HomeMy WebLinkAboutAgenda Fire Pension 011209l 7
Teght Plan Adm/n/sfrators
I ~. . Tegrit Plan Administrators .. ~. . ,,~ ~ - I.i>.'.
PALM BEACH GARDENS FIREFIGHTERS'
PENSION FUND
Meeting of Monday, January 12,2009
Location: Council Chambers, Palm Beach Gardens City Hall
10500 North Military Trail
Palm Beach Gardens, FL 33410
Time: 9:00 A.M.
AGENDA
1. Call Meeting to Order
2. Welcome of New Trustee: Roy Olliff
3. Minutes of Meeting Held November 17,2008
4. Annual Audit: Steve Gordon
5. Investment Monitor Report: Bogdahn Consulting
TIPSCIPS Manager Search
International Growth Manager Search
Report on changes at Voyageur
Status of Disability Hearing for Toby Bivins
* Request by Crty for Actuarial Information
6. Attorney Report: Bob Sugarman
7. Administrative Report: Margie Adcock
Disbursements
8. Other Business
9. Schedule Next Meeting: Monday, March 16,2009 at 9:OO A.M.
10.Adjouyn
PLEASE NOTE:
Should any interested party seek to appeal any dedsion made by the Board with respect to any matter
considered at such meeting or hearing, he will need a record of the proceedings, and for such purpose he
may need to insure Mat a verbatim remrd of the proceedings is made. which remd indudes the testimony
and evidence upon which the appeal is to be based. In accordam with the Americans WW Disabilities Act of 1990, persons needing a spedal acmmmodation to participate in this meeting shwld contact Tegril Plan
Adminim, UC m later man four days prior to the meem.
Resource Centers LLC - Omega Recordkeeping Group LLC
Pension Resource Center LLC - Financial Resource Center LLC
I December 18,2008
Mr. Ed Morejon
City of Palm Beach Gardens Firefighters
c/o The Pension Resource Center, LLC
4360 North Lake Blvd., Suite 206
Palm Beach Gardens, FL 33410
Dear Ed:
Voyageur’s success has always been predicated on our ability to provide our clients with unparalleled
service. Part of our commitment to clients is to proactively communicate changes at the firm. I’d like to
inform you of the following changes taking place at Voyageur:
Mike Lee has assumed the role of Chief Executive Officer, replacing John Taft who continues
in his role as President, Chief Executive Officer and Head of RBC Wealth Management, U.S.
Division. Mike will maintain his current responsibilities and continues to report to John
Montalbano, the head of the RBC Global Asset Management.
Carol Kuha has been promoted to the position of Chief Operating Officer-US. Carol is
responsible for working with business lines to develop and implement corporate strategy and
initiatives for the firm. Carol continues to report to Mike Lee.
Randy Zeller has been promoted to the position of Managing Director, Head of Client Service.
He reports to Mike Lee and oversees institutional client service and consultant relations for the
firm.
If you have any questions or concerns about these changes, please don’t hesitate to contact me or your client
service representative.
Sincerely,
Michael T. Lee, CFA
President and CEO
November 7,2008
Margaret M. Adcock
The Pension Resource Center, LLC
4360 Northlake Blvd, Suite 206
Palm Beach Gardens, FL 33410
Dear Margaret:
Re: City of Palm Beach Garden Firefighters Pension
I'm writing today to inform you that Jack Farland, institutional sales and client service representative,
left Voyageur on October 3 1. With Jack's departure, I will become your primary client service contact
effective immediately. As you know, I have been very involved in your international account, so I
expect a smooth transition into this new role.
Thank you for your continued business. Please feel free to contact me with questions about this
transition or any other service need you may have. I can be reached at 6 17-722-4727, or via email at
mspencer@voyageur.net.
Sincerely,
Mike Spencer
Senior Portfolio Manager
Voyageur Asset Management Inc.
January 9,2009
Ms. Margaret M. Adcock
Administrator
Tegrit Plan Administrators, LLC
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, Florida 33410
Re: Proposed Fees for Projection of Required Contributions for the City of Palm Beach
Gardens Firefighters' Pension Fund
Dear Margie:
As requested, we are providing a fee estimate for an actuarial study to project required contributions
for the above-mentioned Pension Fund under various economic scenarios.
A description of the project is as follows:
GRS will provide projected contribution requirements for future actuarial valuations as of
10/1/2008 - 10/1/2012 under various economic scenarios. All scenarios will start with the actual
market value of assets as of October 1,2008. For future years, assumed market value returns are
shown in the table below.
Contributions for Assumed Market Value Return for
Valuation Fiscal Year Year Ending on Valuation Date
10/1/2008 10/1/2009 Actual Actual Actual Actual
10/1/2009 1 0/1/201 0 0.00% -15.00% -25.00% 8.25%
1 O/I /2010 10/1/2011 8.25% 8.25% 8.25% 8.25%
10/1/2011 10/1/20 I 2 8.25% 8.25% 8.25% 8.25%
1 0/1/2012 10/1/2013 8.25% 8.25% 8.25% 8.25%
Date Beginning Scenario 1 Scenario 2 Scenario 3 Scenario 4
We will also assume that demographic experience (e.g., retirements, deaths, pay increases, etc.) will
exactly follow the actuarial assumptions used in the most recent valuation as of September 30,
2007.
