HomeMy WebLinkAboutMinutes Fire Pension 072722CITY 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, July 27, 2022, at 1:O01DM
TRUSTEES PRESENT: Rick Rhodes
Mike Zingaro
Jon Currier
Thomas Topor
TRUSTEES ABSENT: Eric Bruns
OTHERS PRESENT: Siera Feketa, Foster & Foster
John Thinnes, AndCo Consulting
Pedro Herrera, Sugarman and Susskind
1. Call to Order— Rick Rhodes called the meeting to order at 1:OOPM.
2. Roll Call — As reflected above.
3. Public Comments — None.
4. Approval of Minutes
a. Rick Rhodes commented on page six he would like to add that he stated the Plan spent
$100,000 on Foster & Foster fees last year based on the expenses presented.
The Board approved the April 27 2022 quarterly meeting minutes with revisions upon motion by
Jon Currier and second by Mike Zingaro• motion carried 4 0
New Business
a. Proposed 2023 meeting dates
i. Siera Feketa reviewed the proposed 2023 meeting dates commenting she followed
the same schedule as calendar year 2022. Siera confirmed the consultants were
available and the room had been reserved.
ii. The Board agreed with the proposed 2023 meeting dates by consensus.
b. Proposed FY2022-2023 budget
i. Siera Feketa reviewed the requirement for the Board to have an administrative
budget commenting they cannot go over the total budgeted amount. Siera
reviewed the increase in the budget commenting to avoid going over budget due
to unexpected costs, there was some cushion included.
ii. Rick Rhodes asked if AndCo was proposing a fee increase. John Thinnes
commented he was not. Siera Feketa commented their fee guarantee expires
September 30, 2022, so she increased that line item to be prepared for any
proposed fee increases.
The Board approved the FY2022-2023 Budget as presented upon motion by Jon Currier and second
by Mike Zmgaro. motion carried 4-0
Old Business
a. Foster & Foster fee proposal
i. Siera Feketa reviewed the original fee proposal commenting they would like to
continue to partner with the Board to provide the administrative and actuarial
services. Siera commented they understand the Board's concern with the
requested increase without a set maximum. Siera commented, remaining
consistent with all other Florida plans, they offered the original proposal with a
range of 1-5% on the Consumer Price Index (CPI). Siera commented alternatively,
they could offer a fixed 4% annual increase.
ii. The Board briefly discussed the options offered. Mike Zingaro commented they
asked for a maximum of 3%.
iii. Rick Rhodes asked what the out clause was. Pedro Herrera commented they have
a 30-day out clause and reviewed the process if they wanted to terminate that
agreement.
iv. Thomas Topor asked Siera Feketa to review the fee proposal again and the
alternative options. Siera reviewed the options offered.
v. Rick Rhodes asked Pedro Herrera what other plans have done. Pedro commented
they have one or two clients that did not approve the fee proposal, but a majority
have. Siera Feketa commented for those two clients Foster & Foster was only
providing actuarial services.
vi. Mike Zingaro asked how high Foster & Foster fees were in comparison to other
firms for administrative services when they hired them. Rick Rhodes commented
more, but services were better. Pedro Herrera commented their work was
significantly better.
vii. Pedro Herrera reviewed other firms that perform administrative/actuarial services
commenting other firms for actuarial services have either the same fees or higher.
viii. Jon Currier commented they do not have a desire to change administrators.
ix. Mike Zingaro commented he does not like the 4% fixed option.
x. Rick Rhodes commented he does not like any of it, but they could approve the fee
proposal and instruct the attorney to put out a Request for Proposal (RFP) for both
administrative and actuarial services, which would give them a year to review other
firms before the October 1, 2023 increase. Thomas Topor commented he agrees
with that.
xi. Siera Feketa commented she could bring the CPI increase to the Board each year
at the 31d quarter meeting for approval prior to it taking effect. Rick Rhodes
commented that would not give them enough time to change providers if they did
not want to approve the CPI increase.
xii. Rick Rhodes commented Foster & Foster does a good job and he thinks they were
due an increase but did not like the options provided.
xiii. The Board discussed approving this now and putting out an RFP for both
administrative and actuarial services so they have a year to review that before the
CPI increase.
i ne Board approved the Foster & Foster fee proposal as presented with a minim
maximum of 5.00% of the Consumer Price Index effective October 1 2023 and ea
upon motion by Thomas Topor and second by Mike Zingaro; motion carried 4 0
The Board directed the Plan Attorney to put out an RFP for administrative and actuarial services
upon motion by Mike Zingaro and second by Jon Currier; motion carried 4 0
xiv. Pedro Herrera asked what timeframe they were looking at to get responses. The
Board discussed commenting they would like results at the next meeting to decide
if they want to interview any in January.
xv. Mike Zingaro asked how many firms they would send it to and if there was a
maximum number. Pedro Herrera commented there was no maximum, but they
do have a list of vendors that do this work and they would send the RFP to those
vendors.
xvi. Pedro Herrera commented they would have the responses for review at the next
meeting.
