HomeMy WebLinkAboutMinutes Fire Pension 012622CITY 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, January 26, 2022, at 1:00PM
TRUSTEES PRESENT: Mike Zingaro
Rick Rhodes
Jon Currier
Thomas Topor
Eric Bruns
TRUSTEES ABSENT: None
OTHERS PRESENT: Siera Feketa, Foster & Foster
John Thinnes, AndCo Consulting
Bob Sugarman, Sugarman and Susskind
1. Call to Order — Rick Rhodes called the meeting to order at 1:01 PM.
2. Roll Call — As reflected above.
3. Public Comments — None.
4. Approval of Minutes
The Board approved the October 27, 2021, quarterly meeting minutes, upon motion by Jon Currier
and second by Mike Zingaro; motion carried 5-0.
5. New Business
a. Election of Officers
i. Siera Feketa reviewed the election of Officers, commenting it had to be done
annually at the first meeting of the year. Siera commented the current Chairman
was Rick Rhodes, Vice -Chairman was Eric Bruns, and Secretary was Jon Currier.
Siera commented they could approve keeping the same Officers or elect new
ones.
The Board voted to reselect the current Officers, upon motion by Jon Currier and second by Mike
Zingaro; motion carried 5-0.
b. Actual expenses as of September 30, 2021
i. Siera Feketa reviewed the requirement to approve the actual expenses and each
expenditure type. Eric Bruns asked what the fees for the custodian were. Siera
Feketa reviewed.
The Board voted to approve the actual expenses as of September 30 2021 as presented upon
motion by Eric Bruns and second by Jon Currier; motion carried 5-0.
Update on collection of contributions for leave time
i. Siera Feketa gave a brief update commenting there were 8 people left that needed
to make their contributions.
ii. Siera Feketa reviewed the background of the why they were collecting
contributions for the newest trustee.
iii. The Board discussed the options and if they could just deduct the contributions
from their monthly benefit payment.
iv. Bob Sugarman commented they could send a letter saying for the member's
convenience the funds would be withheld from next pension payment. Bob
commented the deduction was after tax. Bob commented this would be deducted,
or they could write a check, or they could show up to a meeting if they want to
dispute it.
v. The Board discussed putting a deadline on it. Rick Rhodes recommended using
the April 1st payment date so the administrator had time to send the letter and give
the members until March to respond. The Board agreed with that recommendation.
d. Auditor Engagement Letter
i. Bob Sugarman commented he reviewed the letter and the language looked
good. Siera Feketa commented the fee was $10,750 and last year it was
$10,000.
The Board voted to approve the auditor engagement letter, upon motion by Mike Zingaro and
second by Eric Bruns; motion carried 5-0.
e. Discussion of pension seminar
i. Jon Currier gave a brief update on the pension seminar, commenting it had been
difficult to schedule. Jon commented he was waiting to confirm he would be
available, as he was scheduled to work, but he was trying for the July meeting
date. Jon commented he wanted John Thinnes and Pedro Herrera in attendance.
6. Old Business — None.
7. Reports
a. AndCo Consulting, John Thinnes, Investment Consultant
i. Quarterly
report through December 31, 2021
1.
John Thinnes gave a brief firm update and thanked the Board for their
business.
2.
John Thinnes gave a market update.
3.
John Thinnes reviewed the schedule of investable assets.
4.
John Thinnes reviewed the asset allocation and the rebalance that was
requested today to raise cash.
5.
John Thinnes reviewed the financial reconciliation. Rick Rhodes asked if
the $4.9 million was a prepaid contribution. Siera Feketa confirmed it
was.
6.
The Market Value of Assets as of 12/31/21 was $151,986,779.
7.
The total fund gross returns for the quarter were 5.55%, slightly
underperforming the benchmark of 5.74%. The total fund trailing gross
returns for the 1, 3, 5, 7, and 10-year periods were 15.37%, 15.51 %,
11.58%, 9.67% and 11.10% respectively. Since inception (5/1/1998),
total fund gross returns were 7.06%, slightly underperforming the
benchmark of 7.07%.
8.
