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HomeMy WebLinkAboutMinutes Fire Pension 111609PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD November 16, 2009 A meeting of the Board of Trustees was called to order at 9:00 A.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Tom Murphy (9:23 A.M.) Rick Rhodes Ed Morej on Donna Wisneski OTHERS Margie Adcock, Administrator Ken Harrison, Attorney (9:07 A.M.) Joe Bogdahn, Investment Monitor Mike Dana, Investment Manager It was noted that the City appointed Donna Wisneski to the Board to replace Richard Hitchins. Mr. Morejon welcomed new Trustee Donna Wisneski to the Board. MINUTES The Board reviewed the minutes of the meeting held September 21, 2009. A motion was made, seconded and carried 3 -0 to accept the minutes of the meeting held September 21, 2009. INVESTMENT MANAGER REPORT: DANA INVESTMENT ADVISORS Mike Dana appeared before the Board. He discussed the market environment. He stated that things are better but there is a long way to go. He is not seeing any inflation at this time, but there is a continuing concern of inflation. He noted that Fed Chairman declared the end of the recession a moth or two ago. Mr. Dana reviewed the performance of the portfolio as of September 30, 2009. He stated that the stocks in the portfolio have gone up from a low on March 9, 2009 to October 31, 2009 by 47.75 %. Ken Harrison entered the meeting. The total portfolio was up 13.52% for the quarter ending September 30, 2009 while the Russell 3000 was up 16.31 %. For the fiscal year to date, the portfolio was down 10.68% while the Russell 3000 was down 6.41 %. The total market value of the portfolio as of September 30, 2009 was $12,928,124.96. There was a lengthy discussion on the long- term performance and the risk/reward analysis of Dana. Tom Murphy entered the meeting. 2 INVESTMENT MONITOR REPORT Joe Bogdahn appeared before the Board. He reviewed the market environment for the period ending September 30, 2009. Mr. Bogdahn then reviewed the investment performance for the quarter ending September 30, 2009. The total market value of the Fund as of September 30, 2009 was $27,009,334. The asset allocation was 47.4% in domestic equities; 9.3% in international; 29.9% in fixed income; 2.8% in real estate; and 10.6% in cash. The Fund was up 10.01% net of fees for the quarter while the benchmark was up 11.40 %. Mr. Bogdahn noted that the Fund underperformed the benchmark because the Fund has a higher quality bias. The total equity portfolio was up 14.67% while the benchmark was up 16.79 %. The total domestic equity portfolio was up 13.52% while the Russell 3000 was up 16.31 %. The Dana core equity portfolio was up 15.13% for the quarter while the S &P 500 was up 15.61 %. The Dana growth equity portfolio was up 12.04% for the quarter while the Russell 1000 Growth was up 13.97 %. The total international portfolio was up 19.61% while the benchmark was up 19.52 %. The international portfolio managed by Voyageur was up 15.90% and the international portfolio managed by Manning & Napier was up 25.72% for the quarter while the EAFE was up 19.52 %. The real estate portfolio managed by American Realty was down 9.62% for the quarter while the NCREIF was down 3.32 %. The total fixed income portfolio was up 5.06% for the quarter while the benchmark was up 3.21 %. Agincourt was up 4.01% for the quarter while the benchmark was up 3.71 %. DHJ fixed income was up 6.07% for the quarter while the benchmark was up 3.21 %. Mr. Bogdahn reviewed the compliance checklist as of September 30, 2009. There was discussion on the long -term performance period of 3 to 5 years even if a manger has not been with the Fund for that long of a time frame. Mr. Bogdahn stated that he was comfortable with the direction the managers are taking at this time. There was discussion on the assumption rate. Mr. Bogdahn stated that he thinks 8.25% is still achievable. He stated that there was a period of five years from October 2002 to September 2007 where the Fund met this rate. Mr. Harrison stated that 8.25% is at the high end. The trend is to reduce it, even to go as low as 7.5 %. Mr. Harrison stated that he is aware that some funds have been reducing the rate incrementally .25% each year until they get to the lower rate. He stated that the Board needed to discuss this with the Actuary. Mr. Bogdahn stated that the trend Mr. Harrison is referring to takes into account the municipalities' ability to fund the increase that goes along with lowering the interest rate, which is not the situation here. There was a lengthy discussion. Mike Dana departed the meeting. Mr. Bogdahn stated that he revised the Investment Policy Statement. Mr. Harrison stated that he reviewed the changes made as a result of the recent legislative changes. He noted that since the proposed Ordinance has not yet passed, the IPS does not include the increased limit for international investments. He stated that all the mandatory requirements of the statutes are in the revised IPS. Mr. Rhodes asked that the changes in the IPS be made in legislative style. He stated that he received the revised IPS with highlights, but the version is different and parts have been moved. There was a lengthy 3 discussion. Mr. Rhodes stated that he wanted to know exactly what was removed, added or changed and that it was hard to follow if the changes are not shown in legislative style. The Board requested Mr. Bogdahn to provide the revised IPS in legislative form for the next meeting. Mr. Bogdahn presented a fee increase. He stated that they were still in the process of working out the numbers. He stated that they have some older contracts like this one that charge for additional items. They want to have an all- inclusive fee. They will present a proposal at the next meeting. There was discussion on the contracts of the other service providers. The Board stated that they would like to review all of the service provider contracts, with one being reviewed at each meeting. They advised that they would start with the Investment Monitor at the next meeting. ATTORNEY REPORT Mr. Harrison discussed the status of the proposed Ordinance. He stated that he received an email this morning and the Ordinance is still with the City Attorney. Mr. Harrison stated that there is a new Special Tax Notice from the IRS. He stated that he would provide the information for the next meeting for further discussion. He stated that the Board would need to take action to adopt the new notices. He stated that the safest thing would be to adopt the IRS Notice. Mr. Harrison discussed with the Board several issues that came up during a conference he went to on corporate liability, such as stockholder meetings and the green factor. ADMINISTRATIVE REPORT Ms. Adcock presented the engagement letter for the audit for the fiscal year ending September 30, 2009. It was noted that the fee was the same as last year. Ms. Wisneski noted that there were a few items she would be asking of the auditor when he comes to present such as the requirements for the SAS 70 from the custodian and a peer review letter. A motion was made, seconded and carried 4 -0 to approve the engagement letter for the audit for the fiscal year ending September 30, 2009. Ms. Adcock presented the list of disbursements to be made. A motion was made, seconded and carried 4 -0 to approve the disbursements listed. It was noted that the FPPTA annual dues for 2010 would be due soon. A motion was made, seconded and carried 4 -0 to renew the membership dues for 2010. There was discussion on the FPPTA re- certification fee that is being charged every three years. Ms. Adcock provided the Board with meeting dates for 2010. 4 OTHER BUSINESS Ms. Wisneski stated that she reviewed the prior minutes and noted that there was an issue with the investment options for the DROP Participants. There was a discussion on self - directed DROP accounts. Mr. Rhodes stated that he attended the Division of Retirement Conference in Orlando. He stated that it was a good conference and was very similar to the FPPTA schools. There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary