ICC Large Growth(FYE)11.65 11.65 39.99 15.36 22.22 n/a
Page 21
Performance of Other Managers
December 31, 2013
ALL CAP EQUITY
SMALL CAP EQUITY
REAL ESTATE (9/30/2013)
INTERNATIONAL EQUITY
Qtr YTD 1Yr 3Yr 5Yr 10Yr
Atlanta Capital Management Co., LLC - High Quality Broad Market - Gross Size -0.30 -0.30 -1.89 2.84 3.30 4.49
Denver Investment Advisors - Core Bond Gov't/Corp. - Gross Size 0.02 0.02 -1.76 3.94 5.17 4.90
Eagle Asset Management - Core Fixed Institutional - Gross Size -0.81 -0.81 -3.05 3.23 4.78 4.67
Garcia Hamilton & Associates - Fixed Aggregate - Gross Size 0.97 0.97 0.08 5.21 7.16 6.31
ICC Capital Management, Inc - Core Fixed Income - Gross Size 0.12 0.12 -2.51 3.56 4.45 4.22
Integrity Fixed Income Mgmt, LLC - Core Fixed Income - Gross Size 0.27 0.27 -0.85 4.37 5.48
Montage & Caldwell Inc. - Core Fixed Income - Gross Size 0.02 0.02 -1.44 2.71 3.21 4.66
Sawgrass Asset Management, LLC - Core Fixed Income - Gross Size -0.06 -0.06 -1.63 3.54 4.93 4.98
RBC Global Asset Management, Inc. - Broad Market Core - Gross Size -0.05 -0.05 -1.68 3.53 5.87 4.41
Seix Advisors - Core Fixed Income - Gross Size -0.25 -0.25 -2.33 3.52 5.22 5.09
Wedge Capital Management - Core Fixed Income - Gross Size 0.14 0.14 -1.00 4.01 5.39 5.26
Barclays Aggregate Bond -0.14 -0.14 -2.02 3.26 4.44 4.55
Barclays Gov/Credit Bond -0.03 -0.03 -2.35 3.63 4.40 4.52
Barclays High Yield US Corporate Bond 3.58 3.58 7.44 9.32 18.93 8.62
Denver Investment Advisors - Intermediate Fixed - Gross Size 0.45 0.45 -0.13 3.76 5.17 4.75
Eagle Asset Management - Institutional Conservative - Gross Size -0.32 -0.32 -1.53 3.04 4.25 4.46
Garcia Hamilton & Associates - Intermediate Fixed Income - Gross Size 1.36 1.36 1.21 4.78 6.48 5.66
Integrity Fixed Income Mgmt, LLC - Intermediate Fixed Income - Gross Size 0.32 0.32 0.16 3.80 5.41
Missouri Valley Partners - Intermediate Government/Credit Fixed Income - Gross Size 0.04 0.04 -1.09 2.99 4.01 4.63
RBC Global Asset Management, Inc. - Intermediate Core - Gross Size 0.19 0.19 -0.26 3.27 5.23 3.83
Seix Advisors - Intermediate Fixed Income - Gross Size 0.07 0.07 -0.76 3.19 4.27 4.72
Sit Investment Associates, Inc. - Intermediate Govt/Corp - Gross Size 0.18 0.18 -0.48 3.84 7.35 5.21
Barclays Intermediate Aggregate -0.14 -0.14 -1.02 2.79 4.18 4.30
Barclays Gov/Credit-Intermediate -0.02 -0.02 -0.86 2.91 3.96 4.09
Brandywine Global - International Fixed Invst. Grade - Gross Size -0.03 -0.03 -1.57 5.71 6.76 6.14
Federated Investors - Non-US Fixed Income Unhedged - Gross Size -1.24 -1.24 -5.32 0.73 2.92 3.92
PIMCO - Non US Fixed Income Unhedged - Gross Size -0.33 -0.33 -5.23 3.40 7.89 5.87
Wells Capital Mgmt. - Global Fixed Income Ex-US - Gross Size 0.85 0.85 -3.20 2.55 5.36 5.86
Citigroup World Government Ex-US -1.24 -1.24 -4.57 0.62 2.27 4.10
ICC Fixed Income(FYE)-0.02 -0.02 -2.82 3.20 4.20 3.73
International Bonds(FYE)0.47 0.47 -4.04 2.33 n/a n/a
American Realty(FYE)3.62 3.62 12.62 n/a n/a n/a
Page 22
INTERMEDIATE FIXED INCOME
INTERNATIONAL FIXED INCOME
Performance of Other Managers
December 31, 2013
CORE FIXED INCOME
ULLICO ORGANIZED LABOR PROTECTION GROUP, LLC
a voluntary membership organization operating pursuant to the Liability Risk Retention Act of 1986 and 'whose
principal office is: 1625 Eye Street, NW, Washington, DC 20006
GOVERNMENTAL FIDUCIARY LIABILITY INSURANCE PREMIUM QUOTATION
DATE ISSUED: 12/04/2013 UNDERWRITER: Ann Hughes
QUOTATION NO: QT0000016843 RENEWAL: Y
ISSUED BY: Alterra America Insurance Company
INSURANCE REPRESENTATIVE: Ullico Casualty Group, Inc.
1625 Eye St., NW
Washington, DC 20006
PRODUCER: United Members Insurance, Inc.
ADDRESS: 6826 Linebaugh Avenue
Tampa, FL 33625
TRUST(S) OR PLAN(S): Palm Beach Gardens Police Officers Pension Fund
ADDRESS: C/O The Resource Center
4360 Northlake Blvd Suite 206
Palm Beach Gardens, FL 33410
POLICY PERIOD: 12/01/2013 to 12/01/2014
PRIOR & PENDING
LITIGATION DATE: 12/01/2002
LIMITS OF LIABILITY: (a) $1,000,000 Aggregate Limit of Liability for all Loss
(b) $1,000,000 HIPAA & PPACA Fines and Penalties Sub -Limit:
Aggregate Limit of Liability for all Loss in the form
of civil fines and penalties imposed pursuant to HIPAA
& PPACA (included within and not in addition to the
maximum Aggregate Limit of Liability set forth in
Item 04(a) of the Policy Certificate.
(c) $100,000 Voluntary Compliance Program Expenditure
Sub -Limit: Aggregate Limit of Liability for all
Voluntary Compliance Program Expenditures
(included within and not in addition to the maximum
Aggregate Limit of Liability set forth in Item 04(a) of
the Policy Certificate.
SELF -INSURED RETENTION: $0 each Claim
GOV-1000-Q (10/2012) Page 1 of
COVERAGE: Alterra America Insurance Company
Governmental Fiduciary Liability Insurance Claims -Made Policy Form GOV-1000 (10/2012),
Claims Expenses Inclusive
PREMIUM: (a) $5,389.00 Basic Premium
(b) $177.84 Tax/Other
(c) $5,566.84 Total
CONDITIONS/COVERAGE SUBJECT TO:
Nothing else required
THE FOLLOWING ENDORSEMENTS WILL ATTACH TO THE POLICY:
END NO.1REF NO. ENDORSEMENT
1. GOV-FL (01/13) Florida Amendatory Endorsement
This quotation is valid for a period of thirty (30) days from the Issue Date shown above unless amended or withdrawn by
Alterra America Insurance Company (Insurer), with or without cause, prior to its acceptance and binding, and is
subject to the terms and conditions of the policy (ies) to be issued. If the information supplied by the Trust or Plan in
the application changes between the date of the application for this insurance and the Effective Date of the insurance or
the time when the policy is bound (whichever is later), the Trust or Plan must immediately notify Insurer in writing of
such changes and the Insurer may withdraw or amend any outstanding quotations based upon such changes.
Ullico Organized Labor Protection Group, LLC is administered by U111co Casualty Group, Inc., alk/a Ullico Insurance
Agency, Inc. in CA, and Ullico Casualty Agency in NY. CA License #OH86030 and FL (Craig Arneson) License #
A008437.
GOV-1000-Q (10/2012) Page 2 of
Alterra America Insurance Company
9020 Stony Point Parkway, Suite 325
Richmond, VA 23235
GOV-FL
Issue Date:
Policy Number:
Trust or Plan:
Endorsement Number:
Endorsement Effective Date: (12:01 a.m. Local Time)
Florida Amendatory Endorsement
It is agreed that the above -numbered policy is amended as follows:
1. Section V Exclusions, Part A is amended by adding the following new exclusion:
- Based, upon, arising from, or in consequence of the manufacturing, handling, selling, distribution, disposal,
existence, use of, or exposure to asbestos dust, asbestos fibers, or asbestos products or materials.
Section VI Conditions, Item I (Cancellation) and J (Non -Renewal) are amended by adding the following
wording and supersedes any provision to the contrary:
Cancellation of Policies in Effect for Ninety (90) Days or Less
If this policy has been in effect for ninety (90) days or less, the Insurer may cancel it by mailing or delivering
to the Insured shown in Item 02 of the Policy Certificate, written notice of cancellation, accompanied by the
reasons for cancellation, at least:
Ten (10) days before the Effective Date of cancellation if the Insurer cancels for non-payment of
premium; or
2. Twenty (20) days prior to the Effective Date of cancellation if the Insurer cancels for any other reason,
except the Insurer may cancel immediately if there has been:
a. A material misrepresentation; or
b. A failure to comply with underwriting requirements established by the Insurer.
Cancellation of Policies in Effect for More Than Ninety (90) Days
If this policy has been in effect for more than ninety (90) days, the Insurer may only cancel it for one or more
of the following reasons:
a. Non-payment of premium;
b. The policy was obtained by a material misstatement;
c. There has been a failure to comply with underwriting requirements within ninety (90) days of
the effective date of coverage;
d. There has been a substantial change in the risk covered by the policy;
e. The cancellation is for all Insureds under such policies for a given class of Insureds.
If the Insurer cancels this policy for any of the above reasons, it will mail or deliver to the Insured shown in Item
02 of the Policy Certificate written notice of cancellation, accompanied by the reasons for cancellation, at least:
1. Ten (10) days before the Effective Date of cancellation if the cancellation is for non-payment of
premium; or
2. Forty-five (45) days before the Effective Date of cancellation if the cancellation is for any other reason
stated above, except non-payment of premium.
Page 1 of 2
GOV-FL (01/2013)
Non -Renewal of Policy
1. If the Insurer elects not to renew this policy, it shall mail or deliver to the Insured shown in Item 02
of the Policy Certificate written notice of non -renewal, accompanied with the reasons for non -
renewal, at least forty-five (45) days prior to the expiration of this policy.
2. Any notice of non -renewal will be mailed or delivered to the last known address of the Insured shown
in Item 02 of the Policy Certificate. If notice is mailed, proof of mailing will be sufficient proof of
notice.
3. Section II Definition S (Pollutants) is deleted in its entirety and replaced with the following definition:
S. Pollutants means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot,
fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.
Nothing contained herein shall vary, alter or extend the terms, conditions and limitations of the policy except as stated
above.
This Endorsement is part of the above numbered policy and is effective as of the Endorsement Effective Date
shown above.
ALTERRA AMERICA INSURANCE COMPANY
Authorized Representative
Page 2 of 2
GOV-FL (01/2013)
11 PALM BEACH GARDENS POLICE
PENSION FUND
Benefit Approvals I
Meeting of February 18, 2014
APPLICATION FOR REFUND OF CONTRIBUTIONS
BRANDON RADANOVICH
DATE OF BIRTH
DATE OF HIRE
DATE OF TERMINATION
YEARS OF SERVICE
TOTAL REFUND
TAX WITHHOLDING (20%)
TOTAL NET REFUND
04/25/1985
12/08/2008
05/24/2010
1 YEAR, 5 MONTHS & 16 DAYS
$6,852.16
$1,370.43 (cash)
$5,481.73
APPLICATION FOR DISTRIBUTION OF DROP ACCOUNT
(1/15/2014)
WAYNE SIDEY DATE OF RETIREMENT
DATE OF BIRTH
TYPE OF DISTRIBUTION
TOTAL GROSS DISTRIBUTION
TAX WITHHOLDING (20%)
TOTAL NET DISTRIBUTION
CURRET DROP ACCOUNT BALANCE
ROBERT WUMMER
APPLICATION TO EXIT THE DROP
DATE OF BIRTH
DATE OF HIRE
DROP ENTRY DATE
DATE OF TERMINATION
FORM OF BENEFIT
MONTHLY BENEFIT AMOUNT
SUPPLEMENTAL BENEFIT
04/30/2012
11/01/1961
PARTIAL LUMP SUM -CASH
$20,000.00
$ 4,000.00
$16,000.00
$318,233.48
11/14/1963
04/02/1984
04/02/2009
11/29/2013
MODIFIED CASH ANN.
$6,409.02
$ 312.50
CHAIRMAN
,SECRETARY
DATE
Pension Resource Centers
Accounts Payable Check Register
FOR: PALM BEACH GARDENS POLICE
Meeting 2/18/2014
Check Number
Date
Payee and Description
Amount
2531
November 1, 2013
City of Palm Beach Gardens
$13,414.82
Retiree Insurance
2532
November 7, 2013
Pension Resource Centers
$2,596.60
Administration Fee- November 2013
2533
November 8, 2013
Perry & Jensen, LLC
$427.00
Legal Services Rendered through 10/15/13
2534
November 8, 2013
ICC Capital Management
$26,294.14
Investment Management Fees- 3rd Qtr 2013
2535
December 13, 2013
United Members Insurance, Inc
$5,566.84
Renew Fiduciary Liability Policy 12/01/13 - 12/01/14
2536
December 13, 2013
FPPTA
$450.00
Register Winter FPPTA Conference - Ron Glass
2537
December 13, 2013
Perry & Jensen, LLC
$1,046.45
Legal Services Rendered through 11/15/13
2538
December 13, 2013
Gabriel Roeder Smith and Company
$1,998.00
Actuarial Services Rendered 10/31/13
2539
December 13, 2013
Hyatt Regency Jacksonville
$537.00
Reservations/Winter Conference - Ron Glass
2540
December 13, 2013
FPPTA
$600.00
2014 Membership Renewal
2541-2551
VOID
$0.00
Computer Printing Error
2552
November 29, 2013
City of Palm Beach Gardens
$13,414.82
Retiree Insurance
2553
December 1, 2013
City of Palm Beach Gardens
$829.70
Retiree Insurance
2554
December 4, 2013
Pension Resource Centers
$2,575.00
Administration Fee- December 2013
2555
January 1, 2014
City of Palm Beach Gardens
$14,244.52
Retiree Insurance
2556
January 6, 2014
Pension Resource Center
$2,590.42
Administration Fee - January 2014
2557
January 6, 2014
Gabriel Roeder Smith & Company
$1,461.00
Actuarial Services Rendered 11/30/13
2558
January 6, 2014
Perry & Jensen LLC
$310.00
Legal Services Rendered 12/15/13
2559
February 1, 2014
City of Palm Beach Gardens
$13,718.02
Retiree Insurance
2560
February 4, 2014
Pension Resource Center
$2,597.20
Administration Fee - February 2014
2561
February 4, 2014
Cherry Bekaert & Holland
$5,000.00
Progress Billing year ended 9/30/13
2562
February 4, 2014
Gabriel Roeder Smith & Company
$9,640.00
Actuarial Services Rendered 12/31/13
2563
February 4, 2014
ICC Capital Management
$26,921.02
Investment Management Fees - 4th Quarter 2013
2564
February 4, 2014
Perry & Jensen LLC
$93.55
Legal Services Rendered through 1/15/14
2565 February 4, 2014 Rhumbline Advisors $5,534.00
Investment Management Fees - 4th Quarter 2013
2566 February 4, 2014 Thistle Asset Management $5,052.00
Performance Monitoring ending 12/31/13
Total: $156,912.10
Chair
Secretary.
Date
GT Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone
1�{`J Consulaart, & Actuaries Suite 505 954.525.0083 fax
Ft. Lauderdale, FL 33301-1804 vww.gabrielruedencom
December 18, 2013
Ms. Audrey Ross
Resource Centers, LLC RE�'—' •�1�: i'r
4360 Northlake Blvd., Suite 206
Palm Beach Gardens. Fl. 33410
Re: Palm Beach Gardens Police Officers' Pension Fund
Dear Audrey:
As requested on November 25, 2013 by Pension Board members, we have prepared the enclosed Supplemental
Actuarial Valuation Report which measures the financial impact of the following potential Plan changes:
• Changing the eligibility conditions for Normal Retirement for members with less than 10 Years of
Credited Service on September 13, 2012 from age 59 with 10 Years of Credited Service to the earlier
of age 55 with 10 Years of Credited Service or 25 Years of Credited Service regardless of age (this
change is included in Scenarios 1 and 2).
• Changing the eligibility conditions for entry into the DROP so that a participant may delay DROP
entry until he or she has accrued the maximum benefit of 75% of his or her Final Average Earnings
(Scenarios 2 and 3). Currently, the option to participate in the DROP is forfeited if not exercised
within the first 25 years of service.
• Changing the eligibility conditions for Normal Retirement for members with less than 10 Years of
Credited Service on September 13, 2012 from age 59 with 10 Years of Credited Service to the earlier
of age 59 with 10 Years of Credited Service or 25 Years of Credited Service regardless of age
(Scenario 3).
The baseline figures for the fiscal year ending September 30, 2014 (prior to any assumption changes) match the
figures shown in our Actuarial Valuation Report dated April 11, 2013. The projections under the current Plan
benefits versus the proposed Plan benefits reflect the continued phase -in of the change in the investment return
assumption from 7.3% to 6.5% over the next 8 years. The only other assumption changes were adjustments to
the retirement rates under the proposed Plan benefits to reflect the proposed revisions to the Notarial Retirement
eligibility provisions.
Chapter 185 Revenue
It is our understanding that under the Division of Retirement's current interpretation of Chapter 185, all
Chapter 185 funds aray be allocated towards the annual contribution requirement as long as the additional
premium tax revenues (the increase in Chapter 185 funds since 1998) are insufficient to fund the cost of
Chapter minimum benefits (and the cost to provide current benefits, if any are below Chapter minimums).
We have previously demonstrated (and provided supporting documentation to the Division of Retirement)
that the additional Chapter 185 premium tax revenues received by the Palm Beach Gardens Police Officers'
Pension Fund are currently less than the cost to fund Chapter minimum benefits (and less than the cost to
fund the current benefits that are below Chapter minimums), so all Chapter 185 funds currently being
received gray be permissibly allocated towards the annual contribution requirement for the Pension Fund.
Under the Division of Retirement's previous interpretation (prior to the "Naples Letter"), which had stood
for more than 13 years, any increases in Chapter 185 funds above the "Base Amount" received in 1998 could
only be used to provide additional or improved benefits. Increases in pension benefits would increase the
"Base Amount" by the increase in the annual contribution requirement resulting from the benefit increase.
Ms. Audrey Ross
December 18, 2013
Page 2
'The original "Base Amount" for the Palm Beach Gardens Police Officers' Pension Fund in 1999 was
$235,818. This "Base Amount" was increased in 2006 to $412,644 due to the passage of Ordinance 8-2006,
which increased the benefit multiplier from 3.0% to 3.5%, increased the maximum benefit from 75% of
Average Monthly Earnings to 100%, and added a supplemental benefit of $12.50/month per year of service.
In September of 2012, Ordinance 24-2012 reduced the benefit multiplier from 3.5% to 2.75%, reduced the
maximum benefit to 75% of Average Monthly Earnings from 100%, changed the definition of pensionable
Compensation to base pay, and delayed the Normal Retirement Date for non -vested members. These
changes resulted in benefits that are below the benefits which were in place in 2006 - prior to the passage of
Ordinance 8-2006. However, no changes were made to the Chapter 185 "Base Amount" when Ordinance
24-2012 was initially analyzed and discussed because it was believed that all Chapter 185 revenue would be
forfeited going forward, as the "Naples Letter" had not yet surfaced and benefits were being reduced below
Chapter 185 minimums and below the benefit levels which were in place in March of 1999. The ongoing
true "Base Amount" will be less than $412,644 after it is recalculated to reflect the benefit reductions under
Ordinance 24-2012.
