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HomeMy WebLinkAboutMinutes Fire Pension 011209PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD January 12, 2009 A meeting of the Board of Trustees was called to order at 9:05 A.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Tom Murphy Rick Rhodes Richard Hitchins Ed Morej on Roy 011iff MINUTES OTHERS Margie Adcock, Administrator Bob Sugarman, Attorney Joe Bogdahn, Investment Monitor Steve Gordon, Auditor The Board reviewed the minutes of the meeting held November 17, 2008. A motion was made, seconded and carried 5 -0 to accept the minutes of the meeting held November 17, 2008. ANNUAL AUDIT Steve Gordon appeared before the Board to present the audit for the period ending September 30, 2008. He stated that he was issuing a clean unqualified opinion. He reviewed the Statement of Plan Net Assets. The total assets of the Fund as of September 30, 2008 were $23,649,308 almost all of which were in investments. Total liabilities were $45,516. Total net assets of the Fund as of September 30, 2008 were $23,603,792. Mr. Gordon reviewed the Statement of Changes in Plan Net Assets. He reported that there was a total net investment loss was $3,085,849. The total contributions to the Fund were $4,512,281. The total additions were $1,431,067 and total deductions were $618,361. The net increase in Plan net assets was $812,706. Mr. Gordon then discussed the schedule of funding progress that he is required to include in the Audit but that is provided for in the Actuarial Valuation. He reviewed the notes to the financial statements. Mr. Gordon stated that there was no unusual matter to discuss or disclose regarding the audit of the Fund for the period ending September 30, 2008. A motion was made, seconded and carried 5 -0 to accept the audit for the period ending September 30, 2008. INVESTMENT MONITOR REPORT Joe Bogdahn appeared before the Board. He stated that he would have the quarterly report for the period ending December 31, 2008 at the next meeting. He stated that the total market value as of December 31, 2008 was $22,144,000. However, that amount does not include the American Realty December 31 number. Mr. Bogdahn discussed the Madoff situation. He stated that the Fund had no investments with Madoff. 2 Mr. Bogdahn provided a revised Investment Policy Statement. He stated that the Statement was changed to change the name of the bond index from the Lehman Brothers to Barclays Intermediate Aggregate Bond Index. He also provided an Addendum to DHJ for the ability to invest in TIPS /CIPS. A motion was made, seconded and carried 5 -0 to approve the revised Investment Policy Statement. Mr. Bogdahn provided an update on the international growth search. He provided information on the following managers: Manning & Napier; Masters' Select International; MFS International Growth I; American Funds Euro Pacific R5; and Voyageur International Equity. There was a discussion on the changes at Voyageur. It was noted that Jack Farland was no longer with the firm. He was the client servicing person. Mike Spencer has been meeting with clients now so Mr. Bogdahn does not see client servicing being an issue. He noted that a lot of the managers have cut back on the marketing team in this economic downturn. There have been no other changes at Voyageur. Mr. Bogdahn reviewed the performance of the international growth candidates as of September 30, 2008. He reviewed the risk and return analysis of the blended candidates with Voyageur. He reviewed the up and down capture ratios of the blended candidates with Voyageur. He noted that Manning & Napier would have someone visit the Board whereas with Euro Pacific that would not be a possibility. Manning & Napier would also do a side letter for the Fund. There was a lengthy discussion. A motion was made, seconded and carried 5 -0 that based on the recommendation of the Investment Monitor that the Board engage Manning & Napier as the manager for international growth contingent upon reaching an acceptable agreement. The Board authorized the Chairman to execute the agreement once approved by the Attorney. ATTORNEY REPORT Mr. Sugarman stated that the City has made a request for actuarial information. The Actuary did provided a cost estimate in providing the requested information. Allan Owens appeared before the Board and stated that he was requesting from both the Fire and Police Pension Plans information from the Actuary on the contribution requirements for Actuarial Valuations as of October 1, 2008 — October 1, 2012. He stated that the City was trying to get a five -year forecast for budgeting and effects of the market on the Pension Funds. He requested the Board's consideration. It was noted that in a letter dated January 9, 2009 the Actuary stated that they could do a study not to exceed $3,000 to be done within two to three weeks. Mr. Sugarman stated that the request was appropriate and the City, the Fund or both, could cover the cost. Mr. Owens stated that his first choice