HomeMy WebLinkAboutMinutes Fire Pension 110619CITY OF PALM BEACH GARDENS
FIREFIGHTERS' PENSION BOARD OF TRUSTEES
QUARTERLY MEETING MINUTES
City Hall, Council Chambers
10500 North Military Trail Palm Beach Gardens, FL 33410
Wednesday, November 06, 2019, at 1:00PM
TRUSTEES PRESENT: Ed Morejon
Rick Rhodes
Jon Currier
Frank Spitalny
Eric Bruns
TRUSTEES ABSENT: None.
OTHERS PRESENT: Siera Feketa, Foster & Foster
John Thinnes, AndCo Consulting
Bob Sugarman, Sugarman and Susskind
1. Call to Order — Jon Currier called the meeting to order at 1:00pm
2. Rall Call — As reflected above.
3. Public Comments — None.
4. Reports
a. Sugarman and Susskind, Bob Sugarman, Plan Attorney
i. Bob Sugarman welcomed the new trustees and gave a brief overview of the plan.
ii. Bob Sugarman reviewed the pension board meetings, the pension fund, and the
benefit options for the plan.
iii. Bob Sugarman reviewed the four methods of funding for the plan. Bob asked the
amount of the State Monies. Siera Feketa commented $699,764.46 was the
distributed amount.
iv. Frank Spitalny asked if the plan was 100% funded. The board discussed the plan's
funding, commenting it was just above 80% funded. Bob Sugarman commented
that was a good funded status for this line of work.
v. Bob Sugarman briefly reviewed some state requirements, commenting the plan
was closely regulated.
vi. Bob Sugarman briefly reviewed the Division of Retirement's School in April,
recommending the new trustees attend.
vii. Bob Sugarman reviewed the role of each consultant of the plan.
viii. Bob Sugarman reviewed the Sunshine Law and the ethics laws.
ix. Bob Sugarman reviewed the Share Plan. Jon Currier explained how the State
Monies were used.
x. Bob Sugarman reviewed the DROP account. Frank Spitalny and Bob Sugarman
discussed the DROP account.
xi. Bob Sugarman gave a brief overview of the board of trustees, how they were
appcintedlelected, and their role.
5. Approval of Minutes
a. Rick Rhodes commented under Public Comments, the word "Police" needed to be "Policy."
b. Ed Morejon commented under the quarterly report as of June 30, 2019, presented by John
Thinnes with AndCo Consulting, it should be reflected the fund was slightly
"underperforming" the benchmark, not "overperforming."
c. Rick Rhodes commented the motion to accept the proposed fee increase for AndCo
Consulting, should be reflected as the motion carried 3-1.
The board voted to approve the August 07 2019 meeting minutes with revisions upon motion b
Ed More'on and second by Rick Rhodes; motion carried 5-0.
6. Reports (continued
a. AndCo Consulting, John Thinnes, Investment Consultant
i. Quarterly report as of September 30, 2019
1. John Thinnes gave a brief overview of his role and the reports provided by
his firm.
2. John Thinnes reviewed the S&P total fund return index history.
3. John Thinnes reviewed the history of the market and reviewed the risk in
trying to time the market. John reviewed the importance of long-term
thinking with investments.
4. John Thinnes reviewed the preliminary performance and allocation
update.
5. The market value of assets as of November 5, 2019, was $116,511,908.
6. John Thinnes gave an overview of the market environment for the quarter.
John reviewed the success of bonds during the last year.
7. John Thinnes reviewed the market rate and yield curve comparison. John
reviewed the impact of the rates in the market, commenting there was a
25% chance they would be cut in the next quarter.
8. John Thinnes reviewed the schedule of investable assets from August 1,
2007 through September 30, 2019. John commented there had been
tremendous growth in the plan.
9. Ed Morejon commented a common misconception with the plans was how
they were funded. Ed commented a large portion of the funding was
through investments.
10. John Thinnes and Bob Sugarman discussed the portion of benefits that
were funded through investments. John commented 63% of benefits paid
were funded by investments.
11. John Thinnes briefly reviewed the state limitations on investments. The
board discussed additional limitations set by the Investment Policy
Statement (IPS) and Ordinance_
12. John Thinnes commented the plan was compliant with the IPS and he
would discuss a rebalance later in the meeting.
13. John Thinnes briefly reviewed the financial reconciliation for the plan,
commenting having a positive $5 million cash flow was a help to the plan.
14. John Thinnes reviewed the comparative performance through September
30, 2019, commenting it had been a success story.
15_ The total fund gross returns for the quarter were 1.48%, slightly
outperforming the benchmark of 1.12°/x. The total fund trailing gross
returns for the 1, 3, 5 and 7 -year periods were 5.71 %, 9.81%, 8.03% and
9.65% respectively. Since inception (511198), total fund gross returns were
6.36%, slightly outperforming the benchmark of 6.12%.
16. John Thinnes commented the plan had done very well and was in the 15t
percentile for the 7 -year period.
17. John Thinnes reviewed the internal benchmark.
18. John Thinnes briefly reviewed the different investment managers.
19. John Thinnes gave a brief overview of the differences between the mutual
funds and the stocks.
20. John Thinnes reviewed the funds in each asset class.
21. Frank Spitalny questioned how marketable the real estate investment was.
John Thinnes commented it was marketable, but they were not Real
Estate Investment Trusts (REITs). Bob Sugarman commented the
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trustee's question was regarding liquidity. John Thinnes briefly reviewed
the liquidity risk. The board reviewed the different types of real estate
investments.
22. Frank Spitalny asked how the board was prepared if the market dipped
substantially. John Thinnes referred to the S&P 500 total fund return index
history, commenting they invested for the long-term and had a strategic
long-term plan. John commented they did not try to time the market.
23. John Thinnes and Bob Sugarman reviewed the State requirement for the
City to contribute the actuarily required contributions.
24. John Thinnes reviewed the investment compliance checklist.
25. John Thinnes reviewed the fee analysis and AndCo's fee schedule for the
new trustees. John reviewed the difference between soft -dollar and hard -
dollar fees at Bob Sugarman's request. John commented they were soft -
dollar and did not have any relationships with the investment managers
and acted in the best interest of the plan.
26. Eric Bruns asked for the fact sheet of the Separately Managed Accounts
(SMA) accounts.
27. Ed Morejon asked John Thinnes if they were using the same criteria
everywhere with regards to the investment compliance checklist. John
Thinnes reviewed the IPS. John commented he would update the IPS and
bring it to the next meeting.
28. Rick Rhodes asked how much cash the plan had now. John Thinnes
commented he spoke with Salem Trust that day and it was about $3.5
million, and Salem Trust recommended keeping $1 million.
29. John Thinnes recommended the board make a motion to invest the excess
cash in accordance with the IPS.
The board approved investing the excess cash in accordance with the IPS, upon motion by Ed
More°on and second by Frank S itain • motion carried 5-0.
ii. DROP Quarterly Report
1. Ed Morejon briefly reviewed why the DROP handout was prepared,
commenting there was a self-directed account option offered through
ICMA-RC and this report tracked the performance.
2. John Thinnes commented Balanced/Asset allocation was a little low. The
VT Puritan Fund R5 returns for the quarter were .36%. The total fund
trailing returns for the 1, 3, 5, 7 and 10 -year periods were .85%, 9.06%,
7.33%, 9.14%, and 9.68% respectively. Since inception (511/99), total fund
trailing returns were 6.30°/x.
3. John Thinnes commented in the long-term the fund had done great, but
he would be reviewing the fund closer.
4. John Thinnes briefly reviewed the different funds and their returns.
5. John Thinnes commented he did not have any recommendations at this
time, but he would keep an eye on the VT Puritan Fund R5.
b. The board reviewed the proposed 2020 meeting dates and agreed with the dates by
consensus.
c. Sugarman & Susskind, Bob Sugarman, Plan Attorney (continued)
i. Bob Sugarman briefly reviewed the items covered since the last quarterly meeting.
ii. Bob Sugarman briefly reviewed Steven Rogers, commenting he got divorced and
they had received a settlement agreement. Bob reviewed the requirements and
potential splitting of assets under the law. Bob reviewed the information that had
to be provided to the plan in order for payments to be made to the member's ex-
spouse. Bob commented the plan could not pay the ex-spouse directly unless
there was an Income Deduction Order (IDO). Bob commented he informed Steven
Rogers' ex-spouse of this information. Siera Feketa commented the payment
could be put into a joint account upon the member's request. Bob commented that
was true, but it would be fully taxable to the member. Ed Morejon commented this
had come up before.
iii. Bob Sugarman commented David Derita was interested in working as a firefighter
after exiting the DROP. Bob commented that was fine as long as the member was
not working as a firefighter for the City of Palm Beach Gardens.
iv. Ed Morejon asked about an amendment to the Ordinance to incorporate the
firefighter cancer bill, as they were billed for it. Bog Sugarman commented if they
were billed for it, it was prepared.
v. Bob Sugarman gave a brief overview of the firefighter cancer bill and the
presumptions.
7. New Business
a. Actual expenses as of September 30, 2019
i. Siera Feketa reviewed the requirement to prepare actual expenses and reviewed
each expenditure type. Siera commented the plan went over budget as the prior
administrator prepared the prior budget and it did not include increases in fees.
Siera commented there were one-time expenses included in the fees and reviewed
the one-time expenses.
ii. Siera Feketa recommended an amendment to the 2018-2019 budget.
iii. Frank Spitalny asked why there was not a budget for custodial expenses. Ed
Morejon reviewed the fees associated with the old custodian versus the new
custodian.
The board voted to amend the 2018-2019 budget to be reflected as the same values as the
September 30 2019 actual expenses, upon motion by Rick Rhodes and second bv Eric Bruns•
motion carried 5-0.