The Pension Fund has an Accumulated Excess Chapter 185 Contribution Reserve of $538,552 as of October
1, 2012. This reserve is an accumulation of prior years' Chapter 185 funds received in excess of the "Base
Amount" and has been set aside to provide additional benefits in the future. Under the Division's current
interpretation of Chapter 185 (as revised by the "Naples Letter"), the Accumulated Excess Reserve should
only be used for additional benefits, and its use is subject to collective bargaining.
The benefit changes being considered in this Supplemental Actuarial Valuation Report would be considered
improvements over the benefits currently in place (post -Ordinance 24-2012), but they would not be
improvements over the benefits which were in place prior to September 13, 2012. Therefore, we believe the
use of additional Chapter 185 revenue and the use of the Accumulated Excess Reserve in connection with
these benefit changes should not be automatic, but should instead be subject to collective bargaining.
In our previous Supplemental Actuarial Valuation Report dated May 29, 2013, which analyzed similar
scenarios to those analyzed in this report, it was assumed that the Accumulated Excess Reserve would be
used and the ongoing Chapter 185 funds would be increased to reflect the benefit improvements.
In this report, however, both for the reasons described above and to highlight the fact that the use of
additional and excess Chapter 185 contributions should be subject to collective bargaining, we have prepared
the results in two different ways:
(1) Reflecting the use/release of the Accumulated Excess Chapter 185 Contribution Reserve of $538,552
(which increases the Plan's net assets and reduces the Plan's unfunded liability by this amount), and
allowing all Chapter 185 funds to be allocated towards the annual contribution requirement for the
Pension Fund; and
(2) Reflecting no changes in Chapter 185 Funds (keeping the "Base Amount" at the 2006-2012 level of
$412,644, which is actually higher than the true "Base Amount" will be going forward after it is
recalculated to reflect the benefit reductions under Ordinance 24-2012) and not using/releasing the
Accumulated Excess Chapter 185 Contribution Reserve.
It is important to keep in mind that these are not the only two options. The increase in Chapter 185 funds and
the use of the Excess Contribution Reserve are subject to collective bargaining, so a different arrangement
could be agreed upon besides these two options. It is also important to keep in mind that proposed Senate
Bill 246, if passed in the Spring of 2014, may result in significant changes to Chapter 185 and may nullify
the Division of Retirement's current interpretation under the "Naples Letter".
Gabriel Roeder Smith & Company
Ms. Audrey Ross
December 18, 2013
Page 3
Summary of Findings
Assuming Chapter 185 Revenue Increased & Excess Reserve Funds Released
Net FY 2014 Req'd
City Contribution Change
Unfunded
Liability Change
Funded
Ratio Change
Baseline
$2,712,635
N/A
$22,297,433
N/A
69.1%
N/A
Scenario l
$2,733,583
+$20,948
$22,437,798
+$140,365
69.2%
+0.1 %
Scenario 2
$2,727,397
+$14,762
$22,406,050
+$108,617
69.2%
+0.1 %
Scenario 3
$2,695,948
-$16,687
$22,253,596
-$43,837 1
69.4%
+0.3%
Assuming No Changes in Chapter 185 Revenue * & Excess Reserve Not Used
Net FY 2014 Req'd
City Contribution Change
Unfunded
Liability Change
Funded
Ratio Change
Baseline
$2,712,635
N/A
$22,297,433
N/A
69.1%
N/A
Scenario 1
$2,858.020
+$145,385
$22,976,350
+$678,917
68.5%
-0.6%
Scenario 2
$2,851,834
+$139,199
$22,944,602
+$647,169
68.5%
-0.6%
Scenario 3
$2,819,870
+$107,235
$22,792,148
+$494,715
68.6%
-0.5%
* Reflects $412,644 in annual Chapter 185 money, which is higher than the true "Base Amount" will
be after it is recalculated to reflect the benefit reductions under Ordinance 24-2012.
Actuarial Assumptions and Methods, Financial Data and Member Census Data
The actuarial assumptions and methods, financial data, and member census data used for the purposes of this
Supplemental Actuarial Valuation Report are the same as those used in our October 1, 2012 Actuarial
Valuation Report with the following exceptions:
■ The investment return assumption is lowered by 0.1 % per year throughout the projection period until
it reaches 6.5% in 2020.
■ The assumed retirement rates under Scenarios 1-3 have been revised to reflect the proposed revisions
to the Normal Retirement eligibility provisions. Please see pages 5-6 for details regarding the
changes to the assumed retirement rates.
Future annual Chapter 185 revenue is expected to increase 2.0% per year throughout the projection period,
starting from the actual Chapter 185 revenue received in August 2013 ($475,215). Administrative expenses
are expected to increase 3.0% per year.
Throughout the forecast period new members are assumed to be hired each year at a rate sufficient to
maintain a constant active headcount, or stationary population. New employees are assumed to have the
same average demographic characteristics (age, gender, salary — adjusted each year for inflation) as members
hired over the past five years.
Gabriel Roeder Smith & Company
Ms. Audrey Ross
December 1 g, 2013
Page 4
Projections are deterministic and throughout the projection period Plan experience is expected to match the
assumptions.
Required Disclosures
This report was prepared at the request of the Board and is intended for use by the Retirement System and
those designated or approved by the Board. This report may be provided to parties other than the Board only
in its entirety and only with the permission of the Board.
The purpose of this report is to describe the financial effect of the proposed plan changes. This report should
not be relied on for any purpose other than the purpose described above.
The calculations in this report are based upon information furnished by the Plan Administrator for the
October I, 2012 Actuarial Valuation concerning Plan benefits, financial transactions, plan provisions and
active members, terminated members, retirees and beneficiaries. We reviewed this information for internal
and year-to-year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or
completeness of the information provided by the City or Plan Administrator.
Except as noted above, the assumptions and methods used for this report are the same as those shown in the
October I. 2012 Actuarial Valuation Report. The calculations are based upon assumptions regarding future
events, which may or may not materialize. Future actuarial measurements may differ significantly from the
current measurements presented in this report due to such factors as the following: plan experience differing
from that anticipated by the economic or demographic assumptions; changes in economic or demographic
assumptions; increases or decreases expected as part of the natural operation of the methodology used for
these measurements (such as the end of an amortization period or additional cost or contribution
requirements based on the plan's funded status); and changes in plan provisions or applicable law. If you
have reason to believe that the assumptions that were used are unreasonable, that the plan provisions are
incorrectly described, that important plan provisions relevant to this proposal are not described, or that
conditions have changed since the calculations were made, you should contact the author of the report prior
to relying on information in the report.
The undersigned actuaries are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The
undersigned actuaries are independent of the plan sponsor.
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems. To the best of our knowledge the information contained in this report is accurate and
fairly presents the actuarial position of the Plan as of the valuation date. All calculations have been made in
conformity with generally accepted actuarial principles and practices, and with the Actuarial Standards of
Practice issued by the Actuarial Standards Board and with applicable statutes.
Respectfully submitted,
Peter N. Strong, ASA, MA , FCA J Tr Amrose, MAAA
Enrolled Actuary No. 1 I-0 7'5 m I ed Actuary No. 11-06599
Enclosures
Gabriel Roeder Smith & Company
Plan
SUPPLEMENTAL ACTUARIAL VALUATION REPORT
City of Palm Beach Gardens Police Officers' Pension Fund
Valuation Date
October 1, 2012
Date of Report
December 18, 2013
Report Requested by
Board of Trustees
Prepared by
Peter N. Strong
Group Valued
All active and inactive members of the Plan.
Benefit Provisions Being Considered for Change
■ Changing the eligibility conditions for Normal Retirement for members with less than 10 Years of
Credited Service on September 13, 2012 from age 59 with 10 Years of Credited Service to the earlier
of age 55 with 10 Years of Credited Service or 25 Years of Credited Service regardless of age (this
change is included in Scenarios 1 and 2).
■ Changing the eligibility conditions for entry into the DROP so that a participant may delay DROP
entry until he or she has accrued the maximum benefit of 75% of his or her Final Average Earnings
(Scenarios 2 and 3). Currently, the option to participate in the DROP is forfeited if not exercised
within the first 25 years of service.
■ Changing the eligibility conditions for Normal Retirement for members with less than 10 Years of
Credited Service on September 13, 2012 from age 59 with 10 Years of Credited Service to the earlier
of age 59 with 10 Years of Credited Service or 25 Years of Credited Service regardless of age
(Scenario 3).
Actuarial Assumptions and Methods Being Considered for Change
Same as October 1, 2012 Actuarial Valuation Report with the following exceptions:
Under Scenario 1, the probability of normal retirement for members affected by the proposed change in
Normal Retirement eligibility has been changed from 100% when first eligible (at age 59 with 10
Years of Credited Service) to the following rates:
Revised Retirement Rates
S
42 - 49
50 - 54
55
56
57
58
59
60
e
10
0.0%
2.5%
20.0%
20.0%
20.0%
55.0%
65.0%
100.0%
r
11 - 19
0.0%
2.5%
10.0%
10.0%
10.0%
47.5%
57.5%
100.0%
v
20
0.0%
2.5%
30.0%
40.0%
45.0%
70.0%
80.0%
100.0%
i
21 - 22
0.0%
2.5%
12.5%
15.0%
15.0%
47.5%
65.0%
100.0%
c
23 - 24
0.0%
2.5%
15.0%
15.0%
15.0%
47.5%
65.0%
100.0%
e
25
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%v
100.0%
100.0%
5
Under Scenario 2, the probability of normal retirement for members affected by the proposed change in
Normal Retirement eligibility has been changed from 100%c when first eligible (at age 59 with 10
Years of Credited Service) to the following rates:
Revised Retirement Rates
S
42 - 49
50 - 54
55
56
57
58
59
60
10
0.0%
2.5%
20.0%
20.0%
20.0%
55.0%
65.0%
100.0%
e
11 - 19
0.0%
2.5%
10.0%
10.0%
10.0%
47.5%
57.5%
100.0%
r
20
0.0%
2.5%
30.0%
40.0%
45.0%
70.0%
80.0%
100.0%
v
21 - 22
0.0%
2.5%
12.5%
15.0%
15.0%
47.5%
65.0%
100.0%
c
23 - 24
0.0%
2.5%
15.0%
15.0%
15.0%
47.5%
65.0%
100.0%
c
25 - 26
15.0%
15.0%
15.0%
15.0%
15.0%
47.5%
65.0%
100.0%
e
27
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Also, if at any point a member reaches the maximum benefit of 75% of his or her Average Monthly
Earnings, his or her probability of retirement is assumed to be 100%.
Under Scenario 3, the probability of normal retirement for members affected by the proposed change in
Normal Retirement eligibility has been changed to the following rates:
Revised Retirement Rates
42 - 49
50 - 54
55
56
57
58
59
60
S
10
0.0%
2.5%
2.5%
2.5%
2.5%
2.5%
100.0%
100.0%
e
11-19
0.0%
2.5%
2.5%
2.5%
2.5%
2.5%
100.0%
100.0%
r
20
0.0%
2.5%
2.5%
2.5%
2.5%
2.5%
100.0%
100.0%
v
21 - 22
0.0%
2.5%
2.5%
2.5%
2.5%
2.5%
100.0%
100.0%
i
23 - 24
0.0%
2.5%
2.5%
2.5%
2.5%
2.5%
100.0%
100.0%
c
25 - 26
15.0%
15.0%
15.0%
15.0%
15.0%
47.5%
100.0%
100.0%
e
27
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Also, if at any point a member reaches the maximum benefit of 75% of his or her Average Monthly
Earnings, his or her probability of retirement is assumed to he 100%.
Amortization Period for Any Change in Actuarial Accrued Liability
15 years
Summary of Data Used in Report
See attached page
Actuarial Impact of Proposal(s)
See attached page(s)
Special Risks Involved with the Proposal That the Plan Has Not Been Exposed to Previously
None
Other Cost Considerations
As of October 1, 2012 the Actuarial Value of Assets exceeds the Market Value of Assets by $714,862.
This difference will be gradually recognized over the next several years. In turn, the computed
employer contribution rate will increase by approximately 1.6% of covered payroll in the absence of
offsetting gains.
R
ANNUAL REQUIRED CONTRIBUTION (ARC)
(With Increases in Chapter 185 Revenue)
Scenario l
Scenario 2
Scenario 3
A. Valuation Date
October 1, 2012
October 1, 2012
October 1, 2012
October 1, 2012
Baseline
Proposed
Proposed
Proposed
Plan Provisions:
Plait Provisions:
Plant Provisions:
55 & 10, 25 & out
55 & 10, 25 & out
59 & 10, 25 & out
Delayed DROP entry
Delaved DROP entry
B. ARC to Be Paid During
Fiscal Year Ending
9/30/2014
9/30/2014
9/30/2014
9/30/2014
C. Assumed Date of Employer Contrib.
Quarterly
Quarterly
Quarterly
Quarterly
D. Annual Payment to Amortize
Unfunded Actuarial Liability
S 1,905,316
S 1,919,952
S 1,916,642
S 1.900,745
E. Employer Normal Cost
944,743
1,006,264
1,003,817
990.834
F. ARC if Paid on the Valuation
Date: D+E
2,850,059
2,926,216
2,920,459
2,891,579
G. ARC Adjusted for Frequency of
Payments
2,976,630
3,056,169
3,050,157
3.019,994
H. ARC as % of Covered Payroll
60.62 %
62.24 %
62.12 %
61.51 %
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year
5.00 %
5.00 %
5.00 %
5.00 %
J. Covered Payroll for Contribution Year
5,155,524
5,155,524
5,155,524
5,155,524
K. ARC for Contribution Year: H x J
3,125,279
3,208,798
3,202,612
3,171,163
L Estimate of Annual State Revenue in
Contribution Year
412,644
475,215 *
475,215 *
475,215
M. Required Employer Contribution (REC)
2,712,635
2,733,583
2,727,397
2,695,948
in Contribution Year
N. REC as % of Covered
Payroll in Contribution Year: M _ J
52.62 %
53.02 %
52.90 %
52.29 %
O. Change in REC from Baseline
20,948
14,762
(16,687)
P. Change in REC as % of Covered Payroll
from Baseline
0.40 %
0.28 %
(0.33) %
* This assumes that, subject to collective bargaining, the accumulated excess Chapter revenue ($538,552 as of October 1, 2012)
would be used to help offset the impact of these plan changes, since the proposed plan changes would be improvements over the
benefits currently in place, so assets have been increased by $538,552 to reflect the expected release of these funds. In addition, and
also subject to collective bargaining, all annual Chapter revenue is assumed to be used to offset the required contribution since the
cost to provide Chapter 185 minimum benefits exceeds the amount of Chapter revenue currently being received.
fl
ACTUARIAL VALUE OF BENEFITS AND ASSETS
(With Increases in Chapter 185 Revenue)
Scenario 1
Scenario 2
Scenario 3
A. Valuation Date
October 1, 2012
October 1, 2012
October 1, 2012
October 1, 2012
Baseline
Proposed
Proposed
Proposed
Plan Provisions:
Plan Provisions:
Plan Provisions:
55&10,25&out
55&10,25&out
59&10,25&out
Delayed DROP entry
Delayed DROP entry
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits
$ 26.846,938
$ 28,053,935
$ 28,023,570
$ 27,986,694
b. Vesting Benefits
1,217,271
1,369,956
1,369,956
1,196,728
c. Disability Benefits
4,133,242
3,348,617
3,428,741
3,451,825
d. Preretirement Death Benefits
457,605
395,229
402,387
397,781
e. Return of Member Contributions
14,349
14,349
14,349
14.349
f. Total
32,669,405
33,182,086
33,239,003
33,047.377
2. Inactive Members
a. Service Retirees & Beneficiaries
48,572,874
48,572,874
48,572,874
48,572,874
b. Disability Retirees
2,920,636
2,920,636
2,920,636
2.920,636
c. Terminated Vested Members
279,574
279,574
279,574
279.574
d. Total
51,773,084
51.773,094
51,773,094
51,773,094
3. Total for All Members
94,442,489
94,955,170
85.012,087
84,820.461
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25
72,156,731
72,835,648
72,803,900
72,651,446
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35
N/A
N/A
N/A
N/A
E. Plan Assets
I . Market Value
49,144,436
49,682,988 *
49,682,988 *
49,682,988 *
2. Actuarial Value
49,859,298
50,397,850 *
50,397,850 *
50,397,850 *
F. Unfunded Actuarial Accrued Liability: C-E2
22,297,433
22,437,798
22,406,050
22,253,596
G. Actuarial Present Value of Projected
Covered Payroll
52,548,809
47,426,382
47,956,572
48,424,639
H. Actuarial Present Value of Projected
Member Contributions
4.519,197
4.078,669
4,124,265
4,164,519
1. Funded Ratio: E2/C
69.1 %
69.2 %
69.2 % 1
69.4 %
* This assumes that, subject to collective bargaining, the accumulated excess Chapter revenue ($538,552 as of October 1, 2012) would be
used to help offset the impact of these plan changes, since the proposed plan changes would be improvements over the benefits currently in
place, so assets have been increased by $538,552 to reflect the expected release of these funds.
ANNUAL REQUIRED CONTRIBUTION (ARC)
(No Changes in Chapter 185 Revenue)
A. Valuation Date
October 1, 2012
Scenario t
October 1, 2012
Scenario 2
October 1, 2012
Scenario 3
October 1, 2012
Baseline
Proposed
Proposed
Proposed
Plan Provisions:
Plan Provisions:
Plan Provisions:
55 & 10, 25 & out
55 & 10, 25 & out
59 & 10, 25 & out
Delayed DROP entr v
Delayed DROP entry
B. ARC to Be Paid During
Fiscal Year Ending
9/30/2014
9/30/2014
9/30/2014
9/30/2014
C. Assumed Date of Employer Contrib.
Quarterly
Quarterly
Quarterly
Quarterly
D. Annual Payment to Amortize
Unfunded Actuarial Liability
$ 1,905,316
$ 1,976,108
$ 1,972,798
$ 1.956,901
E. Employer Normal Cost
944,743
1,006,264
1,003.817
990,834
F. ARC if Paid on the Valuation
Date: D+E
2,850,059
2,982,372
2,976,615
2.947,735
G. ARC Adjusted for Frequency of
Payments
2,976,630
3,114,819
3,108,806
3,078,644
H. ARC as % of Covered Payroll
60.62 %
63.44 %
63.32 %
62.70 %
I. Assumed Rate of Increase in Covered
Payroll to Contribution Year
5.00 %
5.00 %
5.00 %
5.00 %
J. Covered Payroll for Contribution Year
5,155,524
5,155,524
5,1.55,524
5,155,524
K. ARC for Contribution Year: H x J
3,125,279
3.270,664
3,264,478
3,232,514
L Estimate of Annual State Revenue in
Contribution Year
412,644
412,644 *
412,644 *
412,644
M. Required Employer Contribution (REC)
2,712,635
2,858,020
2,851,834
2,819,870
in Contribution Year
N. REC as % of Covered
Payroll in Contribution Year: M : J
52.62 %
55.44 %
55.32 %
54.70 %
O. Change in REC from Baseline
145,385
139,199
107,235
P. Change in REC as % of Covered Payroll
from Baseline
2.82 %
2.70 %
2.08 %
* $412,644 is actually higher than the true "Base Amount" will be after it is recalculated to reflect the benefit reductions under
Ordinance 24-2012.