would be for the Fund to pay for the study, but he was willing to do whatever he could to work with the Board on this. There was discussion on the City's committee formed to look at FRS. Mr. Owens stated that a committee was formed to look at FRS. It is at the beginning stages. The City is hiring a consultant and the representative for the Fire is Mark Floyd. There have been some discussions but it is very early on in those discussions. There has been only one meeting. It was noted that Mark Floyd represents the Union and not the Board. The Board stated that they have previously requested to have a representative on that committee. The Board asked again if the City would consider having a representative from the Board on the committee. Mr. 3 Owens stated that the Actuary firm the City selected is Bolton Partners who previously did an experience study and the City has a current agreement with them. There was a lengthy discussion on the City's request. It was noted that Council Member Russo asked for this information in a Council meeting. The Board asked to see the request that was made. Mr. Owens stated that it was a verbal directive at the last Council meeting. Mr. Rhodes stated that he was not comfortable with the Fund paying for the cost of the study because the Board is not asking for the study and the Board is not getting a seat on the committee. Mr. Murphy felt that if the Board and the City were a partnership, the cost should be split. Mr. Morejon stated that if there were truly a partnership then they Board would have been made a part of the committee. He stated that he was concerned that the study would be used to dissolve the promises that the City made to the employees and he finds it hard to use Fund money to do that. There was further discussion. A motion was made, seconded and carried 3 -2 to authorize the Actuary to do the study requested by the City and have the study delivered to both the City and the Board with the expense to be split between the Fund and the City with the total cost not to exceed $3,000. Mr. Morejon and Mr. Rhodes opposed the motion. The Board asked Mr. Owens to assist in getting a Fund representative on the committee. Mr. Owens stated that he would take the Board's request to the City Manager. Mr. Owens stated that the committee meetings were open to the public. The Board stated that they would like to do a workshop as it was in the very least important for Council Member Russo to hear from this Board. Mr. Sugarman stated that he would do a response to Council Member Russo. He stated that he would need someone to listen to the recording from the Council meeting. He stated that the request from Mr. Owens was just for documents, but the documents do not tell the whole story. Mr. Bogdahn stated that he did meet with Mr. Owens after the last meeting. One question that came up was whether it was feasible to go to FRS. He stated that he would be pleased to be involved in a workshop or whatever is needed. Mr. Morejon stated that for the longest time the City contributed absolutely nothing to the Plan. The cost to the City overall has been very low. There was discussion on how to proceed. Mr. Morejon stated that he understood that the transcription of the Council meetings were on the City's website. He would obtain a copy and provide that to Mr. Sugarman. Mr. Sugarman discussed the status of the disability hearing for Toby Bivins. He stated that Mr. Bivins went for an IME in December. He is expecting the draft written report to be provided in the next week. The Board stated that a special meeting should be held as soon as possible. It was determined that a special meeting would be held on February 2, 2009. Roy 011iff departed the meeting for an emergency call. There was discussion on the remaining balance of the Share Account for Mr. Bivins. It was noted that the Actuary advised that he would be able to provide all of the Share Account balances by the end of the week. A motion was made, seconded and carried 4 -0 4 to disburse the remaining balance as of September 30, 2008 of the Share Account for Toby Bivins as soon as possible once that amount is provided by the Actuary. Roy 011iff re- entered the meeting. Mr. Sugarman discussed House Bill 5 regarding the proposal to increase the international allocation to 25 %. Mr. Sugarman discussed the IRS Determination Letter. He stated that there are two more windows ending in 2011 and 2014. He recommended waiting to see if any Legislative relief is forthcoming. ADMINISTRATIVE REPORT Ms. Adcock presented the list of disbursements to be made. A motion was made, seconded and carried 5 -0 to approve the disbursements listed. Ms. Adcock noted that the Fiduciary Liability Policy renewal was due on March 10, 2009. She stated that she did not have the renewal quote at this time. A motion was made, seconded and carried 5 -0 to renew the Fiduciary Liability Policy not to exceed 120% of last year's premium. OTHER BUSINESS There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary