HomeMy WebLinkAboutMinutes Fire Pension 071315PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
MINUTES OF MEETING HELD
JULY 13, 2015
A meeting of the Board of Trustees was called to order at 1:03PM 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
Ed Morejon John Hamlin, Investment Manager
Jon Currier
PUBLIC COMMENTS
N/A
INVESTMENT MANAGER REPORT: DANA INVESTMENT ADVISORS (JOHN
HAMLIN)
Mr. Hamlin reviewed the market performance during the quarter ending June 30, 2015.
He noted that they do not take any sector bets but they did have a lot more turn over this
quarter than normal due to the S&P rebalancing. For the quarter the large cap fund
underperformed the index at -0.90% versus 0.28%, but for the fiscal year they are still
ahead at 7.84% versus the index at 6.22%. The small cap fund had a better quarter and
outperformed the index at 1.35% versus 0.42%, and for the fiscal year they are in the
same position at 18.12% versus 14.94%. Mr. Hamlin discussed the funds current asset
allocation and reviewed the sectors that contributed during the quarter as well as the ones
that detracted during the quarter as well. Mr. Johnson discussed the shareholder yield
presented in the report versus the dividend yield that used to be in the prior reports. Mr.
Hamlin explained that they changed the name in the report when they revised the
booklets, but it did not change any of their investments or processes. Lastly Mr. Hamlin
reviewed his market outlook and stated that the GDP has not been doing well and he does
not intend for that to change throughout the rest of 2015. Also bonds remain volatile as
the US dollar becomes more stable and he briefly discussed the International market and
noted that these funds do not have any exposure to Puerto Rico or Greece. Mr. Johnson
commented that he does not have any recommendations at this time in regards to Dana
and their portfolio, it is doing well.
INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (DAN
JOHNSON)
Mr. Johnson stated that he has the preliminary June 30, 2015 flash report with him today
as next month he will have the final report to present. He reviewed the funds
reconciliation through June 30, 2015 and noted that it does not reflect the City’s
contributions that were just received in last week. Those contributions have already been
allocated per his recommendation at that time. Mr. Johnson commented that this flash
performance report does not include the real estate numbers or RBC as they are not
available yet. June was not a good month as they were down -1.14%, which brought
them down for the quarter at -0.26%. For the fiscal year the fund is still up and doing
well at 6.46%. Mr. Johnson stated that both domestic equity and fixed income had a
negative month which brought down the performance. He will have the complete June
30, 2015 quarterly report at next month’s meeting.
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Mr. Johnson stated that Mindy Johnson, the Plan’s account contact at Regions bank is no
longer there and they have assigned a new contact person. He commented that
everything has still been running smoothly since Ms. Johnson’s departure and that he will
continue to monitor it. Right before Ms. Johnson left she contacted Mr. Johnson about
the standing R&D account memo on file with Regions Bank regarding the cash flow.
The monthly benefit payments have increased due to more retirees/DROP participants
and therefore the Board needs to update the standing memo on file with Regions. Mr.
Johnson is recommending that the Board increase the target balance to $400K with a
maximum balance of $700K and a minimum balance of $200K. The Trustees concurred.
A motion was made by Ed Morejon to update the Plan’s standing R&D account
memo on file with Regions Bank to reflect a cash target balance of $400K, with a
maximum balance of $700K, and a minimum balance of $200K as recommended.
The motion was seconded by Marty Cohen and carried 5-0.
Mr. Johnson briefly reviewed the new State disclosure that his office had to produce
which reflects a 5 year comparison of the Plan’s returns. This report has been posted to
the Plan’s website as required.
Lastly Mr. Johnson reviewed the GTAA fund (global tactical asset allocation) and how it
works. He discussed his recommendations and stated that he would start off with
allocating about $1.8M or 2.5% to this fund, taking from the bond portfolio. This
produce is an alternative for bonds right now and they offer a lot of yield as well as are
very liquid. Mr. Johnson reviewed and compared the different managers that offer this
product and noted that all their fees are reasonable and comparable and they all have
global exposure. Also all the managers listed invest in only domestic registered
companies and do not invest in any international companies. He commented that he
wants the Trustees to review this report in preparation for the discussion at the next
meeting. Mr. Johnson stated that this Pension Plan has done great the way it is but thinks
this opportunity will take some of the volatility off the table and also add some more
diversification to the overall portfolio.
MINUTES
The Board reviewed the minutes of the regular meeting held on May 6, 2015.
A motion was made by Marty Cohen to approve the minutes of the May 6, 2015
regular meeting. The motion was seconded by Tom Murphy and carried 5-0.
ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA)
Mr. Herrera reviewed the RGR&D memo regarding a new class action case against
Trinity Industries, Inc. He explained that that case was brought to his attention in
between meetings and he reached out to the Chair who did approve to move forward as
lead plaintiff since the Board did lose $80K (and then the Board would have ratified that
decision at today’s meeting). Since than another pension plan has come in with a bigger
loss so now this Plan is no longer the lead plaintiff, although they are still part of the class
action case and will still get a recovery if one is made. Mr. Herrera stated that he will
continue to update the Board as more information becomes available on this case. He
also commented that he will update the Board on the other class action case they are
involved in with RGR&D as well.
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Mr. Herrera briefly noted in between meetings there was a question that arose regarding
the COLA benefit but it has since been resolved.
Mr. Herrera reviewed the Bills that passed during Legislative session. House Bill 1309
requires that all pension plans need to use the same mortality table as the FRS uses.
Although if pension plans are currently using the RP2000 table, in which this fund does,
then there should not be much of a difference cost wise. Also a new law passed that
mandates all pension plans need to have individual share accounts, in which this Plan is
already in compliance with as well. Lastly, the State required new disclosures this year
to be completed by the Plan’s Actuary and also posted on the Plans website, which have
already been completed for this Plan so that we are in compliance.
Mr. Herrera noted that the annual Form 1 Disclosures are were due July 1, 2015 so if a
Trustees has not turned in their form yet then they need to do so as soon as possible
because a fee will start to be implemented.
Mr. Herrera stated that the Plan’s IRS determination letter is still pending.
Lastly the Trustees discussed the DROP and Share accounts and allowing other pre-taxed
money to be deposited into them. Ms. Ross stated that she does have some other pension
Plan’s that allow this and Mr. Herrera stated that he will look into this to see if this Plan
allows it and will get back to the Board. The Trustees also brought up the Share account
and having alternative investment options (besides just the Plan’s return) like the DROP
account does. Mr. Herrera stated that in order for the Share accounts to have other
investment options, then it would require and Ordinance change. The Board directed Ms.
Ross to add the Share account investment options discussion to the next agenda for the
Board to review.
ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS)
DISBURSEMENTS
The Board reviewed the disbursements presented for approval by the Administrator.
A motion was made by Marty Cohen to approve the disbursements as presented by
the Administrator. The motion was seconded by Tom Murphy and carried 5-0.
BENEFIT APPROVALS
The Board reviewed the applications for distributions from Share accounts for Mike
Dunaway and Jim Kreidler and the applications to enter the DROP for Chris Goodson &
Tom Murphy.
A motion was made by Tom Murphy to approve the applications for distributions
from Share accounts for Mike Dunaway and Jim Kreidler and the application to
enter the DROP for Chris Goodson. The motion was seconded by Ed Morejon and
carried 5-0.
A motion was made by Marty Cohen to approve the application to enter the DROP
for Tom Murphy. The motion was seconded by Ed Morejon and carried 4-0 (note
Tom Murphy did abstained from the vote – conflicting voting form on file).
Ms. Ross presented the Board with some draft language regarding a timeframe members
have to return their benefit election forms once they retire/DROP. The Trustees
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discussed and stated that once members receive their final retirement/DROP
calculations, they are taking a while to elect an option and return the form. The Board
wants to implement some kind of timeframe in which the member has to elect an option
and return the form before the standard option is automatically selected by default. The
Trustees had a lengthy discussion and agreed that 60 days is enough time to allow a
member to choose and option and return the form before a default option is elected.
A motion was made by Ed Morejon to authorize the Plan’s Attorney to draft a
policy regarding implementing a 60 day window for a member to select and return
their benefit election form (from once they receive their final retirement/DROP
calculations) before the standard form (10 year certain) is selected by default. The
motion was seconded by Tom Murphy and carried 5-0.
Ms. Ross stated that the Board still needs to create a policy regarding DROP account
distributions. A while back the Board changed their Ordinance to allow for members to
keep their money in their DROP accounts once they separate service, and now the Board
needs to create a policy regarding how money can be taken from their accounts and when
it can be taken. Ms. Ross stated that she can send Mr. Herrera some samples of policies
that her other Plans use that work out.
A motion was made by Ed Morejon to authorize the Plan’s Attorney to draft a
DROP distribution policy to be reviewed by the Board. The motion was seconded
by Marty Cohen and carried 5-0.
Lastly Ms. Ross stated that the Board has to set an administrative budget by September
30, 2015 which is due to the new Bill that passed this Legislative session. Her office has
been working on this and she will bring a draft budget to the next meeting for the Board
to review and approve.
NEW BUSINESS
N/A
OLD BUSINESS
Mr. Morejon asked about a member’s buyback that is not being recorded on his benefit
statements.
OTHER BUSINESS
N/A
There being no further business, the meeting adjourned at 3:38PM.
Respectfully submitted,
Tom Murphy, Secretary