Ms. Margaret M. Adcock
January 9,2009
Page 2
The fees to produce these results would not exceed $3,000. Should the City or Board wish to
proceed with this analysis, results will be provided in two to three weeks from the date the approval
is given.
Please let us how if you have any questions or comments regarding this proposal.
Respectfully submitted,
W@W
Brad Lee Armstrong
BLA:mrb
Gabrid Rocdcr Smith & Company
PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
MINUTES OF MEETING HELD
November 17,2008
A meeting of the Board of Trustees was called to order at 9:15 A.M. at Council
Chambers, Palm Beach Gardens, Florida. Those persons present were:
TRUSTEES OTHERS
Tom Murphy Margie Adcock, Administrator
Rick Rhodes
Richard Hitchins
Ken Hamson, Attorney (10:02 A.M.)
Mike Dana, Dana Investment Advisors
Janna Woods & Gilbert Garcia, Davis Hamilton
It was noted that Rick Rhodes received an e-mail this morning advising that neither Joe
Bogdahn nor Mike Welker would be coming to the meeting. The e-mail indicated that they
would review the international manager search at the next meeting.
MINUTES
The Board reviewed the minutes of the meeting held October 20, 2008. A motion was
made, seconded and carried 3-0 to accept the minutes of the meeting held October 20,
2008.
INVESTMENT MANAGER REPORT DANA INVESTMENT ADVISORS
MiEe Dana appeared before the Board. He discussed the market environment. The market
continues with deleveraging. Stocks and bonds are reacting to the deleveraging situation.
He stated that he did not think the Board would want to go into TIPS/CIPS right now but
maybe when inflation comes back. The focus is on the GM situation right now. It is a
significant continuance of this deleveraging. He noted that anytime there is a mortgage
and housing decline, it takes a long time to come back.
Mr. Dana reviewed the performance of the portfolio as of September 30,2008. The total
portfolio was down 8.70% for the quarter while the Russell 3000 Value was down 8.73%
and the Russell loo0 Growth was down 12.33%. The Board inquired as to an update of
performance though the end of October. Mr. Dana stated that he did not have an update
but could call and get an update through November 14. After obtaining the information
from his offi, Mr. Dana reported that calendar year to date through November 14,2008
the portfolio was down 32.3%. For the fiscal year to date through November 14, 2008
the portfolio was down 26.8%. Mr. Dana revkwed the history of stocks and recessions.
He noted that no one could time the market. They avoided the big blowups of Lehman
Brothers, Washington Mutual, Fannie May and Freddie Mac, Wachovia, National City,
Bear Sterns, Merrill Lynch and Countrywide. He stated that they expect unemployment
to rise. He reviewed the asset allocation as of September 30,2008, which was 55.3% in
2
large cap growth; 34.5% in large cap value; 8.6% in small cap and 1.5% in cash. He
reviewed the holdings in the portfolio as of September 30, 2008. He thinks the Board
needs to be cautious with bonds. He thinks TIPS will be good down the road but he does
not think the Board can afford to own them for a while. There was a lengthy discussion
on the market and out look.
Ken Harrison entered the meeting.
INVESTMENT MANAGER REPORT DAVIS HAMILTON JACKSON
Janna Woods and Gilbert Garcia appeared before the Board. Ms. Woods stated that they
would review the portfolio and the performance and then discuss TIPSKIPS. Mr. Garcia
stated that the portfolio was down 2.60 for the quarter ending September 30, 2008 while
the benchmark was down .13%. As of November 14", the portfolio was down 2.43%
while the benchmark was down .50%. He stated that when the market does turn around
the Fund could miss a significant amount of rebound if it is not invested in the market. He
stated that a significant amount of their underperformance was due to the fact that they
did not sell Lehman Brothers soon enough. Mr. Garcia reviewed the 3rd Quarter 2008
Fixed Income market commentary. The failure of Lehman Brothers and the failure of the
government to step in was one of the more cataslxophic events that lead to these other
things. The Fed saving Fannie May, Freddie Mac and AIG but not Lehman Brothers
created such uncertainty. There is still not a coherent longer-term strategy to handle this
crisis. He reviewed the corporate bond spreads From 1997 to 2008. The models show
improvement could potentially happen in the second half of 2009. If they were to make
wholesale changes they would miss the rebound. Mr. Garcia reviewed the potential total
return opportunity using a GE 10 year bond. He discussed the government policy actions
that are taking place. He reviewed the fixed income portfolio characteristics as of
September 30,2008. Although they have an overweight in corporate bonds (35% versus
17%), they have 65% to 70% in US guaranteed securities or agency securities.
Mr. Garcia discussed TIPS/CIPS. He reviewed the differences between TIPSKIPS. He
stated that they give exposure in the event inflation increases. 'It has been a severe
underperforming asset over the last couple of months. In an environment where the
outlook is for deflation, every asset class outside of normal Treasuries has
underperformed significantly, particularly on the short end. Ms. Woods stated that she
understands that the Board has not approved the use of TIPS/CIPS as of yet. They would
recommend not having a special allocation for TIPSKIPS so they would not be required
to have them in the portfolio unless they see an opportunity for them.
