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HomeMy WebLinkAboutMinutes Police Pension 030917 Minutes 3-9-17.doc Page 1 of 4 City of Palm Beach Gardens Police Officers’ Pension Fund Minutes of the Meeting Held March 9, 2017 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers’ Pension Fund was called to order at 9:05 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) Brad Seidensticker, Secretary Bonni Jensen (KKJ&L) Marc Glass, Trustee John McCann (AndCo. Consulting) Greg Mull, Trustee Steve Stack (Highland Capital) TRUSTEE UPDATE Ms. Ross briefly stated that the City is still working on appointing someone for the open Trustee seat on the pension Board. The City is also asking for any recommendations as well. INVESTMENT MANAGER REPORT Highland Capital Management – Presented by Steve Stack Mr. Stack briefly updated the Board on his firm and stated that they recently added a new employee who works in the financial and risk based sector. He reviewed the market environment during the quarter ending December 31, 2016 and noted that interest rates rose and bonds sold off and this Plan benefited from it. Mr. Stack stated that portfolio wise they have shortened duration in anticipation on interest rates rising so therefore 60% of their assets are in the 3-5 year range and they are finding good yield there. They are also moving more into mortgage backed securities because as rates rise less people will be refinancing their homes. As of March 7, 2017 the fixed income portfolio was up 1.28% so they are still keeping ahead. Lastly Mr. Stack gave a brief update on the equities and noted that they continue to do well and are up 12.91% for the quarter. INVESTMENT CONSULTANT REPORT AndCo. Consulting – Presented by John McCann Mr. McCann explained this firm’s new name change to AndCo. Consulting that was effective January 1, 2017. This name change does not have any effect on the portfolio or personnel. Mr. McCann briefly reviewed the Plan’s September 30, 2016 aggregate chart that he does at the end of each year since he did not have time to go over this at the last meeting. Mr. McCann stated that the Plan now has 4 funds with Rhumbline as the International equity portfolio was recently funded. As of December 31, 2016 the total fund was up 2.43% versus the benchmark at 1.72% and the total assets are up to $84.4M. Since the end of the quarter the fund has added another $2M. He reviewed the asset allocation which is slightly out of balance on the fixed income side due to the bonds rallying, but since the end of the quarter they are back in line with the target allocation. Mr. McCann briefly reviewed each manager’s performance during the quarter and commented that Oppenhiemer and Dreyfus will be moving Minutes 3-9-17.doc Page 2 of 4 over to Highland Capital. Also as of current this Plan is fully invested with American Realty at 7.8% but can still go up to 10%. The Trustees had a lengthy discussion on adding more to American Realty as real estate has been doing great. American Realty currently has a 6 month entry queue but they can still put in the request now. Mr. McCann stated that they will more than likely take from fixed income to fund real estate, but he stated that he will confirm that once the call from American Realty is actually made. MOTION: Mr. Glass made a motion to increase the American Realty holding to 10% by moving $2M from Highland Capital. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 4-0. Ms. Jensen commented that Thistle contract was assigned to the Bogdahn Group and now they will need to assign it to AndCo. Consulting. Ms. Jensen recommends at this point for the Board to sign a new contract with AndCo. Consulting to reflect the name change, but everything else remains the same. MOTION: Mr. Glass made a motion to allow the Chair to sign in between meetings the updated Investment Consultant contract noting the name change only. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 4-0. ATTORNEY REPORT KKJ&L - Presented by Bonni Jensen Ms. Jensen reviewed the new online State Annual Report requirement. This new requirement requires that all State Annual Reports be filed online through the Division of Retirement website. Therefore the signatures of the Chairman and Secretary are no longer required. Ms. Jensen stated that the FRS recently decreased their assumed rate of return from 7.8% to 7.6%, although their goal is 7.5%. This Plan was already proactive in decreasing their assumed rate of return as they are at 6.8%. Also last year the FRS changed their mortality table in which all DB Plans had to adopt as well, and this Plan adopted that new table last year. Now this year the FRS has changed their mortality table again, therefore this Plan has another 2 years to implement the new table into the Plan once again. Ms. Jensen noted that the IRS mileage rate decreased from 54 cents to 53.5 cents effective