HomeMy WebLinkAboutMinutes Police Pension 060922Palm Beach Gardens Police Officers' Pension Fund
Minutes of the Meeting Held: June 9, 2022
1. Chair Jay Spencer called the regular Quarterly Meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers' Pension Fund to order at 9:02 AM in the Council Chambers and called roll. Those persons present
included:
2. TRUSTEES PRESENT
Jay Spencer, Chairman
Brad Seidensticker, Secretary
Allan Owens, Trustee
Marc Glass, Trustee
Greg Mull, Trustee
3. REPORTS
Investment Manager (Steve Stack, Highland Capital)
OTHERS PRESENT
Scott Baur & A.C. Lovingood (Resource Centers)
Bonni Jensen (Klausner Kaufman Jensen & Levinson)
Jennifer Gainfort, Consultant (AndCo Consulting)
Steve Stack, Investment Manager (Highland Capital)
Steven Stack with Highland Capital started his presentation by reviewing the labor market participation by age group
with the Board, noting that the labor participation has not yet recovered to pre-COVID-19 2020 levels. The lower
participation rates continue to pressure the market and food inflation due to rising labor costs. Inflation remains a
global problem. Mr. Stack then reviewed some of the highlights for the Highland Capital Funds for the Period
ending March 31, 2022 and stated that for Year -To -Date, that Growth is down 0.44%, Fixed is down 5.06%, and the
1-3 year Fixed is down 2.42%. Trustee Marc Glass mentioned that 40% of new homeowners in the past six months
have already missed a mortgage payment. The Trustees and Mr. Stack then had a detailed conversation regarding
the potential impact that inflation will have on the Plan.
Investment Consultant (Jennifer Gainfort, AnclCo
Jennifer Gainfort started her presentation by reviewing the current asset allocation of the Plan, which remains in
line with the Plan's target range. The Plan's Total Fund Composite from December 31, 2021, through March 31,
2022 was reviewed with the Board. For the quarter ending March 31, 2022, the net returns were -4.13% compared
to the benchmark of-3.26%. The Fiscal -Year -To -Date returns were 1.34% compared to the benchmark rate of
2.84%. The Three -Year trailing returns were 11.63% compared to the benchmark of 12.44%. The Five -Year returns
were 10.07%, compared to the benchmark rate of 10.67%, and since inception the Plan has an 8.02% net return on
investments compared to the benchmark rate of 8.94%. Miss. Gainfort then each investment manager in detail,
noting that ARA Core Property Fund had net earnings of 8.17% and American Strategic Value Realty earned 6.16%
for the quarter. The only other investments that were in positive territory was the IFM Global Infrastructure, which
earned 1.22% for the quarter. Miss. Gainfort then presented the board with an updated draft Investment Policy
Statement which adds the Standard & Poor's BBB Bond Rating, the Moody's Baa Bond Rating, and the Fitch BBB
Bond Rating along with any investment grade by a major rating agency as an allowed investment along with a cap
being set that no more than 15% of the fixed income portfolio shall be in the lowest investment grade rating.
Marc Glass made a motion to the Investment Policy Statement updates to allow for Investment Grade Rated Bonds
and allowing up to 15% of the Fixed Income Allocation to be in Investment Grade Bonds. The Motion received a
second from Brad Seidensticker, approved by the Board 5-0.
Attorney Report (Bonni Jensen, Klausner Kaufman Jensen & Levinson)
Jensen Memo - Form 1: Attorney Bonni Jensen reminded the Board that the Trustee's Form 1 needs to be submitted
by July 1, 2022. Mrs. Jensen also informed the Board that the State is testing out the ability to submit Form 1's
electronically.
Jensen Memo — IRS Milage Rate for 2022: Mrs. Jensen informed the Board that the Internal Revenue Service
released its updated Standard Milage Rate for 2022. The new rate is 58.5 cents per mile for miles driven on or after
January 1, 2022. This is up 2.5 cents from last year. Mrs. Jensen noted that in previous years, the milage rate can
fluctuate within the same year and that her firm will do their best to keep the Trustees and Plan Administrator
informed of any changes.
Jensen Memo - IRS RMD Guidance + Crypto Investments: Mrs. Jensen reviewed the IRS proposed regulations
revising the required minimum distribution regulations to align with the SECURE Act, as well as providing additional
guidance.
Mrs. Jensen also informed the Board that on March 10, 2022, the U.S. Department of Labor published a compliance
assistance release concerning 401(k) plans investing in cryptocurrencies and related products due to significant risk
of fraud, theft, and loss because of their speculative nature custodial, recordkeeping, and valuation concerns, in
addition to evolving regulatory market.
Jensen Memo — Generic Signature Authorization Forms
Mrs. Jensen informed the Board that there are instances where the Signature Authorization Forms in the possession
of existing service providers are no longer up to date as Trustee terms expire every two to four years, depending on
the language of the plan ordinance. To that end, Mrs. Jensen stated that she is recommending that the Plan
Administrator maintain a generic Signature Authorization Form for the Fund and update the signers annually.
Trust as Beneficiary
Mrs. Jensen presented the Board with a proposed Trust as Beneficiary Policy for the Plan. The reason for the
proposed policy is a result of members asking to designate a Trust as the beneficiary of a DROP or Share Account.
Mrs. Jensen reviewed the requirements for a member to make such a beneficiary designation, stating that the
Board Must receive a copy of the Trust Document and make an immediate distribution to the Trust in the event of
the death of the member. All such distributions are taxable. Mrs. Jensen went on and stated that we would need a
copy of the Trust Document and assurance that the money will leave the Plan when the member passes away.
