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HomeMy WebLinkAboutMinutes Fire Pension 050317PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD MAY 3, 2017 A meeting of the Board of Trustees was called to order at 1:07PM in the Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chair (departed 2pm) Audrey Ross, Administrator Martin Cohen, Vice Chair Dan Johnson, Investment Consultant Jon Currier, Secretary Brad Hess, Investment Consultant Tom Murphy Pedro Herrera, Attorney Doug Lozen, Actuary Eric Levnethal, Auditor Allan Owens, Finance Director PUBLIC COMMENTS N/A MINUTES The Board reviewed the minutes of the regular meeting held on November 2, 2016. A motion was made by Marty Cohen to approve the minutes of the November 2, 2016 regular meeting. The motion was seconded by Tom Murphy and carried 4-0. The Board reviewed the minutes of the regular meeting held on March 6, 2017. A motion was made by Marty Cohen to approve the minutes of the March 6, 2017 regular meeting. The motion was seconded by Tom Murphy and carried 4-0. 9/30/2016 ACTUARIAL VALUATION REPORT PRESENTATION: FOSTER & FOSTER (DOUG LOZEN) Mr. Lozen stated that this year’s report will be projecting the City’s contributions for the fiscal year 2017/2018, and it will also show the results from this most recent fiscal year ending September 30, 2016. For the next fiscal year, the City’s contributions increased from 40.31% to 51.88%. The increase was due to the assumed rate of return assumption change, which is still in the process of being implemented. This year the rate decreased from 7.65% to 7.45%, but we still have one more year to get down to 7.25%. Also the new FRS mortality table change requirement had a big impact on the Plan, in which he discussed in more detail. Lastly, the salary increases that were issued this year were larger than expected and that contributed to the increases in contributions as well. The Plan’s funded ratio is still solid at 79.4% even after all the changes. Overall Mr. Lozen commented that the Plan is doing well and they are actuarially sound as long as all parties keep on making their required contributions. A motion was made by Marty Cohen to approve the 9/30/2016 Actuarial Valuation Report as presented. The motion was seconded by Jon Currier and carried 4-0. 2 A motion was made by Tom Murphy to approve the Plan’s assumed rate of return at 7.45% for next year, the following year, and the long term thereafter. The motion was seconded by Jon Currier and carried 3-0. 9/30/2016 AUDITED FINANCIAL STATEMENTS PRESENTATION: KSDT (ERIC LEVENTHAL) Mr. Leventhal stated that an unmodified clean opinion was issued in regards to the audit ending September 30, 2016. He reported that as of September 30, 2016 the Plan’s assets increased to $81,344,787, which was up from the beginning of the fiscal year at $72,969,734. He reviewed the Plan’s contributions and noted that the employer and 175 money decreased this year, as the employee contributions slightly increased. He noted that the benefit payments and admin expenses slightly increased, although the investment income grew as well. As of September 30, 2016 there were 23 retirees, 3 vested deferred members, and 101 active members. Mr. Leventhal commented that the Plan increased their fiduciary liability insurance coverage to $2M, so that caused a big spike in the premium this year. Mr. Leventhal reviewed all the new reporting requirements this year and stated that all it did was increase the amount of disclosures and footnotes; it did not change any funding requirements or assets. He commented that there were no material weaknesses found or internal controls with management while performing the audit. Lastly, he noted that the net assets in this report do include the DROP and share accounts. Mr. Cohen stated that he would like the comment about the DROP and Share accounts being included in the net assets added into the rep letter or the management notes so that it is documented somewhere. Mr. Leventhal explained that the audit report itself and the rep letter are in accordance with GASB and they do not have the room to add anything else in there. The Trustees had a lengthy conversation as to where they can add this additional language. A motion was made by Marty Cohen to not approve the 9/30/2016 audit rep letter because it is not properly represented because it is aromatically incorrect, but still incompliance with GASB. The motion died for a lack of a second. Ultimately, the Board agreed to add in the language to the communications letter as a disagreement with management, and not the rep letter. A motion was made by Jon Currier to approve September 30, 2016 Audited Financial Statements report