HomeMy WebLinkAboutMinutes Fire Pension 072610PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
MINUTES OF MEETING HELD
July 26, 2010
A meeting of the Board of Trustees was called to order at 10:00 A.M. at Council
Chambers, Palm Beach Gardens, Florida. Those persons present were:
TRUSTEES
Tom Murphy
Roy 011iff
Ed Morej on
Donna Wisneski
MINUTES
OTHERS
Margie Adcock, Administrator
Pedro Herrera, Attorney
Joe Bogdahn, Investment Monitor
The Board reviewed the minutes of the meetings held May 10, 2010 and June 18, 2010.
It was noted that there were two typographical errors on the minutes of May 10, 2010. A
motion was made, seconded and carried 4 -0 to accept the minutes of the meeting held
May 10, 2010 as corrected. A motion was made, seconded and carried 4 -0 to accept the
minutes of the meeting held June 18, 2010.
INVESTMENT MONITOR REPORT
Joe Bogdahn appeared before the Board. He reviewed the preliminary performance for
the quarter ending June 30, 2010. He stated that they were still waiting on the universe
and peer ranking information. He reviewed the market environment. He reviewed the top
ten index weights and performance for the 2nd Quarter.
The total market value of the Fund as of June 30, 2010 was $29,809,720. The Fund was
down 4.98% net of fees for the quarter. The benchmark information was not available
because the NCREIF numbers were not available as of yet. The total equity portfolio was
down 10.29% while the benchmark was down 11.66 %. The total domestic equity
portfolio was down 10.31% while the Russell 3000 was down 11.32 %. The Dana core
equity portfolio was down 9.73% for the quarter while the S &P 500 was down 11.43 %.
The Dana growth equity portfolio was down 11.02% for the quarter while the Russell
1000 Growth was down 11.75 %. The total international portfolio was down 10.19%
while the benchmark was down 13.75 %. The international portfolio managed by RBC
Global was down 8.12% and the international portfolio managed by Manning & Napier
was down 13.75% for the quarter while the EAFE was down 13.75 %. The total fixed
income portfolio was up 2.93% for the quarter while the benchmark was up 2.92 %.
Agincourt was up 3.67% for the quarter while the benchmark was up 3.49 %. DHJ fixed
income was up 2.24% for the quarter while the benchmark was up 2.92 %. The real estate
portfolio managed by American Realty was up 3.26.
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Mr. Bogdahn provided information to the Board regarding the domestic equity portfolio.
At the last meeting Mr. Morej on has asked for information on those managers that
previously interviewed before the Board and how their performance has been. Mr.
Bogdahn noted that there were three managers that interviewed in 2002: Bank of
America; Trusco; and Eagle Asset Management. He noted that he was unable to put
something together for Bank of America because their structure has changed since the
time of the interview. He noted that Eagle and Trusco had changes in management since
the time of the interview. He stated that if the Board had hired any one of these three
managers, he thinks soon afterward the Board would have been talking about replacing
them due to the changes that occurred in each firm. Mr. Bogdahn reviewed the trailing
performance through June 30, 2010 comparing Dana to Eagle; Ceredex /Silvant (the
current Trusco product equivalent); and the S &P for the quarter, year to date, 1, 2, 3, 4, 5,
6 7, 8, 9 and 10 year periods. He stated that looking back on the firms the Board
interviewed in 2002, he feels the Board would have made changes due to the
management changes those firms have had since then. He noted that the Board has had
a more conservative approach. He questioned whether that is the approach the Board
wants to stay with or move away from. There was a lengthy discussion.
Mr. Bogdahn stated that he thinks with this Fund it makes sense to add ICC Multi -cap to
the mix and allocate more to real estate. There was further discussion on the domestic
equity investment strategy review. Mr. Bogdahn recommended the Board add the ICC
Multi -cap at some percentage based on further discussion on asset allocation at the next
meeting, but noted that he thought it would be in the 20% to 25% range. The Board
directed the Monitor to prepare the proper asset allocation and split the domestic equity
component between Dana and ICC to be presented at the next meeting.
There was discussion on the status of the international product. Mr. Herrera stated that
the contract should be completed soon. He stated that they are held up on one issue at the
moment, which is the indemnification provision. Mr. Morejon questioned information
that came up at the most recent conference regarding Intercontinental and possible
personnel changes. Mr. Bogdahn stated that they had discussions with Intercontinental
about that matter. They did change someone in their accounting department and one
person on the marketing side was asked to leave. Mr. Bogdahn stated that they are
confident that Intercontinental has marked down their properties and are doing full
appraisals every quarter. He stated that there are a couple other firms in the real estate
space that like to stir things up and he feels that is what was happening. Mr. Bogdahn
stated that he was still recommending the Board be involved in real estate. A motion was
made, seconded and carried 3 -1 to hire Intercontinental with a 5% allocation contingent
on reaching a proper agreement and bringing the allocation of American Realty up to 5 %.