ACTUARIAL VALUE OF BENEFITS AND ASSETS
(No Changes in Chapter 185 Revenue)
A. Valuation Date
October I, 2012
Scenario 1
October 1, 2012
Scenario 2
October 1, 2012
Scenario 3
October 1, 2012
Baseline
Proposed
Proposed
Proposed
Plan Provisions:
Plan Provisions:
Plan Provisions:
55 & 10. 25 & out
55 & 10. 25 & out
59 & 10. 25 & out
Delayed DROP entry
Delayed DROP entry
B. Actuarial Present Value of All Projected
Benefits for
1. Active Members
a. Service Retirement Benefits
S 26,846.938
S 28.053,935
$ 28,023,570
S 27,986,694
b. Vesting Benefits
1,217,271
1,369,956
1,369,956
1,196,728
c. Disability Benefits
4,133,242
3,348,617
3,428,741
3.451,825
d. Preretirement Death Benefits
457,605
395,229
402.387
397,781
e. Return of Member Contributions
14.349
14,349
14,349
14,349
f. Total
32,669.405
33,182,086
33,239,003
33,047.377
2. Inactive Members
a. Service Retirees & Beneficiaries
49,572,874
48.572,874
48,572,874
48.572,874
b. Disability Retirees
2,920,636
2,920,636
2,920,636
2,920,636
c. Terminated Vested Members
279.574
279.574
279,574
279.574
d. Total
51,773,084
51,773,084
51,773,094
51,773,084
3. Total for All Members
84,442,489
84,955,170
85,012,087
84,820,461
C. Actuarial Accrued (Past Service)
Liability per GASB No. 25
72,156.731
72,835,648
72,803.900
72,651.446
D. Actuarial Value of Accumulated Plan
Benefits per FASB No. 35
N/A
N/A
N/A
NIA
E. Plan Assets
l . Market Value
49,144,436
49,144,436 *
49.144,436 *
49.144,436 *
2. Actuarial Value
49,859,298
49,859,298 *
49.859,298 *
49,859,298 *
F. Unfunded Actuarial Accrued Liability: C-E2
22,297,433
22,976,350
22,944,602
22,792,148
G. Actuarial Present Value of Projected
Covered Payroll
52,548,809
47,426,382
47,956,572
48,424,639
H. Actuarial Present Value of Projected
Member Contributions
4,519,197
4,078,669
4.124,265
4,164,519
1. Funded Ratio: E2/C
69.1 %
68.5 %
68.5 %
68.6
* This assumes that under collective bargaining, the accumulated excess chapter revenue would not be used to offset the impact of these plan
changes, since the proposed plan changes would not be improvement over the benefits in effect before September 13, 2012.
10
CALCULATION OF EMPLOYER NORMAL COST
A. Valuation Date
October 1, 2012
Scenario 1
October 1, 2012
Scenario)
October I, 2012
Scenario 3
October 1, 2012
Baseline
Proposed
Proposed
Proposed
Plan Provisions:
Plan Provisions:
Plan Provisions:
55 & 10, 25 & out
55 & 10, 25 & out
59 & 10, 25 & out
Delayed DROP entry
Delayed DROP entry
B. Normal Cost for
1. Service Retirement Benefits
$ 887,980
$ 962.546
$ 957.894
$ 953.000
2. Vesting Benefits
89,091
98.419
97.952
90.763
3. Disability Benefits
230,964
209,442
211.986
211,437
4. Preretirement Death Benefits
25,544
24,217
24.403
24,086
5. Return of Member Contributions
9,859
10,335
10.277
10.243
6. Total for Future Benefits
1243.438
1,304,959
1,302.512
1,289.529
7, Assumed Amount for Administrative
Expenses
123,567
123,567
123.567
123.567
8. Total Normal Cost
1,367,005
1,428,526
1,426,079
1,413.096
As % of Covered Payroll
27.84 %
29.09 %
29.04 %
28.78 %
C. Expected Member Contribution
422,262
422,262
422,262
422,262
As % of Covered Payroll
8.60 %
8.60 %
8.60 %
8.60 %
D. Net Employer Normal Cost: B8-C
944,743
1,006,264
1,003,817
990,834
As % of Covered Payroll
19.24 %
20.49 %
20.44 %
20.18 %
PARTICIPANT DATA
Scenario l
Scenario 2
Scenario 3
October 1, 2012
October 1, 2012
October 1, 2012
October I, 2012
Baseline
Proposed Plan
Proposed Plan
Proposed Plan
Provisions:
Provisions:
Provisions:
55 & /0, 25 & out
55 & 10, 25 & out
59 & 10, 25 & out
Delayed DROP
Delayed DROP
Entn'
Entry
ACTIVE MEMBERS
Number
74
74
74
74
Covered Annual Payroll
$ 4,910,023
$ 4,910,023
$ 4,910,023
S 4.910,023
Average Annual Payroll
S 66,352
S 66,352
$ 66,352
S 66,352
Average Age
40.2
40.2
40.2
40.2
Average Past Service
10.7
10.7
10.7
10.7
Average Age at Hire
29.5
29.5
29.5
29.5
RETIREES, BENEFICIARIES & DROP*
Number
54
54
54
54
Annual Benefits
$ 3,934,797
$ 3,934.797
$ 3,934,797
$ 3,934,797
Average Annual Benefit
S 72,867
$ 72,867
$ 72,867
$ 72.867
Average Age
54.8
54.8
54.8
54.8
DISABILITY RETIREES
Number
10
10
10
10
Annual Benefits
S 272,822
$ 272,822
S 272,822
S 272,822
Average Annual Benefit
S 27,282
$ 27,282
$ 27,282
$ 27,282
Average Age
56.2
56.2
56.2
56.2
TERMINATED VESTED MEMBERS
Number
1
1
l
l
Annual Benefits
$ 49,452
$ 49,452
S 49,452
S 49,452
Average Annual Benefit
$ 49.452
$ 49,452
S 49.452
S 49,452
Average Age
41.0
41.0
41.0
41.0
* Does not include deferred supplemental benefits for DROP members
12
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year
Projection of Required City
Contributions
Scenario 1 (2.75% Multiplier; Age 55&10
or 25 & Out); 6.5%
phased -in
Current Plan; 6.5% phased -in
(Reflects Increase in Chapter 185 Revenue and Use of Excess Reserve)
Required
City
Required
City
Contribution
Contribution
Estimated
Actual10
Funded
Estimated
Actual10
Funded
Fiscal
Actual Payroll
year
AAL on
Ratio on
Actual Payroll
year
AAL on
Ratio on
Valuation
Year
during Fiscal
payroll
% of
Valuation
Valuation
during Fiscal
payroll
% of
Valuation
Valuation
Date
F,ndine
Year
>tmwth
Amount
Payroll
Date
Date
Year
erowth
S Amount
Payroll
pate
Date
10/12012
2014
1,155,524
-1.26%
2,712,635
52.62%
72,156,731
69.10%
5,155524
-1.26%
2,733,583
53.02%
72.835,648
69.19%
10/12013
2015
5,444,394
-1.24%
2,681,909
49.26%
75,222,963
70.08%
5,445.297
-1.24%
2,742,796
50.37%
76,021.717
69.52%
10/1/2014
2016
5,815586
-1.77%
2,850,219
49.01%
78,448,808
70.80%
5,817.484
-1.77%
2.955.282
50.80%
79,377.896
69.75%
10/1/2015
2017
6,155.764
-1.93%
3.014,478
48.97%
81,828.419
71.36%
6,158540
-1.93%
3,158,715
51.29%
82,899.653
69.92%
10/12016
2018
6546123
-2.61%
3.248236
49.62%r
85.251.283
71.50%
6548.117
-2.61%
3.439,726
52.53%
86,499.420
69.81%
10/12017
2019
6,955524
-2.68%
3,440,898
49.47%
88,776.357
72.27%
6,957,071
-2.68%
3,669,855
52.75%r.
90.234,151
70.39%
10/1/2018
2020
7.259,334
-3.06%
3570,140
49.18%
92.430545
73.16%
7260.442
-3.05%
3,826,979
52.71%
94.124.968
71.19%n
10/12019
2021
7.688,325
-2.08%
3.793.419
49.34%
96,025,871
74.04%
7,683531
-2.08%
4,088,407
53.21%
97.982,871
72.08%
10/12020
2022
7.791,803
-0.63%
3,821,100
49.04%
99,667.667
74.95%
7,795310
-0.64%
4.129,176
52.97%
101.917.617
73.06%
10/1/2021
2023
8,311,418
3.51%
3 560,611
42.84%
102,132.737
76.66%
8,308.852
3.52%
3,871,094
46.59%
104,698,688
74.85%
10/12022
2024
8,686,465
5.79%
3.470,243
39.95%
104,582,325
78.42%
8,668.645
5.79%
3,778,663
43.59%
107 519,871
76.67%
10/12023
2025
9,012,044
5.48%
3233,521
35.88%
107.066,839
79.82%
9.009248
5.46%
3536,130
39.25%
110,382.610
78.11%
10/12024
2026
9,406587
5.17%
3.378,846
35,92%
109.452.966
81.05%
9388.882
5.16%
3.713,303
39.55%
113214,747
79.38%
10/12025
2027
9.697 273
4.93%
3,386,288
34.92%
111,835.939
82.01%
9.690243
4.90%
3.746,248
38.66%
116.097.043
80.36%
10/12026
2028
10,070,974
4.65%
4.313,398
42,83%
114.167,925
83.04%
10,021.102
4.64%
4.808,125
47.98%
118,942,151
81.40%
10/1/2027
2029
10,486,304
4.40%
4.682,135
44.65%:
116,440,089
84.029,
10,358.266
4,35%
.5,216,423
50.36%
121,725,660
82.40%
10/12028
2030
10,790,371
4.19%
4,763,949
44.15%
118.736.052
85.78%
10.435242
4.06%
5251.014
50.32%
124,458.628
84.23%
10/12029
2031
1 1245,71 1
4.04%
4.895.258
43.53%
121,025,012
87.84%
10,673 241
3.69%
5,429,478
50.87%
126.868 510
86.33%c
10/12030
2032
11A49,497
3.88%
4.372 563
38,19%
123.354.166
89.97%
10,731,355
3.34%
4,879547
45.47%
129,006.079
88.46%
10/12031
2033
11,894,881
3.92%
4265,504
35.86%
125,657 502
92.18%
11,134,127
3.25%
4,881,201
43.84%
130,834,434
90.72%
Total
73,455,350
79,855,745
Total Present Value
40,759,873
43,848,506
Cost/(Savings)
Amount
20,948
60,887
105,063
144.237
191,490
228,957
256,839
294,988
308.076
310,483
308,420
302.609
334,457
359,960
494,727
534.288
487,065
534220
506,984
615,697
6,400,395
3,088,633
% of
Payroll
0.41%
1.12%
1.81%
2.34%
2.92%
3.29%
3.54%
3.84%
3.95%
3.74%
3.56%
3.36%
3.56%
3,71 %
4.94%
5.16%
4.67%
5.01 %
4.72%
5.53%
13
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of Required City Contributions
Scenario 1 (2.75% Multiplier; Age 55&10 or 25 & Out); 6.5% phased -in
Current Plan; 6.5%
phased -in
(With No Increases in Chapter 185 Revenue) �
Required City
Required City
Contribution
Contribution
Cost/(Savings)
Estimated
Actual10
Funded
Estimated
Actual10
Funded
Fiscal
Actual Payroll
year
AAL on
Ratio on
Actual Payroll
year
AAL on
Ratio on
Valuation
Year
during Fiscal
payroll
% of
Valuation
Valuation
during Fiscal
payroll
% of
Valuation
Valuation
% of
Date
Ending
Year
amwth
Amount
Payroll
Date
Dag
Year
Qrnwth
Amoun
Payroll
Date
Date
unt
Payroll
10/12012
2014
5,155524
-1.26%
2,712.635
52.62%
72.156,731
69.10%
5.155.524
-1.26%
2,858,020
55.44%
72,835,648
68.45%
145,385
2.82%
10/12013
2015
5,444.394
-1.24%
2,681.909
49.26%
75,222,963
70.08%
5,445297
-1.24%
2,874,572
52.79%
76,021,717
68.82%
192,663
3.54%
10/12014
2016
5.815 586
-1.77%
2,850.219
49.01%
78,448,808
70.80%
5,817,484
-1.77%
3.091,993
53.15%
79.377,896
69.16%
241,774
4.16%
10/12015
2017
6,155,764
-1.93%
3,014.478
48.97%
81.828,419
71.36%
6,158340
-1.93%
3.300,978
53.60%
82,899,653
69.44%
286500
4.65%
10/12016
2018
6546.223
-2.61%
3.248.236
49.62%
85251,283
71.50%
6548,117
-2.61%
3587,713
54.79%
86,499,420
69.43%
339,477
5.18%
10/12017
2019
6,955 524
-2.68%
3,440,898
49.47%
88,776,357
72.27%
6,957,071
-2.68%
3,823,606
54.96%
90.234,151
70.10%
382,708
.5.50%
10/l2018
2020
7,259334
-3.06%
3570,140
49.18%
92,430545
73.16%
7.260,442
-3.05%
3,9859982
54.90%
94,124,968
70.99%
415,842
5.73%
10/12019
2021
7,688,32.5
-2.08%
3,793,419
49.34%
96,02.5,871
74.04%
7,683531
-2.08%
4.254,371
55.37%
97.982,871
71.96%
460,952
6.00%
10/12020
2022
7,791,803
-0.63%
3,821,100
49.04%
99,667,667
74.95%
7.795310
-0.64%
4.300,673
55.17%
101,917,617
73.01%
479573
6.15%
10/12021
2023
8,311,418
3.51%
3560,611
42.84%
102,132,737
76.66%
8,308,852
3.52%
4,052,227
48.77%
104,698,688
74.88%
491,616
5.92%
10/l2022
2024
8,686,465
5.79%
3,470,243
39.9.5%
104,582,325
78.42%
8,668,645
5.79%
3,966,772
45.76%
107 519,871
76.75%
496 529
5.73%
10/12023
2025
9,012,044
5.48%
3.233521
35.88%
107,066,839
79.82%
9,009.248
5,46%
3.738,838
41.50%
110.382,610
78.26%
505 317
5.61%
10/l/2024
2026
9,406587
5.17%
3,378,846
35.92%
109.452.966
81.05`k
9,388,882
5.16%
3,925,492
41.81%
113214,747
79.59%
546,646
5.82%
10/l2025
2027
9,697.273
4.93%
3,386,288
34.92%
111,835,939
82.01%
9,690.243
4.90%
3,969,124
40.96%
116,097,043
80.64%
5829836
6.01%
10/12026
2028
10,070.974
4.65%
4,313,398
42.83%
114.167.925
83.04%
10,021,102
4.64%
5,021574
50.11%
118.942,151
81.75%
708,176
7.07%
10/12027
2029
10,486304
4.40%
4,682.135
44.65%
116,440,089
84.02%
10.358266
4.35%
5,361,439
51.76%
121,725,660
82.81%
679,304
6.56%
10/I/2028
2030
10,790,371
4.19%
4,763,949
44.151A
118,736,052
85.78%
10,435,242
4.06%
.5,387,716
51.63%
124,458,628
84.70%
623,767
5.98%
10/l2029
2031
11,245,711
4.04%
4,895,258
43.53%
121,025,012
87.84%
10,673.241
3.69%
5562,893
52.12%
126,868,510
86.78%
667,635
6.26%
10/12030
2032
11,449,497
3.88%
4,372,563
38.19%
123,354,166
89.97%
10,731,355
3.34%
5,035,152
46.92%
129,006,079
88.88%
662589
6.17%
10/12031
2033
11,894,881
3.92%
4.265 504
35,86%
125,657502
92.18%
11,134,127
3.25%
5,040,419
45.27%
130,834,434
91.10%
774,915
6.96%
Total
73,455,350
83,139,554
9,684,204
Total Present Value
40,7599873
45,722,587
4,962,713
* Reflects $412,644 in annual Chapter 185 money, which is higher than the true "Base Amount" will be after it is recalculated to reflect the benefit reductions under
Ordinance 24-2012.
14
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of Required City Contributions
Scenario 2 (Age 55&10 or 25&Out; May delay DROP); 6.5% phased -in
Current Plan; 6.5% phased -in (Reflects Increase in Chapter 185 Revenue and Use of Excess Reserve)
Required
City
Contribution
Estimated
Actual10
Funded
Estimated
Fiscal
Actual Payroll
year
AAL on
Ratio on
Actual Payroll
Valuation
Year
during Fiscal
payroll
% of
Valuation
Valuation
during Fiscal
P-ok
Ending
YSM
growth
$ Amoun Am
Payroll
Pak
Date
Year
10/1/2012
2014
5,155524
-1.26%
2.712,635
52.62%
72.156.731
69.10%
5,155524
10/1/2013
2015
5,444.394
-1.24%
2.681,909
49.26%
75222,963
70.08%
5,445.297
10/1/2014
2016
5.815586
-1.77%
2.850.219
49.01%
78.448,808
70.80%
5.817.484
10/1/2015
2017
6,155.764
-1.93%
3,014,478
48.97%
81.828,419
71.36%
6,158540
10/1/2016
2018
6,546.223
-2.61%
3.248.236
49.62%
85,251.283
71.50%
6 548,117
10/1/2017
2019
6,955,524
-2.68%
3,440.898
49.47%
88.776.357
72.27%
6,957,071
10/1/2018
2020
7,259,334
-3.06%
3,570,140
49.18%
92,430,545
73.16%
7,260,442
10/1/2019
2021
7,688.325
-2.08%
3.793,419
49.34%
96.025,871
74.04%
7,683531
10/1/2020
2022
7,791,803
-0.63%
3.821,100
49.04%
99,667.667
74.95%
7.795,310
10/1/2021
2023
8.311.418
3.51%
3 560.611
42.84%
102,132,737
76.66%
8,308,852
10/1/2022
2024
8.686,465
5.79%
3,470.243
39.95%
104582,325
78.42%c
8,668,645
10/1/2023
2025
9.012,044
5.48%
3.233,521
35.88%
107,066,839
79,82%
9,009 248
10/1/2024
2026
9.406.587
.5.17%>
3,378,846
3.5.92%
109.452.966
81.05%
9,388,882
10/1/2025
2027
9,697.273
4,93%
3.386.288
34.92%
111,835,939
82.01%
9,690243
10/1/2026
2028
10,070,974
4.65%
4.313,398
42.83%
114,167,925
83.04%
10.021,102
10/1/2027
2029
10,486,304
4.40%c
4.682,13.5
44.65%
116.440,089
84.02%
10.362,946
10/1/2028
2030
10.790.371
4.1917t
4,763,949
44.1.5%
118,736.052
85.78%
10554572
10/I/2029
2031
l 1.245,711
4.04%
4,895 258
43.53%
121.025,012
87.84%
10,747,04.5
10/IP030
2032
11,449,497
3.88%
4,372563
38.19%
123,354.166
89.97%
10,903.323
10/1P-031
2033
11,894,881
3.927c
4,265.504
35.86%
125,657,502
92.18%
11212,361
Total
73,455,350
Total Present Value
40,759,873
Required City
Contribution
Actual 10
year
payroll
% of
erowth
Amount
Payroll
-1.26%
2,727.397
52.90%
-1,24%
2,736.262
50.25%
-1.77%
2,948,883
50.69%
-1.93%
3,152557
51.19%
-2.61 %
3,433,832
52.44%
-2.68%
3.664.289
52.67%
-3.05%
3,821.170
52.63%
-2.08%r.
4,083,029
53.14%
-0.64%
4.124,499
52.91 %
3.52%
3,867.771
46.55%
5.79%
3.775,195
43.55%
5.46%
3 532526
39.21 %
5.16%
3,709547
39.51 %
4.90%r:
3.742,372
38.62%
4.64%
4,805,118
47.95%
4.35%
5.220,852
.50.38%
4.07%
5,319504
50.40%c
3.81 %
5.422,959
50.46%
3.41 %
4.937,024
45.28%
3.41 %
4.854,953
43.30%
79,879,739
43,831,340
AAL on
Valuation
Date
72,803,900
75.984.959
79 335,930
82,852.425
86,446,601
90.175,716
94.060.954
97.913.483
101,843,301
104,618219
107.433334
110.289,669
113.1 15,357
115,991,058
118,829,452
121,606,351
124,339,680
126.916,989
129.205,043
131,320,450
Funded
Ratio on
Valuation
Pak
69.22%
69._56%
69.78%
69.94%
69.83%
70.40%
71.20%
72.09%)
73.06%
74.85%
76.66%
78.107c
79.37%
80.34%
81.38%
82.38%
84.21 %
86.33%
88.50%
90.777c
Cost/(Savings)
moun
14,762
54.353
98.664
138.079
185.596
223,391
251,030
289,610
303,399
307.160
304,952
299.005
330.701
356.084
491,720
538,717
555 555
527.701
564.461
589,449
6,424,389
3,071,467
% of
0.29%
1.00%
1.70%
2.24%
2.83%:
3.21 %
3.46%
3.77%
3.89%
3.70%
3.52%
3.32%.