Trustee Allan Owens asked how we would establish that the member has a valid Trust Document. Mrs. Jensen
stated that we would have the member state "I was advised to seek my own qualified tax and legal counsel' when
designating a Trust as a beneficiary.
Greg Mull made a motion to approve and adopt the Policy regarding a Trust as Beneficiary as presented. The
Motion received a second from Brad Seidensticker, approved by the Board 5-0.
Pension COLA Provision — Update
Mrs. Jensen informed the Board that she has not received any communication from the city as the Board lowered
the Assumed Rate of Return. Mrs. Jensen suggested that the City and the Police Bargaining Union may want to look
at the Provisions in the Ordinance that address any possible distributions. Trustee Marc Glass stated he does not
want to address other pension matters unrelated to the current bargaining cycle. Mrs. Jensen advised that the PBA
and the City must decide how to address this issue.
Pending Legal Issue on Former Member
Mrs. Jensen informed the Board that the felony charges pending against a former police officer of the city has been
reduced to misdemeanor charges. With this change, the Plan no longer needs to monitor the situation.
Administrator Report (Scott Baur & AC Lovingood, Resource Centers)
Resource Centers Memo —Officer Lease Rollover Example: Scott Baur presented the Board with a Memo regarding
office lease rollovers as it has been a continuous discussion with the Boards who have Real Estate investments. Mr.
Baur informed the Board that his firm is eliminating approximately one-third of the office space that is currently
being used. Mr. Baur explained that that way the Administrators work within the company has changed for the
long-term and the upcoming lease renewal was an opportune moment to jettison the unused space and create a
"Hotel Office Space" for the Plan Administrators when they need to come into the office to meet with members and
prepare for Board Meetings.
Minutes: March 10, 2022
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Resource Centers Memo — PBI CertiDeath Service: Mr. Baur presented the Board with a memo regarding a new PBI
CertiDeath Service that The Resource Centers will start utilizing in the coming weeks. Mr. Baur informed the Board
that the current PBI Death Search Service that his firm is using is not as detailed and accurate as the new PBI
CertiDeath Service. Mr. Baur reviewed the key differences along with the cost differences, noting that the new PBI
CertiDeath Service is less expensive than the Annual Income Verification Letters that were sent out last year.
Active DROP Participant List: Mr. Lovingood presented the Board with the Active DROP Participant list as of May 30,
2022.
Signature Authorization Updates: Mr. Lovingood informed the board that he has updated Signature Authorization
Forms for the Trustees to sign.
Resource Centers —Application Status Notifications: Mr. Baur presented the Board with a Fee Increase Letter which
was reviewed in detail with the Board. Mr. Baur noted that his firm has not asked for an increase in over 10 years.
Mr. Baur and the Trustees had a detailed discussion regarding the fee increase which resulted in Trustees Marc
Glass and Greg Mull requesting a fee breakdown on the proposed retainer increase so that the Trustees can justify
the increase.
4. MINUTES
The Trustees reviewed the draft Minutes for the March 10, 2022, Board Meeting.
Brad Seidensticker made a motion to approve the Minutes for the March 10, 2022, Quarterly Meeting as
ammended. The Motion received a second from Marc Glass, approved by the Board 5-0.
5. DISBURSEMENTS AND FINANCIAL STATEMENTS
The Board reviewed the Warrant dated June 9, 2022, for payment of expenses.
Marc Glass made a motion to approve the expenses on the Warrant dated June 9, 2022, as presented. The Motion
received a second from Allan Owens, approved by the Board 5-0.
The Board received, reviewed, and filed the interim financial statement through April 30, 2022.
6. BENEFIT APPROVALS
The Benefit Approvals June 9, 2022, were presented for review. The Board questioned if a member had taken a
refund of contributions back when he terminated employment with the City and requested that the Plan
Administrator look into the matter.
Marc Glass made a motion to approve the Benefit Approvals dated June 9, 2022, except for Kenneth Jenkins Benefit
Approval. The Motion received a second from Greg Mull, approved by the Board 5-0.
7. OTHER BUSINESS
Chairman Jay Spencer informed the Board that Wayne Sidey wants to take a DROP Distribution and is asking for
Board Approval due to the amount exceeding the DROP Policy threshold where the Board would need to approve
the amount before distributing the payment. Attorney Bonni Jensen informed the Board that they can authorize the
distribution and suggested that the Board to allow the member to take a distribution in excess of $35,000.00.
M Marc Glass made a motion to allow Wayne Sidey to take a DROP Distribution in excess of $35,000.00 with a
maximum amount not to exceed $125,000.00, pending receipt of the DROP Application. The Motion received a
second from Allan Owens approved by the Board 5-0.
Minutes: March 10, 2022
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Attorney Bonni Jensen informed the Board that Salem Trust is introducing a Retiree Portal and noted that this new
option was discussed at the MFA Conference that the attended.
The Board had a discussion regarding Truist Bank and asked The Resource Centers how well the banking relationship
is. There was a detailed discussion regarding the banks that The Resource Centers uses which resulted in the Board
requesting that they are given updates on any issues from Truist Bank.
8. PUBLIC COMMENTS
No members of the public had any comment.
9. ADJOURN
There being no further business, Chair Jay Spencer adjourned the meeting at 11:18 AM.
Respectfully submitted,
Brad Seidensticker, Secretary
Minutes: March 10, 2022
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