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HomeMy WebLinkAboutMinutes Police Pension 102110City of Palm Beach Gardens Po /ice Officers' Pension Fund Minutes of the Meeting Held October 21, 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) Wayne Sidey, Trustee John McCann (Thistle Asset Consulting) INVESTMENT MANAGER REPORT ICC Capital — Presented by Steve Stack Mr. Stack reported that September was a great month for the equities, which were up about 12 -13 %. He commented that we are still seeing the equity rally, and we probably will continue to see it until the end of the year. Within the quarter the more risky names outperformed in which this fund benefited from because their portfolio was positioned for that. On the fixed income side the yields are still low, and the bond market still has so much volatility going on. Mr. Stack stated that they are moving away from the Treasuries and will continue to buy more in Corporates. Mr. Stack reviewed their fee structure and stated that this fund has hit their price break point. With that said, Mr. Stack wants to revise ICC's contract with the board to reflect the price break point amount, which will save the Plan about $1,400 per yea r. MOTION: Mr. Pierson made a motion to revise the ICC contract to reflect the price break point fee, which is effective January 1, 2011. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5 -0. INVESTMENT CONSULTANT REPORT Thistle Asset Consulting — Presented by John McCann Mr. McCann reviewed the aggregate for the fiscal year ending September 30, 2010. He explained that this shows where the plan lies. There is 55% in large cap, 24% in mid cap and 21% in small cap. Mr. McCann stated that this is a very nicely diversified portfolio, and he likes to go over this exercise at the end of each fiscal year to make sure there portfolio is positioned correctly. Minutes 10 -21 -10 - Palm Beach Gardens Police.doc Page 1 of 6 Mr. McCann reported the performance for the quarter ending September 30, 2010. He stated that over all it was a great quarter and this fund has had the highest return for the fiscal year out of all his other clients that he has already done reports for. At the end of the quarter there was 55% in equities, 39% in fixed income and 6% in cash. The total fund was slightly behind for the quarter at 8.17% versus the index at 9.02 %. The total equities outperformed the index at 12.78% versus 12.39 %, and the fixed income also outperformed at 3.07% versus 2.49 %. Mr. McCann reported that for the fiscal year to date the fund outperformed their actuarial assumption return, but fell short of the benchmark at 10.09% versus 10.82 %. He then reviewed each Manager's performance: Rhumbline S &P 500 - Slightly behind the index for the quarter at 11.26% versus 11.29 %, but for the fiscal year to date they outperformed at 10.21% versus 10.16 %. Rhumbline S &P 400 - Outperformed the index for the quarter at 13.13% versus 13.12 %, but the opposite for the fiscal year; 17.77% versus 17.78 %. Rhumbline S &P 600 - Fell short of the benchmark for both the quarter and the fiscal year at 9.56% versus 9.62% and 14.14% versus 14.21% respectively. ICC Large Cap Growth - Had a great quarter at 13.45% versus the index at 13 %, and also had a great fiscal year at 14.62% versus 12.65 %. International Equity - Outperformed significantly for both the quarter and the fiscal year. For the quarter they were way ahead at 18.06% versus the index at 16.53 %, and for the fiscal year they performed even better at 9.09% versus the index at 3.71 %. Mr. McCann stated that they two new international bond managers were just funded about one week ago, so he will have a report on them next quarter. He reviewed the risk versus return chart and stated that the fund is in a good position right now and they are getting a lot more return for the little risk they are taking. Mr. McCann commented that he did some more research on other international bond managers and reviewed what he found out. Mr. Pierson stated that at this time he does not think that the board should put anymore money into the international bonds as he thinks bonds are just a bubble waiting to burst. The board discussed their different options. MOTION: Mr. Pierson made a motion to not allocate anymore money to the international bond accounts. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 5 -0 Mr. McCann also reviewed the current allocation of the assets. He stated that the S &P 500 allocation fell under the policy amount, so we need to raise the allocation in order to be in compliant with the policy. MOTION: Mr. Seidensticker made a motion to transfer 3% from the ICC fixed income account to Rhumbline's S &P 500 account, to be in compliance with the investment policy guidelines. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5 -0 Minutes 10 -21 -10 - Palm Beach Gardens Police.doc Page 2of6 Lastly, Mr. McCann reviewed the revised investment policy guidelines. He noted that the only revision he made was to add in the two new international bond managers. MOTION: Mr. Seidensticker made a motion to approve and accept the revised investment policy guidelines that were presented by the Investment Consultant. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5 -0 Ms. Ross noted that she would get all the parties signatures and file it with the appropriate parties. ATTORNEY REPORT Law Offices of Perry & Jensen - Presented by Bonni Jensen Ms. Jensen reviewed the revisions she made to the summary plan description. She noted that once approved by the board, copies must be provided to all active plan members. Ms. Ross stated that she will drop off copies of the summary plan description to payroll to be distributed with the members' paychecks. MOTION: Mr. Barone made a motion to approve and accept the revised summary plan description that was prepared by the Plan's Attorney. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5 -0. Ms. Jensen stated that she revised the DROP distribution policy to state that members who want to take a monthly annuity payment from their DROP account must get the amount calculated by an accountant. MOTION: Mr. Barone made a motion to approve and accept the revised DROP distribution policy that was prepared by the Plan's Attorney. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carried unanimously 5 -0. Ms. Jensen updated the board on the new Federal laws. She reviewed the changes that the SEC and GASB made that could possibly impact the pension plan. Although these changes are not effective yet, Ms. Jensen commented that they are on the fast track to being approved and put into place. She will update the board as she hears more. Ms. Jensen explained to the board that there is an issue with the mutual funds when the Resource Centers purchases them. She explained that the Custodian of the plan should be the ones doing the purchase, but Fiduciary Trust does not offer this kind of service. Ms. Jensen recommended that the board should consider looking for a Custodian that will purchase the mutual funds on behalf of the board. The board discussed the different Custodians out there and Mr. Spencer stated that he recently spoke to Salem Trust at a conference and they offer this kind of service and stated that they can also save the plan some money as well. Minutes 10 -21 -10 - Palm Beach Gardens Police.doc Page 3of6 MOTION: Mr. Seidensticker made a motion to authorize Ms. Jensen to do a RFP for a new Custodian. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5 -0. Lastly, Ms. Jensen stated that when you transition from Custodians you may loose some information. With that said, Ms. Jensen reported that a class action monitoring firm, Barroway, Topaz, Kessler, Meltzer & Check (BTKMC) contacted her and they want to file on behalf of the plan throughout the entire transition for free as long as the board commits to staying with them in the future. Ms. Jensen explained that this firm will look at all the holdings in the plan and then they will try to find cases that they can make litigation out of. She commented that this offer has a tremendous upside and no downside, and she also noted that she has no relationship with this monitoring firm. MOTION: Mr. Pierson made a motion to hire Barroway, Topaz, Kessler, Meltzer & Check as their class action monitoring firm. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carried unanimously 5 -0. ADMINISTRATOR REPORT Resource Centers — Presented by Audrey Ross Ms. Ross presented the board with the September 30, 2010 audit engagement letter. Ms. Jensen stated that she reviewed the document and does not see any issues as is. MOTION: Mr. Sidey made a motion to approve and authorize the September 30, 2010 audit engagement letter. SECOND: Mr. Baron seconded the motion. CARRIED: The motion carried unanimously 5 -0. Ms. Ross stated that the buyback policy does not state how long a member has from the time they receive their buyback cost to the time they need to notify me whether or not they want continue or not. The board discussed and stated that 90 days should be plenty of time from when a member receives their buyback cost to decide whether they want to buyback their time or not. MOTION: Mr. Sidey made a motion to allow members 90 days from when they receive their buyback cost to notify the administrator if they want to buyback the time or not. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 5 -0. Ms. Ross reviewed the 2011 meeting dates. She explained that the regular dates that the board has previously meet on are not available this year. The board scheduled their first meeting date for January 27, 2011 at 3PM, and stated that they will discuss the future dates at that meeting. Lastly, Ms. Ross stated that her office is having a difficult time with the VEBA Minutes 10 -2 1 - Palm Beach Gardens Police.doc Page 4of6 calculations. She explained that her office was directed to deducted the VEBA contributions out of the retirees pension checks so that they can still contribute to their VEBA accounts as a retiree. Ms. Ross commented that she was informed by the Attorney on the VEBA fund that the members contribute 2% of their final payroll for their last year of service. She stated that the issue is that we are not sure what should be included in their payroll for purposes of the VEBA calculation; overtime, base pay, salary, pensionable earnings, etc. Ms. Jensen stated that the pension board should not responsible for doing the VEBA calculations, and that the VEBA board needs to do the calculation and notify the administrator of the dollar amount to deduct from the members pension check. Ms. Jensen noted that she will notify the VEBA attorney of this issue and let them know they need to do all VEBA calculations in the future. MINUTES MOTION: Mr. Pierson made a motion to approve the minutes from the July 29, 2010 regular meeting. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5 -0. DISBURSEMENTS APPROVALS MOTION: Mr. Sidey made a motion to approve the disbursements. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 5 -0 BENEFIT APPROVALS MOTION: Mr. Sidey made a motion to approve the application to enter the DROP for Richard Facchine. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 5 -0 MOTION: Mr. Sidey made a motion to approve the application to exit the DROP for Jay Spencer. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 4 -0 (Mr. Spencer abstained from the vote) MOTION: Mr. Sidey made a motion to approve the applications to exit the DROP for Glenn Brown, Michael Rispoli and Paul Leffler. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 5 -0 Minutes 10 -21 -10 - Palm Beach Gardens Police.doc Page 5 of 6 MOTION: Mr. Barone made a motion to approve the application for distribution of DROP account (closeout) for Glenn Brown. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carried unanimously 5 -0 FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through August 2010. The board received and filed the financial statements through August 2010. OLD BUSINESS N/A OTHER BUSINESS Mr. Spencer stated that he received notification from the City that the City Council reappointed Mr. Pierson and Mr. Seidensticker. Both Trustees stated that they were willing to accept their term for another 4 years. Mr. Spencer stated that he had some concerns with last year's audit that was completed by Cherry, Bekaert & Holland, and he is not sure how things will go this year as well. He recommended to the board that they should consider doing an RFP for an Auditor. Ms. Jensen stated that you would have to wait until this years audit is complete before you issue an RFP. 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 January 27, 2011 at 3PM; the Trustees officially adjourned the meeting at 11:11AM. Respectfully submitted, DAVID PIERSON, Secretary Minutes 10 -21 -10 - Palm Beach Gardens Police.doc Page 6of6