Mr. Woods discussed the transition of the account. She stated that they received a lot of
corporate bonds when they received the portfolio. There was discussion on how much of
the underpe&nnance was due to what was received in the portfolio. Mr. Garcia stated
that the right thing would have been to sell the Lehman Bmthers holdings. However, it
was a small issue and liquidity was poor. They did not anticipate that poor would go to
disastrous. Lehman Brothers was an unforeseen surprise. It was one of the biggest
components of their whole underperformance.
3
The Board reviewed the Addendum to the Investment Policy Statement that was prepared
by the Investment Monitor. Ms. Woods stated that it would be best if there were only
one portfolio where they have the option to add to TIPSICIPS if they found it to be
appropriate. Mr. Hanison stated that the Addendum refers to “each portfolio” so it
implies that two accounts would be open. It clearly talks about different portfolios. Mr.
Harrison recommended that the Board not sign the Addendum until it is cleared with the
Investment Monitor. Ms. Woods and Mr. Garcia stated that they would talk to Mr.
Bogdahn about what they would like to see in the Addendum. Mr. Harrison stated that he
would talk to Mr. Bogdahn as well.
ATTORNEY REPORT
Mr. Harrison discussed the status of the disability hearing for Toby Bivins. He stated that
they sent the letter to Dr. McFarland requesting additional information and requested a
response by December IOth. He stated that they received no response as of yet. The
Board inquired about the status of scheduling the FCE for Mr. Bivins. Mr. Harrison
stated that there was nothing in his meeting file that indicated that they have heard from
anyone. He will have Jessica from his ofice. provide the latest update to the
Administrator.
Mr. Harrison discussed the second workshop held regarding the proposed changes to
Rule 60T.
Mr. Hamson discu&d the updates to USERRA and the changes to the death provisions.
He noted that there are also disability provisions that are not mandatory but that conflict
with Chapter 175. Chapter 175 provides that a plan cannot give disability benefits if the
disability occurred in the armed services.
There was a lengthy discussion on FRS and mergers. There was discussion on the market
downturn and the effect on contributions. Mr. Harrison stated that it is a difficult market
right now. If the investment return does not meet the assumption, the City has to make
that up. It can be spread out over time, but the funding percentage becomes critical.
ADMINISTRATlVE REPORT
Ms. Adcock presented the list of disbursements to be made. A motion was made,
seconded and carried 3-0 to approve the disburssmentslktd
Mr. Rhodes asked Ms. Adcock to e-mail the agenda packet to the Board before the
meeting and bring hard copies of the material to the meeting rather than sending the
agenda packet to the Board before the meeting via overnight delivery.
Ms. Adcock discussed the research regarding the crediting to Share Accounts. She
provided the Board with copies of the Ordinances regarding crediting to Share Accounts.
It was noted that the first Ordinance provision credited the Share Accounts by salary. It
was then changed to crediting by service.
Ms. Adcock provided a schedule of meeting dates for 2009. A motion was made,
seconded and carried 3-0 to approve the meeting calendar for 2009.
Ms. Adcock reported on the name change to Tegrit Plan Administrators. She stated that
the fii has m additional partner. They are changing the name and the letterhead,
although they do not believe it requires a change to the contract. The name change would
not affect the Fund or the operations of their firm. It is believed that the change will bring
in extra resources to their firm.
Ms. Adcock stated that she was in the process of updating the Application for Benefits to
include the DROP and PLOP. She has provided the draft Application to the Actuary for
input as to information he would need for someone wanting the PLOP.
OTHER BUSINESS
Mr. Murphy stated that he understood that Voyageur laid off some people. Mr. Harrison
stated that he understood those were client service people and not analysts. He stated that
the Bard should ask Mr. Bogdahn to report on that.
There being no further business, the meeting adjourned.
Respectfully submitted,
Tom Murphy, Secretary
PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
DISBURSEMENTS
January 12,2009
TEGRIT PIAN ADMINISTRATORS, LLC.
(Bill for services for December and January 2008)
REGIONS MORGAN KEEGAN TRUST
(Custodial Fees for October and November 2008)
SUGARMAN & SUSSKIND
(Fees for legal services for November 2008)
STEVEN I. GORDON
(Progress bill for audit for year ended
September 30, 2008)
(3rd and 4'h Quarter 2008 Monitoring Fee)
BOGDAHN CONSULTING, LLC.
Total Disbursements for Approval
3,250.00
1,391.02
2,365.50
4,205.00
7,750.00
18,961.52
(Trustee) (Trustee)
‘leprit -
=PlMAm#nbmm
4310 Norlhl.ke BM
SUlh 208
Pdm Beach I?ard.na, FL 33410
Invoice
Dsaa lnvolcril
Total Amount Due 31,675.00
Post Ollice Box 12385
Birmingham. Alabama 35202-238s
J. SCOTT BAUR
TEGRIT PLAN ADMINISTRATORS
4360 NORTHLAKE BLVD, SUITE 206
PALJ4 BEACH GARDEN FL 33410
-
$ 1, jPh. 3::
c. .......... .,t~...r~~r . OF X'tYN!I~.'T
PREVIOUS BALANCE 1,439.06
1.' ., . 727,Z.l
..................................................... .llf.f..l.Al.