John Thinnes reviewed the returns of the investment managers.
9.
Mike Zingaro asked if Dana would attend the next meeting. John Thinnes
commented he could have them attend the next meeting. John
commented the return for American Realty was 8.81%, but they did not
have that figure when the books were prepared. John commented that
made the overall return even higher.
Note: Mike Zingaro left the meeting at 1:27PM.
10. Eric Bruns asked how their bond managers situated, asking if it would
help or hurt them if the Fed raised rates. John Thinnes gave an overview
of the strategy of their bond managers.
ii. Direct Lending — Senior Review
1. John Thinnes gave a brief overview of direct lending.
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2. The Board requested the investment consultant to wait to present this
since it was requested by Mike Zingaro.
b. Sugarman and Susskind, Bob Sugarman, Plan Attorney
i. Legislative update
1. Bob Sugarman commented there was no legislative update.
ii. Bob Sugarman reviewed the items his office worked on since the last meeting.
Bob reviewed a payroll question he received. Jon Currier and Bob Sugarman
discussed if special event pay was considered pensionable. Jon asked how they
could confirm if the City was paying them correctly and withholding contributions.
The Board discussed different ways they could check this. Jon commented he
would ask members to check their pay stubs and start there.
8. Consent Aaenda
a. Payment ratification
i. Warrant #48, #49, #50
b. Payment approval
i. None
c. Fund activity report for October 21, 2021, through January 19, 2022
The Board approved the Consent Agenda as presented, upon motion by Jon Currier and second by
Eric Bruns; motion carried 4-0.
Staff Reports, Discussions and Action
a. Foster & Foster, Siera Feketa, Plan Administrator
i. Fiduciary liability policy renewal
1. Siera Feketa reviewed the renewal quote for the current policy through
Hudson commenting the total would be $9,818.25, which included a
$9,750 base fee plus a $68.25 FIGA surcharge. Siera commented the
only change was there was now a $10,000 retention, which would be
included in all Euclid/Hudson renewal quotes moving forward. Siera
commented they also got a quote from Markel with the same limits of
liability and $0 retention. Siera commented the premium was $9,798.11,
which included a $9,730 base fee and $68.11 FIGA surcharge. Siera
reviewed the Florida Insurance Guarantee Association (FIGA) surcharge
that was required by Florida effective 1/1/22 commenting the surcharge
was 0.7%.
2. Eric Bruns asked what the downside of switching carriers was. Siera
Feketa commented she did not see any issues on her end.
3. Bob Sugarman reviewed both companies commenting they were both
leading companies in the industry.
The Board voted to approve the fiduciary liability policy with Markel, upon motion by Jon Currier
and second by Eric Bruns; motion carried 4-0.
ii. Upcoming educational opportunities
1. Siera Feketa reviewed the upcoming FPPTA Annual Conference from
June 26-29, 2022, in Orlando, FL. Jon Currier asked if the Annual
Conference gave 10 CEUs. Siera commented it did but stated she would
confirm.
iii. Jon Currier asked for an update on the Share Plan statements. Siera Feketa
commented the 9/30/21 statements were prepared in conjunction with the
valuation report, so they took longer. Siera commented the valuation should be
presented at the next meeting. Rick Rhodes asked if the City had provided the
requested information. Siera commented she would have to check with Doug
Lozen, but to her knowledge there had not been any significant issues.
10. Reports (continued)
a. AndCo Consulting, John Thinnes, Investment Consultant
i. Direct Lending Review
1. The Board and John Thinnes discussed how this asset class would fit in
the portfolio.
2. John Thinnes and Bob Sugarman discussed how direct lending worked
and the liquidity of this asset class. John commented their portfolio was
extremely liquid, so he was not concerned about a 5% allocation to this
asset class.
3. John Thinnes reviewed the benefits of direct lending, commenting there
were higher returns. John commented the statements were usually
generated 45 days after the end of the quarter so they would always be a
quarter behind presenting the returns for this asset class.
4. John Thinnes reviewed the risk and reward of direct lending.
5. Thomas Topor asked how long this type of investment had been in
business. John Thinnes commented one of the firms started in 1994, but
the asset class had been around longer.
