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HomeMy WebLinkAboutMinutes Police Pension 031016 Minutes 3-10-16.doc Page 1 of 4 City of Palm Beach Gardens Police Officers’ Pension Fund Minutes of the Meeting Held March 10, 2016 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers’ Pension Fund was called to order at 9:07 AM by Jay Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT OTHERS PRESENT Jay Spencer, Chairman Audrey Ross (Resource Centers) Marc Glass, Trustee Bonni Jensen (KKJ&L) Brad Seidensticker, Trustee John McCann (Thistle Asset Consulting – Greg Mull, Trustee via teleconference) John Manuel, Trustee Steve Stack (Highland Capital) PUBLIC COMMENTS N/A INVESTMENT CONSULTANT REPORT Thistle Asset Consulting – Presented by John McCann (via teleconference) Mr. McCann reviewed the Calen table for the end of 2015 and noted that large cap growth was the best performing asset class during the year and emerging markets was the worst performing asset class. As of December 31, 2015 the total fund’s assets were up to $78.9M and Mr. McCann reviewed the Plan’s current asset allocation. He noted that Real Estate is still underweighted but that will change once American Realty makes another capital call. Mr. McCann reviewed the Plan’s performance for the quarter ending December 31, 2015 and noted that the total Plan net of fees was slightly behind the index at 5.06% versus 5.55%. He reviewed each manager’s performance for the quarter and noted that most of the manager’s outperformed their indexes with the exception of Highland Capital and the International equity funds. The Trustees discussed the fixed income ranking which seemed low this quarter. Mr. McCann explained that the universe ranking on the fixed income side is not very comparable but as long as you are outperforming the relative index then we are in good shape (the universe ranking has a lot of high yield bonds in it which this Plan does not, but there is no other universe to compare against for fixed income so we have to stick with this one and have been since the beginning of time). Mr. McCann stated that overall he is very pleased with the portfolio and does not have any recommendations at this time. Mr. McCann discussed the Thistle/Bogdahn merge effective April 1, 2016. He explained that this transition will be very beneficial for his company as well as his clients as he will now have a huge back office support team, which means that it will now free up a lot of his time so that he can go back to solely focusing on the portfolios. Although he reassured the Board that nothing will change up front and that they will still see either himself or Mr. Vavrica at the pension Board meetings. Next quarter the Board will see the name change as well as a reporting format change, but that is it. Ms. Jensen stated that there is a consent letter that the Board will need to approve and execute regarding the merge and noted that she does not have any issues with the merge. Mr. Spencer commented that he was also personally contacted prior to the meeting by Mr. McCann regarding this merge and Minutes 3-10-16.doc Page 2 of 4 he does not foresee any issues as long as they continue to receive the same great service that they have always received in the past form Mr. McCann Company. Lastly Mr. McCann noted that all fees will remain the same. After Mr. McCann departed the meeting the Trustees had a discussion on their current fees with Thistle/Bogdahn and how long they are good for. Also since the Board is moving out of the International mutual funds to Rhumbline, the fees that his firm charges for the International mutual fund account reviews should be removed. The Board would like Ms. Jensen to reach out to Mr. McCann to find out the specifics on the fees. MOTION: Mr. Seidensticker made a motion to authorize Ms. Jensen to contact Mr. McCann and negotiate his fees for anything less than what they are currently paying and for a 3 year contract. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. INVESTMENT MANAGER REPORT Highland Capital Management – Presented by Steve Stack Mr. Stack briefly updated the Board on the current market environment during the quarter ending December 31, 2015. He noted that it was a good quarter for equites as they were up 4.50%, but still lagging the index at 7.32%. Although things have turned around since the quarter ended and as of current they are down -6.3%. Mr. Stack discussed the fixed income portfolio which remained slightly positive for the quarter at 0.05% versus the index at -0.57%. As of current they remain up 1.91%. Overall the portfolio is doing well despite the market environment and he commented that they