January 1, 2017. Ms. Jensen reviewed the Miami Beach fraud issue that recently occurred. She explained what happened and commented that now would be a good time for this Plan to double check their securities with their service providers and to also look into cyber liability insurance coverage which can also protect the Plan against multiple other uses. Ms. Ross will look into having someone attend a Board meeting to discuss cyber liability coverage and to give some quotes. The Board briefly discussed transitioning the DROP statements from GRS to PRC since PRC processes the actual DROP distributions, the accounting would be easier and cleaner. The Trustees tabled this discussion until the next meeting. Minutes 3-9-17.doc Page 3 of 4 The Trustees had a very lengthy discussion on the Share accounts and the excess State money. Mr. Spencer explained that after the last meeting Ms. Jensen sent a letter to the City regarding this outstanding issue and the City stated that the CBA is closed and they are not reopening it at this time. Therefore at this point the default plan is now in place regarding the Share accounts and splitting the excess State money 50/50 between the Plan and the City. This default plan also affects the retirees. On behalf of the retirees, Mr. Spencer stated that the default Plan will take away benefits from retirees that they have earned and that is not legally allowed. Therefore we need to keep in mind any legal ramifications that could occur when dealing with this issue. There was a very lengthy discussion on the State money and what benefits it has been used for and what benefits it will be used for going forward. Ms. Jensen reminded the Trustees that under the default provision Share accounts have to be established, but now the question is how those Share accounts will be funded. Mr. Spencer shared some ideas he had the Actuary work out in regards to splitting up the State money amongst the Share accounts for active and retired members. Ms. Jensen stated that at this point to get a move on the issue, the City will need to pass an Ordinance implementing Share accounts into the pension plan and then they will work on funding them. After that the Board will need to meet with the PBA to come up with the funding aspect. Ms. Jensen stated that the summary plan description needs to be updated but at this point she thinks the Board should wait until the Share account/state money issue is resolved so that it can be added into this document as well. Ms. Jensen presented the Board with her fee increase proposal. Her last fee increase was back in March 2014 and therefore she is now asking to increase her hourly rate to $265 (she noted that all her new clients pay $365 per hour). This new fee would be effective April 1, 2017 and there is no lock in period. The Trustees discussed the proposal and asked that a 3 year fee guarantee rate be added in. Ms. Jensen concurred. MOTION: Mr. Glass made a motion to approve Ms. Jensen’s fee increase to $265 per hour effective April 1, 2017, with a 3 year fee guarantee. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4-0. ADMINISTRATOR REPORT Resource Centers – Presented by Audrey Ross N/A MINUTES MOTION: Mr. Glass made a motion to approve the minutes from the December 2, 2016 regular meeting. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 4-0. DISBURSEMENTS APPROVALS MOTION: Mr. Glass made a motion to approve the disbursements. SECOND: Mr. Mull seconded the motion. Minutes 3-9-17.doc Page 4 of 4 CARRIED: The motion carried unanimously 4-0. BENEFIT APPROVALS MOTION: Mr. Seidensticker made a motion to approve the applications to exit the DROP for Jack Schnur, Ralph Kranchick, Chris Barca & Tim Roman, the application for distribution from DROP account (due to retirement 1/1/17) for Jack Schnur, the applications for distributions from DROP account (due to retirement 3/1/17) for Chris Barca & Tim Roman, the applications for distributions from DROP accounts (1/15/17) for William Brandt, Robert O’Dell, Wayne Sidey & Todd Thomas, the applications for distributions from DROP accounts (2/15/17) for John Boyle, Sheree Brown, Gwen Fleming, Richard Geist, Robert Odell, Jeff Main & Joseph Sheehan, and the application for distribution of DROP account (3/15/17) for Gary Carmack. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 4-0. FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through January 2017. The board received and filed the financial statements through January 2017. OTHER BUSINESS Ms. Ross presented the Board with the Salem Trust letter that announced Mr. Rinsem’s retirement that was effective December 31, 2016. PUBLIC COMMENTS N/A AJOURN There being no further business, the Trustees officially adjourned the meeting at 11:08PM. The next meeting is scheduled for Wednesday May 31, 2017 at 9AM. Respectfully submitted, _____________________________ Brad Seidensticker, Secretary