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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: Minutes 7 -29 -10 - Palm Beach Gardens Police.doc Page 1 of 4 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 Minutes 7 -29 -10 - Palm Beach Gardens Police.doc Page 2 of 4 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. Minutes 7 -29 -10 - Palm Beach Gardens Police.doc Page 3 of 4 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 Minutes 7 -29 -10 - Palm Beach Gardens Police.doc Page 4of4