6. John Thinnes commented he would be recommending they hire Golub.
7. Rick Rhodes commented there was a 2-3-year period before they were
invested so the 10-year period the funds would be invested would not
begin for another 2-3 years. John Thinnes commented that was correct
and they also had the right to request 2 one-year extensions.
8. Thomas Topor asked if this would offer more diversity in the portfolio. John
Thinnes commented it did.
9. The Board discussed the recommendation and the asset class.
10. John Thinnes reviewed how many plans were invested in this asset class,
commenting there were not as many because the portfolio had to be at
least $50 million to invest this asset class, but more than half of his clients
that qualified to invest in this asset class did invest in it.
11. John Thinnes commented as of today the market value of the fund was
approximately $143 million.
12. The Board discussed diversification.
13. John Thinnes reviewed each the managers that were currently raising
capital: Deerpath, Golub, and TCW.
Note: Mike Zingaro returned at 2:18PM.
14. John Thinnes commented they were looking at a $5 million commitment,
which was about 3.5% but eventually getting that to 5%.
15. John Thinnes commented they knocked off TCW as they were closing
their fund soon. John further reviewed Deerpath and Golub.
16. John Thinnes commented Golub had agreed to the Florida side letters.
17. John Thinnes reviewed the fees for each manager, commenting the
management fee was lower for Golub. John commented there was a
preferred return which was also known as a performance fee, commenting
they got a higher percentage as they exceeded the preferred return. John
commented Golub would have a lower fee to start, but if they began to get
double-digit returns, Golub had the highest fees. John commented he was
comfortable with that since they were expecting higher returns. John
commented he was recommending a $5 million commitment to Golub.
18. The Board discussed how these firms vetted the companies they invested
in. John Thinnes commented they had teams of professionals that vetted
this information.
19. John Thinnes commented they did not need to make a decision today and
they could discuss it again at the next meeting.
20. Eric Bruns and John Thinnes discussed how this would be funded. John
commented if it was relatively soon it would likely come from the equity
side because it was overweight. John commented in the long term this
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would be taken from US Fixed Income, but right now they were
underweight in bonds.
21. The Board and John Thinnes discussed the locations of Golub's offices.
22. Bob Sugarman asked John Thinnes if he was proposing to interview them.
John commented he did not think it was necessary, as he and his research
team had researched these companies.
23. Bob Sugarman commented they recommended doing the interviews. The
Board discussed. Bob commented the Board could interview them, they
could form a committee to interview them, or they could rely on AndCo's
due diligence.
24. Jon Currier asked if they would be rebalancing soon. John Thinnes
commented they just rebalanced today, but they may rebalance again next
month.
25. The Board and John Thinnes discussed the Investment Policy Statement
(IPS) and how this would fit into the IPS.
26. John Thinnes commented there was no hurry to make a decision. John
commented he could work with Pedro Herrera and Bob Sugarman to
amend the IPS and then discuss this further at the next meeting.
27. John Thinnes commented he would bring an updated IPS to the next
meeting.
28. The Board discussed if they wanted to meet with the manager.
29. Siera Feketa reminded the Board the next meeting would be longer. John
Thinnes commented he would ask Dana to come to a future meeting. The
Board agreed they were comfortable with not interviewing the managers.
30. Rick Rhodes asked for the draft IPS as soon as possible so if they had
any questions, they could bring it to John Thinnes before the meeting.
John commented he would go through the IPS and review it with Pedro
Herrera. John commented he should be able to provide the draft in a few
weeks.
31. Bob Sugarman asked if they should start working on an agreement with
Golub. John Thinnes commented he could send them the side letters to
review before the next meeting.
11. Trustee's Reports, Discussion and Action — None.
12. Adiournment — The meeting was adjourned at 2:49PM.
13. Next Meeting — April 27, 2022, at 1:OOPM, quarterly meeting.
Respectfully submitted by: Appr ed
era Feketa, Plan Administrator J urrier, Secretary
Date Approved by the Pension Board: '�I L1 I Zci �. -2
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