3.52%
3.67%
4,91 %
5.20%
5.26%
4.91 %
5.18%
5.26%
15
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of Required City Contributions
Scenario 2 (Age 55&10 or 25&Out; May delay DROP); 6.5% phased -in
Current Plan; 6.5% phased -in
(With No Increases in Chapter 185 Revenue) "
Required City
Required
City
Contribution
Contribution
_ Cost/(Savings)
Estimated
Actual10
Funded
Estimated
Actual10
Funded
Fiscal
Actual Payroll
year
AAL on
Ratio on
Actual Payroll
year
AAL on
Ratio on
Valuation
Year
during Fiscal
payroll
% of
Valuation
Valuation
during Fiscal
payroll
% of
Valuation
Valuation
% of
Date
Fndine
Year
erowth
Amount
Pavm11
Date
Dater
growth
Amoun
11
Dam
DaAmount
Payroll
10/1/2012
2014
5,155 524
-1,26%
2,712,635
52.62%
72,156,731
69.10%
5,155 524
-1.26%
2,851,834
55.32%
72,803,900
68.48%
139,199
2.70%
10/12013
2015
5,444,394
-1.24%
2,681,909
49.26%
75,222,963
70.08%
5,4452297
-1.24%
2,868,038
52.67%
75,984,959
68.85%
186,129
3.42%
10/12014
2016
5,815586
-1.77%
2,850,219
49.01%
78,448,808
70.80%
5,817,484
-1.77%
3,085594
53.04%
79,335,930
69.19%
235.175
4.05%
10/l/2015
2017
6.155,764
-1.93%
3,014.478
48.97%
81,828,419
71.36%
6.158 540
-1.93%
3.294,203
53.49%
82,852,42-5
69.46%
279.725
4.54%
10/l/2016
2018
6546.223
-2.61%
3.248.236
49.62%
85.251283
71.50%
6548,117
-2.61%
3581,820
54.70%
86,446,601
69.45%
333584
5.09%
10/1/2017
2019
6,955524
-2.68%
3,440,898
49.47%
88,776,357
72.27%
6,957,071
-2.68%
3,818,040
54.88%
90,175,716
70.11%
377,142
5.42%
10/12018
2020
7.259,334
-3.06%
3570,140
49.18%
92,430545
73.16%
7,260,442
-3.05%
3,980,900
54.83%
94,060,954
71.00%
410,760
5.66%
10/12019
2021
7,688,325
-2.08%
3,793,419
49.34%
96,025,871
74.04%c
7,683531
-2.08%
4,248,993
55.30%
97,913,483
71.96%
455 574
5,93%
10/l2020
2022
7,791,803
-0.63%
3.821,100
49.04%
99,667,667
74.95%
7,795,310
-0.64%
4.295,995
55.11%
101,843.301
73.01%
474,895
6.09%
10/12021
2023
8311.418
3.51%
3560,611
42.84%
102,132,737
76.66%
8.308.852
3.52%
4,048,073
48.72%
104,618,219
74.87%
487,462
5.87%
10/12022
2024
8,686,465
5.79%
3,470,243
39.95%
104582,325
78.42%
8,668,645
5.79%
3,963,305
45.72%
107,433,334
76.75%
493,062
5.69%
10/12023
2025
9,012,044
5.48%
3,233,521
35.88%
107,066,839
79.82%
9,009,248
5.46%
3,73.5,234
41.46%
110,289,669
78.25%
501,713
5.57%
10/12024
2026
9,406587
5.17%
3,378,846
35.92%
109,452,966
81.05%
9,388,882
5.16%
3,921,736
41.77%
113,115,357
79.58%
542,890
5.78%
10/l2025
2027
9,697.273
4.93%
3,386,288
34.92%
111,835,939
82.01%
9,690.243
4.90%
3,966,217
40.93%
115,991,058
80.62%
579,929
5.98%
10/l2026
2028
10,070,974
4.65%
4.313,398
42.83%
114,167,925
83.04%
10,021,102
4.64%
5,018568
50.08%
118,829,452
81.73%
705.170
7.04%
10/12027
2029
10.486.304
4.40%
4,682.135
44.65%
116A40,089
84.02%
10,362.946
4.35%
5,365,934
51.78%
121,606,351
82.79%
683.799
6.60%
10/l2028
2030
10,790,371
4.19%
4,763,949
44.15%
118,736,052
85.78%
10554572
4.07%
5,455,658
51.69%
124,339,680
84.67%
691,709
6.55%
10/12029
2031
11,245,711
4.04%
4,895,258
43.53%
121,025,012
87.84%
10,747,045
3.81%
5,558,372
51.72%
126,916,989
86.78%
663.114
6.17%
10/12030
2032
11,449,497
3.88%
4,372,563
38.19%e
123,354,166
89.97%
10,903,323
3.41%
5,091,852
46.70%
129,205.043
88.92%
719,289
6.60%
10/12031
2033
11,894,881
3.92%
4.265,504
35.86%
125.657:502
92.18%
11.212,361
3.41%
.5,015.289
44.73%
131,320,450
91.14%
749,785
6.69%
Total
73,455,350
83,165,655
9,710,305
Total Present Value
40,759,873
45,705,%3
4,946,090
* Reflects $412,644 in annual Chapter 185 money, which is higher than the true "Base Amount" will be after it is recalculated to reflect the benefit reductions under
Ordinance 24-2012.
EL
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year
Projection of Required City
Contributions
Scenario 3 (Age 59&10 or 25&Out; May delay DROP);
6.5%
phased -in
Current Plan; 6.5% phased -in
(Reflects Increase in Chapter 185 Revenue and Use of Excess Reserve)
Required City
Required
City
Contribution
Contribution
Estimated
Actual10
Funded
Estimated
Actual10
Funded
Fiscal
Actual Payroll
year
AAL on
Ratio on
Actual Payroll
year
AAL on
Ratio on
Valuation
Year
during Fiscal
payroll
% of
Valuation
Valuation
during Fiscal
payroll
% of
Valuation
Valuation
Date
Ending
Year
grrwv h
moun
Pavmll
Date
Date
Year
emwth
Amount
Payroll
Date
Date
10/1/2012
2014
5,155324
-1.26%
2312,635
52.62%
72,156331
69.10%
5,155524
-1.26%
2,695,948
52.29%
72,651,446
69.37%
10/I2013
2015
5,444,394
-1.24%
2,681,909
49.26%
75,222,963
70.08%
5.444,394
-1.24%
2,702,053
49.63%
75,805,211
69.72%
10/1/2014
2016
5,815 586
-1.77%
2,850.219
49,01%
78,448,808
70.80%
5,815 586
-1.77%
2,913.608
50.10%
79,130,077
69.93%
10/12015
2017
6,155.764
-1.93%
3,014,478
48.97%
81,828.419
71.36%
6,155,764
-1.93%
3.118510
50.66%
82,626,941
70.07%
10/12016
2018
6 546.223
-2,61%
3.248,236
49.62%
85,251,283
71.50%
6546223
-2.61%
3.394,217
51.85%
86,182,664
69.93%
10/I2017
2019
6,955 524
-2.68%
3,440,898
49.47%
88,776,357
72,27%
6,955524
-2.68%
3.623,132
52.09%
89,871,314
70.48%
10/1/2018
2020
7259,334
-3.06%
3570.140
49.18%
92,430545
73.16%
7,259,334
-3.06%
3,779,209
52.06%
93,715,067
71,26%
10/1/2019
2021
7.688,325
-2.08%
3,793.419
49.34%
96,025,871
74.04%
7,688.325
-2.08%
4.040.215
52.55%
97523530
72.13%
10/1/2020
2022
7,791.803
-0.63%
3,821,100
49.04%
99,667,667
74.95%
7,791,803
-0.63%
4.075.113
52.30%
101,420,983
73.09%
10/ 12021
2023
8,31 1.418
3.51 %
3560,611
42.84%
102,132,737
76.66%
8,311,418
3.51 %
3,821,590
45.98%
104,150.184
74.87%
10/1/2022
2024
8,686,465
5.79%
3,470,243
39.95%
104 582,325
78.42%
8,686,465
5.79%
3,734,311
42.99%
106,924,660
76.66%
10/12023
2025
9,012.044
5.48%
3.233521
35.88%
107,066.839
79.82%
9,012,044
5.48%
3,480,451
38.62%
109,767,736
78.10%
10/12024
2026
9,406587
5.17%
3.378,846
35.92%
109,452,966
81.05`k
9.406587
5.17%
3,661,044
38.92%
112550,906
79.36%
10/l2025
2027
9,697,273
4.93%
3,386288
34.92%
111,835,939
82.01%
9,697.273
4,93%
3,681,085
37.96%
115,379,915
80.31%
10/1/2026
2028
10,070,974
4.65%
4,313,398
42.83%
114.167,925
83.04%
10,070,974
4.65%
4,764,578
47.31%
118,198,389
81.35%
]0/12027
2029
10.486.304
4.40%
4.682,135
44.65%
116,440.089
84.02%
10.429,897
4.40%
5,187,831
49.74%
121.010548
82.33%
10/12028
2030
10.790.371
4.19%
4,763,949
44.15%
118.736.052
85.78%
10580,373
4.13%
5 256,329
49.68%
123,825,815
84.18%
10/12029
2031
11245,711
4.04%
4,895,258
43.53%
121,025,012
87.84%
10,784579
3.84%
5,387,975
49.96%
126,434,003
86.31%
10/l/2030
2032
11.449,497
3.88%
4,372,563
38.19%
123,354,166
89.97%
10,867.277
3.44%
4,869,627
44.81%
128.746,683
88.47%
10/12031
2033
11,894.881
3.92%
4265.504
35.86%
125.657502
92.18%
11,186.103
3.38%
4,818,973
43.08%
130,830.056
90.73%
Total
73,455,350
79,005,799
Total Present Value
40,759,873
43,340,408
Cost/(Savings)
Amount
(16,687)
20,144
63,389
104.032
145,981
182234
209,069
246.796
254.013
260,979
264,068
246.930
282,198
294,797
451,180
505,696
492,380
492,717
497,064
553,469
5,550,449
2,580,535
% of
Payroll
-0.33%c
0.37%
1.09%
1.69%
2.23%
2.62%
2.88%
3.21 %
3.26%
3.14%
3.04%
2.74%
3.00%
3.04%n
4.48%
4.85%
4.65%
4.57%
4.57%
4.95%
17
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of Required City Contributions
Scenario 3 (Age 59&10 or 25&Out; May delay DROP); 6.5% phased -in
Current Plan; 6.5% phased -in
(With No Increases in Chapter 185 Revenue) °
Required
City
Required
City
Contribution
Contribution
Cost/(Savings)
Estimated
Actual10
Funded
Estimated
Actual10
Funded
Fiscal
Actual Payroll
year
AAL on
Ratio on
Actual Payroll
year
AAL on
Ratio on
Valuation
Year
during Fiscal
payroll
% of
Valuation
Valuation
during Fiscal
payroll
% of
Valuation
Valuation
% of
Date
Ending
Year
growth
S Amount
Payroll
Date
Date
Year
gMwth
S Amount
Payroll
Date
Date
Amount
Payroll
10/12012
2014
5,155524
-1.26%
2,712.635
52.62%
72.156,731
69.10%
5.155,524
-1,26%
2,819,870
14.70%
72,651,446
68.63%
107.235
2.08%
10/1/2013
2015
5,444,394
-1.24%
2,681,909
49.26%
75.222,963
70.08%
5,444,394
-1.24%
2,833,807
52.05%
75,805 211
69.01%
151,898
2.79%
10/1/2014
2016
5,815,586
-1.77%
2,850,219
49.01%
78,448.808
70.80%
5,815,586
-1.77%c
3,050,856
52.46%
79,130,077
69.33%
200,637
3.45%
10/1/2015
2017
6.155,764
-1.93%
3,014.478
48.97%c
81,828,419
71.36%
6.155,764
-1.93%
3,260,093
.52,96%
82,626,941
69.58%
245,615
3.99%
10/ 1 /2016
2018
6546.223
-2.61 %
3.248,236
49.62%
85251.283
71.50%
6.546,223
-2.61 %
3.542,161
54.11 %
86.182.664
69.54%
293,925
4.49%
10/1/2017
2019
6,955.524
-2.68%
3,440,898
49.47%
88.776,357
72.27%
6,955,524
-2.68%
3,776,849
54.30%
89,871,314
70.19%
335,951
4.83%
10/1/2018
2020
7,259,334
-3.06%
3570,140
49.18%
92,430,545
73.16%
7,259,334
-3.06%
3,938,188
54.25%
93,715,067
71.06%
368,048
5.07%
10/1/2019
2021
7,688,325
-2.08%
3,793,419
49.34%c
96,025,871
74.04%
7.688.32.5
-2.08%
4.206282
54.71%
97,523,530
72.01%
412,863
5.37%
10/1P-020
2022
7,791.803
-0.63%
3,821.100
49,04%
99.667.667
74.95%
7.791,803
-0.63%
4.245,754
54.49%
101.420.983
73.05%
424,654
5.45%
10/ 1 /2021
2023
8,311,418
3, 51 %
3560.611
42.84%
102,132.737
76.66%
8,311,418
3.51 %
4.001,948
48.15%
104.150,184
74.89%
441,337
5.31 %
10/1/2022
2024
8,686,465
5.79%
3,470,243
39,95%
104,582,325
78.42%
8,686,465
.5.79%
3,922,808
45.16%
106,924,660
76.75%
452,565
5.21%
10/12023
2025
9,012,044
5.48%
3233,521
35.88%
107,066,839
79.82%
9,012,044
5.48%
3,684,123
40.88%
109,767,736
78.25%
450,602
5.00%
10/IR024
2026
9,406587
5.17%
3.378.846
35.92%
109.452.966
81.05%
9.406,587
5.17%
3.873,633
41.18%
112.550,906
79.57%
494,787
5.26%
10/12025
2027
9,697,273
4.93%
3,386,288
34.92%
111,835,939
82.01 %
9,697.273
4,93%
3,905,092
40.27%
115,379,915
80.59%
518,804
5.35%
10/1/2026
2028
10,070,974
4.65`1c
4,313,398
42.83%
114,167,925
83.04%
10,070,974
4.65%
4,978,082
49.43%
118,198„389
81.69%
664,684
6.60%
10/1/2027
2029
10,486,304
4.40%
4,682,135
44.65%
116,440,089
84.02%
10,429,897
4.40%
5,333,849
51.14%
121,010548
82.75%
651,714
6.25%
10/12028
2030
10,790.371
4.19%
4,763,949
44.15%
118,736,052
85.78%
10580,373
4.13%
5.392,816
50.97%
123.825,815
84.64%
628,867
5.94%
10/12029
2031
11,245,711
4.04%
4,895,258
43.53%
121,025,012
87.84%
10.784,579
3.84%
-5,522,783
5121%
126,434,003
86.75%
627,525
5.82%
10/12030
2032
11,449,497
3.88%
4,372,563
38.19%
123,354,166
89.97%
10,867,277
3.44%
5.025,029
46.24%
128,746,683
88.88%
652,466
6,00%
10/12031
2033
11,894,881
3.92%
4265,504
35.86%
125,657,502
92.18%
11.186,103
3.38%
4.978,934
44.51%
130,830,056
91.10%
713,430
6.38%
Total
73,455,350
82,292,957
8,837,607
Total Present Value
40,759,873
45,215,244
4,455,371
* Reflects $412,644 in annual Chapter 185 money, which is higher than the true "Base Amount" will be after it is recalculated to reflect the benefit reductions under
Ordinance 24-2012.
18
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of City Contribution Requirement
WITH Increases in Chapter 185 Revenue
5,000,000
e
0
a
4,000,000
c
0
U
3,000,000
U
t
u
u
v
2,000,000
�Currenl Plan; 6.5% phased -in
Scenario 1 (55& 10 or 25); 6.5% phased -in
1,000,000
-i-Scenario 2 (55&10 or 25), Delayed DROP Entry; 6.5% phased -in
—*—Scenario 3 (59&10 or 25), Delayed DROP Entry; 6.5% phased -in
0
A
b O ry b b 4
O ry
ry01
,10� ,y0~ ,yOry ROR' ROB' 4,
Fiscal Year End
19
City of Pahn Beach Gardens Police Officers' Pension Fund
20-Year Projection of City Contribution Requirement
6,000,000 , With No Increases in Chapter 185 Revenue *
5,000,000
o
�
a
4,000,000
G
0
U
3,000,000
U
d
u
d
'ryo^1
2,000,000
—�—Current Plan; 6.5% phased -in
—0—Scenario 1 (55&10 or 25); 6.5% phased -in
1,000,000
- Scenario 2 (55&10 or 25), Delayed DROP Entry; 6.5% phased -in
--*-Scenario 3 (59&10 or 25), Delayed DROP Entry; 6.5%n phased -in
INS
Fiscal Year End
* Reflects $412,644 in annual Chapter 185 money, which is higher than the one "Base Amount' will be after it is recalculated to reflect the benefit reductions
under Ordinance 24-2012.
20
70%
60%
50%
40%
30%
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of City Contribution Requirement (% of Pay)
WITH Increases in Chapter 185 Revenue
20% Current Plan; 6.5% phased -in
Scenario 1 (55& 10 or 25); 6.5% phased -in
10% (Scenario 2 (55& 10 or 25), Delayed DROP Entry; 6.5% phased -in
—dr-Scenario 3 (59& 10 or 25), Delayed DROP Entry; 6.5% phased -in
[ODA
tie
ti 1§1
If,
1P
ti��o
ry��ry
Fiscal Year End
21
70%
m 60%r
0.
w
0
s 50%
N
0
O Qfl%
a
c 30%
U
T
p 20%
u
u
b
O
rye, 10%
City of Palm Beach Gardens Police Officers' Pension Fund
20-Year Projection of City Contribution Requirement (% of Pay)
With No Increases in Chapter 185 Revenue *
Current Plan; 6.5% phased -in
tScenario 1 (55& 10 or 25); 6.5% phased -in
tScenario 2 (55& 10 or 25), Delayed DROP Entry; 6.5% phased -in
tScenario 3 (59& 10 or 25), Delayed DROP Entry; 6.5% phased -in
'Y�`bT ryp�4 tibryO ryoy`L ryO,`b ryOryb ryQ,16
Fiscal Year End
If,
• Reflects $412,644 in annual Chapter 185 money, which is higher than the true "Base Amount" will be after it is recalculated to reflect the benefit reductions
under Ordinance 24-2012.
22
on
iJe(��7L:,-t l,kf
No CPAs S< AdvNors
November 6, 2013
Board of Trustees
Palm Beach Gardens Police Pension Fund
Palm Beach Gardens, Florida
Board of Trustees:
This engagement letter between Palm Beach Gardens Police Pension Fund (hereafter
referred to as the "Fund") and Cherry Bekaert LLP (the "Firm" or "CB") sets forth the nature
and scope of the services we will provide, the Fund's required involvement and assistance in
support of our services, the related fee arrangements and other Terms and Conditions, which
are attached hereto and incorporated by reference, designed to facilitate the performance of
our professional services and to achieve the mutually agreed upon objectives of the Fund.
SUMMARY OF SERVICES
We will provide the following services to the Fund as of and for the year ended September
30, 2013:
Audit services
1. We will audit the basic financial statements of the Fund as of and for the year ended
September 30, 2013.
2. We will audit the schedule of administrative and investment expenses. As part of our
engagement, we will apply certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used
to prepare the financial statements or the financial statements themselves.
3. We will apply limited procedures to the pension plan information and management's
discussion and analysis (MD&A)) which will consist of inquiries of management about the
methods of preparing the information and comparing the information for consistency with
management's responses to our inquiries, the basic financial statements, and other
knowledge we obtained during our audit of the financial statements.
Accounting and other services
We will provide the following additional services:
1. Assist in the preparation of the financial statements and footnotes.
YOUR EXPECTATIONS
As part of our planning process, we will discuss with you your expectations of CB, changes
that occurred during the year, your views on risks facing you, any relationship issues with CB,
and specific engagement arrangements and timing. Our services plan, which includes our
audit plan, is designed to provide a foundation for an effective, efficient, and quality -focused
approach to accomplish the engagement objectives and meet or exceed your expectations.
Our service plan will be reviewed with you periodically and will serve as a benchmark against
which you will be able to measure our performance. Any additional services that you may
request, and that we agree to provide, will be the subject of separate written arrangements.
The engagement will be led by Jim Burdick, who will be responsible for assuring the overall
quality, value, and timeliness of the services provided to you.
BAKER TULY
800 N. Magnolia Avenue, Suite 1300, Orlando, FL 32803 1 P 407.423,7911 1 &h.corn ;NTft >,NAaONN ,z
Palm Beach Gardens Police Pension Fund
November 6, 2013
Page 2
AUDIT SERVICES
The objective of our audit is the expression of opinions as to whether your basic financial
statements are fairly presented, in all material respects, in conformity with U.S. generally
accepted accounting principles and to report on the fairness of the additional information
referred to in the Summary of Services section when considered in relation to the basic
financial statements taken as a whole. The objective also includes reporting on:
• Internal control related to the financial statements and compliance with the provisions
of applicable laws, regulations, contracts, agreements and grants, noncompliance
with which could have a material effect on the financial statements in accordance
with Government Auditing Standards.
The reports on internal control and compliance will each include a paragraph that states that
the purpose of the report is solely to describe (1) the scope of testing of internal control over
financial reporting and compliance and the result of that testing and not to provide an opinion
on the effectiveness of internal control over financial reporting or on compliance, and (2) that
the report is an integral part of an audit performed in accordance with Government Auditing
Standards in considering internal control over financial reporting and compliance. The
paragraph will also state that the report is not suitable for any other purpose.
Our audit will be conducted in accordance with auditing standards generally accepted in the
United States of America; Government Auditing Standards, issued by the Comptroller
General of the United States; and will include tests of accounting records and other
procedures as deemed necessary to enable us to express such opinions and to render the
required reports. If any of our opinions resulting from the procedures described above are
other than unqualified, we will fully discuss the reasons with you in advance. If, for any
reason, we are unable to complete the audit or are unable to form or have not formed
opinions, we may decline to express opinions or issue a report as a result of this
engagement.
ACCOUNTING AND OTHER SERVICES
Accounting services
We will advise Management about the application of appropriate accounting principles, and
may propose adjusting journal entries to the Fund's financial statements. Management is
responsible for reviewing the entries and understanding the nature of any proposed entries
and the impact they have on the Fund's financial statements. If, while reviewing the journal
entries, Management determines that a journal entry is inappropriate, it will be Management's
responsibility to contact us to correct it.
Financial statement preparation
We will assist in the preparation of the Fund's financial statements and notes, based on
information in the Fund's accounting records. However, the responsibility for the Fund's
financial statements and notes remains with Management. This responsibility includes
establishing and maintaining adequate records and effective internal controls over financial
reporting, the selection and application of accounting principles, the safeguarding of assets,
and adjusting the financial statements for any material misstatements as well as reviewing
and approving for publication the draft financial statements prepared with our assistance.
Palm Beach Gardens Police Pension Fund
November 6, 2013
Page 3
Management's responsibilities related to accounting and other services
For all nonattest services we perform in connection with the engagement, you are
responsible for designating a competent employee to oversee the services, make any
management decisions, perform any management functions related to the services, evaluate
the adequacy of the services, and accept overall responsibility for the results of the services.
Prior to the release of the report, Management will need to sign a representation letter
acknowledging your responsibility for the results of these services.
FEES
The estimated fee contemplates only the services described in the Summary of Services
section of this letter. If Management requests additional services not listed above, we will
provide an estimate of those fees prior to commencing additional work.
The following summarizes the fees for the services described above:
Description of Services Estimated Fee
Audit services
Audit of the financial statements, including assistance with
Preparation of financial statements $15,150
If the foregoing is in accordance with your understanding, please sign a copy of this letter in
the space provided and return it to us. If you have any questions, please call Jim Burdick at
(407)423-7911.
Sincerely,
CHERRY BEKAERT LLP
ATTACHMENT — Engagement Letter Terms and Conditions
Palm Beach GardenAPolice Pension Fund
ACCEPTED BY:
1
TITLE: DATE:
Attachment - Page 1
Cherry Bekaert LLP
EnRaRement Letter Terms and Conditions
The following terms and conditions are an integral part of the attached engagement letter and should be
read in their entirety in conjunction with your review of the letter.
LIMITATIONS OF THE AUDIT REPORT
Should the Fund wish to include or incorporate by reference these financial statements and our report
thereon into any other document at some future date, except the Fund annual report or the annual audit
or CAFR of the plan sponsor or employer, we will consider granting permission to include our report into
another such document at the time of the request. However, we may be required by generally accepted
auditing standards ("GAAS") to perform certain procedures before we can give our permission to include
our report in another document such as an annual report, private placement, regulator filing, official
statement, offering of debt securities, etc. You agree that you will not include or incorporate by reference
these financial statements and our report thereon, or our report into any other document without our prior
written permission. In addition, to avoid unnecessary delay or misunderstandings, it is important to
provide us with timely notice of your intention to issue any such document.
LIMITATIONS OF THE AUDIT PROCESS
In conducting the audit, we will perform tests of the accounting records and such other procedures as we
consider necessary in the circumstances to provide a reasonable basis for our opinion on the financial
statements. We also will assess the accounting principles used and significant estimates made by
Management, as well as evaluate the overall financial statement presentation.
Our audit will include procedures designed to obtain reasonable assurance of detecting misstatements
due to errors or fraud that are material to the financial statements. Absolute assurance is not attainable
because of the nature of audit evidence and the characteristics of fraud. For example, audits performed in
accordance with GAAS are based on the concept of selective testing of the data being examined and are,
therefore, subject to the limitation that material misstatements due to errors or fraud, if they exist, may not
be detected. Also, an audit is not designed to detect matters that are immaterial to the financial
statements. In addition, an audit conducted in accordance with GAAS does not include procedures
specifically designed to detect illegal acts having an indirect effect (e.g., violations of fraud and abuse
statutes that result in fines or penalties being imposed on the Fund) on the financial statements.
Similarly, in performing our audit we will be aware of the possibility that illegal acts may have occurred.
However, it should be recognized that our audit provides no assurance that illegal acts generally will be
detected, and only reasonable assurance that illegal acts having a direct and material effect on the
determination of financial statement amounts will be detected. We will inform you with respect to errors
and fraud, or illegal acts that come to our attention during the course of our audit unless clearly
inconsequential. In the event that we have to consult with the Fund's counsel or counsel of our choosing
regarding any illegal acts we identify, additional fees incurred may be billed to the Fund. You agree to
cooperate fully with any procedures we deem necessary to perform with respect to these matters.
If, for any reason, we are unable to complete the audit, or are unable to form, or have not formed an
opinion on the financial statements, we may decline to express an opinion or decline to issue a report as
a result of the engagement. We will notify the appropriate party within your organization of our decision
and discuss the reasons supporting our position.
MANAGEMENT'S RESPONSIBILITIES RELATED TO THE AUDIT
Management is responsible for the fair presentation of the financial statements in conformity with GAAP,
including the appropriate basis of accounting is applied by all component units, if applicable, for making
all financial records and related information available to us, for ensuring that all material information is
Attachment - Page 2
disclosed to us, and for identifying and ensuring that the Fund complies with the laws and regulations
applicable to its activities and with the provisions of contracts and grant agreements.
Management is responsible for the preparation of the supplementary information in conformity with
GAAP. Management agrees to include our report on the supplementary information in any document that
contains and indicates that we have reported on the supplementary information. Management also
agrees to include the audited financial statements with any presentation of the supplementary information
that includes our report thereon or make the audited financial statements readily available to users of the
supplementary information no later than the date the supplementary information is issued with our report
thereon.
Management is also responsible for adjusting the financial statements to correct material misstatements,
informing us of events that occurred subsequent to the balance sheet date until the date of the auditors'
report that might affect the financial statements or related disclosures and informing us of any discovery
of facts related to items that existed at the financial statement date that might affect the financial
statements or related disclosures.
Management is responsible for informing us of its views regarding the risk of fraud at the Fund.
Management must inform us of their knowledge of any allegations of fraud or suspected fraud affecting
the Fund received in communications from employees, former employees, regulators, or others and for
informing us about all known or suspected fraud affecting the Fund involving (a) Management, (b)
employees who have significant roles in internal control, and (c) others where the fraud could have a
material effect on the financial statements.
Management is responsible for the design and implementation of programs and controls over financial
reporting and to prevent and detect fraud. Appropriate supervisory review procedures are necessary to
provide reasonable assurance that adopted policies and prescribed procedures are adhered to and to
identify errors and fraud or illegal acts. As a part of our audit, we will consider the Fund's internal control
structure, as required by GAAS, sufficient to plan the audit and to determine the nature, timing, and extent
of auditing procedures necessary for expressing our opinion concerning the financial statements. An audit
is not designed to provide any assurance on internal controls. As part of our consideration of the Fund's
internal control structure, we will inform you of matters that come to our attention that represent significant
deficiencies or material weaknesses in the design or operation of the internal control structure.
Management is responsible for establishment and maintenance of a process for tracking the status of
audit findings and recommendations. Management is also responsible for identifying to us previous audits
or other engagements or studies related to the objectives discussed in the Audit Objectives section of this
letter. This responsibility includes relaying to us corrective actions taken to address significant findings
and recommendations resulting from those audits or other engagements or studies. You are also
responsible for providing management's views on our current findings, conclusions and
recommendations, as well as your planned corrective actions, and the timing and format related thereto.
At the conclusion of the engagement, Management will provide to us a representation letter that, among
other things, addresses (1) Management's responsibilities related to the audit and confirms certain
representations made to us during the audit, including, Management's acknowledgement of its
responsibility for the design and implementation of programs and controls to prevent and detect fraud; (2)
Management's responsibilities related to the monitoring of internal control over financial reporting; and (3)
Management's knowledge, directly or from allegations by others, of fraud or suspected fraud affecting the
Fund. The representation letter will also affirm to us that Management believes that the effects of any
uncorrected misstatements, if any, pertaining to the financial statements are immaterial, both individually
and in the aggregate, to the financial statements taken as a whole. The Firm will rely on Management
providing these representations to us, both in the planning and performance of the audit, and in
considering the fees that we will charge to perform the audit.
Attachment - Page 3
AUDIT PROCEDURES —GENERAL
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements; therefore, our audit will involve professional judgment about the number of
transactions to be examined and the areas to be tested. We will plan and perform the audit to obtain
reasonable rather than absolute assurance about whether the financial statements are free of material
misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or
(4) violations of laws or governmental regulations that are attributable to the Fund or to acts by
management or employees acting on behalf of the Fund. Because the determination of abuse is
subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of
detecting abuse.
Because an audit is designed to provide reasonable, but not absolute assurance and because we will not
perform a detailed examination of all transactions, there is a risk that material misstatements or
noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect
immaterial misstatements or violations of laws or governmental regulations that do not have a direct and
material effect on the financial statements or major programs. However, we will inform you of any material
errors and fraud, or illegal acts that come to our attention during the course of our audit. We will also
inform you of any violations of laws or governmental regulations that come to our attention, unless clearly
inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not
extend to any later periods for which we are not engaged as auditors.
Our procedures will include tests of documentary evidence supporting the transactions recorded in the
accounts, and may include tests of the physical existence of inventories and direct confirmation of
receivables and certain other assets and liabilities by correspondence with selected individuals, creditors
and financial institutions. We will request written representations from your attorneys as part of the
engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will
also require certain written representations from you about the financial statements and related matters.
AUDIT PROCEDURES — INTERNAL CONTROLS
Our audit will include obtaining an understanding of the Fund and its environment, including internal
controls, sufficient to assess the risks of material misstatement of the financial statements and to design
the nature, timing and extent of further audit procedures. Tests of controls may be performed to test the
effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud
that are material to the financial statements and to preventing and detecting misstatements resulting from
illegal acts and other noncompliance matters that have a direct and material effect on the financial
statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on
internal control and, accordingly, no opinion will be expressed in our report on internal control issued
pursuant to Government Auditing Standards.
An audit is not designed to provide assurance on internal control or to identify significant deficiencies.
However, during the audit, we will communicate to management and those charged with governance
internal control related matters that are required to be communicated under professional standards, and
Government Auditing Standards.
AUDIT PROCEDURES - COMPLIANCE
As part of obtaining reasonable assurance about whether the basic financial statements are free of
material misstatement, we will perform tests of the Fund's compliance with applicable laws and
regulations and the provisions of contracts and agreements, including grant agreements. However, the
objective of those procedures will not be to provide an opinion on overall compliance and we will not
express such an opinion in our report on compliance issued pursuant to Government Auditing Standards.
Attachment - Page 4
Communications
At the conclusion of the audit engagement, we may provide Management and those charged with
governance a letter stating any significant deficiencies or material weaknesses which may have been
identified by us during the audit and our recommendations designed to help the Fund make
improvements in its internal control structure and operations related to the identified matters discovered in
the financial statement audit. As part of this engagement we will ensure that certain additional matters are
communicated to the appropriate members of the Fund. Such matters include (1) our responsibility under
GAAS; (2) the initial selection of and changes in significant accounting policies and their application; (3)
our independence with respect to the Fund; (4) the process used by Management in formulating
particularly sensitive accounting estimates and the basis for our conclusion regarding the reasonableness
of those estimates; (5) audit adjustments, if any, that could, in our judgment, either individually or in the
aggregate be significant to the financial statements or our report; (6) any disagreements with
Management concerning a financial accounting, reporting or auditing matter that could be significant to
the financial statements; (7) our views about matters that were the subject of Management's consultation
with other accountants about auditing and accounting matters; (8) major issues that were discussed with
Management in connection with the retention of our services, including, among other matters, any
discussions regarding the application of accounting principles and auditing standards; and (9) serious
difficulties that we encountered in dealing with Management related to the performance of the audit.
OTHER MATTERS
Access to working papers
The working papers and related documentation for the engagement are the property of the Firm and
constitute confidential information. We have a responsibility to retain the documentation for a period of
time to satisfy legal or regulatory requirements for records retention. Except as discussed below, any
requests for access to our working papers will be discussed with you prior to making them available to
requesting parties.
We may be requested to make certain documentation available to regulators, governmental agencies
(e.g., SEC, PCAOB, HUD, DOL, etc.) or their representatives ("Regulators") pursuant to law or
regulations. If requested, access to the documentation will be provided to the Regulators. The Regulators
may intend to distribute to others, including other governmental agencies, our working papers and related
documentation without our knowledge or express permission. You hereby acknowledge and authorize us
to allow Regulators access to and copies of documentation as requested. In addition, our Firm, as well as
all other major accounting firms, participates in a "peer review" program covering our audit and
accounting practices as required by the American Institute of Certified Public Accountants. This program
requires that once every three years we subject our quality assurance practices to an examination by
another accounting firm. As part of the process, the other firm will review a sample of our work. It is
possible that the work we perform for you may be selected by the other firm for their review. If it is, they
are bound by professional standards to keep all information confidential. If you object to having the work
we do for you reviewed by our peer reviewer, please notify us in writing.
Electronic transmittals
During the course of our engagement, we may need to electronically transmit confidential information to
each other, within the Firm, and to other entities engaged by either party. Although email is an efficient
way to communicate, it is not always a secure means of communication and thus, confidentiality may be
compromised. You agree to the use of email and other electronic methods to transmit and receive
information, including confidential information between the Firm, the Fund and other third party providers
utilized by either party in connection with the engagement.
Attachment - Page 5
Subpoenas
In the event we are requested or authorized by you or required by government regulation, subpoena, or
other legal process to produce our working papers or our personnel as witnesses with respect to our
engagement for you, you will, so long as we are not a party to the proceeding in which the information is
sought, reimburse us for our professional time and expense, as well as the fees and expenses of our
counsel, incurred in responding to such a request at standard billing rates.
TERMS AND CONDITIONS SUPPORTING FEE
The estimated fees set forth in the attached engagement letter are based on anticipated full cooperation
from your personnel, timely delivery of requested audit schedules and supporting information, timely
communication of all significant accounting and financial reporting matters, the assumption that
unexpected circumstances will not be encountered during the audit, as well as working space and clerical
assistance as mutually agreed upon and as is normal and reasonable in the circumstances. We strive to
ensure that we have the right professionals scheduled on each engagement. As a result, sudden Fund
requested scheduling changes or scheduling changes necessitated by the agreed information not being
ready on the agreed upon dates can result in expensive downtime for our professionals. Any last minute
schedule changes that result in downtime for our professionals could result in additional fees. Our
estimated fee does not include assistance in bookkeeping or other accounting services not previously
described. If for any reason the Fund is unable to provide such schedules, information and assistance,
the Firm and the Fund will mutually revise the fee to reflect additional services, if any, required of us to
achieve these objectives.
The estimated fees contemplate that the Fund will provide adequate documentation of its systems and
controls related to significant transaction cycles and audit areas.
In providing our services, we will consult with the Fund with respect to matters of accounting, financial
reporting or other significant business issues as permitted by professional standards. Accordingly, time
necessary to effect a reasonable amount of such consultation is reflected in our fee. However, should a
matter require research, consultation or audit work beyond that amount, the Firm and the Fund will agree
to an appropriate revision in our fee.
The estimated fees are based on auditing and accounting standards effective as of the date of this
engagement letter and known to apply to the Fund at this time, but do not include any time related to the
application of new auditing or accounting standards that impact the Fund for the first time. If new auditing
or accounting standards are issued subsequent to the date of this letter and are effective for the period
under audit, we will estimate the impact of any such standard on the nature, timing and extent of our
planned audit procedures and will communicate with you concerning the scope of the additional
procedures and the estimated fees.
In the event of nonpayment of any invoice rendered by us, we retain the right to (a) suspend the
performance of our services, (b) change the payment conditions under this engagement letter, or (c)
terminate our services. If we elect to suspend our services, such services will not be resumed until your
account is paid. If we elect to terminate our services for nonpayment, the Fund will be obligated to
compensate us for all time expended and reimburse us for all expenses through the date of termination.
This engagement letter sets forth the entire understanding between the Fund and the Firm regarding the
services described herein and supersedes any previous proposals, correspondence, and understandings
whether written or oral. Any subsequent changes to the terms of this letter, other than additional billings,
will be rendered in writing and shall be executed by both parties. Should any portion of this engagement
letter be ruled invalid, it is agreed that such invalidity will not affect any of the remaining portions.
THE LAW OFFICES OF
ANN H. PERRY
aperry@perryjensenlaw.com
[IDTRRY &JENSEN, LLC
MEMORANDUM
TO: Board of Trustees
FROM: Bonni S. Jensen ,`-
Fund Legal Counsel
DATE: December, 2013
SUBJECT: IRS Mileage Rate for 2014
BONNI SPATARA JENSEN
bsjensen@perryjensenlaw.com
This is to inform you that the Internal Revenue Service ("IRS") released its updated
Standard Mileage Rate for 2014. The new rate is 56 cents per mile as of January 1, 2014.
As you know from previous years, the mileage rate can fluctuate within the same
year. We will do our best to keep you and the administrator informed. You can find the
current rate at the link below.
http://www.irs.gov/pub/irs-drop/n-13-80.pdf
If you have any questions, please do not hesitate to contact us.
BSJ/pah
H:\AII Miscellaneous\ALL BOARDS\2014\2014 Mileage Rate Memo.wpd
400 EXECUTIVE CENTER DRIVE, SUITE 207 % WEST PALM BEACH, FLORIDA 33401-2922
PH: 561.686.6550 :• Fx: 561.686.2802
ort�wreavneu
The Law Offices of Perry & Jensen, LLC
400 Executive Center Drive, Suite 207
West Palm Beach, Florida 33401
2008 FEE SCHEDULE
(Current)
COSTS/FEES AMOUNT PER
Attorney Fees
$ 200
Hour
Legal Assistant
$ 75
Hour
Office Assistant
$ 25
Hour
Travel Time*
$ 100
Hour
Photocopies
$0.15
Page
Faxes
$0.50
Page
Postage is billed at the current rate as posted by the U.S. Postal Service.