The board voted to approve the September 30 2019 actual expenses, upon motion by Ed More"on
and second by Eric Bruns; motion moved 5.0.
iv. Bob Sugarman commented Foster & Foster did a good job in bringing up the
overage in the budget.
b. Proposed 2020 meeting dates
i. This item was discussed earlier in the meeting.
c. Update on trustee terms
i. Siera Feketa commented Jon Currier ran unopposed and would serve another
term. Siera commented the City Clerk advised her Rick Rhodes' term expired
September 30, 2019. Bob Sugarman commented the fifth trustee could not be
voted on unless it was added to the agenda. Siera commented she would add it
to the next agenda.
d. Election of Officers
i. Siera Feketa asked if the board would like to wait until the next meeting to vote on
the election of officers since the 51h trustee would be appointed at the next meeting.
The board agreed by consensus to table the election of officers until the next
meeting.
e. Ed Morejon commented he had a question on the DF -4, Change of DROP Return Election
form and gave the form to Bob Sugarman for clarification.
8. Old Business
a. DROP Audit
i. Siera Feketa commented Doug L07en, the plan actuary, could not attend this
meeting and would be presenting at the next meeting.
ii. Ed Morejon reviewed the history of the DROP issues and why an audit was being
performed.
9. Consent Agenda
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i. Payment ratification
1. Warrant #19, #20, #21, #22, and #23
a. Ed Morejon requested Warrants #20 and #21 be pulled for
discussion.
H. Payment approval
1. None
iii. Fund activity report for August 1, 2019 through October 30, 2019
The board voted to accept the Consent Agenda as presented with exception of Warrants #20 and
#21, upon motion by Rick Rhodes and second by Ed Morejon• motion carried 5-0
iv. Ed Morejon questioned the Sugarman & Susskind Invoice #140555 on Warrant
#20, questioning the $399.00 listed twice. Siera Feketa reviewed the invoice and
clarified that this had not been paid twice and reviewed the layout of the invoice.
v. Ed Morejon reviewed the Foster & Foster Invoice #15109 on Warrant #20, asking
if the board paid a fee for the Chapter 112.664 compliance disclosure in the prior
year. Siera commented they likely had, but she would confirm and send him the
prior year's invoice.
vi. Rick Rhodes reviewed the RBC Global Asset Invoice #20181231143-A on
Warrant #21 and asked if this was the same invoice discussed at the last meeting
or if it was a duplicate payment. Siera Feketa commented she believed it was and
not a duplicate payment.
vii. Ed Morejon and Bob Sugarman reviewed the DF -4 form listed on the Foster &
Foster portal. Bob and Fd reviewed the rules of the DROP return elections under
the plan documents. Bob Sugarman reviewed how often members could make or
change their elections.
viii. Bob Sugarman commented Foster & Foster needed to determine how long it would
take to transfer the funds to ICMA-RC or back to the fund. The board discussed
the procedures. Bob commented Foster & Foster would have to work with AndCo
to determine how long the process would take.
Note: Ed Morejon left at 3;15pm.
The board voted to approve Warrants #20 and #21 upon motion by Rick Rhodes and second by
Eric Bruns• motion carried 4-0.
10. Staff Reports, Discussions and Action
a. Foster & Foster, Siera Feketa, Plan Administrator
i. Siera Feketa commented $699,764.46 was deposited to the fund on September
24, 2019. Siera commented there would not be a supplemental distribution this
year.
Note: Ed Morejon returned at 3:20pm.
ii. Siera Feketa briefly reviewed the FPPTA membership and the benefit of the board
being a member_ Siera commented the cost of renewal for the board was $620.00.
The board approved paying the FPPTA membership renewal fee upon motion by Rick Rhodes and
second by Eric Bruns; motion carried 5-0.
iii. Ed Morejon and Jon Currier discussed the plaque for Marty Cohen. Jon Currier
commented neither trustee was interested in attending the next council meeting.
The board discussed purchasing a plaque for Thomas Murphy for his service.
The board voted to allocate $90.00 to purchase a plaque for Thomas Murphy for his service upon
motion by Ed Morejon and second by Frank S itain • motion carried 5-0.
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iv. Siera Feketa commented there would be a COLA effective January 01, 2020, and
asked the board if they would like a letter provided to the retirees and DROP
participants that were eligible for the COLA. By consensus, the board agreed to
have Foster & Foster send a letter to those members eligible for the COLA.
11 _ Trustee's Reports, Discussion and Action
a. Frank Spitalny requested the background on the prior administrator. The board gave a
brief overview of the history and their experiences with the prior administrator.
b. Rick Rhodes briefly reviewed the CPPT program. Ed Morejon discussed the benefits of
the CPPT program.
12. Adiournment — The meeting was adjourned at 3:34pm.
13. Next Meeting — January 29, 2020, at 1:00pm, quarterly meeting.
Re pectfully submitted by:
>orfe—ra Feketa, Plan Administrator
Appro
alra urrier, Chairman
Date Approved by the Pension Board: Q Pogo
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