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HomeMy WebLinkAboutMinutes Police Pension 012710City of Palm Beach Gardens Po /ice Officers' Pension Fund Minutes of the Meeting Held JANUARY 27, 2010 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 9:10 AM by Jay Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT Jay Spencer, Chairman David Pierson, Secretary Brad Seidensticker, Trustee Jules Barone, Trustee OTHERS PRESENT Audrey Ross (Resource Centers) Bonni Jensen (Law Offices of Perry & Jensen) Steve Stack (ICC Capital Management) Donna Cannon (PBG Clerk's Office) Brendon Vavrica (Thistle Asset Consulting) Jim Burdick (Cherry, Bekaert & Holland) Rowana Filtan (Cherry, Bekaert & Holland) INVESTMENT MANAGER REPORT ICC Capital — Presented by Steve Stack Ms. Stack reported that it was an Equity rally last quarter and that the 30 year bonds increased. Also Fixed Income was flat, which is now less of a risk for the portfolio. He commented that they will continue to buy the build America bonds, and stated that within the last quarter some sold off which resulted in nice premium for the fund. Mr. Stack reviewed the Fixed Income side of the portfolio, and stated that for the quarter ending December 31, 2009 there was 88.7% in fixed income and 11.3% in cash. For the quarter the total bonds were behind the index at -0.43% versus 0.20 %, and the total fund was also behind at -0.46% versus 0.20 %. Mr. Stack explained that his Firm's view on the fixed income side is about a 4 -6% return for this fiscal year. Also, there are still some US Treasuries in the portfolio which have a very light holding. Lastly, Mr. Stack reported on the Growth side and stated that within the quarter there was 91.7% in Equity and 8.3% in cash. This Fund did a lot better for the quarter with Equities at 8.98% versus 7.94 %, and the total fund also ahead of the benchmark at 8.06% versus 7.94 %. Mr. Stack commented that he thinks the Equities will do better then the Bonds this yearand he believes that Technology and Energy will be the leaders. INVESTMENT CONSULTANT REPORT Thistle Asset Consulting — Presented by Brendon Vavrica Mr. Vavrica reported that it was a good quarter and reviewed the compliance checklist. He stated that they are inline with all the policies on the Equity side, but is off target slightly on the Fixed Income side. He then reviewed the assets by Manger for the quarter ending December 31, 2009. He stated that there is a slight overweight in Fixed Income and an underweight in Equities. Minutes 1 -27 -10 - Palm Beach Gardens Police.doc Page 1 of 4 Mr. Vavrica reviewed the returns for the quarter ending December 31, 2009. The total fund was slightly behind the index at 3.26% versus 3.72 %, the total Equities outperformed at 5.90% versus 5.58% and the total Fixed Income was negative and behind the index at -0.45% versus 0.20 %. Mr. Vavrica also reported the returns by Manager and commented that all the Rhumbline funds are outperforming. The International fund is outperforming as well at 3.76% versus the index at 2.22 %. Mr. Vavrica gave an update on the Mainstay's fund performance. Since this fund fired them, they raised all their fees and were down about 24% for the year when other funds were only down 14 %. Lastly, Mr. Vavrica explained the asset allocation analysis that he put together. He stated that they are looking to allocate more to International since they can now increase their International target from 10% to 25 %. Mr. Vavrica reviewed some different scenarios showing what the funds allocations and returns would look like if they increased international, taking it from fixed income. Mr. Stack commented that he likes the PIMCO International Fund because they have the risk built in. Also PIMCO is the worlds biggest bond holder and they are a mutual fund. The Board discussed the different options and asked Mr. Vavrica to look into some International Bond Funds and to bring back some recommendations. The Board also discussed some real estate options. Mr. Seidensticker commented that they can look at REITS and Mr. Vavrica stated that he would shy away from REITS at this time because they have gone up so much recently. Mr. Vavrica commented that there are other real estate options out there like direct managers and that he will do some research and bring it back to the Board. 