Other shipping charges are billed at the current rates set by the service
provider.
2013 FEE SCHEDULE
(Proposed)
COSTS/FEES AMOUNT PER
Attorney Fees
$ 225
Hour
Legal Assistant
$ 75
Hour
Office Assistant
$ 25
Hour
Travel Time*
$ 110
Hour
Photocopies
$0.15
Page
Faxes
$0.50
Page
Postage and Shipping charges will continue to be billed at the current rates
set by the service providers.
*Travel time is billed only when traveling on behalf of the Fund outside of
Palm Beach County.
HAAII Miscellaneous\ALL BOARDS\2013\Atty Fees\FEE Schedule Comparison 2008-2013.wpd
THE LAW OFFICES OF
PERRY &JENSEN.) LLC
ANN H. PERRY BONNI SPATARA JENSEN
aperry@perryjensenlaw.com bsjensen@perryjensenlaw.com
29, 2013 j@Perryjensenlaw.com
Palm Beach Gardens Police Officers' Pension Fund
Board of Trustees
4360 Northlake Boulevard
Suite 206
Palm Beach Gardens, FL 33410
Re: Palm Beach Gardens Police Officers' Pension
Fund
Fee Increase
Our File Number 0003
Dear Trustees:
Over the past several years, our firm has faced increased expenses in significant
areas of our operation such as office supplies, office space, utilities, employee benefits,
travel expenses, etc. We have avoided passing these increased costs to our clients by
economizing in ways not affecting our quality of service or our ability to respond to your
needs.
At this time, we must make an adjustment to our fees. Beginning December 16,
2013, your new rate will be $225 per hour. Please note that our last fee increase was in
June of 2008. Attached is a breakdown of past fees and proposed fees.
We greatly appreciate your business and the opportunity to continue serving you.
If you have questions regarding this increase, please contact me.
Sincerely yours,
Bonni S. Jensen
BSJ/Ig
Enclosure
E-Copy: Administrator
H:WII Miscellaneous\ALL BOARDS\2013\Atty Fees\2013-10-29 Fee Increase Ltr.wpd
400 EXECUTIVE CENTER DRIVE, SUITE 207•:• WEST PALM BEACH, FLORIDA 33401-2922
PH: 561.686.6550 •:• Fx: 561.686.2802
13
WE �@4fbinb2
Palm Beach Gardens Police Officers' Retirement Fund
Investment Review
Quarter Ending
December 31, 2013
ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Table of Contents
Total Return Summary
Page 2
Performance Returns for Various Periods
Page 3
Performance Metrics
Page 5
Equity Sector Allocation and Returns
Page 6
Top Ten Holdings
Page 7
Portfolio Characteristics
Page 8
Fixed Income Characteristics
Page 9
Portfolio Holdings & Purchases and Sales
Page 13
Commentary
Page 27
Period Ending 12/31/2013
ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund Period Ending 12/31/2013
Total Return Summary - Growth
Total Return Summary - Fixed
Talue MarketTalueI
Quart
er Quart - 12/31/13) $16,533,712.47 $16,309,564.19-$224,148.28 $0.00-$246,256.06 $22,107.78
One Year
One 3 - 12/31/13) $16,811,961.11 $16,309,564.19-$502,396.92 $700,000.00-$792,836.35-$409,560.57
Five Year $11,959,556.22 $16,309,564.19 $4,350,007.97 $13,539,534.18-$12,189,940.25 $3,000,414.04
(1/1/09 - 12/31/13)
ICC'CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Growth
Total
R1000G
10% 10
Period Ending 12/31/2013
Performance Returns for Various Periods - Growth
% 10% 11% 11% 11% 1 32% 33% 34% 35% 36% 1 20%
Growth
10.94%
10.44 %
35.53 %
33.49 %
Growth
Performance Returns for Various Periods - Fixed
20% 20% 20%
20.25 %
20.39%
-0.2% -0.1% 0.0% 0.1% 0.2%
-2% -2% -2% -2%
4% 4% 4% 4% 4% 5%
Core Fixed
Core Fixed
Core Fixed
Quarter
One Year
Five Year (Annualized)
1
1•
Total'
0»14%
-2.36%
BCAG
-0.14%
-2.03%
-2.36%
4.44%
BCGC
-0.03 %
4.40%
.sk,
3 ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Period Ending 12/31/2013
Large Cap Growth - Five Year Performance Metrics vs. Russell 1000 Growth
le
Metric History
,e`
Definition
Batting
55.0% 50.0% 50.0% 50.0%
The percentage of quarters the portfolio has outperformed the benchmark.
Average(%)
Alpha (%)
2.15 1.55
2.33
-0.39
The excess return of the portfolio relative to the return of the benchmark index on a
risk -adjusted basis.
Beta
1.03
1.01
1.00
1.06
A measure of the volatility, or systematic risk, of the portfolio in comparison to the
index.
Composite
20.56 15.88
18.64
16.86
A measure of the dispersion of the portfolio's historical returns from the average. The
Std. Deviation (%)
more spread apart the returns, the higher the deviation.
Benchmark
19.03
14.11
17.89
15.22
A measure of the dispersion of the benchmark's historical returns from the average.
0
Std. Deviation (/)
The more read apart the returns, the higher the deviation.
p P g
R-Squared
0.916
0.924
0.919
0.925
A statistical measure that represents the percentage of portfolio's movements that can
be explained by movements in the benchmark index.
Up -Market
A statistical measure of the portfolio's overall performance in up -markets. It is used to
107.90
104.20
103.10
103.70
evaluate how well the portfolio performed relative to an index during periods when
Capture Ratio (%)
that index has risen.
Down -Market
A statistical measure of the portfolio's overall performance in down -markets. It is used
95.80
95.80
89.50
98.80
to evaluate how well the portfolio performed relative to an index during periods when
Capture Ratio (%)
that index has fallen.
Information Ratio
0.33
0.25
0.39
0.13
The information ratio measures a portfolio's ability to generate excess returns relative
to a benchmark, but also attempts to identify the consistency of the portfolio.
Tracking Error
6.44
6.48
6.26
5.62
This measure reports the difference between the return a portfolio receives and that of
the benchmark it is paired against.
Sharpe Ratio
0.45
0.45
0.77
1.25
A measure that indicates the average return minus the risk -free return divided by the
standard deviation of return.
*All metrics are based upon the composite performance.
ICC'CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
30%
25%
20%
15%
10%
5%
0%
20%
15%
10%
5%
0%
-5%
-10%
Growth Sector Allocation
Period Ending 12/31/2013
MATERIALS INDUSTRIALS TELECOM. CONS. DISCRETION CONSUMER ENERGY FINANCIALS HEALTH CARE INFO. TECH. UTILITIES
STAPLES
Growth Sector Returns (4Q13)
MATERIALS INDUSTRIALS TELECOM. CONS. DISCRETION CONSUMER ENERGY FINANCIALS HEALTH CARE INFO. TECH. UTILITIES
STAPLES
O Account 4J R1000G
6 ICC APITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Growth - Top Ten Equity Holdings
AMERICAN EXPRESS CORP.
2.80
20.51
IBM
2.48
1.81
AFFILIATED MANAGERS GROUP INC
2.39
18.75
CARDINAL HEALTH INC
2.36
28.69
EBAY INC.
2.30
(1.67)
GOOGLE INC CL A
2.27
13.09
LOWES CORP
2.13
4.47
HONEYWELL
2.11
10.60
CBS CORP. CLASS B
2.11
15.78
HOME DEPOT
2.09
9.09
Period Ending 12/31/2013
ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Period Ending 12/31/2013
Large Cap Growth - Portfolio Characteristics vs. Russell 1000 Growth
Metric History
Market Capitalization -Large Cap Growth
($MM) -Benchmark "
112 Definition
61.9 62.5 60.9 74.1 The weighted average of the total dollar market value of each company's
93.7 84.0 87.3 101.1 outstanding shares.
Price to Earnings
Large Cap Growth
+�
14.5
14.3
14.9
16.1
A weighted average of the valuation ratio of each company's current share price
compared to its previous year per-share earnings.
-Benchmark
�r
14.9
16.5
17.5
18.6
Price to Book
Large Cap Growth
.�
3.3
3.1
3.4
3.8
A weighted average of the valuation ratio of each company's current share price
compared to its per-share book value.
-Benchmark
4.4
4.4
4.5
4.9
Price to Sales
Large Cap Growth0.9
0.9
1.0
1.1
A weighted average of the valuation ratio of each company's current share price
compared to its previous year per-share sales.
-Benchmark
�.�_.
1.8
1.8
1.9
2.0
Price to Cash Flow
Large Cap Growth
.f�/
11.3
11.0
11.3
12.1
A weighted average of the valuation ratio of each company's current share price
compared to its previous year per-share cash flows.
-Benchmark
�'f
12.3
12.6
13.3
14.3
Dividend Yield (%)
Large Cap Growth
`�'�.��
1.8
1.9
1.7
1.6
A weighted average that shows how much each company pays out in dividends
each year relative to its share price.
-Benchmark
~��-"��
1.8
1.7
1.7
1.6
EPS Growth (%)
(1 Year)
-Large Cap Growth.
10.0
9.0
11.0
13.0
The weighted average of each company's percentage change in earnings per share
(EPS), on a historical one-year basis.
-Benchmark
�,
17.0
10.0
9.0
11.0
EPS Growth (%) -Large Cap Growth
(3 Year) -Benchmark
~�+-.
16.0
14.0
12.0
13.0
The weighted average of each company's percentage change in earnings per share
(EPS), on a historical three-year annualized basis.
" �
20.0
17.0
14.0
15.0
EPS Growth (%) -Large Cap Growth
(5 Year) -Benchmark
/ r;
11.0
12.0
17.0
20.0
The weighted average of each company's percentage change in earnings per share
(EPS), on a historical five-year annualized basis.
.��f.�
18.0
17.0
18.0
21.0
Return on Assets (%)
Large Cap Growth
"���
11.5
11.2
11.0
10.7
The weighted average of how profitable each company is relative to its total assets
on a historical five-year basis.
-Benchmark
�.
15.4
14.8
14.7
14.8
Debt to Equity (%)
-Large Cap Growth
+
35.0
35.0
36.0
38.0
A weighted average of each company's financial leverage calculated by dividing its
total liabilities by stockholders' equity. It indicates what proportion of equity and
debt the company is using to finance its assets.
-Benchmark
33.0
34.0
34.0
34.0
*Characteristics are based upon the composite.
CC`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
ICC Core Fixed Income
Portfolio
o Corporate Bonds i US Treasuries
Gov't Sponsored Mortgage Pools
I Municipal Bonds
Corporate Bonds
66.9%
US Treasuries
4.3%
Gov't Sponsored
17.6%
Mortgage Pools
10.2%
Municipal Bonds
1.0%
ee�,
Fixed Income Sector Allocation
Barclays Capital
Government/Credit Index
Id Corporate Bonds
I US Treasuries I
u Gov't Sponsored
Corporate Bonds
32.8%
US Treasuries
52.5%
Gov't Sponsored
14.7%
Total00
,
Period Ending 12/31/2013
Barclays Capital Aggregate
Index
I_] Corporate Bonds I US Treasuries
i Gov't Sponsored i CMBS
` TABS
iUSMBS
Corporate Bonds
22.3%
US Treasuries
35.7%
Gov't Sponsored
10.0%
CMBS
1.7%
ABS
0.5%
US MBS
Totalee
,
9 ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
ICC Core Fixed Income
Portfolio
0 AAA
W AA
oA
u BBB
Other
AAA
6.9%
AA
50.2%
A
41.7%
BBB
0.0%
Other
1.3%
Fixed Income Quality Allocation
Barclays Capital
Government/Credit Index
o AAA
o AA
oA
BBB
Other
AAA
60.5%
AA
6.7%
A
16.1%
BBB
16.8%
Other
Total11',
0.0%
Period Ending 12/31/2013
Barclays Capital Aggregate
Index
kid AAA
u AA
uA
IJ BBB
Other
AAA
72.4 %
AA
4.9%
A
11.1%
BBB
11.6%
Other
0.0%
11',
10 t�C—A—PITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
ICC Core Fixed Income
Portfolio
Ll <3 Yrs
13-5 Yrs
15-7 Yrs
u 7-10 Yrs
_1 >10 Yrs
<3 Yrs
28.9%
3-5 Yrs
36.4%
5-7 Yrs
13.8%
7-10 Yrs
20.0%
>10 Yrs
El
1.0%
to°°
Fixed Income Maturity Allocation
Barclays Capital
Government/Credit Index
1 <3 Yrs
13-5 Yrs
15-7 Yrs
7-10 Yrs
>10 Yrs
<3 Yrs
34.2%
3-5 Yrs
22.7%
5-7 Yrs
13.0%
7-10 Yrs
12.6%
>10 Yrs
Total
17.5%
M
Period Ending 12/31/2013
Barclays Capital Aggregate
Index
M.
L1 <3 Yrs
13-5 Yrs
15-7 Yrs
7-10 Yrs
>10 Yrs
<3 Yrs
25.5%
3-5 Yrs
18.5 %
5-7 Yrs
16.0%
7-10 Yrs
21.4%
>10 Yrs
Total00
18.7%
°
11 ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
ICC Core Fixed Income
Portfolio
E
A <3 Yrs
13-5 Yrs
15-7 Yrs
u 7-10 Yrs
I >10 Yrs
<3 Yrs
34.0%
3-5 Yrs
38.4%
5-7 Yrs
11.0%
7-10 Yrs
16.7%
>10 Yrs
Total00
0.0%
,
Fixed Income Duration Allocation
Barclays Capital
Government/Credit Index
M <3 Yrs
-A 3-5 Yrs
u 5-7 Yrs
17-10 Yrs
i >10 Yrs
<3 Yrs
35.9%
3-5 Yrs
24.2%
5-7 Yrs
13.9%
7-10 Yrs
10.4%
>10 Yrs
Total00
15.5%
,
Portfolio Duration vs. Index Duration (Ratio)
1.8%
1.4%
1.0%
0.6%
0.2%
12/31/2011
3/31/2012 6/30/2012 9/30/2012 12/31/2012 3/31/2013
Period Ending 12/31/2013
Barclays Capital Aggregate
Index
U <3 Yrs
U 3-5 Yrs
15-7 Yrs
1 7-10 Yrs
i >10 Yrs
<3 Yrs
27.1%
3-5 Yrs
25.0%
5-7 Yrs
22.7%
7-10 Yrs
14.6%
>10 Yrs
Total
10.6%
00
Index Acct
6/30/2013 9/30/2013 12/31/2013
12 ICC„ APITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Portfolio Holdings - Growth
Unit Tota I Market •
Quantity Security Cost Cost Price Value Assets Yield
SUPERVISED ASSETS
CASH AND EQUIVALENTS
CASH & CASH EQUIVALENTS 316,817.57 316,817.57 3.5 0.1
DIV CASH ACCRUAL ACCT 4,871.50 4,871.50 0.1 0
321,689.07 321,689.07 3.5 0.1
COMMON STOCK
MATERIALS
3500 FREEPORT MCMORAN COP & GOLD
45.74
160,078.83
37.74
132,090.00
1.5
3.3
1000 ROCK-TENN COMPANY CL-A
63.71
63,714.09
105.01
105,010.00
1.2
1.3
500 SHERWIN WILLIAMS CO
169.17
84,583.40
183.50
91,750.00
1
0.4
850 WESTLAKE CHEMICAL CORP
85.570
72,733.23
122.07
103,759.50
1.100
0.7
381,109.55
432,609.50
4.8
1.6
INDUSTRIALS
1000 BOEING CO
75.66
75,662.90
136.49
136,490.00
1.5
2.1
1200 CARLISLE COS INC
58.81
70,566.30
79.40
95,280.00
1
1.1
300 CATERPILLAR TRACTOR CO
101.36
30,406.92
90.81
27,243.00
0.3
2.6
1600 DEERE & CO.
93.53
149,644.16
91.33
146,128.00
1.6
2
6400 DELTA AIR LINES, INC
19.1
122,266.88
27.47
175,808.00
1.9 ?
2600 EMERSON ELECTRIC CO.
49.32
128,238.84
70.18
182,468.00
2
2.5
1500 FLOWSERVE CORP
47.21
70,808.30
78.83
118,245.00
1.3
0.7
2100 HONEYWELL
66.55
139,760.88
91.37
191,877.00
2.1
2
1500 IDEX CORP
48.7
73,045.20
73.85
110,775.00
1.2
1.1
4000 MASCO CORP.
19.6
78,394.40
22.77
91,080.00
1
2.8
6200 SOUTHWEST AIRLINES CO.
8.97
55,623.00
18.84
116,808.00
1.3
0.8
2300 THOR INDUSTRIES INC
53.34
122,677.93
55.23
127,029.00
1.4
1.7
1400 WABTEC CORP COM
57.04
79,854.04
74.27
103,978.00
1.1
0.2
900 WHIRLPOOL CORP
135.19
121,671.27
156.86
141,174.00
1.6
1.1
1,318,621.02
1,764,383.00
19.4
1.4
TELECOMMUNICATIONS
3500 VERIZON COMMUNICATIONS
50.31
176,090.25
49.14
171,990.00
1.9
4.3
CONSUMER DISCRETIONARY
1700 A. 0. SMITH
45.01
76,514.96
53.94
91,698.00
1
1.5
2300 AUTONATION INC
45
103,508.97
49.69
114,287.00
1.3
0
Period Ending 12/31/2013
13 ICC`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
3000 CBS CORP. CLASS B
2300 COMCAST CLASS A
11600 FORD MOTOR CO.
1600 HARLEY DAVIDSON INC
1700 HASBROINC
2300 HOME DEPOT
3900 LOWES CORP
1600 STARBUCKS CORP
CONSUMER STAPLES
3600 COCA COLA COMPANY
2100 CVS CAREMARK CORP
3900 FLOWERS FOODS INC
2400 GENERAL MILLS INC.
1300 INGREDION INC
1200 KIMBERLY CLARK CORP
1600 TUPPERWARE CORPORATION
1400 WALGREENS CO.
Portfolio Holdings - Growth
31.27
93,812.66
63.74
191,220.00
2.1
0.8
47.57
109,405.94
51.96
119,519.50
1.3
1.5
17.09
198,253.53
15.43
178,988.00
2
2.6
64.59
103,341.60
69.24
110,784.00
1.2
0.9
42.34
71,979.67
55.01
93,517.00
1
2.9
58.96
135,614.07
82.34
189,382.00
2.1
1.4
38.41
149,781.84
49.55
193,245.00
2.1
1.5
56.86
90,977.86
78.39
125,424.00
1.4
1.3
1,133,191.10
1,408,064.50
15.5
1.4
36.77
132,357.18
41.31
148,716.00
1.6
2.5
59.63
125,215.44
71.57
150,297.00
1.7
1.5
18.95
73,909.68
21.47
83,733.00
0.9
2.1
39.73
95,363.18
49.91
119,784.00
1.3
3
56.9
73,966.49
68.46
88,998.00
1
2.5
93.85
112,619.76
104.46
125,352.00
1.4
3.1
68.62
109,787.52
94.53
151,248.00
1.7
2.6
59.8
83,720.56
57.44
80,416.00
0.9
2.2
806,939.81
948,544.00
10.5
2.4
Period Ending 12/31/2013
ENERGY
700
CARBO CERAMICS INC
117.46
82,221.95
116.53
81,571.00
0.9
1
800
CONOCOPHILLIPS
46.87
37,492.76
70.65
56,520.00
0.6
3.9
1400
EXXON MOBIL CORP.
81.89
114,639.59
101.20
141,680.00
1.6
2.3
1100
PHILLIPS 66
40.37
44,403.81
77.13
84,843.00
0.9
2
800
SM ENERGY CO
67.96
54,365.04
83.11
66,488.00
0.7 ?
1000
WHITING PETROLEUM CORP
49.77
49,766.06
61.87
61,870.00
0.7
0
382,889.21
492,972.00
5.4
1.6
FINANCIALS
1000
AFFILIATED MANAGERS GROUP INC
89.7
89,702.08
216.88
216,880.00
2.4
0
500
AMERCO
208.02
104,011.45
237.84
118,920.00
1.3 ?
