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HomeMy WebLinkAboutMinutes Police Pension 021814 Minutes 2-18-14.doc Page 1 of 4 City of Palm Beach Gardens Police Officers’ Pension Fund Minutes of the Meeting Held February 18, 2014 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers’ Pension Fund was called to order at 9:05 AM by Jay Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT OTHERS PRESENT Jay Spencer, Chairman Audrey Ross (Resource Centers) David Pierson, Secretary Bonni Jensen (Law Offices of Perry & Jensen) Brad Seidensticker, Trustee Steve Stack (ICC Capital) Greg Mull, Trustee John McCann (Thistle Asset Consulting) Marc Glass, Trustee Brad Rinsem (Salem Trust Company) Karen Russo (Salem Trust Company) SALEM TRUST BANK REPORT Presented by Brad Rinsem & Karen Russo Mr. Rinsem welcomed himself and Ms. Russo back. Mr. Rinsem is the President of Salem Trust, which was founded in 1998 and they currently provide custodial services for 260 Florida clients. He explained that they were both here today t personally discuss with the board the recent changes that have occurred at Salem Trust and also about the “system glitch” they encountered with transitioning between accounting systems. Salem Trust had a system that was very expensive to run and most of their clients didn’t even use most of the programs in it. Therefore when their contract expired with this company, Salem decided not to renew with them and ultimately switched to a new system, SunGard. Switching to SunGard would save their company a lot of money each year, but the transition fell apart when it was time to make the switch. Mr. Rinsem explained that they just couldn’t get some of the brokers to send their transactions to the new and correct delivery instructions and that ultimately broke down their transactions and crashed their system. After that occurred they had to manually enter all the transactions and everything started falling behind after that. At that point Salem Trust hired an outside company to come in and help them pick up their pieces and move forward. It took them awhile to get back on track but Mr. Rinsem stated that as of now everything is again running smoothly. Mr. Rinsem explained that there were a couple of clients that had an impact to their portfolio because of trades not being posted in time, but Salem wrote checks to those clients to make up for the losses. Mr. Rinsem expressed that this Plan had no impacts. He apologized to the board for this error and also thanked them for their time and understanding in this unfortunate matter. He noted that all of his clients have stayed with them during this time, with the exception of one client who changed providers. Lastly Mr. Rinsem stated that they have gave all their clients a 10% discount on their 6/30/2013 and 9/30/2013 custodial fees due to the inconvenience this transition has caused and also for the delay in issuing the custodial statements. Mr. McCann stated that he wrote a letter to Salem Trust after the last meeting per direction of the board requesting that Salem refund 100% of their fees for the quarter ending 9/30/2013, and reducing their 6/30/2013 fees by 33%. The Trustees and Mr. Rinsem had a lengthy discussion regarding this request and Mr. Rinsem explained that unfortunately they can not do a 100% refund for Minutes 2-18-14.doc Page 2 of 4 9/30/2013, but he did offer to decrease the plan’s quarterly fee by 15% each quarter effective 6/1/2013 thru 12/31/2014. MOTION: Mr. Seidensticker made a motion to approve and accept Salem Trust’s fee reduction of 15% per quarter effective June 1, 2013 they December 31, 2014. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5-0. INVESTMENT MANAGER REPORT ICC Capital – Presented by Steve Stack Mr. Stack stated that in the fall of 2012 they made some changes to ICC as a firm and Mr. Stack was promoted to CEO. He noted that in regards to the Salem Trust issue they did have one broker that was not following the new account directions, but that has since resolved. He reviewed the growth fund and noted that they plan had a great quarter with a gain of $894K, which was a return of 10.94% versus the index at 10.44%. For the 1 year the fund is also ahead of the index at 35.53% versus 33.49%. On the fixed income side things are a little slower, but the plan did have a gain of $22K, which was a return of 0.14% versus the index at -0.03%. For the one year on the fixed income side, they are negative and behind the index at -2.36% versus -2.03%. Mr. Stack explained that during the quarter bonds didn’t do so well, but the equity markets rallied. Also they are trying to invest their cash into domestic equity because they are currently has 10.1% in cash. Lastly Mr. Stack reported that