9/30/2009 AUIDTED FINANCIAL STATEMENT PRESENTATION Cherry, Bekaert & Holland — Presented by Jim Burdick & Rowana Filtan Mr. Burdick presented the Board with the Audit communication letter which is now required under the new auditing standards. He reviewed Cherry, Bekaert & Holland's responsibilities in performing the Audit and commented that they issued an unqualified opinion, which is the highest level of opinion that could be issued. Mr. Burdick reported that there were no new accounting policies adopted within the fiscal year and that there were no difficulties found while performing the audit; except that the buybacks still needed to be reconciled and briefly explained why. He stated that there were no consultations with any other Auditors during this Audit and explained that he will need the Board to sign off and approve this letter. MOTION: Mr. Pierson made a motion to approve the September 30, 2009 Audit Representation Letter. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4 -0. Mr. Burdick reported on the Financial Statements for the fiscal year ending September 30, 2009. He reviewed the Independent Auditors Report and the Management Discussion and Analysis Report. He stated that the Plan's assets have increased from $28M in 2008 to $34M in 2009, and that there was an addition to the plan in the amount of $6,687,824 which was due to positive investments. Mr. Burdick also reported that the total investments increased in 2009 to $32M and that the Employer and State contributions were also higher in 2009 compared to 2008. The Plans funded ratio as of October 1, 2008 was at 53.4% and Mr. Burdick stated the he expects it to be slightly higher for this fiscal year, but they will not find that out until the Actuary has completed their report. Minutes 1 -27 -10 - Palm Beach Gardens Police.doc Page 2 of 4 Mr. Burdick explained that the Administrative expenses have increased as well as the Investment expenses. Mr. Seidensticker had some questions about the internal controls and policies. Mr. Burdick commented that they have strict rules and regulations that they must abide by and that they visit the Pension Resource Center to view all documents and files. Also all the Investment Managers and Custodians have SAS70 reports of their own. MOTION: Mr. Seidensticker made a motion to approve the September 30, 2009 Audited Financial Statements as presented by the Auditors at Cherry, Bekaert & Holland. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 4 -0. MINUTES MOTION: Mr. Pierson made a motion to approve the minutes from the October 29, 2009 regular meeting as amended. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4 -0. ADMINISTRATOR REPORT Resource Centers — Presented by Audrey Ross N/A ATTORNEY REPORT Law Offices of Perry & Jensen - Presented by Bonni Jensen Ms. Jensen reviewed the revised DROP distribution policy which reflects the new open enrollment periods. MOTION: Mr. Seidensticker made a motion to approve the revised DROP Distribution Policy. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 4 -0. Ms. Jensen reported that effective January 1, 2010 the IRS mileage has changed from $.55 to $.50. Mr. Jensen stated that she and Mr. Spencer appeared at the City Council meeting last month were they passed the first amendment at the first reading. Also they received the impact statement from the Actuary regarding this amendment, in which there is no cost impact. The amendment will now be going to the second reading soon. Ms. Jensen sent letters to all the Investment Manager's regarding the scrutinized companies. She stated that Vanguard had invested in some of the companies that were on the list, but they have another vehicle that they can move that investment to. This letter will have to be sent to the Managers on an annual basis. Minutes 1 -27 -10 - Palm Beach Gardens Police.doc Page 3 of 4 The Attorney General recently issued an Advisory Legal Opinion regarding meeting of a retirement board via electronic technology and how this is impacted by the Sunshine Law. There are two parts to this: • Workshops can be conducted via internet or electronic media as long as there is quorum. • Formal meetings must have a physical quorum present in a room and then will allow an absent Board member to join via internet or electronic technology. Ms. Jensen explained that in order to allow this, the Board would have to add certain language to the bottom of the agenda's advertising this option. The Board took no action. DISBURSEMENTS APPROVALS MOTION: Mr. Seidensticker made a motion to approve the disbursements. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 4 -0 BENEFIT APPROVALS MOTION: Mr. Pierson made a motion to approve the benefit approval for Ronald Council. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4 -0 OLD BUSINESS N/A OTHER BUSINESS N/A AJOURN There being no further business, and the future meetings are scheduled for the last Thursday of the first month of the quarter. The next regular meeting was scheduled for Thursday April 29, 2010 at 9AM; the Trustees officially adjourned the meeting at 11AM. Respectfully submitted, DAVID PIERSON, Secretary Minutes 1 -27 -10 - Palm Beach Gardens Police.doc Page 4of4