..... .. i c. .: . :.
1,388.02
-. _.. .
BALANCE DUE s
... .. -. .~ . .! i^ 1-.3 ....... _- 2- - _. 1" ___._
.... TOTAL
..................... ......................... .......*.....
I.__ ._..I .. ..
S 16,4 6 R , F7 - ............ ..............
s";.y;.,,:,'; ,!.' ,:v:: ~'~;,,,~::l,~~'~?!~!.: 1>111;,1 I ............................................... .............
.<.:YJx - - ,:. . ...... ........... ......... ~~~~ .- .................. ....... . I, :r;, , I' ........... . ;$L.--
TOTAL AMOW DUE FOR CURRENT PERIOD 5 686.20
......... i. ... :. ._ ........... . ,.
I REGIONS MORGAN KEEGAN
STATEXEWT OF 'PRUSl'EES FEES INVOICE DATE 12/12/2008
ACCW" NAME PERCENTME MARKET VALW
3320005077 PB OAROENS FIRE 15.85873802t 3,264,707.07
3320010132 PB GARDENS FREED 11.752437470 2,419,376.98
3350000088 PB GARD ?IRE EQ 38.66768751% 7.960.196.62
3350000097 PB GARD FIRE FXD 17.981746520 3.702.988.42
33woooio4 PB CARD FIRE AGN 15.733390480 3,238.902.81
FEES ARB WITHIN 120 DAYS OF THE IMWZCB MT8.
ANY FEB KTr PAID WILL BE MAR[IKD 'Eo "HE TRDST.
IF you HAVE ANY QUESTIONS, PLEASE COUTACT
CINDY FARBOVI AT 813-639-3411
2
J. SCOTT BAUR
THE PENSION RESOURCE CENTER, INC
4360 NORTHUKE BLM, SUITE 206
PALM BEACH GARDEN PL 33410
iY,C i i E I n[?IBE?. 4 6 0 < >
SU!.IILAP.Y OF .'ICCOUI:T
PREVIOVS BALANCE
........................................
?;1Y:,:Ex;TS PECXI>:fD:
CURREI!T FEE:
BALhNCE DOE
. - __ ~ - ChLCULATIC:< DET>.IL I__ ........................................
KrTE
5 1, .:33, ,.:e
.Il*tl**t*ll. ..,..1~**1.+1
2.049.32
1.315.3:
704. R2
S 1.439.06
.0~01'"08 - i; :1:230c ............. .............
FEE TOrAI.
17,620.55
5
17.62C.55
17.620.5'1
FEE CALCULh?IOX EETAIL 13:Cl 2306 - N'Xl '2OOP
I TE!.l X.:?\;:)y ............ .................................
DISCOUNT : PERIOD ENDING 10/31:200R 16.915.71-
I;LII.D~RY OP FEE CALC~JLATION IIE'~RIL ..................................................... .............
ITE!.!
W&KET VhLU?
DISCOUNT
.. .l... .... rr..,. L,... .......... ..........
17,620.55
16.915.73
TOTAL AMOUNT DUE FOR CVRRENT PERIOD .5 704.82
FOP. FEZ CALCULATION PERIOD 10. @1:2Ofl8 - 10/31,1flOR
CONSOLIDATED ACCOUNT PRORATION FOR EVtSTER ACCOUNC 1.121485 S'Al~l.1 BCH GhHDEEIS
AX'3IJ:IT II.U.I?
~ .. , ,, -c-: -,=. cxnF::$ =TR=
F EECENTAtiE ;c.:a":.:T cii;<i.,~;,~ .EILL I.':::: .....
: 5. 5 0 6 '?7 0 19'f. 1m.50 3Iil. -.-_ILI^-
~~~~~ ~ ....... . - ......
!5250?0132 PB GARDENS FREEC 11 .i36453D?P RO.61 BILL T3 .i/C JjLC005977
33500000RR ?B GHRD FIRE EO 41.2326171Rh 290.67 BILI, 1'0 A/C 3320005077
3350000097 PB GARD FIRE FXD 16.9759O~~~Y. 113.65 BILL TO 4iC 3320005077
?,3SCGOfl194 PB GARD FIRE AGN 1.l.E1RO5721Y. 104.62, EILI. m AJC 33r0cc5077
._ ..&,REGIONS . L MORGAN KEEGAN
pod~BOX1236S TliLIST
Blnlngham, Ahlsama -2385
332000507’1 PB OMDENS FIRE 15.50697029% 3,278,909.56
3320010132 PB GARDW PREO 11.43645303% 2,418,209.01
3350000088 PB GARD FIRS EQ 41.23261’118* 8,718,532.44
3350000097 PB GARD FIRE FXD 16.97590229* 3,589,511.53
3350000101 PB GARD FIRE AGN 14.848057219 3.139.584.08
FEES ARE Dw llfillIN 120 DAYS OF THE INVOICE DATE.
ANY FEB Wm PAID HILL BE CHARGED TO THE TRUST.
