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HomeMy WebLinkAboutMinutes Fire Pension 020316PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD FEBRUARY 3, 2016 A meeting of the Board of Trustees was called to order at 1:01PM 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 (arrived 1:16PM) Tom Murphy, Secretary (arrived 1:20PM) Pedro Herrera, Attorney (arrived 2:06PM) Ed Morejon Brad Coats & Ryon Acey, Investment Manager Jon Currier PUBLIC COMMENTS N/A MINUTES The Trustees reviewed the minutes of the November 4, 2015 regular meeting. Ed Morejon made a motion to approve the November 4, 2015 minutes as amended. The motion was seconded by Marty Cohen and it carried 4-0. The Trustees reviewed the minutes of the January 11, 2016 regular meeting. Ed Morejon made a motion to approve the January 11, 2016 minutes as amended. The motion was seconded by Jon Currier and it carried 4-0. INVESTMENT MANAGER REPORT: AGINCOURT CAPITAL (BRAD COATS & RYON ACEY) Mr. Coats introduced himself and Mr. Acey. He stated that Agincourt is 100% employee owned and they currently have over $5B in assets. He briefly reviewed their client list and noted that they work with many defined benefit pension funds just like this one in the State of Florida. For the quarter ending December 31, 2015 this Plan’s total fund was at %7.5M, although it slightly underperformed the index at -0.63% versus -0.57%. They had an overweight to Corporates during the quarter which really hurt them because Corporates really underperformed. Mr. Acey reviewed their investment process and philosophy which has remained unchanged for the past 20 years or so. The average quality in the portfolio is AA or better and he reviewed the portfolio asset allocation. He noted that they think they are better positioned now than they were at the end of the quarter. He reviewed the mortgage and corporate sectors and noted that they only have a small holding in the mortgage sector as they don’t like to take a lot of credit risk. They are also keeping duration low right now as they are trying to preserve their yield. The dollar remains a safe haven and is still higher than other currencies, as bonds remain as the anchor to the portfolio during turbulence times. Lastly, Mr. Acey noted that they do not own any direct foreign bonds and relative to the benchmark they are comfortable with where they currently are positioned. 2 INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (DAN JOHNSON) Mr. Johnson updated the Board on Regions Bank and their recent firm changes. He stated that he has not seen any issues in regards to the change and this Plan, but will keep the Board updated if there are any issues that come up. Mr. Johnson updated the Board on his firm and noted that Bogdahn will be acquiring another local consulting firm, Thistle Asset Consulting effective April 1, 2016. Thistle Assets has about 30 clients and they only have three employees, so it is a big gain for them to have all the back office help etc. This change does not affect this Plan in anyway. Mr. Johnson passed out the December 31, 2015 flash performance report for the DROP accounts with ICMA. He noted that everything is fine here and he does not have any recommendations at this time. Mr. Johnson reviewed the January 31, 2016 preliminary performance report. For the quarter to date they are down -3.1%, but for the fiscal year to date they remain slightly positive at 0.3%. Lastly, Mr. Johnson briefly reviewed the December 31, 2015 quarterly report because he went over at the last meeting. He noted that the GTAA was funded during the quarter and real estate remains the best performing asset class as they are up 15%. Equity was the largest underperformer during the quarter and the index funds remained right in line with their targets, just as you would expect them to. Mr. Johnson stated that there are no compliance issues and no recommendations at this time in regards to rebalancing or manager changes. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera presented the Board with the DROP distribution policy. The Trustees had a very lengthy discussion on the periods of when a withdrawal or changes can occur, as well as hardship withdrawals. The Trustees made some revisions to the policy and Mr. Herrera stated that he will bring it back to the next meeting for review and approval. Mr. Herrera stated that he does not have any update on the BanCorp case at this time. Mr. Herrera reminded the Trustees of the upcoming educational offers. Lastly, Mr. Herrera briefly discussed the current Legislative session going on in which there are no proposed Bills out there right now that would affect the Chapter 175/185 Plan’s. Although there is a Bill out that would affect the FRS. This Bill is proposing to add all cancer types to the currently Heart and Lung Bill. 