as presented. The motion was seconded by Marty Cohen and carried 4-0. A motion was made by Tom Murphy to approve September 30, 2016 Audit Rep letter as presented and authorize the Chair to execute. The motion was seconded by Marty Cohen and carried 3-0. INVESTMENT MONITOR REPORT: ANDCO CONSULTING (DAN JOHNSON & BRAD HESS) Mr. Johnson introduced Mr. Hess and stated that he works with the SMID Cap and he was here today to observe. Mr. Johnson briefly reviewed the market environment during the quarter and noted that bonds were positive and large cap outperformed small cap. As of March 31, 2017 this Plan’s assets are up to $87.8M and he noted that the asset allocation is in line with the policy targets and he does not have any recommendations at this time for rebalancing. Mr. Johnson commented that as of current, all the Plan’s assets have successfully transitioned over to Salem Trust and they discussed the cash in the 3 Plan, which is used to pay benefits and accounts payable. The Plan now has a local checking account that they pay benefits and invoices from instead of the R&D account at the Custodian. Mr. Johnson explained that each month PRC will notify him how much they will need in cash and depending on the portfolio position, Mr. Johnson will direct her where to take the funds from. Also if there is extra cash that builds up in the local checking account, they will reinvest it back into the Plan. Mr. Johnson reviewed the Plan’s financial reconciliation during the quarter and noted that they added another $3.4M, which was a net rate of return of 4.41% versus the index at 4.26%. For the fiscal year to date they are ahead of the index at 7.19% versus 5.56%. All managers are doing well and are either outperforming or inline with their relative indexes. Mr. Johnson discussed the Dana small cap fund and commented that he thinks they can get a better return in SMID cap. Also, Dana’s small cap fund is no longer on AndCo’s recommendation list of managers/strategy’s so they will review this in more detail at the next meeting. Overall the fund is doing well and there are no recommendations at this time for any changes. Mr. Johnson explained that after the last meeting GHA changed their benchmark so now the Board needs to update their IPG to reflect this change as well. A motion was made by Tom Murphy to approve the revised Investment Policy Guideline as presented. The motion was seconded by Jon Currier and carried 3-0. Mr. Johnson briefly reviewed the March 31, 2017 ICMA DROP report. He commented that all is well here and there are no recommendations. Also the ICMA rep will be attending the next meeting for an update and any questions. Lastly, Mr. Johnson reviewed the May 1, 2017 flash performance report. For the quarter to date they are up 1.2%, and for the fiscal year to date they are up 8.5%. They have added $6.7M since the fiscal year, with $1M coming from this past quarter. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera commented that there is no update regarding the BanCorp South litigation case since the last meeting, although we should have something by the next meeting. Mr. Herrera gave a brief update on the current Legislative session and the pending Senate and House Bills. As of yet nothing has officially passed but he will update the Board as more information becomes available. Mr. Herrera stated that there are some Trustee educational opportunities coming up such as the FPPTA and the Division of Retirement conferences. Lastly, Mr. Herrera noted that all Trustee’s annual Form 1 Disclosures Forms are due by July 1, 2017. ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. A motion was made by Jon Currier to approve the disbursements as presented by the Administrator. The motion was seconded by Tom Murphy and carried 3-0. 4 BENEFIT APPROVALS The Board reviewed the benefit approval list dated May 3, 2017 as presented by the Administrator (applications to enter the DROP for John Flint, Julie Tuman and Paul Hodges and the application for normal retirement for Jill Willis). A motion was made by Tom Murphy to approve the applications to enter the DROP for John Flint, Julie Tuman & Paul Hodges and the application for normal retirement for Jill Willis. The motion was seconded by Jon Currier and carried 3-0. FINANCIAL STATEMENTS The Trustees reviewed the interim financial statement as of March 2017. The financial statements were received and filed as of March 2017. OLD BUSINESS N/A NEW BUSINESS The Trustees stated that they would table the KTMC review until the next meeting when all the Trustees are available. There being no further business, the meeting adjourned at 3:16PM. Respectfully submitted, Jon Currier, Secretary