HomeMy WebLinkAboutMinutes Police Pension 072910City of Palm Beach Gardens Po /ice Officers'
Pension Fund
Minutes of the Meeting Held
JULY Z9, 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 8:56 AM by Wayne Sidey in the
Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail,
Palm Beach Gardens, Florida.
TRUSTEES PRESENT
OTHERS PRESENT
Jay Spencer, Chair
Audrey Ross (Resource Centers)
David Pierson, Secretary
Bonni Jensen (Law Offices of Perry & Jensen)
Brad Seidensticker, Trustee
Steve Stack (ICC Capital Management)
Jules Barone, Trustee
Donna Cannon (PBG Clerk's Office)
John McCann (Thistle Asset Consulting)
INVESTMENT MANAGER REPORT
ICC Capital — Presented by Steve Stack
Mr. Stack reviewed the fixed income side and commented that there was a Treasury
rally within the last quarter, which did not benefit this fund because this portfolio has
very little exposure to Treasuries. For the quarter ending June 30, 2010 the total
fixed income fund was up at 3.06 %, but not as much as the market at 3.49 %. Mr.
Stack stated that he thinks the portfolio is in a good position right now. He still likes
the build America Bonds because of their yield spread, and they also sold off some
Kentucky Bonds for 10% more than what they bought them for. Mr. Stack
commented that he thinks moving forward with international equity bonds as talked
about at the last meeting is a great idea.
On the growth side of the portfolio, it was a negative quarter but the portfolio was
ahead of the benchmark at - 11.44% versus - 11.75 %. Mr. Stack stated that he likes
the technology and materials sector and that he might buy back into some more
financials soon. Lastly, Mr. Stack commented that he believes there will be some
stabilization with unemployment and housing within the near future, and that this
portfolio is in a good position and has down sized some of the bad.
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting — Presented by Brendon Vavrica
Mr. McCann reviewed the compliance checklist and stated that we are in a good
position and inline with the policy, except that the Equities are 9% below target. He
suggests taking 5% from fixed income and distributing it equally between the three
Rhumbline accounts.
For the quarter ending June 30, 2010 there was 55% in equities, 40% in fixed
income and 5% in cash. Mr. McCann reported that we ended the quarter with $35M
which is up from last quarter. The total fund was negative but ahead of the
benchmark for the quarter at -5.38% versus - 6.16 %. The total equities were in the
same position at -9.99% versus the benchmark at - 11.35 %, and the total fixed
income was positive but behind at 1.57% versus 3.49 %. Mr. McCann then reviewed
each Manager's performance for the quarter:
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Rhumbline S &P 500 — They were almost inline with the index at - 11.39%
versus - 11.43 %.
Rhumbline S &P 400 — Outperformed the index, but still negative at -9.55%
versus - 9.59 %.
Rhumbline S &P 600 - Also outperformed at -8.64% versus the index at
- 9.92 %.
ICC Large Cap Growth — Had a great quarter and outperformed at -6.90%
versus - 11.75 %, but still negative.
International Equity — Came pretty close to the benchmark at - 13.39% versus
- 13.97 %.
Mr. McCann commented that he does not think the Plan will meet their assumed rate
of return of 7.5% for the fiscal year ending September 30, 2010. He then reviewed
the risk versus return chart and reported that the Plan is lying in the good quadrant
which means we are taking less risk and getting a better return.
Mr. Spencer talked about lowering the assumption rate by a whole percent, but doing
it by little increments at a time. He stated that he would like the Board to consider
moving that direction with the next valuation that is done.
INTERNATIONAL EQUITY AND BONDS SEARCH /PRESENTAITON
Mr. McCann reviewed the International Equity and Bond Funds that he did some
research on. He explained that all the funds were highly diversified and are doing
great. He reported on some of the Managers that he found would be a good fit for
this fund, and commented that we would either buy into ETF's or Mutual Funds. Mr.
McCann explained that as part of a Mutual Fund they are allowed to buy under
quality bonds. He reviewed Blackrock, Evergreen, Dreyfus, Oppenheimer and T.
Rowe. Mr. McCann is recommending taking 10 %, which is about $3.5 M, and
allocating it to a couple different managers in the International Equity and Bond
accounts. The Board discussed what managers they would want to go with, and also
gave some names of other Mangers that they would like Mr. McCann to do some
research on. Mr. McCann stated that he will do some additional research, but in the
meantime the Board can go ahead and fund two of three managers that they like.
The Board agreed to move $1.4M from fixed income to fund Oppenheimer and
Dreyfus, and then will decide on another manager to fund at the next meeting.
MOTION: Mr. Seidensticker made a motion to move $1.4M from ICC
Capital's fixed income account to fund Oppenheimer Capital
and Dreyfus International accounts(splitting the funds equally
between the two accounts).
SECOND: Mr. Barone 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 Gilbert presentation that was presented at the FPPTA
conference. She explained that they are trying to get a 10 year annualized return on
gold and show different ways of getting it. Mr. Pierson gave his opinion on adding
gold into the portfolio and commented that when he worked at Merrill Lynch there
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first rule was to never buy any metals into retirement accounts. Mr. Stack reported
that the gold run was only recently and that there is tremendous amount of volatility
with commodities. Mr. McCann commented that you can always buy into I- shares
which hold gold, but doesn't buy it directly.
Ms. Jensen stated that her office has filed for a tax exempt certificate for the pension
fund itself.
Ms. Jensen announced that the House Bill 5607 was vetoed by the Governor and that
next years Legislative session will be interesting.
Ms. Jensen reported to the Board the State Annual Report has been approved and we
should be receiving the money shortly.
Lastly, Mr. Spencer wanted to update the Board as to what is going on in the City.
He explained that they are eliminating the Lieutenant and Captain positions effective
September 30, 2010. Mr. Spencer's position will no longer exists so therefore he will
apply for the Commander position, but it's not guaranteed that he will get it. If he
does not get the position then he will take up the City's offer with the buyout
package. Although, he would like the City to pay him his buyout over a period of
time instead of one lump sum so that he can still participate in the DROP and not get
hit so hard on the taxes. Mr. Spencer stated that the next bargaining session is
scheduled for August 10, and that he would like Ms. Jensen to be present at the
session so that she can represent the Board in case they had any questions in
regards to the impact on the pension fund. Ms. Jensen noted that we would have to
make sure that they don't consider it a leave of absence because then you can't
participate in the pension plan. Mr. Spencer commented that he is asking for the
pension board's permission to have Ms. Jensen present with him at the bargaining
session on August 10, 2010. The Board agreed and stated that they had no problem
with Ms. Jensen being present.
MINUTES
MOTION: Mr. Pierson made a motion to approve the minutes from the
April 29, 2010 regular meeting.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 4 -0.
DISBURSEMENTS APPROVALS
MOTION: Mr. Pierson made a motion to approve the disbursements.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 4 -0
BENEFIT APPROVALS
MOTION: Mr. Barone made a motion to approve the applications to enter
the DROP for Gwendolyn Fleming, Jack Segreto and Joseph
Corrao.
SECOND: Mr. Seidensticker seconded the motion.
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CARRIED: The motion carried unanimously 4 -0
FINANCIAL STATEMENTS
The board reviewed and discussed the financial statements that were provided
through June 2010.
The board received and filed the financial statements through June 2010.
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
rescheduled for Thursday October 21, 2010 at 9AM; the Trustees officially adjourned
the meeting at 10:42AM.
Respectfully submitted,
DAVID PIERSON, Secretary
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