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 Ed Morejon and carried 5-0. 3 BENEFIT APPROVALS The Board reviewed the benefit approval list dated February 3, 2016 as presented by the Administrator (application to exit the DROP for Cathy Mauser). A motion was made by Tom Murphy to approve the application to exit the DROP for Cathy Mauser. The motion was seconded by Jon Currier and carried 5-0. Ms. Ross presented the Board with the Fiduciary Liability Insurance quote for the currently policy which is renewing at $1M, as well as coverage for $2M, $3M, and $5M (they do not do coverage in increments of $500K, only $1M). The Trustees had a very lengthy discussion on the quotes, the coverage, and the premiums. They also discussed examples of when this type of insurance would be used and why. This insurance covers the Trustees personally, as they are Trustees serving on the Board. Mr. Herrera stated that in most cases they like to see around 1% of assets in coverage so if the Board stayed with the $1M coverage, than from a legal standpoint they would be fine but ultimately it is up to the Board. The Trustees discussed the price different between the $1M coverage compared to the $2M coverage and noted that it is $5,679. A motion was made by Marty Cohen to approve and authorize the Plan to increase their Fiduciary Liability Insurance coverage to $2M as quoted at $11,636. The motion was seconded by Ed Morejon and carried 3-2. Ms. Ross stated that they are reviewing the Attorney and Investment Consultant contracts today as they review all their service providers periodically. The Trustees discussed and agreed that they were pleased with both the Attorney and Investment Consultant and did not want to make any changes. Ms. Ross noted that she would add the next two service providers for review to the next agenda. Ms. Ross presented the Board with an interim benefit election option form as requested at the last meeting. This form is to be filled out as part of the “entering DROP packet”. This is the form where a member can elect what their pension benefit election intent is while they are waiting on their final calculations from the Actuary. Just in case something happens to a member in between when they entered the DROP and when they received their final DROP calculations, we know what their intent was (the DROP process takes about 8 weeks). Once the member receives their final calculations, they will have to sign another final form electing their pension benefit option as well. A motion was made by Ed Morejon to approve the interim benefit election option form as revised. The motion was seconded by Tom Murphy and carried 5-0. OLD BUSINESS Mr. Cohen explained that he would like to raise the concern again regarding the Share accounts and allowing fully vested members to have an alternative investment option, similar to the DROP account. He would like the Board to write a letter to the City and the Union and asking them to consider making this Ordinance change, as it is comparable to the DROP accounts. Mr. Cohen stated that he knows that this change is not something the pension board can make, as it is a negotiated change but it is something the Board can recommend to the parties. 4 A motion was made by Marty Cohen to authorize the Board to send a recommendation letter to the City and the Union asking them to make an Ordinance change in regards to the Share account investment options, similar to the DROP account. Ed Morejon seconded the motion for discussion. Mr. Rhodes stated that the Share account money is part of the Plan’s assets as compared to the DROP account assets which are not (they are the individual member’s assets). The Trustees concluded that this is a negotiated benefit and is not something that this Board can make a decision on; we only administer the benefits that are already in place. In addition, the Board should not get into the habit of making recommendations to other parties about benefits. The motion did not pass 1-4 (noted Mr. Cohen voted for it). NEW BUSINESS The Trustees discussed the Share account statements, which are now being complete on a quarterly basis along with the DROP account statements. Prior to this, the Actuary only processed the Share account statements on an annual basis and the switch caused a lot of confusion and questions from the members. The Trustees stated that they think going back to annually would cause less confusion as the State money is only received and allocated once a year anyways. Ms. Ross stated that she will make that change. OTHER BUSINESS There being no further business, the meeting adjourned at 3:06PM. Respectfully submitted, Tom Murphy, Secretary