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HomeMy WebLinkAboutMinutes Fire Pension 080515PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD AUGUST 5, 2015 A meeting of the Board of Trustees was called to order at 1:07PM at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chair (arrived at 1:45pm) Audrey Ross, Administrator Martin Cohen, Vice Chair Dan Johnson, Investment Consultant Ed Morejon Pedro Herrera, Attorney Jon Currier Allan Owens, Finance Director PUBLIC COMMENTS N/A INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (DAN JOHNSON) Mr. Johnson briefly reviewed the June 30, 2015 ICMA DROP reporting. No action is needed. Mr. Johnson reviewed the June 30, 2015 quarterly performance report and noted that during the quarter the Fed’s announced that they will be raising interest rates sometime between September 2015 and January 2016. The total fund assets as of June 30, 2015 are up to $73.3M, which was a gain of $455,631 for the quarter. Mr. Johnson stated that there is no recommendation for rebalancing at this time, other than the additional City contributions that just occurred. For the quarter the total fund net of fees was slightly negative and behind the index at -0.08% versus 0.23%, but for the fiscal year they are ahead of the index net of fees at 6.42% versus 5.18%. Mr. Johnson briefly reviewed each Manager’s return for the quarter and noted that equities really hurt the portfolio and brought down the total plan’s return in June. Overall, all the managers are doing well despite the bad month and Mr. Johnson commented that he has no recommendations at this time in regards to the managers. Mr. Johnson briefly reviewed the July 31, 2015 flash performance report and noted that for the fiscal year to date they are up 7.7% and quarter to date they are positive at 0.8%. Lastly Mr. Johnson reviewed the Global Tactical Asset Allocation Fund (GTAA). He explained that his firm does not recommend investing in individual commodities, but they do recommend hiring a manager to do so. He reviewed all the different asset classes that GTAA invests in and also reviewed and compared the different investment manager’s that invests in this type of product. Some funds have higher fees compared to others, and some funds invest only in only domestic funds. The Trustees had a very lengthy discussion on the GTAA product as well as all the different managers. This product offers great diversification with lower fees and is completely liquid. Also this product is considered a domestic mutual fund because they don’t look at each underlying investment. Mr. Johnson commented that if the Board did hire one of these managers, then he would recommend taking about 5% from stocks to fund this new product. The Trustees had a very lengthy discussion on the different managers and Mr. Johnson stated that he would not recommend Westwood for this fund because you don’t get a lot of diversification with them and also some managers have higher fees than the others. The 2 Trustees stated that they would like to invite a couple of different firms in to interview to better understand their investment philosophy and process before they make any final decisions. A motion was made by Ed Morejon to invite BlackRock, GMO, and William Blair to the next meeting for interviews. The motion was seconded by Jon Currier and carried 4-0. MINUTES The Board reviewed the minutes of the regular meeting held on July 13, 2015. A motion was made by Marty Cohen to approve the minutes of the July 13, 2015 regular meeting. The motion was seconded by Jon Currier and carried 4-0. NEW BUSINESS Mr. Owens presented the Board with a census data request from the City. He explained that the City has hired GRS to complete their OPBED report and therefore the City is requesting census data information on the Fire pension Plan. The Trustees discussed the request and noted that all the information being requested is public records anyways. A motion was made by Marty Cohen to approve and authorize that the Plan’s Administrator comply with the City’s request and provide them with the census data being requested in the letter from the City to the Pension Board. The motion was seconded by Ed Morejon and carried 4-0. The Board thanked Mr. Owens and the City for the additional contributions that they City recently made into the pension fund to help pay down the Plan’s unfunded liability. Mr. Rhodes stated that the Plan’s Actuary could not attend today’s meeting but he did make a recommendation in regards to the additional contributions that the City made. In the meantime the cash is sitting in the Plan’s R&D account and Mr. Johnson stated that he will have a rebalancing allocation sheet tomorrow for the money to be invested and in the meantime the Board has asked the Actuary to attend the next Board meeting to discuss how the money should be applied to the Plan’s unfunded liability. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera stated that he is in the process of drafting the Plan’s DROP distribution policy and will have it for the Board to review at the next regular meeting. Mr. Herrera stated that the IRS determination letter is still pending and will update the Board as more information becomes available. Mr. Herrera discussed the new State requirements in regards to the Share account funding since the members are currently in negotiation. In this contract the City and the Union must mutually agree on how they are going to split the State money going forward, if no mutual agreement is reached then there is a “default” plan that the Division of Retirement has ruled. Mr. Herrera also commented that due to other new State requirements this Plan will need to have a discussion with their Actuary at the next meeting regarding the new mandatory mortality table requirements. Lastly Mr. Herrera notified the Trustees of some upcoming educational opportunities. 3 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 Jon Currier and carried 4-0. BENEFIT APPROVALS The Board reviewed the application to enter the DROP for Mark Petruzzi. A motion was made by Ed Morejon to approve the application to enter the DROP for Mark Petruzzi. The motion was seconded by Jon Currier and carried 4-0. Ms. Ross presented the Board with the administrative budget for the fiscal year beginning October 1, 2015. She explained that this budget is a new State requirement and must be filed the Plan sponsor and posted on the Plan’s website by October 1, 2015. This budget represents an estimated budget of just administrative expenses and it must be revised if the Plan does go over the budget. A motion was made by Jon Currier to approve and authorize the Plan’s administrative budget as presented by the Plan’s Administrator. The motion was seconded by Marty Cohen and carried 4-0. Ms. Ross presented the Board with the September 30, 2015 audit engagement letter from Steve Gordon’s office. She noted that Mr. Gordon is merging with another auditing firm, but this will not result in any change to the Board other than the name change. Ms. Ross noted that this year’s auditing fee is in line with last year’s fee as well. A motion was made by Ed Morejon to approve and authorize the September 30, 2015 audit engagement letter as presented by the Plan’ Auditor. The motion was seconded by Marty Cohen and carried 5-0. OLD BUSINESS The Trustees had a very lengthy discussion on the Share accounts and having an alternative investment option, similar to the DROP accounts. Mr. Herrera explained that this change would have to be bargained in negotiation and if passed, than it would also require an ordinance change. Mr. Herrera stated that the Board can present the idea to the Union, but the Board cannot make the change themselves. Mr. Morejon and Mr. Currier stated that they will bring this idea forth to the Union to see where it goes and will report back to the Board. Mr. Cohen explained that he is in favor with giving the members an opportunity to diversify their Share accounts and that he would be willing to formally notify the City and the Union of the Board’s recommendation. Mr. Herrera explained that this is not the Board’s responsibility and would recommend that the 2 members of this Board, who are also Union members, bring this recommendation up to the Union Rep at one of the meetings and then we will go from there. OTHER BUSINESS Mr. Ross stated that the June 30, 2015 Garcia Hamilton report is available. 4 Mr. Ross updated the Board on the Bickel buyback case and noted that everything has since been straightened out and all records are correctly updated. Lastly the Trustees briefly discussed the DROP and Share accounting. Ms. Ross stated that the online accounts are updated daily for any deposits or withdrawals, but the interest is only posted quarterly. There being no further business, the meeting adjourned at 3:36PM. Respectfully submitted, Tom Murphy, Secretary