IFyoowA~AmQwsTT~, PLBMECOEFPACT
CasDy FARPJXJ AT 813-639-3411
2
SUGARMAN & SUSSKIND
. SUGARMAN & SUSSKIND
100 Miracle Mile
Suite 300
Coral Gables, Florida 33134
Telephone: 305-529-2801
www.sugormansusskind.net
Fox: 305-447-81 15
City d PaLn Beech oardcns Fiihkm'pensrOn Fund
clb Wxgatut M. Adcock. Administrator
The Pertsion Resarree Center, Inc.
4360 Northlake Boulevard, Sui 208 Pahn Beach Gardens FL 33410
Dscembar 04.200
ClientMatter FBGFDISA-BM
In Rafwsnca To:Toby Bivins Disability
Arount
pravkus belance 51,015.94
(5207.44)
($680.25)
Total payments end adjustments ($887.69)
IlIlM008 Pmt - Thank YW. Chedc NO. 8798935 1111012008 Payment - Thank You. Check No. 8798935
Bahnce due
CkntMatter PBGFMER
InRekenceTrnMeethg
Professional Sendces
HRRIazeAmount
11112RooB Review and edit minu-, email to PRC 0.30 85.50 285.00hr
285.001hr
285.00hr
11/17/2008 Prepareformaating 0.50 142.50
Attsndnmethgandbevel 6.00 1,710.00
6.80 51,938.00 For pweswml ' senrieesrendwad
CHy d Pahn Beach Gardms Fmflghterd Pension Fund
Previous balana,
1 I/lOnooS Papent - Thank Yar. Check No. 8798935
Total paymenb and adjustmanis
paae 2
Amwnt
52.707.50
($1,567.60)
(51,567.50)
Balance due 93.078.00
ClintMattCr PBGFMISC
In Rcfcrsncr TmMiscelm
FTOkdUWlSl?lVbS
HrslRateAmaunt
11/y2008 Rev*wandrespondemailconsultantrderena,agreement 0. !a 142.50
0.50 142.50
286.OQlhr
285.OQlhr
285.0olhr
11/1312008 Receipt and review of mail and attechments from Margie. email to client
11114ROoB Revimandeppcareagreement 0.60 142.50
Fapmiewod . Servke3- 1.50 5427.50
WmwdW 5427.50
ClientMaMr PBGF:PLAN
InReteremeTmPlan
Amount
Pleviousrnnce $142.50
Balance due $142.50
Pa& 3
Steven I. Gordon
Certified Public AbmmWl
4600 W.C!amndal BIvd.. sb 5
Tmrac, FL 333 19
Fkac (9%) 435-5788
Pabn Beach Gardens Fbefighten Penslan
do Pension Resources Inc.
4360 N. Lake Blvd.. # 206
FabnEkachGarden$FL 33410
Invoice#: 5498
Date: 1/5/2009
Pmgress baling in connection with artaied audit as of and for the yar adcd
Septemba 30,2008
S2.145.00
Tom1 Charges: 2,145.00
Prior Balance (Credit) Befon this Invoice: 1,460.00
Steven I. Gordon
Wfied PuMk Acwunlml
4600 W. Canmerrial Ukd, SIC. 5
Tam- FL 33319
Phone (!354)485-5788
Palm Besch Ga~kiis Firefighters Pmsion
do Pension R~s~~rces Inc.
4360N. Lake Blvd., X 206
Palm Bench Gardens. FL 334 IO
Invoid: 5462
Date: 12/10/2008
Pmgrcss billing in connection with wrtifi audit asofand fortheyearended
Septembar 30,2008 t1,460.00
TotdCharges: 1,460.00
Prior Bal~w [Credit) Before this Invoice: 0.00
Totd Balance hre: S1.460.00
THE BOGDAHN GROUP
340 West Central Avenue Suite 300 Winter Haw& FL 33880
Bill To
Palm Beach Gardens Firefighters' Pension
C/O Pension Resource Center
4360 NorthLake Boulevard
Palm Beach Gardens, F1 33410
Invoice
Description
Performance Evaluation and Consulting Services
additional portfolio evaluation - intemational equity
additional portfolio evaluation - real estate
additional portfolio evaluation - fixed income
10/01/08 - 12/31/08
Invoice #
I Balance Due
Amount
2,000.00
625.00
625.00
625.00
$3,875.00 1
ROUP
Performance Evalua1ion and Consulting Services
07/01108 - 09/30/08
additional portfolio evaluation - domestic equity
additional portlblio cvaluation - international equity
additional po;Ilolio cvuluation - fixed income
340 West Ccmral Avenue Suite 300 Winter Haven, FL
Bill To
Palm &ach Gardens Firefighters' Pension
C/O Pension Resource Center
4360 NorthLake Boulevard
Palm Beach Gardens. FI 33410
2,000.00
625.00
625.00
625.00
33880
Invoice
9/30/2008 I 3400
I Description I Amount
CITY OF PALM BEACH GARDENS FIREFIGHTERS’
PENSION FUND
FINANCIAL STATEMENTS
SEPTEMBER 30,2008 AND 2007
CITY OF PALM BEACH GARDENS FIREFIGHTERS PENSION FUND
FINANCIAL STATEMENTS
SEPTEMBER 30,2008 AND 2007
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT
FINANCIAL STATEMENTS
Statements of plan net assets
Statements of changes in plan net assets
NOTES TO FINANCIAL STATEMENTS
SUPPLEMENTAL INFORMATION
Schedules of administrative expenses
Schedule of contributions from
employer and other contributors
Schedule of funding progress
COMPLIANCE REPORT
Report of Independent Certified Public Accountant on Internal Control over
financial reporting and compliance and other matters based on an audit of financial
statements performed in accordance with govemment auditing standards 13-14
11
12
Page No.