2800
AMERICAN EXPRESS CORP.
53.59
150,050.04
90.73
254,044.00
2.8
0.9
2900
APARTMENT INVT & MGMT
29.78
86,356.16
25.91
75,139.00
0.8 ?
1900
FIRST REPUBLIC BANK
26.77
50,863.40
52.35
99,465.00
1.1
0.8
2400
LPL FINANCIAL HOLDINGS INC
30.92
74,220.00
47.05
112,920.00
1.2
1.6
14
CG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Portfolio Holdings - Growth
Unit Tota I Market •
Quantity
600 VISA INC-CLASS A SHARES 118.31 70,988.16 222.68 133,608.00 1.5 0.7
626,191.29 1,010,976.00 11.1 0.6
HEALTH CARE
2200 ABBVIE INC
33.11
72,831.48
52.81
116,182.00
1.3
3
2400 AMERISOURCE BERGEN CORP
46.2
110,876.16
70.31
168,744.00
1.9
1.3
3200 CARDINAL HEALTH INC
41.2
131,833.40
66.81
213,792.00
2.4
1.8
1900 CIGNA CORP
34.89
66,283.61
87.48
166,212.00
1.8
0
600 MCKESSON HBOC INC.
90.6
54,357.66
161.40
96,840.00
1.1
0.6
1600 MEDNAX INC
53.23
85,167.44
53.38
85,408.00
0.9 ?
521,349.75
847,178.00
9.3
1.2
INFORMATION TECHNOLOGY
150 APPLE COMPUTER INC
294.47
44,171.00
561.02
84,153.00
0.9
1.9
3800 EBAY INC.
42.2
160,370.77
54.86
208,487.00
2.3
0
4800 EMC CORP
18.36
88,114.20
25.15
120,720.00
1.3
1.6
1600 GLOBAL PAYMENTS INC
47.57
76,118.24
64.99
103,984.00
1.1
0.1
184 GOOGLE INC CL A
1039.13
191,200.82
1,120.71
206,210.64
2.3
0
1200IBM
199.47
239,362.66
187.57
225,084.00
2.5
1.8
200 MASTERCARD INC
678.62
135,723.86
835.46
167,092.00
1.8
0.5
4600 MICROSOFT CORP.
27.48
126,394.08
37.41
172,086.00
1.9
2.5
2500 ORACLE CORPORATION
31.52
78,794.59
38.26
95,650.00
1.1
1.3
3100 PAYCHEX INC
32.26
100,007.53
45.53
141,143.00
1.6
3.1
6500 SYMANTEC CORP
17.96
116,711.67
23.58
153,270.00
1.7
2.5
1,356,969.42
1,677,879.64
18.5
1.3
6,703,351.40
8,754,596.64
96.5
1.5
7,025,040.47
9,076,285.71
100
1.4
TOTAL PORTFOLIO
7,025,040.47
9,076,285.71
100
1.4
15
Period Ending 12/31/2013
Icc`CAPITAL
MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Purchases and Sales - Growth
PURCHASES
Period Ending 12/31/2013
10/4/2013
10/9/2013
2700
A.0.SMITH
45.01
121523.76
11/4/2013
11/7/2013
500
AMERCO
208.02
104011.45
12/20/2013
12/26/2013
400
APARTMENT INVT & MGMT
25.51
10205.16
11/15/2013
11/20/2013
2300
COM CAST CLASS A
47.57
109405.94
12/2/2013
12/5/2013
10100
FORD MOTOR CO.
17.15
173212.98
12/13/2013
12/18/2013
1500
FORD MOTOR CO.
16.69
25040.55
10/29/2013
11/1/2013
127
GOOGLE INC CL A
1031.51
131001.63
11/26/2013
12/2/2013
57
GOOGLE INC CL A
1056.13
60199.19
10/10/2013
10/16/2013
1600
HARLEY DAVIDSON INC
64.59
103341.6
10/16/2013
10/21/2013
4000
MASCO CORP.
19.6
78394.4
10/16/2013
10/21/2013
800
MEDNAX INC
106.46
85167.44
10/16/2013
10/21/2013
500
STARBUCKS CORP
78.05
39027.15
11/14/2013
11/19/2013
3500
VERIZON COMMUNICATIONS
50.31
176090.25
11/13/2013
11/18/2013
1400 WALGREENS CO.
59.8
83720.56
1300342.06
SALES
10/23/2013
10/28/2013
1000
A.0.SMITH
50.05
50048.62
11/15/2013
11/20/2013
2700
ELI LILLY AND COMPANY
50.99
137665.74
10/16/2013
10/21/2013
6600
GRAFTECH INTERNATIONAL LTD
8.09
53417.48
12/9/2013
12/12/2013
1100
HASBROINC
52.15
57363.67
10/9/2013
10/15/2013
400
MCKESSO N HBOC INC.
133.35
53338.07
10/24/2013
10/29/2013
300
MCKESSO N HBOC INC.
149.33
44800.02
12/18/2013
12/23/2013
2900
ORACLE CORPORATION
33.81
98048.74
11/15/2013
11/20/2013
1000
SM ENERGY CO
91.01
91009.51
12/2/2013
12/5/2013
1100
TARGET CORPORATION
63.05
69356.1
10/29/2013
11/1/2013
400
VISA INC-CLASS A SHARES
204.71
81883.93
736931.88
0.
ICC`CAPITAL
MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
SUPERVISED ASSETS
CASH AND EQUIVALENTS
CASH & CASH EQUIVALENTS
Portfolio Holdings - Fixed
848,858.05
848,858.05 5.2 0.1
Period Ending 12/31/2013
CORPORATE BONDS
125000 HONEYWELL INTERNATIONAL
99.560
124,452.50
100.41
125,508.12
0.800
3.900
A A2
3.875%
2/15/14
70000 YALE UNIVERSITY
105.5
73,847.90
101.97
71,381.45
0.4
2.8 AAA
Aaa
2.900%
10/15/14
35000 GENERAL ELEC CAP CORP
99.86
34,950.65
104.36
36,526.84
0.2
3.4 AA+
Al
3.500%
6/29/15
165000 MICROSOFT CORP
99.56
164,275.65
102.08
168,436.62
1
1.6 AAA
AAA
1.625%
9/25/15
200000 WAL-MART STORES INC
99.09
198,190.00
101.90
203,805.80
1.2
1.5 AA
AA2
1.500%
10/25/15
190000 PROCTER & GAMBLE CO/THE
99.2
188,480.00
102.31
194,390.52
1.2
1.8 AA-
AA3
1.800%
11/15/15
150000 SAN DIEGO GAS & ELECTRIC
111.890
167,829.00
108.16
162,235.35
1.000
4.9 A+
Aa3
5.300%
11/15/15
150000 MONSANTO CO
99.79
149,680.50
104.25
156,379.80
1
2.6 A+
Al
2.750%
4/15/16
255000 MERCK & CO INC
100.19
255,479.40
99.82
254,553.49
1.6
0.7 AA
A2
0.700%
5/18/16
80000 AMERICAN EXPRESS CREDIT
104.82
83,856.80
104.49
83,590.40
0.5
2.7 A-
A2
2.800%
9/19/16
160000 PNC FUNDING CORP
103.64
165,830.40
104.31
166,890.08
1
2.6 A-
A3
2.700%
9/19/16
245000 MISSISSIPPI POWER CO
103.99
254,770.60
102.82
251,909.00
1.5
2.3 A
BAA1
2.350%
10/15/16
240000 AFLAC INC
105.36
252,876.00
103.19
247,658.16
1.5
2.6 A-
A3
2.650%
2/15/17
100000 NATIONAL RURAL UTIL COOP
99.68
99,680.00
111.41
111,413.90
0.7
4.9 A+
Al
5.450%
4/10/17
210000 WELLS FARGO & COMPANY
102.87
216,033.30
101.86
213,916.29
1.3
2.1 A+
A2
2.100%
5/8/17
320000 FRANKLIN RESOURCES INC
100.65
322,083.20
97.76
312,830.08
1.9
1.4 AA-
Al
1.375%
9/15/17
115000 MCDONALD'S CORP
102.47
117,839.35
115.29
132,585.91
0.8
5 A
A2
5.800%
10/15/17
260000 GENERAL DYNAMICS CORP
99.71
259,243.40
96.89
251,920.24
1.5
1 A
A2
1.000%
11/15/17
40000 GENERAL ELEC CAP CORP
100.86
40,345.20
99.34
39,736.72
0.2
1.6 AA+
Al
1.600%
11/20/17
200000 METLIFE INC
101.18
202,362.00
98.94
197,878.60
1.2
1.8 A-
A3
1.756%
12/15/17
260000 BB&T CORPORATION
99.8
259,493.00
97.37
253,154.20
1.6
1.5 A-
A2
1.450%
1/12/18
250000 WELLS FARGO & COMPANY
100.17
250,425.00
99.35
248,385.00
1.5
1.5 A+
A2
1.500%
1/16/18
205000 GOLDMAN SACHS GROUP INC
98.95
202,857.75
100.38
205,779.20
1.3
2.4 A-
BAA1
2.375%
1/22/18
335000 BANK OF NEW YORK MELLON
99.86
334,520.95
97.49
326,586.14
2
1.3 A+
Al
1.300%
1/25/18
30000 JPMORGAN CHASE & CO
100.53
30,159.90
99.12
29,736.66
0.2
1.8 A
A3
1.800%
1/25/18
175000 CATERPILLAR FINANCIAL SE
100.42
175,731.50
96.96
169,679.30
1
1.3 A
A2
1.300%
3/1/18
115000 CONS EDISON CO OF NY
99.96
114,949.40
115.65
132,997.27
0.8
5.1 A-
A3
5.850%
4/1/18
260000 APPLE INC
99.86
259,638.60
96.69
251,406.22
1.5
1 AA+
Aa1
1.000%
5/3/18
160000 BANK OF NEW YORK MELLON
99.59
159,344.00
99.63
159,401.60
1
2.1 A+
Al
2.100%
8/1/18
205000 INTERCONTINENTALE EXCHANGE
100.69
206,408.35
100.74
206,507.77
1.3
2.5 A
A3
2.500%
10/15/18
160000 ORACLE CORP
100.86
161,374.40
100.90
161,432.32
1
2.4 A+
Al
2.375%
1/15/19
195000 WELLS FARGO & COMPANY
100.27
195,528.45
99.69
194,389.26
1.2
2.2
Ate
2.150%
1/15/19
17
ICC`CAPITAL
MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Portfolio Holdings - Fixed
Period Ending 12/31/2013
80000 PRINCETON UNIVERSITY
114.07
91,252.80
113.08
90,467.52
0.6
4.4 AAA
AAA
4.950%
3/1/19
115000 CHEVRON CORP
99.97
114,964.35
113.43
130,445.53
0.8
4.4 AA
AA1
4.950%
3/3/19
80000 DARTMOUTH COLLEGE
113.29
90,632.80
111.39
89,114.96
0.5
4.3 AA+
Aal
4.750%
6/1/19
30000 COSTCO WHOLESALE CORP
100.36
30,109.50
96.32
28,896.81
0.2
1.8 A+
Al
1.700%
12/15/19
140000 BAXTER INTERNATIONAL INC
99.61
139,456.80
107.81
150,931.76
0.9
3.9 A
A3
4.250%
3/15/20
205000 NATIONAL RURAL UTIL CORP
98.36
201,644.15
96.58
197,989.00
1.2
2.4 A+
Al
2.350%
6/15/20
205000 CHEVRON CORP
98.67
202,277.60
97.31
199,477.30
1.2
2.5 AA
Aal
2.427%
6/24/20
155000 GEORGE WASHINGTON UNIVERSITY
100
155,000.00
106.87
165,656.25
1
4.6 A+
Al
4.896%
9/15/20
250000 COCA -COLA CO/THE
99.09
247,730.00
97.13
242,828.50
1.5
2.5 AA-
Aa3
2.450%
11/1/20
50000 GENERAL ELECTRIC CAP CORP
103.86
51,930.00
109.04
54,522.35
0.3
4.2 AA+
Al
4.625%
1/7/21
230000 ALABAMA POWER CO
100.14
230,317.40
101.89
234,352.98
1.4
3.9 A
A2
3.950%
6/1/21
110000 OCCIDENTAL PETROLEUM COR
100.83
110,917.40
97.40
107,136.81
0.7
3.2 A
Al
3.125%
2/15/22
110000 PEPSICO INC
103.44
113,789.50
95.01
104,510.78
0.6
2.9 A-
Al
2.750%
3/5/22
225000 UNITEDHEALTH GROUP INC
99.49
223,861.50
95.12
214,026.75
1.3
3 A
A3
2.875%
3/15/22
195000 US BANCORP
100.41
195,803.40
96.70
188,559.34
1.2
3.1 A+
Al
3.000%
3/15/22
115000 KAISER FOUNDATION HOSPITAL
103.23
118,713.35
94.79
109,004.36
0.7
3.7 A+
3.500%
4/1/22
210000 GENERAL DYNAMICS CORP
98.78
207,448.50
89.79
188,552.91
1.2
2.5 A
A2
2.250%
11/15/22
360000 MICROSOFT CORP
100.32
361,159.20
90.34
325,220.40
2
2.4 AAA
Aaa
2.125%
11/15/22
250000 CONOCOPHILLIPS COMPANY
98.36
245,895.00
91.06
227,653.25
1.4
2.6 A
Al
2.400%
12/15/22
205000 GENERAL ELEC CAP CORP
94.25
193,206.35
94.88
194,495.39
1.2
3.3 AA+
Al
3.100%
1/9/23
205000 E.I. DO PONT DE NEMOURS
94.16
193,036.20
91.58
187,747.81
1.2
3.1 A
A2
2.800%
2/15/23
245000 PEPSICO INC
95.17
233,171.40
92.56
226,762.69
1.4
3 A-
Al
2.750%
3/1/23
210000 MEDTRONIC INC
102.14
214,485.60
92.50
194,247.90
1.2
3 AA-
A2
2.750%
4/1/23
260000 MICROSOFT CORP
100.33
260,868.40
90.47
235,222.78
1.4
2.6 AAA
AAA
2.375%
5/1/23
80000 BAXTER INTERNATIONAL INC
99.08
79,265.60
95.53
76,427.92
0.5
3.3 A
A3
3.200%
6/15/23
165000 HOWARD HUGHES MEDICAL
101.68
167,768.70
98.34
162,254.40
1
3.6 AAA
Aaae
3.500%
9/1/23
255000 SUTTER HEALTH
100
255,000.00
95.65
243,911.32
1.5
1.8 AA-
Aa3
1.674%
8/15/53
Accrued Interest
66,033.70
0.4
10,452,242.65
10,359,453.82
63.5
2.5
MUNICIPAL BONDS
140000 COMMONWEALTH FING AUTH PA REV
100
140,000.00
107.59
150,623.20
0.9
5.3 AA-
Al
5.653%
6/1/24
Accrued Interest
659.52
0
140,000.00
151,282.72
0.9
5.3
GOVERNMENT BONDS
255000 US TREASURY N/B 99.97 254,920.31 100.05 255,119.59 1.6 0.2 AA+ AAA 0.250% 5/31/15
18 ICG'CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund Period Ending 12/31/2013
Portfolio Holdings - Fixed
Quantity
Security
Cost
Cost
Price
Value
Assets
Yield
Ratings
Rating
%
Date
210000
US TREASURY N/B
99.56
209,081.25
99.90
209,786.64
1.3
0.5 AA+
AAA
0.500%
6/15/16
125000
US TREASURY N/B
99.97
124,960.94
99.59
124,492.25
0.8
0.6 AA+
AAA
0.625%
12/15/16
75000
US TREASURY N/B
99.67
74,753.91
97.81
73,359.37
0.4
1 AA+
AAA
1.000%
5/31/18
Accrued Interest
198.66
0
663,716.41
662,956.52
4.1
0.5
MORTGAGE POOLS
4592.87
GNJO M #781313
103.12
4,736.40
104.05
4,778.91
0
5.8 AA+
Aaa
6.000%
7/15/16
13606.1
FNCI M #254371
99.56
13,546.57
106.87
14,540.58
0.1
5.1 AA+
Aaa
5.500%
7/1/17
45348.501
FGCI #E01443
105.41
47,800.16
104.94
47,590.94
0.3
3.3 AA+
Aaa
3.500%
7/1/18
768.38
FGCI N #1313455
99.71
766.11
106.01
814.56
0
4.2 AA+
Aaa
4.500%
4/1/19
18867.25
FNCI N #725445
96.09
18,129.99
106.44
20,082.41
0.1
4.2 AA+
Aaa
4.500%
5/1/19
13836.88
FNCI N #825335
97.31
13,465.01
105.93
14,657.57
0.1
3.8 AA+
Aaa
4.000%
5/1/20
12437.91
FNCI N #255888
97.31
12,103.64
105.91
13,173.46
0.1
3.8 AA+
Aaa
4.000%
8/1/20
6481.03
FNCI N #829053
97
6,286.60
105.91
6,864.23
0
3.8 AA+
Aaa
4.000%
8/1/20
18465.08
FGCI #G12205
96.48
17,815.92
106.26
19,620.55
0.1
4.2 AA+
Aaa
4.500%
6/1/21
980.142
FGCI N #G12323
95.88
939.71
106.25
1,041.40
0
4.2 AA+
Aaa
4.500%
8/1/21
36674.94
GNSF M #552509
98.77
36,222.23
111.24
40,798.89
0.3
5.4 AA+
Aaa
6.000%
4/15/32
9852.4
GNSF M #582153
99.83
9,835.47
111.85
11,020.17
0.1
5.4 AA+
Aaa
6.000%
6/15/32
106024.005
FGLMC#G02268
102.08
108,227.39
111.12
117,815.99
0.7
5.8 AA+
Aaa
6.500%
8/1/36
143984.212
GN POOL#782119
107.08
154,175.60
111.95
161,186.87
1
5.4 AA+
Aaa
6.000%
8/15/36
90477.06
FNCL # 256394
102
92,286.63
111.25
100,657.18
0.6
5.8 AA+
Aaa
6.500%
9/1/36
80055.18
G2 POOL#4194
106.12
84,958.56
110.25
88,261.80
0.5
5 AA+
Aaa
5.500%
7/20/38
35324.712
G2 POOL#4195
99.89
35,286.03
112.59
39,770.79
0.2
5.3 AA+
Aaa
6.000%
7/20/38
126965.044
G2 POOL # 4447
104.81
133,075.24
108.54
137,811.29
0.8
4.6 AA+
Aaa
5.000%
5/20/39
315725.534
G2 POOL # 4496
109.58
345,966.12
108.58
342,811.00
2.1
4.6 AA+
Aaa
5.000%
7/20/39
130646.371
GNSF 5.5% POOL #714005
106.16
138,689.29
109.89
143,565.34
0.9
5 AA+
Aaa
5.500%
10/15/39
223292.9
FG POOL #G05900
108.64
242,586.80
110.38
246,477.85
1.5
5.4 AA+
Aaa
6.000%
3/1/40
Accrued Interest
6,593.62
0
1,516,899.48
1,579,935.39
9.7
5
GOVERNMENT SPONSORED BOND
230000
FREDDIE MAC
100
230,006.90
100.20
230,464.83
1.4
0.5 AA+
AAA
0.500%
8/28/15
225000
FEDERAL HOME LOAN BANK
99.91
224,795.25
100.06
225,137.02
1.4
0.4 AA+
AAA
0.450%
10/26/15
360000
FANNIE MAE
99.87
359,526.32
99.85
359,449.20
2.2
0.4 AA+
AAA
0.375%
12/21/15
160000
FANNIE MAE
99.95
159,920.00
99.74
159,590.88
1
0.6 AA+
AAA
0.600%
8/15/16
40000
FANNIE MAE
100
40,000.00
100.29
40,115.64
0.2
1.5 AA+
AAA
1.500%
3/27/17
19 ICC CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
205000 FEDERAL HOME LOAN BANK
205000 FANNIE MAE
125000 FANNIE MAE
245000 FANNIE MAE
215000 FANNIE MAE
215000 FREDDIE MAC
365000 FREDDIE MAC
100000 FANNIE MAE
40000 FANNIE MAE
Accrued Interest
TOTAL PORTFOLIO
Portfolio Holdings - Fixed
99.63
204,245.60
99.10
203,151.72
1.2
0.8 AA+
100
205,000.00
100.73
206,497.73
1.3
1.6 AA+
99.97
124,968.75
98.50
123,122.12
0.8
0.7 AA+
99.25
243,157.60
97.79
239,592.85
1.5
1.3 AA+
99.99
214,978.50
96.25
206,941.15
1.3
1.2 AA+
99.99
214,978.50
96.00
206,390.54
1.3
1.1 AA+
100
365,000.00
99.38
362,728.60
2.2
1.8 AA+
103.17
103,168.00
100.02
100,015.20
0.6
2.5 AA+
99.95
39,980.00
98.45
39,380.20
0.2
2.3 AA+
4,499.99
0
2,729,725.42
2,707,077.69
16.6
1.1
16,351,442.01
16,309,564.19
100
2.4
2.4
16,351,442.01
16,309,564.19
100
Period Ending 12/31/2013
Aaa
0.750%
4/17/17
AAA
1.600%
9/19/17
AAA
0.700%
11/15/17
Aaa
1.250%
6/20/18
AAA
1.150%
10/30/18
AAA
1.050%
10/30/18
AAA
1.825%
12/31/18
AAA
2.500%
2/13/20
Aaa
2.250%
10/23/23
20 ICG'CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Purchases and Sales- Fixed
Period Ending 12/31/2013
PURCHASES
10/30/2013
11/4/2013
80000
AT&T WIRELESS
90.67
72533.6
2.625% Due 12-01-22
10/30/2013
11/4/2013
80000
BAXTER INTERNATIONAL INC
99.08
79265.6
3.200% Due 06-15-23
11/4/2013
11/7/2013
250000
COCA -COLA CO/THE
99.09
247730
2.450% Due 11-01-20
10/23/2013
10/24/2013
40000
FANNIE MAE
99.95
39980
2.250% Due 10-23-23
11/15/2013
11/18/2013
170000
FANNIE MAE
96.52
164078.9
0.000% Due 06-01-17
11/20/2013
11/22/2013
245000
FANNIE MAE
99.25
243157.6
1.250% Due 06-20-18
11/27/2013
12/2/2013
205000
FEDERAL HOME LOAN BANK
99.63
204245.6
0.750% Due 04-17-17
12/19/2013
12/31/2013
365000
FREDDIE MAC
100
365000
1.825% Due 12-31-18
10/8/2013
10/21/2013
326487.984
G2 POOL # 4496
109.58
357759.41
5.000% Due 07-20-39
10/4/2013
10/9/2013
205000
INTERCONTINENTALE EXCHANGE
100.69
206408.35
2.500% Due 10-15-18
10/23/2013
10/28/2013
245000
PEPSICO INC
95.17
233171.4
2.750% Due 03-01-23
11/12/2013
11/15/2013
100000
PRAXAIR INC
90.41
90413
2.200% Due 08-15-22
12/11/2013
12/16/2013
125000
US TREASURY N/B
99.97
124960.94
0.625% Due 12-15-16
12/13/2013
12/18/2013
195000
WELLS FARGO & COMPANY
100.27
195528.45
2.150% Due 01-15-19
2624232.85
SALES
12/9/2013 12/12/2013 80000 AT&T WIRELESS
2.625% Due 12-01-22
10/28/2013 10/31/2013 230000 BLACKROCK INC
3.375% Due 06-01-22
11/22/2013 11/27/2013 160000 BRISTOL-MYERS SQUIBB CO
21
89.16 71328.8