Rick Rhodes asked if Pedro Herrera prepared the letter for Keith Bryer. Pedro commented
Siera Feketa emailed him all of the information he requested and if that was not
satisfactory, he could draft the letter, but since Siera already sent the information he did
not want to incur more expenses to the plan.
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c. Rick Rhodes asked for an update on the Salem Trust portal. Siera Feketa gave a brief
update commenting her office reviewed the dates of birth for all retirees and submitted
them to Salem Trust this week so it was in process.
d. Rick Rhodes asked for an update on the Investment Policy Statement (IPS) that was
approved at the last meeting. Siera Feketa commented it was filed with the State and Plan
Sponsor on May 23, 2022.
e. Rick Rhodes asked for an update on Golub. John Thinnes gave a brief update commenting
that had been completed.
f. Rick Rhodes asked for an update on the Annual Report. Siera Feketa commented
everything necessary had been submitted to the State, but the Annual Report had not been
approved yet.
g. Pedro Herrera asked the Board if they wanted a hard copy or an electronic copy of the
proposals submitted. Pedro commented usually they request an electronic copy with one
hard copy. The Board commented they were comfortable with the electronic copy. Mike
Zingaro asked that he still request the one hard copy.
7. Reports
a. AndCo Consulting,
John Thinnes, Investment Consultant
i. Quarterly report through June 30, 2022
1.
John Thinnes reviewed the letter from their president and gave an update
on AndCo. John thanked the Board for their business.
2.
John Thinnes reviewed the market environment for the quarter and the
current market environment. Mike Zingaro asked about his outlook on the
market. John gave a brief overview on his outlook on the market.
3.
John Thinnes and Pedro Herrera discussed the Federal Reserve raising
rates.
4.
The preliminary Market Value of Assets as of June 30, 2022 was
$125,728,488.
5.
The preliminary total fund gross returns for the quarter were-10.62%,
slightly outperforming the benchmark of-11.16%. The total fund trailing
gross returns for the 1, 3, 5, 7, and 10-year periods were-10.39%, 4.99%,
6.45%, 6.67% and 8.60% respectively. Since inception (5/1/1998), total
fund gross returns were 6.19%, slightly underperforming the benchmark
of 6.21 %.
6.
John Thinnes reviewed the returns of the investment managers. John
commented he would review Dana in further detail later.
7.
John Thinnes commented in the next quarter or so Intercontinental was
going to post large returns and reviewed their performance fee.
8.
John Thinnes reviewed the smoothing technique commenting the returns
would not be as much of an impact as if they did not smooth because they
will not get the whole impact in one year.
9.
Rick Rhodes asked about real estate going forward and what the outlook
is. John Thinnes reviewed commenting his biggest concern with real
estate managers was liquidity.
Note: Mike Zingaro left the meeting at 1:40PM.
10. Rick Rhodes asked how residential impacts their managers. John Thinnes
reviewed the different real estate properties that their managers invest in.
Note: Mike Zingaro returned to the meeting at 1:42PM
11. John Thinnes continued to review the real estate market and the factors
that impact that market.
12. Rick Rhodes and John Thinnes discussed the locations where their
managers have properties.
13. Mike Zingaro asked John Thinnes if they could look at sector specific real
estate and if he could also look at it geographically. John commented they
could look at it. Rick Rhodes asked for a list of where their holdings were.
John commented if they want him to find a fund, he could find a Florida
specific fund.
Domestic Equity Manager Analysis
1. John Thinnes reviewed Dana's historical performance.
2. John Thinnes commented he does like Dana but agrees they may want to
take some from Dana to further diversify.
3. John Thinnes gave a brief overview of each of the managers in the
analysis.
4. John Thinnes commented he used all mutual funds in the analysis.
5. John Thinnes commented unless otherwise requested he would focus on
JPMorgan and Parnassus and reviewed the factors why he narrowed it
down to the two managers.
6. John Thinnes reviewed the introduction.
7. John Thinnes reviewed the firm and investment option information.
8. John Thinnes reviewed the current portfolio characteristics.
9. John Thinnes reviewed the Historical Portfolio Characteristics
Comparison.
10. The Board briefly discussed their goal in diversifying their managers.
11. John Thinnes reviewed the current and historical portfolio style
comparison.
12. John Thinnes reviewed the trailing performance
13. John Thinnes reviewed the Dana vs Parnassus.
14. John Thinnes reviewed the calendar year performance.
15. John Thinnes reviewed the correlation matrix.
16. John Thinnes reviewed the risk for each of the managers commented
Parnassus seems to be less risky.
17. John Thinnes commented he likes Parnassus and JPMorgan and he
thinks they will pair well with Dana. John commented he does not want to
get rid of Dana entirely.
18. Rick Rhodes commented the Federal Reserve raised 75 basis points.
19. Jon Currier asked why they should keep Dana. John Thinnes reviewed
the long-term perspective. John Thinnes commented he does want to take
some from Dana. Rick Rhodes reviewed his perspective of Dana.