1-2
3
4
5-9
10
Steven I. Gordon
Certified Public Accountant \
INDEPENDENT AUDITOR'S REPORT
Board of Trustees
City of Palm Beach Gardens Firefighters' Pension Fund
Palm Beach Gardens, Florida
I have audited the accompanying statements of plan net assets of City of Palm Beach
Gardens Firefighters' Pension Fund ("Fund") as of September 30, 2008 and 2007, and the
related statements of changes in plan net assets for the years then ended. These financial statements
are the responsibility of the Trustees. My responsibility is to express an opinion on these financial
statements based on my audits.
I conducted my audits in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States of America. Those
standards require that I plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by the Trustees, as
well as evaluating the overall financial statement presentation. I believe that my audits provide a
reasonable basis for my opinion.
In my opinion, the financial statements refmed to above present fairly, in all material
respects, the Plan's net assets as of September 30, 2008 and 2007, and the changes in the Plan's
net assets for the years then ended in conformity with accounting principles generally accepted in
the United States of America.
My audits were conducted for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary schedules of administrative expenses are
presented for the purpose of additional analysis and are not a required part of the basic financial
statements. The schedules have been subjected to the auditing procedures applied in the audits of
the financial statements, and, in my opinion, are fairly stated in all material respect in relation to the
basic financial statements as a whole.
In accordance with Government Auditing Standards, I have also issued my report dated
December 23,2008 on my consideration of City of Palm Beach Gardens Firefighters’ Pension
Fund internalcontrol aver financial reporting and on my tests of its conpliance with certain
provisions of laws, regulations, contracts and grants. The purpose of that report is to describe the
scope of my testing and not to provide an opinion on the internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be considered in assessing the results of my audit.
The supplemental schedules of fhding progress and the schedule of contributions from the
emptoyer and other contributors, which show historical pension information, are not a required
part of the basic financial statements, but are supplementary information required by the
Government Accounting Standards Board. I have applied certain limited procedures, which
consisted principally of inquires of management regarding the methods of measurement and
prpentati-on of the supplementary information. However, I did not audit the information and ..
nit.
/ Steven I. Gordon, CPA
December 23,2008
2
CITY OF PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
STATEMENTS OF PLAN NET ASSETS
SEPTEMBER 38,2008 AND 2007
Accounts payable
Total liabilities
ASSETS
$ 45,516 $ -
$ 45,516 $ -
Investments, at fair value (Note 3)
Receivables:
Employees contributions
Employer contributions
Chapter 175 tax contributions
Accrued investment income
Total receivables
Total assets
2008
$ 22,519,822
27,759
763,998
262,s 1 1
75,218
1,129,486
$ 23.649.308
2007
$ 22,377,703
20,593
336,215
56,576
4 13,384
-
$ 22.791.087
READ THE NOTES TO THE FINANCIAL STATEMENTS
3
CITY OF PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
STATEMENTS OF CHANGES IN PLAN NET ASSETS
MIR THE YEARS ENDED SEPTEMBER 30,2008 AND 2007
idditions:
Investment income -
Net (depreciation) appreciation in fair value of investments
Interest and dividend income
Less: Investment expenses
Total investment (loss) income
Net investment (loss) income
Contributions -
Employer
Florida Chapter 175 taxes
Employees
Total contributions
Miscellaneous income
Total additions
Ieductions:
Benefits paid
Administrative expenses (See Schedule)
Total deductions
Increase in plan net assets
'Ian net assets held in trust for pension benefits:
Beginning of year
End of vear
2008
$ (3,407,533
496,177
(2,911,356
174,493
(3,085,849
3,055,991
654,444
801,846
4,512281
4,635
1,43 1,067
558,637
59,724
618,361
812,706
22,791,087
$ 23.603.792
2007
$ 1,524,351
558,495
2,082,852
99,534
1,983,3 18
2,247,828
718,044
759,893
3,725,765
8,141
5,717,224
183,021
65,456
248.477
5,468,147
17,322,340
$ 22.791.087
READ THE NOTES TO THE FINANCIAL STATEMENTS
4
CITY OF PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
SEPTEMBER 30,2008 AND 2007
(1) DESCRIPTION OF THE PLAN
The following description of the City of Palm Beach Gardens Firefighters’ Pension Fund (“Plan”)
provides only general information. Participants should refer to the City’s ordinance for more
complete information.
. General-
The Plan is a single-employer combined defined benefit and money purchase plan covering all
eligible firefighters. The Plan was established by the City in accordance with a City ordinance and
state statutes.
. Eligibility-
Plan as a condition of employment.
. Benefits-
AI1 firefighters as of the effective date, and all future new firefighters, become members of the
Defined Benefit portion:
The Plan provides retirement, death and disability benefits. The benefit provisions are established
and may be amended under the authority of City Ordinance. Normal retirement age is age 52 with
10 years of credited service or upon completion of 25 years of credited Service, regardless of age.