101.75 234018.1
89.75 143600
CG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Purchases and Sales- Fixed
Period Ending 12/31/2013
2.000% Due 08-01-22
12/2/2013
12/2/2013
120000
COCA -COLA CO
100.92
121106.4
3.625% Due 03-15-14
12/2/2013
12/2/2013
135000
COCA -COLA CO
100.92
136244.7
3.625% Due 03-15-14
11/20/2013
11/22/2013
170000
FANNIE MAE
96.61
164237
0.000% Due 06-01-17
11/13/2013
11/14/2013
250000
FREDDIE MAC
100.12
250312.5
0.450% Due 11-24-15
11/4/2013
11/7/2013
80000
GOLDMAN SACHS GROUP INC
97.25
77800.8
3.625% Due 01-22-23
12/18/2013
12/23/2013
255000
IBM CORP
98.4
250920
1.875% Due 05-15-19
12/2/2013
12/5/2013
205000
JPMORGAN CHASE & CO
107.7
220791.15
4.400% Due 07-22-20
11/12/2013
11/15/2013
80000
PRAXAIR INC
105.38
84304
4.050% Due 03-15-21
11/15/2013
11/20/2013
100000
PRAXAIR INC
90.86
90858
2.200% Due 08-15-22
10/23/2013
10/24/2013
40000
US TREASURY N/B
100.55
40221.88
1.375% Due 09-30-18
11/22/2013
11/26/2013
180000
US TREASURY N/B
99.02
178228.12
1.000% Due 05-31-18
11/13/2013
11/18/2013
125000
UTAH ST
108.09
135112.5
4.554% Due 07-01-24
10/23/2013
10/28/2013
115000
VERIZON COMMUNICATIONS
112.92
129855.7
5.500% Due 04-01-17
12/13/2013
12/18/2013
80000
WELLS FARGO & COMPANY
100.69
80552
1.250% Due 07-20-16
2409491.65
PRINCIPAL PAYDOWNS
10/1/2013
10/15/2013
5559.92
FG POOL#G05900
100
5559.92
6.000% Due 03-01-40
11/1/2013
11/15/2013
8097.55
FG POOL #G05900
100
8097.55
6.000% Due 03-01-40
12/1/2013
12/15/2013
4776.38
FG POOL #G05900
100
4776.38
22 ICG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Purchases and Sales- Fixed
Period Ending 12/31/2013
6.000% Due 03-01-40
10/1/2013
10/15/2013
2062.09
FGCI#E01443
100
2062.09
3.500% Due 07-01-18
11/1/2013
11/15/2013
1219.52
FGCI#E01443
100
1219.52
3.500% Due 07-01-18
12/1/2013
12/15/2013
4954.91
FGCI#E01443
100
4954.91
3.500% Due 07-01-18
10/1/2013
10/15/2013
487.88
FGCI #G12205
100
487.88
4.500% Due 06-01-21
11/1/2013
11/15/2013
502.89
FGCI#G12205
100
502.89
4.500% Due 06-01-21
12/1/2013
12/15/2013
392.68
FGCI#G12205
100
392.68
4.500% Due 06-01-21
10/1/2013
10/15/2013
30.11
FGCIN #B13455
100
30.11
4.500% Due 04-01-19
11/1/2013
11/15/2013
19.72
FGCIN #B13455
100
19.72
4.500% Due 04-01-19
12/1/2013
12/15/2013
14.66
FGCIN #B13455
100
14.66
4.500% Due 04-01-19
10/1/2013
10/15/2013
23.93
FGCIN #G12323
100
23.93
4.500% Due 08-01-21
11/1/2013
11/15/2013
34.47
FGCI N #G12323
100
34.47
4.500% Due 08-01-21
12/1/2013
12/15/2013
23.07
FGCIN #G12323
100
23.07
4.500% Due 08-01-21
10/1/2013
10/15/2013
760.69
FGLM C #G02268
100
760.69
6.500% Due 08-01-36
10/1/2013
10/15/2013
2595.74
FGLM C #G02268
100
2595.74
6.500% Due 08-01-36
11/1/2013
11/15/2013
1024.911
FGLM C #G02268
100
1024.91
6.500% Due 08-01-36
11/1/2013
11/15/2013
3497.299
FGLM C #G02268
100
3497.3
6.500% Due 08-01-36
12/1/2013
12/15/2013
1059.061
FGLM C #G02268
100
1059.06
6.500% Due 08-01-36
12/1/2013
12/15/2013
3613.829
FGLM C #G02268
100
3613.83
6.500% Due 08-01-36
23 CG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
10/1/2013
10/25/2013
11/1/2013
11/25/2013
12/1/2013
12/25/2013
10/1/2013
10/25/2013
11/1/2013
11/25/2013
12/1/2013
12/25/2013
10/1/2013
10/25/2013
10/1/2013
10/25/2013
11/1/2013
11/25/2013
11/1/2013
11/25/2013
12/1/2013
12/25/2013
12/1/2013
12/25/2013
10/1/2013
10/25/2013
11/1/2013
11/25/2013
12/1/2013
12/25/2013
10/1/2013
10/25/2013
11/1/2013
11/25/2013
12/1/2013
12/25/2013
10/1/2013
10/25/2013
Purchases and Sales- Fixed
651.33 FNCI M #254371
5.500% Due 07-01-17
746.02 FNCI M #254371
5.500% Due 07-01-17
488.37 FNCI M #254371
5.500% Due 07-01-17
345.1 FNCI N #255888
4.000% Due 08-01-20
254.36 FNCI N #255888
4.000% Due 08-01-20
253.47 FNCI N #255888
4.000% Due 08-01-20
21.483 FNCI N #725445
4.500% Due 05-01-19
692.077 FNCI N #725445
4.500% Due 05-01-19
18.592 FNCI N #725445
4.500% Due 05-01-19
598.948 FNCI N #725445
4.500% Due 05-01-19
18.544 FNCI N #725445
4.500% Due 05-01-19
597.386 FNCI N #725445
4.500% Due 05-01-19
197.17 FNCI N #825335
4.000% Due 05-01-20
200.22 FNCI N #825335
4.000% Due 05-01-20
198.66 FNCI N #825335
4.000% Due 05-01-20
92.57 FNCI N #829053
4.000% Due 08-01-20
271.07 FNCI N #829053
4.000% Due 08-01-20
226.74 FNCI N #829053
4.000% Due 08-01-20
4961.59 FNCL # 256394
Period Ending 12/31/2013
100
651.33
100
746.02
100
488.37
100
345.1
100
254.36
100
253.47
99.99
21.48
100
692.08
99.99
18.59
100
598.95
99.98
18.54
100
597.39
100 197.17
100 200.22
100 198.66
100 92.57
100 271.07
100 226.74
100 4961.59
24 CG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Purchases and Sales- Fixed
Period Ending 12/31/2013
6.500% Due 09-01-36
11/1/2013
11/25/2013
3395.18
FNCL # 256394
100
3395.18
6.500% Due 09-01-36
12/1/2013
12/25/2013
1792.03
FNCL# 256394
100
1792.03
6.500% Due 09-01-36
10/1/2013
10/20/2013
3593.48
G2 POOL # 4194
100
3593.48
5.500% Due 07-20-38
11/1/2013
11/20/2013
2477.72
G2 POOL # 4194
100
2477.72
5.500% Due 07-20-38
12/1/2013
12/20/2013
2120.12
G2 POOL # 4194
100
2120.12
5.500% Due 07-20-38
10/1/2013
10/20/2013
1272.11
G2 POOL # 4195
100
1272.11
6.000% Due 07-20-38
11/1/2013
11/20/2013
1219.97
G2 POOL # 4195
100
1219.97
6.000% Due 07-20-38
12/1/2013
12/20/2013
1117.92
G2 POOL # 4195
100
1117.92
6.000% Due 07-20-38
10/1/2013
10/20/2013
3509.52
G2 POOL # 4447
100
3509.52
5.000% Due 05-20-39
11/1/2013
11/20/2013
2862.8
G2 POOL # 4447
100
2862.8
5.000% Due 05-20-39
12/1/2013
12/20/2013
2531.71
G2 POOL # 4447
100
2531.71
5.000% Due 05-20-39
11/1/2013
11/20/2013
5925.54
G2 POOL # 4496
100
5925.54
5.000% Due 07-20-39
12/1/2013
12/20/2013
4836.91
G2 POOL # 4496
100
4836.91
5.000% Due 07-20-39
10/1/2013
10/15/2013
4515.4
GN POOL # 782119
100
4515.4
6.000% Due 08-15-36
11/1/2013
11/15/2013
3584.12
GN POOL # 782119
100
3584.12
6.000% Due 08-15-36
12/1/2013
12/15/2013
2726.7
GN POOL # 782119
100
2726.7
6.000% Due 08-15-36
10/1/2013
10/15/2013
502.23
GNJO M #781313
100
502.23
6.000% Due 07-15-16
11/1/2013
11/15/2013
254.72
GNJO M #781313
100
254.72
6.000% Due 07-15-16
25 ICC`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Purchases and Sales- Fixed
Period Ending 12/31/2013
12/1/2013
12/15/2013
250.48
GNJO M #781313
100
250.48
6.000% Due 07-15-16
10/1/2013
10/15/2013
14708.21
GN5F 5.5% POOL #714005
100
14708.21
5.500% Due 10-15-39
11/1/2013
11/15/2013
188.34
GNSF 5.5% POOL #714005
100
188.34
5.500% Due 10-15-39
12/1/2013
12/15/2013
188.14
GNSF 5.5% POOL #714005
100
188.14
5.500% Due 10-15-39
10/1/2013
10/15/2013
7307.24
GNSF M #552509
100
7307.24
6.000% Due 04-15-32
11/1/2013
11/15/2013
111.28
GNSF M #552509
100
111.28
6.000% Due 04-15-32
12/1/2013
12/15/2013
121.07
GNSF M #552509
100
121.07
6.000% Due 04-15-32
10/1/2013
10/15/2013
39.16
GNSF M #582153
100
39.16
6.000% Due 06-15-32
11/1/2013
11/15/2013
1576.29
GNSF M #582153
100
1576.29
6.000% Due 06-15-32
12/1/2013
12/15/2013
34.12
GNSF M #582153
100
34.12
6.000% Due 06-15-32
124347.52
26 CG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Period Ending 12/31/2013
ICC QSG Portfolio Manager Commentary
We are pleased to report portfolio results to our clients for 2013. Each of our
products outperformed their respective benchmark in 2013, with Growth
leading an otherwise close style race for the year. Equity markets rose strongly
in this, the fifth year, of the advance following the 2009 credit collapse and now
reside over 131% off their lows.
The key to our outperformance across strategies can be attributed to our
relentless focus on the models as they continuously absorb and compile
comparable equity outlooks for each respective benchmark. Most of our clients
are aware of the advantage that our quantitative modeling process embodies
and our descriptions of its edge. We have often described the portfolio
construction dilemma as follows: If you are a stock investor and you don't know
why a stock goes up, you lack insight. If you followed a winning stock and
decided not to purchase it, then you lack judgment. If you missed a stock
opportunity because you never knew it existed, you lack coverage. Our
modeling process is designed to address these investing pitfalls in a
comprehensive and highly efficient disciplined approach, which we believe, is a
strong edge that our investment process has over competitors.
Most clients look to the annual reviews for the source of their manager's insight
and 2013 will likely see much attention focused on the buzzwords of
"Quantitative Easing," "Budget Impasse" and all the other noise that we
collectively heard as the markets advanced during the year. We will not be
adding to the opinions here, but would offer the insight that this year's advance
was striking in its breadth across style. It mattered very little if an investor was a
"value" or "growth" style supporter since both indexes went up by about the
same magnitude. This is typical of a so called liquidity driven market that favors
the asset allocators who have the judgment to just get in as flows move from
debt and commodities into the equity markets. Diversification across equity
indexes was rewarded due to the broad nature of the advance, but
diversification across asset classes was not.
As an example of our strength of coverage, let's consider the Russell 1000
Growth Index. We know that the benchmark has over 620 choices in it, and in
2013, 347 names (or over 55% of the index) beat the benchmark for the
calendar year. In such a torrid equity environment, one's active management
process is best tasked with opening up managers eyes to the shear multitude of
opportunities to profit in the advance. Rather than "screening" out names for
consideration (a popular fundamental approach), our models objectively rank
every security relative to each other, thus giving a small team like ours a
broadened and complete opportunity set to build outperforming portfolios in a
"target rich environment." Screening only works if the names you screen out
underperform. 2013 was not such a year since the average stock beat the
benchmark.
Our Quant Group takes each market advance and decline as an opportunity to
objectively question our process and its results in different markets. The 2013
uniform product outperformance in the advance leaves us with the confidence
that we were able to identify and act on the strong signals emerging from the
indexes at the beginning of the year, across style disciplines.
As 2014 begins we believe that outperforming benchmarks will necessitate an
even greater focus on individual stock selection as markets digest the record
gains of the past five years. We have witnessed this performance attribution
effect cyclically over time and remain confident in the ability of our modeling
process to effectively guide our construction process accordingly.
27 ICG`CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund Period Ending 12/31/2013
Large Cap Growth Commentary
Like the other domestic disciplines, growth models were indicating a tilt toward smaller capitalization in 2013. Portfolios were constructed with a weighted market
capitalization of $74.08 Billion vs. $99.03 Billion for the R1000 Growth Index.
Key Transacts
for .,
Decreased McKesson HBOC, Inc
52%Gain
Sold A.O Smith
12% Gain
Sold Graftech, Intl
32% Loss
Decreased VISA
73% Gain
Decreased SM Energy
34% Gain
Sold Eli Lilly
27% Gain
Sold Target Corp
1% Gain
Decreased Hasbro, Inc
14%Gain
Decreased Oracle Corp
7% Gain
ions for Q4
New Purchases for .,
AMERCO (U-Haul)
A.O. Smith
Apartment Investment & Management
Comcast Class A
Ford
Google
Harley Davidson, Inc
Masco Corp
Mednax, Inc
Starbucks Corp
Verizon Communications
Looking at the model at year end, we would note a significant development in the Technology sector. The technology sector within the R1000 Growth index is made
up of 105 companies making it the single largest sector by membership count. Our modeling process is deliberately not capitalization weighted, so when a very
populous sector changes investment score, its often very actionable since it indicates the type of "target rich environment" we spoke of at the beginning of this
piece. Furthermore, it's been our experience that when an investment rating change effects a sector that has been dormant for an extended period, that the return
opportunity is significant.
28 ICG'CAPITAL MANAGEMENT
Palm Beach Gardens Police Officers' Retirement Fund
Multi -Strategy
We are thrilled to begin providing a review of the Multi -Strategy Allocation
model since surpassing the $100 Million in AUM mark with our new clients. To
those not yet familiar, several of our clients have asked us to use our modeling
process to actively allocate between our quantitative strategies in response to
opportunities that are "inter -period" (periods when clients don't have meetings
to address new investment opportunities). We have worked with each of our
clients' consultants to determine an appropriate target band of allocation that
would allow us to shift investment, for instance, from Growth to Value in
response to market events. Referring back to the top of page 1, we note that
there was little performance differentiation between large cap growth or value
benchmarks during the year, but if a client was adroit enough to underweight
International allocations like we did, the return was enhanced by an overweight
to domestic equities versus clients aggregate blended index assumptions.
Full year clients began 2013 with a neutral to benchmark allocation strategy,
but as opportunities unfolded throughout the year, our process rebalanced
exposures away from International and towards domestic Large Cap growth. As
proud as we are to have outperformed internationally, it's obvious that our
Multi -Strategy clients, when measured all together, were better off with a
minimum international allocation. Further, our overweight to domestic large
cap growth was equally rewarding.
Looking forward, we are still waiting for the opportunity to show even more
active allocation alpha when market performance begins to meaningfully
distinguish between growth and value benchmarks. The graphic below
illustrates the strategic allocation shifts throughout 2013 for the Multi -Strategy
portfolio
29
$8
$6
0
$4
$2
$0
Period Ending 12/31/2013
Multi -Strategy Asset Allocation for Calendar Year
2013
�0
■ SECTOR ROTATION ❑ VALUE ❑ GROWTH ❑ INTL EQ
The Quant team is looking forward to extending our performance for a
twentieth year in 2014. As always, we believe there is always room to improve
on our results and are already starting the year with a commitment to bringing
new enhancements to our processes to gain greater insight, judgment and
coverage for our clients. Once again, we thank you for your business.
Quantitative Strategies Group
B McMurry
R Dombrower
IGG'CAPITAL MANAGEMENT