will remain underweighted in the corporate bonds as they are taking a latter approach across the portfolio. ATTORNEY REPORT KKJ&L - Presented by Bonni Jensen Ms. Jensen presented the Board with information on the Leadership Conference for Trustees. She explained that Donald Trone who is a frequent speaker at FPPTA is offering the Trustees to attend his leadership conference in West Point in April 2016 at a discounted price. Mr. Spencer stated that he thinks this would be a great conference and would like the other Trustees to considering attending. If the Trustees cannot attend this conference than he would like them to try and make it to the Division of Retirement conference in May 2016. Ms. Jensen notified the Board that the IRS mileage rate decreased to 54 cents per mile effective January 1, 2016. Ms. Jensen presented the Board with her firm’s memo regarding the insurance premium tax (IPT) database reminder. She stated that this memo will also be provided to the City to make sure their database is updated. ADMINISTRATOR REPORT Resource Centers – Presented by Audrey Ross N/A MINUTES MOTION: Mr. Mull made a motion to approve the minutes from the December 5, 2015 regular meeting. Minutes 3-10-16.doc Page 3 of 4 SECOND: Mr. Manuel seconded the motion. CARRIED: The motion carried unanimously 5-0. DISBURSEMENTS APPROVALS MOTION: Mr. Glass made a motion to approve the disbursements. SECOND: Mr. Manual seconded the motion. CARRIED: The motion carried unanimously 5-0. BENEFIT APPROVALS MOTION: Mr. Manual made a motion to approve the applications to enter the DROP for Veronica Rodriguez, Timothy Roman, & Michelle Rose, the applications to exit the DROP for Richard Geist, Todd Thomas, Kathleen Hatchett, Joseph Sheehan & Steven Fee, the applications for distributions from DROP accounts (1/15/2016) for Shree Brown, Gwen Fleming & Robert Thomas, the application for distribution from DROP accounts (2/15/2016) for Richard Geist & Todd Thomas, the application for distribution from DROP account (3/15/2016) for Gwen Fleming, the application for a refund of contribution for Nouman Raja. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 5-0. FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through January 2016. The board received and filed the financial statements through January 2016. OTHER BUSINESS The Trustees had a very lengthy discussion regarding reserve officers and in-service distributions. Ms. Jensen explained that there is an IRS provision regarding in- service distributions that allows a retiree to actively work and collect a pension at the same time, but this Plan currently does not have that provision written in their Ordinance. The Trustees discussed what could happen if the Plan is not incompliance with the IRS and directed Ms. Jensen to reach out to the City to get this resolved as soon as possible. Ms. Jensen commented that she will more than likely need to reach out to a tax advisor to see what the implications could be as well. MOTION: Mr. Glass made a motion to authorize Ms. Jensen to reach out to the City’s Finance Director to set up a meeting regarding the current rehires and how the Plan stands now, and to also authorize Ms. Jensen to take any appropriate actions after the meeting with the City to move forward with correcting the current situation of rehires after retirement and to also make sure that this situation is fixed going forward. SECOND: Mr. Manuel seconded the motion. CARRIED: The motion carried unanimously 5-0. Minutes 3-10-16.doc Page 4 of 4 Mr. Glass discussed the items that the PBA is looking at in regards to the upcoming negotiations and the different costs studies that the City and the Union want completed. Ms. Jensen noted that the Board can allow the City and the Union to use the Plan’s Actuary, GRS, but the pension Board does not pay for any studies that the City or the Union request (each party pays for their own studies). Ms. Jensen did remind the Trustees that during this next contract the City and the Union do need to discuss and document how they are going to distribute the excess State money as this is a new requirement of the State for the Share accounts. MOTION: Mr. Glass made a motion to authorize Ms. Jensen to send a letter to the City and the Union on behalf of the pension Board asking the parties to keep the distribution of the excess State money status quo. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. AJOURN There being no further business, the Trustees officially adjourned the meeting at 11:36AM. The next meeting is scheduled for Wednesday June 1, 2016 at 9AM. Respectfully submitted, _____________________________ Brad Seidensticker, Secretary