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HomeMy WebLinkAboutMinutes Fire Pension 012510PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD January 25, 2010 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 Rick Rhodes Ed Morej on Donna Wisneski Roy 011iff MINUTES OTHERS Margie Adcock, Administrator Ken Harrison, Attorney (9:15 A.M.) Joe Bogdahn, Investment Monitor Steve Gordon, Auditor The Board reviewed the minutes of the meeting held November 16, 2009. A motion was made, seconded and carried 5 -0 to accept the minutes of the meeting held November 16, 2009. ANNUAL AUDIT Steve Gordon appeared before the Board to present the audit for the period ending September 30, 2009. 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, 2009 were $27,958,195 almost all of which were in investments. Total liabilities were $118,246. Total net assets of the Fund as of September 30, 2009 were $27,839,949. Mr. Gordon reviewed the Statement of Changes in Plan Net Assets. He reported that there was total net investment income of $323,079. The total contributions to the Fund were $4,437,680. The total additions were $4,763,257 and total deductions were $527,110. The net increase in Plan net assets was $4,236,157. Ken Harrison entered the meeting. Ms. Wisneski inquired about several matters including the employer contributions, the Chapter 175 premium tax contribution, and the notes to the financial statements. Mr. Gordon responded to Ms. Wisneski's questions and reiterated that these are the Board's financial statements and the Board has to be satisfied with how the financials are presented. He noted that the majority of Ms. Wisneski's comments had to do with a matter of style and /or wording, but that such requested changes would not change the actual numbers presented. Ms. Wisneski stated that she would like to discuss her comments and possible additions to the notes of the financial statements and the representation letter with Mr. Gordon before the audit was finalized. There was concern that the City received a copy of the draft audit prior to approval by the Board. It was noted that the City was advised that they were receiving a draft that had not yet been 2 approved by the Board. It was further noted that it has been normal practice in the past to cooperate with the City and provide them with a draft audit as soon as it is available. A motion was made, seconded and carried 5 -0 that prior to providing any outside party with a draft of the audit, such approval be first obtained by the Chair. INVESTMENT MONITOR REPORT Joe Bogdahn appeared before the Board. He reviewed the market environment for the period ending December 31, 2009. He reviewed the quality rankings breakdown by weight and quarterly performance. He reviewed international and regional market index performance. He reviewed fixed income market performance. He stated that he thinks the Fed will begin raising rates soon. Mr. Bogdahn then reviewed the preliminary investment performance for the quarter ending December 31, 2009. The total market value of the Fund as of December 31, 2009 was $28,596,870. The Fund was up 2.54% net of fees for the quarter while the benchmark was up 3.26 %. The total equity portfolio was up 4.32% while the benchmark was up 5.35 %. The total domestic equity portfolio was up 5.47% while the Russell 3000 was up 5.90 %. The Dana core equity portfolio was up 4.31% for the quarter while the S &P 500 was up 6.04 %. The Dana growth equity portfolio was up 6.97% for the quarter while the Russell 1000 Growth was up 7.94 %. The total international portfolio was down .35% while the benchmark was up 2.22 %. The international portfolio managed by Voyageur was down .58% and the international portfolio managed by Manning & Napier was down .01% for the quarter while the EAFE was up 2.22 %. It was noted that Voyageur changed its name to RBC Global. There was discussion on the name change. Mr. Bogdahn stated that from a management standpoint, there has been no change. The real estate portfolio managed by American Realty was down 4.22% for the quarter while the NCREIF was down 3.40 %. The total fixed income portfolio was up .95% for the quarter while the benchmark was up .53 %. Agincourt was up .60% for the quarter while the benchmark was up .20 %. DHJ fixed income was up 1.28% for the quarter while the benchmark was up. 53%. Mr. Bogdahn discussed managers and performance. He stated that he would have further discussion at the March meeting when he had a final report. Mr. Morejon stated that he would like to see information on similar size plans in the area. Mr. Bogdahn discussed the Revised Investment Policy Statement (IPS). He provided the current IPS and the revised IPS that highlighted the changes. It was noted that they were using a new format for all of the pension plans they have as clients and he worked off that format in making specific changes for this Fund. Mr. Bogdahn reviewed the revised IPS. There was a lengthy discussion. Mr. Harrison stated that he reviewed the revised IPS and it meets the requirements of Chapter 112. Mr. Bogdahn further reviewed the revised IPS. There was a lengthy discussion on the various changes. Mr. Bogdahn stated that he would revise the IPS as discussed and bring it back to the next meeting for approval. 