their firm was ranked the number 2 manager for their 5 year performance as of September 30, 2013 by the Pension & Investments magazine. INVESTMENT CONSULTANT REPORT Thistle Asset Consulting – Presented by John McCann Mr. McCann briefly reviewed the Callen table in the back of his report as of December 31, 2013. He then reviewed the funds performance as of December 31, 2013 and noted that the plan is inline with their policy. As of December 31, 2013 the plan has almost $68M in assets and for the quarter the total fund had a return of 6.87% versus 5.97%. Mr. McCann briefly reviewed each manager’s performance and noted that all the managers outperformed for the quarter. He also stated that American Realty is now fully funded as of January 2, 2014, but he would also like to increase the Real Estate allocation from 5% to 10%. The Trustees asked Mr. McCann to draft a revised IPG for the next meeting so that the board can take a look at increasing their real estate holding. ATTORNEY REPORT Law Offices of Perry & Jensen - Presented by Bonni Jensen Ms. Jensen presented the board with a proposed fee increase for her services. She explained that her last fee increase was in 2008, and now she is asking the board for an increase in her hourly rate only from $200 to $225 effective December 16, 2013 (all her other fees remain the same). MOTION: Mr. Seidensticker made a motion to approve and accept Ms. Jensen’s proposed fee increase as presented (to increase the hourly rate to $225 effective December 16, 2013). SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 5-0. Minutes 2-18-14.doc Page 3 of 4 Ms. Jensen noted that the IRS mileage rate slightly decreased to $0.56 centes per mile effective January 1, 2014. Ms. Jensen reminded the board that the Palm Beach County Ethics Commission changed their Sunshine policy and now Trustees must watch their video every 2 years. Therefore the Trustees are coming up on the 2 years. Ms. Jensen reminded Mr. McCann that the investment policy guidelines need to be changed increase the Real Estate (the American Realty) allocation to 5%. Ms. Jensen explained that there is a new collective bargaining agreement (CBA) that was recently agreed upon and it will reinstate the age 52 retirement requirement. Although the new CBA will not be effective until July 2016, but it will retro back to September 30, 2012. ADMINISTRATOR REPORT Resource Centers – Presented by Audrey Ross Ms. Ross stated that in between meetings she was authorized by the Chair to renew the Plan’s fiduciary insurance as it was set to expire on December 1, 2013. The quote that they received for 2014 was $5,566.84, which was slightly lower than the prior year. MOTION: Mr. Glass made a motion to accept the 2014 Fiduciary Liability Insurance quote as presented. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5-0. Ms. Ross stated that the auditor has issued their September 30, 2013 audit engagement letter. In this year’s letter they have increased their fees from $14,850 to $15,150, for a total increase of $300. Ms. Jensen noted that she has reviewed the letter and does not have any objections, seeing that the board accepts the fee increase that is being proposed MOTION: Mr. Mull made a motion to approve and accept the September 30, 2014 audit engagement letter as presented (noting the acceptance of the fee increase as well). SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5-0. Ms. Ross presented the board with supplemental study that the plans Actuary, GRS completed per the request of the board. This study reflects the cost impact of changing the pension plans retirement and DROP eligibility. MINUTES MOTION: Mr. Pierson made a motion to approve the minutes from the October 18, 2013 regular meeting. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5-0. Minutes 2-18-14.doc Page 4 of 4 DISBURSEMENTS APPROVALS MOTION: Mr. Seidensticker made a motion to approve the disbursements. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5-0. BENEFIT APPROVALS MOTION: Mr. Mull made a motion to approve the application for a refund of contributions for Brandon Radanovich, the application for distribution of DROP account (on 1/15/2014) for Wayne Sidey, and the application to exit the DROP for Robert Wummer. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5-0. OTHER BUSINESS Mr. Spencer commented that he has not heard back from Christopher Sands regarding this request for a refund, so until he does come forth he will remain a vested deferred member under the plan. PUBLIC COMMENTS N/A AJOURN There being no further business, the Trustees officially adjourned the meeting at 10:48. The next is still to be determined. Respectfully submitted, _____________________________ DAVID PIERSON, Secretary