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HomeMy WebLinkAboutMinutes Police Pension 021309City of Palm Beach Gardens Police Officers' Pension Fund Minutes of the Meeting Held February 13, 2009 Special Meeting The special meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 1:13PM 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 Jay Spencer, Chairman David Pierson, Secretary Brad Seidensticker, Trustee Jules Barone, Trustee Wayne Sidey, Trustee OTHERS PRESENT John McCann (Thistle Asset Consulting) Bonni Jensen (Hanson, Perry, & Jensen, P.A.) Donna Cannon (Palm Beach Gardens Clerk's Office) Audrey Ross (Tegrit Plan Administrators -TPA) Denise D'Entremont ( Rhumbline Advisors) Steve Palmquist (GRS) Alan Owens (City of PBG Finance Director) Greg Moll (City of PBG Police Officer) INVESTMENT CONSULTANT REPORT Thistle Assets — Presented by John McCann Mr. McCann reviewed the total funds performance for the quarter ending December 31, 2008. In the fourth quarter they held 49% in equities, 39% in fixed income and 12% in cash. He commented that the equities are underweighted at 49.2% versus the target of 60 %. The total fund was negative for the quarter but ahead of the index at - 10.20% versus - 13.66 %. The total equities are in the same position at - 21.77% versus the index at - 22.76% and the total fixed income out performed at 4.94% versus 4.57 %. Mr. McCann then reviewed the returns per asset class: • Rhumbline S &P500 Equity: - 21.61% versus - 21.94% • Rhumbline S &P 400 Equity: - 25.29% versus - 25.55% Rhumbline S &P 600 Equity: - 25.01% versus - 25.17% ICC Capital Large Cap Growth Equity: - 16.94°/% versus - 22.79% • International Equity: - 22.54% versus - 19.90% Mr. McCann reviewed 12 month trailing report that he handed out. This report reflects the balance in each manager's account as of December 31, 2008 compared to current; 2/1/09. This report also reflects the contributions and withdrawals of the plans since inception. Mr. McCann made some recommendations in regards to rebalancing the portfolio. The board had a discussion and decided that they would like to rebalance a little at time instead of all at once. MOTION: Mr. Pierson made a motion to move $300,000 from ICC Capitals Fixed Income account and split it evenly between Rhumbline's 3 S &P accounts for the next 3 months (February, March and April). SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5 -0. Mr. McCann reviewed with the board the alternative investment manager search that he produced. He explained that he did bring in information on ETF's as the board requested, but stated that he does not think it is a good time right now for the board to invest in these. He than reviewed some other real estate alternatives, which are not REITS. Mr. McCann reported on the JP Morgan Infra Structure investments and explained how they worked. Infra Structure funds are long term investments, but guarantee a 10 -12% return each year. Mr. McCann stated that the only downfall for this investment is that the board would have to change their investment policy guidelines. Lastly, Mr. Pierson commented that he thinks it is a great time to invest in commodities right now instead of infra structures or timbers. INVESTMENT MANAGER REPORT Rhumbline Advisors -- Presented by Denise D'Entremont Ms. D'Entrernont reviewed the market value for each fund as of January 31, 2009. The total assets are around $7.5M which has decreased from $8.6M. She than reviewed each funds return: • S &P 5Q0 (large cap core] - for the year to date in 2009 the fund is slightly ahead at -8.38% versus the index - 8.38 %. For February the fund is up 1.52%, • S &P 400 (mid cap core)- As of February 12, 2009 this fund was up 2.31 %, but was negative for the 2009 year to date at -7.25% versus - 7.23°/x. Ms. D'Entremont commented that they do not trade index funds so they can keep the cost low. • S &P 600 (small cap corel - 2009 year to date numbers are up negative and behind the index at - 12.70% versus - 12.48 %. This fund is up 1% in February 2009. Ms. D'Entremont explained that they do not do security lending for any of their funds. Lastly, she gave a brief update on the firm. The assets under management of their firm have decreased to $14.76 due to the bad economy and losing funds, not terminations. On the flip side they have added about $6B in assets in 2008. 2008 ACTUARIAL VALUATION REPORT Gabriel, Roeder, Smith & Company - Presented By: Steve Palmquist Mr. Palmquist stated that he had a couple of different reports to present today: 1. 10/1/08 Actuarial Valuation Report - Mr. Palmquist commented that this report is not final, as they need the figures from the audit to complete it. He explained that the payroll has increased almost $1M from last year to this year. In 2008 there was a lost of $3.3M with an average pay increase of 13.8 %. He also reported that the plans funded ratio slightly increased from 53.2% to 53.3 %, which is still very low compared to other pension plans. Also, the unfunded liability increased to $28.2M because of the great loss. Mr. Plamquist commented that the payroll increases about 5% each year. He explained that if they lower the payroll growth assumption then it would increase the City's cost. He reminded the board that the goal is to have this plan 100% funded and no unfunded liability. Mr. Palmquist stated that the fund will eventually get to 100% funded, but he is just trying to figure out how to get there faster. Mr. Palmquist reviewed with the board different scenarios and strategies on how to fund the plan quicker. 2. Florida Retirement System Report - Mr. Palmquist explained that the City of Palm Beach Gardens is looking to make a change towards to the FRS. He stated that all new Police Officers' when hired would enter into the FRS and they would give the present members a choice to stay in the pension fund or to switch over to the FRS. Mr. Palmquist briefly reviewed the FRS and how it works; disadvantages and advantages. The advantages are that it is very well funded with attractive benefits, members do not have to make contributions, members receive a 3% COLA and benefits are portable. The downside is that it not be an attractive benefit for new Police Officers' and it will be harder for the members who stay in the pension fund to bargain or change benefits. He commented that once a member chooses to enter the FRS they can not exit and go back into the pension fund at a later date. Lastly, Mr. Palmquist reviewed a chart that he produced reflecting the aggregate funding method for the closed plan, if that is ultimately what the City chooses to do. He stated that it would take more than 15 years for the City to save money by switching to the FRS. The board had a discussion and commented that the City will be hiring there own Actuary to do the same kind of report. Mr. Spencer thanked Mr. Palmquist for providing the board with this report as he felt it was his fiduciary responsibility to do their own investigation. They will wait to hear further from the City. ATTORNEY REPORT Hanson, Perry & Jensen, P.A. - Presented by Bonni Jensen Ms. Jensen reviewed the changes that were made to the DROP distribution policy that were requested at the last meeting. MOTION: Mr. Barone made a motion to approve and accept the DROP Distribution Policy. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carriers unanimously 5 -0. ADMINISTRATOR REPORT Tegrit Plan Administrators, LLC (TPA) - Presented by Audrey Ross Ms. Ross commented that she would like to have the minutes that were tabled at the last meeting to be approved today. MINUTES MOTION: Mr. Seindensticker made a motion to approve the minutes from the December 12, 2008 special meeting and the January 14, 2009 special meeting. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 5 -0. A30U RN There being no further business, and the future meetings are scheduled for the last Thursday of the first month of the quarter. The next meeting is scheduled for Thursday April 30 2009 at 9AM; the Trustees officially adjourned the meeting at 3:31PM. Respectfully submitted, DAVID PIERSON, Secretary