The Fund provides a normal retirement benefit equal to 2.75% of the participants average final
compensation, for each year of credited service, provided however, that the benefit shall not exceed
75% of average final compensation but shall, in any event, average at least 2% for each year of
credited service. The monthly retirement benefit for members retiring on or after January 1, 2005
will be equal to 3% of average final compensation for each year of credited service, provided,
however, that the benefit does not exceed 99% of average final compensation.
Early retirement age is age 50 with 10 years of credited service. Early retirement benefit shall be
determined by reducing the normal retirement benefit by 3% for each year by which the
commencement of benefits precedes age 52.
The death benefit for a member who was partially or fully vested, but had not attained at least age
50, is a payment to the member’s beneficiary for 10 years, beginning on the date that the member
would have attained age 52 for a normal retirement benefit or age 50 for an early retirement benefit,
at the option of the beneficiary.
The disability benefit for a service-incurred disability is 60?? of the average final compensation.
The disability benefit for a non-service incurred disability, for participants with 10 or more years of
service only, is 2.5% of average final compensation multiplied by the credited service.
5
CITY OF PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
SEETEMBER 30,2008 AND 2007
(1) DESCRIPTION OF THE PLAN (CONTINUED):
Benefits (Continued) -
Money purcbme portion:
Upon death, disability or termination as described above, the participant is also entitled to the
value of their individual account in the money purchase portion of the plan,
. Funding-
All participants are required to contribute 6.00% of pretax earnings.
Pursuant to Florida law, the City of Palm Beach Gardens is ultimately responsible for the
actuarially soundness of the Plan. Therefore, each year, the City of Palm Beach Gardens must
contribute an amount determined by the Trustees in conjunction with the Plan’s actuary to be
sufficient, along with the employee’s contribution, to fund the defined benefits under the Plan.
Pursuant to Chapter 175, Florida Statutes, the City imposes a 1.85% tax on fire insurance
premiums paid to insure real or personal property within its corporate limits. The proceeds of this
tax are contributed to the Plan and allocated to the individual participants’ accounts to fund the
money purchase portion of the benefits.
Commencing in 2004, 2.00% of the total salaries for all members during the Plan year will be
deducted fiom the Chapter 175 monies and credited as additional member contributions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
. Valuation of investments -
Investments in common stocks,
international funds, mutual funds, real estate, government securities, and corporate bonds are valued
at quoted market prices. (See Note 3)
. Incometaxes-
no provision for federal income taxes has been made.
Investments in money market funds are valued at cost.
The Plan is exempt &om federal income taxes under the Internal Revenue Code and, accordingly,
6
CITY OF PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
SEPTEMBER 30,2008 AND 2007
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTIMTED):
. Use of estimates -
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amount
of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
. Purchases and sales of securities -
Purchases and sales of securities are recorded on a tradedate basis,
. Accounting principb -
November 30, 1989, unless they contlict with or contradict GASB pronouncements.
The Plan applies all GASB pronouncements as well as FASB pronouncements issued on or before
(3) INYESTMENTS:
The Plan’s investments are being held by Regions Bank. Investments at September 30, 2008 and
2007 consisted of the following: - 2008 2007
Common Stocks $10,356,465 $10,714,340
Government Securities 5,101,054 1,428,964
Corporate Bonds 1,435,794 1,683,268
Mutual Funds - 3,088,095
Miscellaneous - 31,685
International Funds 1,184,091 1,787,539
Real estate 1,131,913 1,086,356
Cash & cash equivalents 3.310.505 2.557.456
Total Q2J19.822 -377.703
7
CITY OF PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR TEE YEARS ENDED
SEPTEMBER 30,2008 AND 2007
(3) INVESTMENTS (CONTINUED):
During the year ended September 30, 2008 the Plan’s investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in value by $3,407,533 as
follows:
Common Stock $(2,455,577)
Guvemment Securities ( 96,819)
International Funds ( 697,054)
Mutual Funds 61,526
Miscellaneous ( 6,670)
Corporate Bonds ( 210.375)
$c3.407.534
The Fund’s investments in government securities and corporate bonds had maturities as follows:
Real estate ( 2,564)
Investment Maturities
Investment me Fair value Less than 1 1-5 6-10 More than 10
Corporate bonds $1,435,794 $100,750 $ 529,655 $ 792,273 $ 13,116 US Treasuries 487,040 - - 82,913 404.127
US Agencies 4,6 14,014 - 1,699,530 836,631 2,077,853
Totals $6,536,848 $100,750 $2,229,185 161,711,817 $2,495,096
The Fund does not have a formal investment policy that limits investment maturities as a means of
State law limits investments in corporate bonds and commercial paper to the top three ratings
managing its exposure to fair value losses arising hm increasing interest rates.
listed by nationally recognized statistical rating organizations. The Fund’s corporate bonds and
money market funds were rated by Moody’s Investors Services as follows:
Rating Fair Value
Aaa $1,913,232
Aa 1 169,716
Aa2 65,533
Aa3 97,612
A1 397,450
A2 3 12,488
Baal 119,448
Baa2 211,307
Baa3 15,203
unrated 3.2 16.876
A3 17,983
Total %6536.848
8
CITY OF PALM BEACH GARDENS FTREFIGHTERS’ PENSION FUND
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
SEPTEMBER 30,2008 AND 2007
(3) INVESTMENTS (CONTINUED):
The Fund limits investments that may be invested in any one issuer to no more than 5% of Plan
Net Assets, other than those issued by the US Government or its Agencies. More than 5% of the
Fund’s plan net assets are invested in debt securities issued by the United States Agencies. This
investment represented 19.55% of Plan Net Assets.