Ms. Wisneski opposed the motion. Mr. Herrera stated that he would finalize the
agreement as soon as possible and get the Chairman to sign so that the product could be
funded at the next earliest possible date. A motion was made, seconded and carried 4 -0 to
approve the 2nd Quarter Investment Monitor Report as presented by Mr. Bogdahn.
Mr. Bogdahn provided the final revised Investment Policy Statement. Mr. Herrera
advised that he reviewed the documents and it was all in order.
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ATTORNEY REPORT
Mr. Herrera discussed the status of the proposed Ordinance. He stated that he followed up
with the City Attorney's Office on the proposed Ordinance. He noted that after that Mr.
Morejon contacted his office and inquired about including language regarding the change
in the joint annuitant. The language was added and there was no cost impact to the Plan.
Any cost could be borne by the Participant with the recalculation. He stated that it is his
understanding that the proposed Ordinance is on the August agenda. Mr. Morejon stated
that Mr. Owens reviewed the Ordinance and in spite of the fact that the Actuary has given
a no cost impact letter to the City, the City is opposed to the 3% fixed option. He stated
that he thinks it might be a good idea for the Board to have the Actuary at the Council
meeting. He also asked Ms. Wisneski if she would be willing to speak at the Council
meeting since she is one of the City representatives on the Board. There was a lengthy
discussion on what to present to the Council.
There was a discussion on possible self - directed options for the DROP. There was a
lengthy discussion on possible options, including ICMA. Mr. Herrera noted that if the
Board wanted to allow self - directed options for the DROP, the Ordinance would need to
be amended to allow for that. It was noted that the proposed Ordinance going before the
City Council now is with a 3% guarantee. There was further discussion.
OTHER BUSINESS
The Board was presented with the engagement letter for Steve Gordon to perform the
Audit for the fiscal year ending September 30, 2010. Ms. Wisneski stated that she met
with the City Auditor and Mr. Owens in mid July regarding the necessary requirements
needed for the Audit. She had a telephone conference with Mr. Gordon after that and Mr.
Gordon indicated that he would make the necessary adjustments. She stated that she
would review the engagement letter to see if she has any further questions. It was noted
that the Board would approve and execute the engagement letter at the next meeting.
Mr. Morejon noted that at the last meeting Mr. Bogdahn provided information on several
custodians. Mr. Morejon stated that he spoke with Brad Rimsen of Salem Trust at the
FPPTA Conference and advised that what he had provided Mr. Bogdahn was their
general fee model. Mr. Rimsen indicated that if he knew the participant information, he
could provide a better fee quote. Mr. Bogdahn stated that he did send detail information
to Salem but apparently Mr. Rimsen did not see it. There was discussion on the services
that the Custodian provides. Mr. Morejon indicated that perhaps the Board should issue a
RFP to learn more about what should be provided. It was noted that if the goal is to find
out what our Custodian does, the Board should invite Regions to a meeting to make a
presentation. The Board decided to have Regions attend the next meeting to give the
Board a tutorial on their mechanics and process.
It was noted that there was a letter from Manning and Napier dated June 11, 2010
regarding management changes. Mr. Bogdahn stated that there is nothing significant that
would affect this Fund.
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The Board reviewed the responses received to the disability review process. It was noted
that Ms. Bush provided a doctor's report that stated she was currently unable to work as a
firefighter. Mr. Weaver provided a letter from a doctor that stated that he did not think
Mr. Weaver could return to work as a firefighter. It was noted that the three other
disability recipients did not provide current letters from a doctor. They all indicated that
they were not currently receiving medical attention for their disability. Mr. Herrera
reviewed the disability review procedures. There was a lengthy discussion. The Board
directed Ms. Adcock to send a follow up letter to the three disability recipients advising
that they need to provide the Board with a letter from a doctor stating that they are still
disabled by September 15th or their pension would be discontinued until the Board
received proper verification.
ADMINISTRATIVE REPORT
Ms. Adcock presented the list of disbursements to be made. She also provided three
additional invoices from Dana, DHJ and Regions to be added to the list. A motion was
made, seconded and carried 4 -0 to approve the disbursements as well as the three
additional invoices submitted for Dana, DHJ and Regions.
OTHER BUSINESS CONTINUED
There being no further business, the meeting adjourned.
Respectfully submitted,
Tom Murphy, Secretary