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.
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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.
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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.
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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