3 Mr. Morejon stated that the IPS might have further changes if the City passes the proposed Ordinance. There was discussion on the status of the proposed Ordinance. Mr. Harrison stated that he has not heard anything from the City. He stated that he would follow up on this matter. The Board discussed the request for a fee increase that had been presented by Mr. Bogdahn at the last meeting. Mr. Bogdahn stated that the current annual fee is $20,500. He stated that they were proposing an all- inclusive fee of $22,500. There would be no additional fees for manager searches, additional portfolio evaluations or special meetings. There was a lengthy discussion. A motion was made, seconded and carried 5 -0 to authorize the Attorney to draft a contract with an all- inclusive annual fee of $22,500 effective April 1, 2010. Mr. Harrison stated that he would have the contact prepared for the Board to review and execute at the next meeting. ATTORNEY REPORT Mr. Harrison provided a revised Ordinance. He stated that at the November meeting he discussed USERRA and noted that the Ordinance needed to be changed to include the required language. He stated that he amended the proposed Ordinance to include USERRA retroactive to January 2007. A motion was made, seconded and carried 5 -0 to approve the revised proposed Ordinance, which includes the USSERA language, and direct the Attorney to provide the revised proposed Ordinance to the City. Mr. Harrison provided the Board with a Memorandum on the new Special Tax Notice from the IRS. He discussed the updated Safe Harbor Rollover Notice and recommended the Notice be adopted. A motion was made, seconded and carried 5 -0 to adopt the IRS updated Special Tax Notice. Mr. Harrison stated that he discussed with Mr. Sugarman the issues raised at the Board's special meeting two weeks ago. He stated that he wanted to reiterate that if a merger is the course of action, it is important that the Board participate at some level. He encouraged the Board to request to be involved in the process. Mr. Morejon stated that the Union did request that the cost be looked at, as did the City and Fire Department. So this is not a unilateral thing. Mr. Harrison stated that he strongly urged the Board make sure they become part of the process to participate. A plan needs to participate in the actual negotiations so they can understand the ramifications of the Interlocal Agreement. Mr. Morejon noted that the Board was provided with a letter from the Actuary dated January 19, 2010 regarding the cost of the actuarial study, as well as a letter from the Union dated January 20, 2010 agreeing to pay half of the cost of the study. He stated that the Actuary is moving forward with the study. Mr. Morejon also noted that the Actuary does not need a poll to be conducted in order to do the study. As such, he advised that he was not moving forward with the poll of the Participants at this time. 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 advised that an election was done for the Trustee position that was held by Ed Morejon. It was noted that no one ran against Mr. Morejon so he was reappointed to the Board for another term. A motion was made, seconded and carried 4 -0 to ratify the reappointment of Ed Morej on. Ed Morej on did not vote on the motion. OTHER BUSINESS There was discussion on additional investment options for the DROP Participants. There was a discussion on self - directed DROP accounts. Ms. Wisneski stated that she would look at possible options for the March meeting. Mr. Bogdahn stated that he was aware of options with ICMA and Hartford. Those happen to be the options available for the City's 457 Plan. Mr. Harrison stated that the Ordinance would need to be amended to allow for self - directed DROP accounts. There was a lengthy discussion. A motion was made, seconded and carried 5 -0 to have presentations from ICMA, Hartford and Nationwide at the May meeting. There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary