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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. I 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 4 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. 5 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