(4) ACTUARIAL VALUATION
The most recent actuarial valuation was done as of October 1, 2007. At that date the actuaries
determined that the unf3nded accrued actuarial liability for benefits was $15,578,135 while the
actuarial value of the assets available to pay benefits was $18,247,947
They hrther determined that the required City contribution for the year ended September 30,
2008 was $3,055,991, which was contributed in full.
Additional information regarding major assumptions used by the actuaries and hnding progress is
included in the attached supplemental information.
(5) RISKS AND UNCERTAINTIES
Fund contributions are made and the actuarial present value of accumulated plan benefits are
reported based on certain assumptions pertaining to interest rates, inflation rates and employee
demographics, all of which are subject to change. Due to uncertainties inherent in the estimations
and assumptions process, it is at least reasonably possible that changes in these estimates and
assumptions in the near term would be material to the financial statements.
The Fund invests in various investment securities. Investment securities are exposed to various
risks such as interest rate, market and credit risks. Due to the level of risk associated with certain
investment Securities, it is at least reasonably possible that changes in the values of investment
securities will occur in the near term and that such changes could materially affect the amounts
reported in the statement of net assets available for benefits.
9
CITY OF PALM BEACH GARDENS' FIREFIGHTERS PENSION FUND
SCEEDULES OF ADM3NISTRATIVE EXPENSES
FOR THE YEARS ENDED SEPTEMBER 30,2008 AND 2007
I
2008
Accounting $ 5,125
Actuarial fees 8,900
Administrative fees 11,919
Conferences 6,738
Insurance 7,070
Legal fees 17,344
Miscellaneous 2,628
Total expenses $ 59,724
2007
$ 4,655
21,825
6,211
10,522
6,713
15,040
490
$ 65,456
READ THE NOTES TO THE FINANCIAL STATEMENTS
10
CITY OF PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND
SCEEDULE OF CONTRIBUTIONS
FROM EMPLOYER AND OTHER CONTRIBUTORS
AS OF SEPTEMBER 30,2008
(UNAUDITED)
I YearEnded 1 SepternE30 1:
2000
Annual
Required Contribution
$2,247,828
1,542,934
1,188,002
739,310
731,241
594,562
423,628
227,154
200,759
Actual
Contribution
$2,247,828
1,542,934
1,188,002
739,310
731,241
594,562
423,628
227,154
200,759
Contributed
100.00
100.00
100.00
100.00
100.00
100.00
100.00
The information presented in the required supplemental information was determined as part of the
actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation
is as follows: I Valuation date
Mortality rates
Actuarial cost method - Funding
Remaining amortization period
Actuarial assumptions:
Investment rate of return
Projected salary increases
Postretirement benefit increases
Inflation
October 1,2007 1
RF’ 2000 Mortality Table
Projected Unit Credit Actuarial Cost Method
27 years
8.25%
4.50%
None
4.50??
11
Steven I. Gordon
Certified Public Accountant \
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL.
REPORTING AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING
STANDARDS
The Board of Directors
City of Palm Beach Gardens
Firefighters’ Pension Fund
Palm Beach Gardens, Florida
I have audited the financial statements of City of Palm Beach Gardens Firefighters’
Pension Fund, as of and for the year ended September 30,2008, and have issued my report
thereon dated December 23,2008. I conducted my audit in accordance with generally accepted
auditing standards and the standards applicable to financial audits contained in Government
Auditing St&&, issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether City of Palm Beach Gardens
Firefighters’ Pension Fund financial statements are free of material misstatement, I performed
tests of its compliance with certain provisions of laws and regulations, noncompliance with
which could have a direct and material effect on the determination of financial statement
amounts. However, providing an opinion on compliance with those provisions was not an
objective of my audit and, accordingly, I do not express such an opinion. The results of my tests
disclosed no instances of noncompliance that are required to be reported under Government
Auditing St&&.
Internal Control Over Financial Rmordng
In planning and perfoming my audit, I considered City of Palm Beach Gardens
Firefthters’ Pension Fund internal control over financial reporting in order to determine my
auditing procedures for the purpose of expressing my opinion on the financial statements and
not to provide assurance on the internal control over financial reporting. My consideration of the
internal control over financial reporting would not necessarily disclose all matters in the internal
control over financial reporting that might be material weaknesses.
4MxI W. Canmcrcd Bbd. Suitc 5 Tunnnc, FL 33319
Voice (954) 405-5788 Fa Q54) 485-8988
rgodon@%trvcngodo.KpperDm
A material weakness is a condition in which the design or operation of one or more of
the internal control components does not reduce to a relatively low level the risk that
misstatements in amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. I noted no matter involving the internal control
over financial reporting and its operation that I consider to be material weaknesses.
Steven I. Gordon
Certified Public Accountant
December 23.2008
14