20. The Board and John Thinnes discussed Dana and whether they should
keep Dana at all.
21. The Board discussed the funds and how it would help them diversify. The
Board discussed how they could allocate the funds.
22. Rick Rhodes asked John Thinnes why they should go with Parnassus and
why he wants to keep Dana. John Thinnes reviewed.
23. Rick Rhodes asked John Thinnes to review his opinion on each manager.
John Thinnes gave a brief overview of each manager and how they will fit
in the portfolio.
24. The Board discussed how much to allocate to each manager.
25. The Board discussed the different managers. Mike Zingaro discussed
allocating 50% of what is currently with Dana and move those funds to
JPMorgan, leave 25% to Dana, and move the remaining 25% to
Parnassus. The Board discussed. John Thinnes and the Board discussed
the allocation.
26. Rick Rhodes asked if he will be using a transition manager. John Thinnes
reviewed what a transition manager was and the purpose of using one.
John commented he would use a transition manager if it made the most
economical sense.
The Board approved selling 75% of Dana portfolio and move 2/3 of the funds to JPMorgan and 1/3
of the Funds to Parnassus and to use a transition manager if economically feasible upon motion
by Jon Currier and second by Mike Zingaro• motion carried 4 0
27. The Board agreed by consensus to give John Thinnes the discretion to
engage with a transition manager if needed. John commented he would
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contact CAPIS and determine if he will use them. Mike Zingaro requested
John update the Board on his decision to use a transition manager.
Sugarman & Susskind Pedro Herrera, Plan Attorney
i. Update on disability applicant
1. Pedro Herrera briefly reviewed the medical status of the applicant
commenting it is Stage IV and he was of the understanding he was
possibly going to hospice soon.
2. Pedro Herrera briefly reviewed the disability process.
3. Pedro Herrera commented if a member has an apparent disability the
courts have decided that the boards could expedite the process.
4. Pedro Herrera suggested taking the current letter from the oncologist and
use that as a basis for the Board's determination to expedite the process.
Pedro commented based on what he heard, they should have a special
meeting soon to determine if the disability application will be granted.
Pedro commented suggesting scheduling a special meeting in the next
week or two.
5. Mike Zingaro asked Siera Feketa if they had all the documents they need.
Siera commented they got the last form today.
6. Pedro Herrera commented one of the questions was if he could elect his
form of benefit prior to getting his final benefit calculation. Pedro
commented they do not have the numbers, but he could make an election
earlier. Siera Feketa asked if that should be letter or email. Pedro
commented he thinks we should compose an email and have him respond
to that email.
7. Pedro Herrera reviewed the pre -retirement death benefits.
8. The Board discussed when to hold the disability hearing. The Board
agreed to hold the disability hearing on Friday, July 29, 2022 at 10:OOAM.
Siera Feketa commented she was available. Pedro Herrera commented
he was available, but would have to call in.
9. Siera Feketa asked which of the trustees could attend. Thomas Topor,
Rick Rhodes, and Mike Zingaro commented they could attend. Jon Currier
commented he would not be available.
10. Siera Feketa asked Pedro Herrera to confirm that all she needed to include
in the agenda was the application and forms received from the member.
Pedro commented that was correct, but redacted.
ii. Pedro Herrera reminded the Board the financial disclosure forms needed to be
filed by July 1, 2022. Siera Feketa commented all trustees have filed them.
iii. Pedro Herrera commented FPPTA will hold a Trustee School in October and the
Division of Retirement School would be held in November.
8. Consent Agenda
a. Payment ratification
i. Warrant #54, #55
b. Payment approval
i. None
C. Fund activity report for April 21, 2022, through July 20, 2022
The Board approved the Consent Agenda as presented upon motion by Jon Currier and second by
Thomas Topor: motion carried 4-0
9. Staff Reports. Discussions and Action
a. Foster & Foster, Siera Feketa, Plan Administrator
i. Upcoming educational opportunities
1. Siera Feketa reviewed the upcoming FPPTA Fall Trustees School from
October 2-5, 2022, in Orlando, FL.
ii. Siera Feketa reviewed the SB534 posting requirements commenting they were
sent to the City for posting on July 25, 2022.
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iii. Siera Feketa commented Jon Currier spent money on refreshments out of pocket
for the workshop and requested the Board for approval to reimburse him for his
expenses.
The Board approved the reimbursement for Jon Currier's expenses incurred on refreshments for
the workshop held on July 27 2022 upon motion by Thomas Topor and second by Mike Zingaro•
motion carried 4-0.
10. Adiournment — The meeting was adjourned at 2:55PM.
11. Next Meeting — July 29, 2022, at 10:OOAM, initial disability hearing.
Respectfully submitted by: Approved by:
iera Feketa, Plan Administrator Jon Currier, Secretary'
Date Approved by the Pension Board: —� (� 1 Z Le ` Z'2