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HomeMy WebLinkAboutMinutes Fire Pension 110514PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD NOVEMBER 5, 2014 A meeting of the Board of Trustees was called to order at 1:04PM at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chair Audrey Ross, Administrator Martin Cohen, Vice Chair Dan Johnson, Investment Consultant Tom Murphy, Secretary Pedro Herrera, Attorney Mark Joyce Doug Lozen, Actuary Ed Morejon (arrived at 11:11AM) PUBLIC COMMENTS N/A MINUTES The Board reviewed the minutes of the regular meeting held on September 8, 2014. A motion was made by Mark Joyce to approve the minutes of the September 8, 2014 regular meeting as amended. The motion was seconded by Tom Murphy and carried 4-0. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (DAN JOHNSON) Mr. Johnson reviewed the September 30, 2014 performance report and discussed the market environment during the quarter. International equity was the largest underperformer during the quarter and domestic did well. The Plan assets have increased to $67.4M during the quarter, although they had a negative return of -1.13% versus the index at -0.34%. For the fiscal year they are way ahead of their assumed rate of return at 12.03% versus the index at 12.13%. Mr. Johnson reviewed the asset allocation and stated that they are in line with the policy and then he briefly reviewed each manager’s performance. RBC and Manning & Napier will continue to be on watch because of their underperformance but in the meantime Mr. Johnson stated that he does think the Board should consider expanding their international equity exposure to another manager in the near future. He commented that overall the Plan is doing very well and they had a great fiscal year. Mr. Johnson briefly reviewed the IMCA DROP report. He commented that he has no concerns in this area and everything is running smoothly. Mr. Johnson discussed the departure of Bill Gross from PIMCO and how it affected some of the accounts. Bogdahn is recommending to all their clients to move out of the PIMCO accounts due to this huge manager change at the firm. Therefore the IMCA fund has one PIMCO account on the list of options that Mr. Johnson is recommending it to be removed and replaced with the Dodge & Cox fund. He explained why he likes the Dodge & Cox fund and why he thinks it is a good fit for this Plan. IMCA will need to agree to this change as well. A motion was made by Marty Cohen to approve and authorize that the PIMCO option be taken off the list of ICMA investments and replaced with the Dodge & 2 Cox fund (pending ICMA’s approval). The motion was seconded by Tom Murphy and carried 5-0. Lastly Mr. Johnson reviewed emerging markets with the Board. He explained that this would be a long term commitment to the portfolio and emerging markets add diversification, strategic allocation, and specialization. He briefly reviewed the pros and cons of emerging markets and what vehicle types they are held in. He also reviewed the returns over different time periods and when they capture the upside and the downside. The Trustees had a lengthy discussion and commented that they are not too interested in emerging markets right now. Mr. Johnson stated that he will bring back more recommendations to the next meeting. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera stated that he has the Robbins, Geller, Rudman, & Dowd (TGR&D) engagement letter with him today to be executed. He noted that he reviewed the letter and does not see any issues with it. A motion was made by Tom Murphy to approve the Robbins Geller Rudman & Dowd engagement letter as presented. The motion was seconded by Marty Cohen and carried 5-0. Mr. Herrera reminded the Trustees that it is that time of year where they will be receiving gifts and he briefly reviewed the gift reporting requirements. Any gifts that are received over $25 need to be reported. Mr. Herrera stated that he is working on revising the Pension Resource Centers agreement as the Board approved a fee increase at the last meeting. He will send this agreement out for signatures in between meetings. ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. A motion was made by Tom Murphy to approve the disbursements as presented by the Administrator. The motion was seconded by Mark Joyce and carried 5-0. BENEFIT APPROVALS The Board reviewed the application for distribution of Share account for Mark Olsen and the applications for distribution of DROP account for Mark Olsen and Jim Kreidler. A motion was made by Tom Murphy to approve the application to enter the DROP for Regional Pickens, the application to exit the DROP for Mike Dunaway, the application for distribution of Share account for Brandon Zace and the application for distribution from DROP account for Mike Dunaway. The motion was seconded by Mark Joyce and carried 5-0. Ms. Ross presented the Board with the list of the 2015 meeting dates. The Trustees’ decided to move all their meetings to 1PM. 3 Ms. Ross presented the board with the September 30, 2014 audit engagement letter from Steve Gordon. She noted that the fee is the same as the one proposed. Mr. Hererra commented that he reviewed the letter as well and does not have any objections. A motion was made by Mark Joyce to accept and approve the September 30, 2014 Audit Engagement Letter as presented. The motion was seconded by Tom Murphy and carried 5-0. ACTUARY REPORT: FOSTER & FOSTER (DOUG LOZEN) Mr. Lozen reviewed his letter regarding the new GASB rules and Senate Bill 534. The September 30, 2014 Actuarial Valuation report will reflect all the new additional GASB 67 requirements and reports, but he explained that these reports are in addition to the regular valuation and will not change any of the Plan’s actual funding, contributions, or assets. He reviewed examples of some of the additional reports that they will have to create and noted that there will be additional fees as well. The fee for the GASB 67 reporting is $1,250, for the GASB 68 it is $2K (which will be paid by the City), and $3,500 for the Senate Bill 534 reports which is a total of $6,750 for all three. The Trustees discussed the different reports and the fees associated with them. A motion was made by Mark Joyce to accept and approve Foster & Foster’s proposed fees totaling $6,750 for the new GASB 67, GASB 68, and Senate Bill 534 requirement. The motion was seconded by Tom Murphy and carried 5-0. NEW BUSINESS Mr. Morejon stated that he had thought in the past that the Board interviewed Saxena White for a securities litigation manager and he would like to discuss it again. The Trustees noted that their services are free and that they do the same thing as the other securities litigation managers, although it does not hurt to have too many looking over your portfolio. A motion was made by Tom Murphy to hire Saxena White as a securities litigation manager pending the agreement that is prepared by Mr. Herrera . The motion was seconded by Mark Joyce and carried 5-0. Mr. Cohen explained that he read in the newspaper that the life expectancy has increased and he wanted to know if the board should be switching their mortality table. Mr. Lozen stated that they have not changed their tables because the study that Mr. Cohen is discussing did not include the public sector, although they are currently doing a study for the public sector. OLD BUSINESS N/A OTHER BUSINESS N/A There being no further business, the meeting adjourned at 3:06PM. Respectfully submitted, Tom Murphy, Secretary