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HomeMy WebLinkAboutMinutes Fire Pension 110810PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD November 8, 2010 A meeting of the Board of Trustees was called to order at 9:02 A.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Tom Murphy (9:19 A.M.) Rick Rhodes Ed Morej on Donna Wisneski MINUTES OTHERS Margie Adcock, Administrator Pedro Herrera, Attorney (9:15 A.M.) Joe Bogdahn, Investment Monitor Mike Dana and John Hamlin, Dana Advisors The Board reviewed the minutes of the meeting held September 20, 2010. A motion was made, seconded and carried 3 -0 to accept the minutes of the meeting held September 20, 2010. The Board reviewed the minutes of the meeting held October 4, 2010. A motion was made, seconded and carried 3 -0 to accept the minutes of the meeting held October 4, 2010. INVESTMENT MANAGER REPORT (Dana) Mike Dana and John Hamlin appeared before the Board. Mr. Dana stated that they had a really good year. He stated that stocks are doing very well and bonds have performed great. He provided the CD and Treasury rates as of November 5, 2010. There is no real inflation in sight, but it will be coming and everyone is worried about that. He thinks stocks are a safer, better play than bonds. He thinks bonds are expensive and does not think bonds can go too much lower in yields. They are seeing good quality stocks available. Ht thinks that stocks are where most of the return will come in the foreseeable future. The total market value as of September 30, 2010 was $15,672,831.72. For the quarter ending September 30, 2010, the portfolio was up 11.15% while the Russell 3000 was up 11.53 %. He noted that the large cap part of the portfolio was up 11.74% while the Russell 1000 Growth was up 13.00 %. The value portion of the portfolio was up 10.62% while the S &P 500 was up 11.29 %. Pedro Herrera entered the meeting. Mr. Dana stated that they are looking for companies that have strong, sustainable, free cash flow. Tom Murphy entered the meeting. Mr. Dana introduced John Hamlin. Mr. Hamlin is new to the firm today. He will be the Board's client service contact. Ms. Wisneski inquired about a few particular stocks that were sold at a loss. Mr. Dana stated that he would provide the information on those stocks to the Board. INVESTMENT MONITOR REPORT 2 Joe Bogdahn appeared before the Board. He discussed the market environment. He noted that Intercontinental has been funded and American Realty will call the money in January. He reviewed the performance of the Fund as of September 30, 2010. The total market value of the Fund as of September 30, 2010 was $34,332,303. The Fund was up 7.17% net of fees for the quarter while the benchmark was up 8.90 %. The total equity portfolio was up 12.01% while the benchmark was up 12.27 %. The total domestic equity portfolio was up 11.07% while the Russell 3000 was up 11.53 %. The Dana core equity portfolio was up 10.55% for the quarter while the S &P 500 was up 11.29 %. The Dana growth equity portfolio was up 11.68% for the quarter while the Russell 1000 Growth was up 13.00 %. The total international portfolio was up 16.13% while the benchmark was up 16.53 %. The international portfolio managed by RBC Global was up 17.21% and the international portfolio managed by Manning & Napier was up 15.18% for the quarter while the EAFE was up 16.53 %. The total fixed income portfolio was up 2.97% for the quarter while the benchmark was up 2.07 %. Agincourt was up 2.86% for the quarter while the benchmark was up 2.48 %. DHJ fixed income was up 3.08% for the quarter while the benchmark was up 2.07 %. The real estate portfolio managed by American Realty was up 4.56% while the benchmark was up 5.99 %. There was a lengthy discussion on the real estate investments. It was noted that the agreement with American was ready for execution today. It was noted that the money would not be called until January. The money to be used to fund American is in the money market account. There was concern raised that the money is not working for the Fund with it being in the money market account. Mr. Bogdahn stated that he would not put the money in equities on a short-term basis. He stated that it would not be prudent to put the money at risk like that. There was discussion on the timing of the investment. The Board thought that the investment with American was going to happen right after the last meeting. Mr. Bogdahn stated that American required an additional document to be singed, but noted that such requirement did not slow down the process at all. Mr. Bogdahn stated that it was his understanding that the money was not going to be called until January all along. Mr. Herrera stated that the Board could revisit the situation if that was not the Board's understanding when the Board voted on the matter originally. Tom Murphy departed the meeting. Mr. Morejon stated that he was hoping for a return of 8.25% for the fiscal year. It was noted that the Fund returned 8.16% net of fees. Mr. Morejon asked Mr. Bogdahn to provide information on returns of his other clients and other information on risk and returns. Mike Dana and John Hamlin departed the meeting. ATTORNEY REPORT Mr. Herrera discussed an issue that arose regarding the definition of normal retirement date. He noted that the Administrator and Actuary had an issue on the normal retirement date if a person's last day falls on the first day of a month. The matter was referred to the Attorney for clarification. It was noted that if a person's last day is the first of the month, their normal retirement date is the first day of the following month Mr. Herrera discussed the status of the proposed IRS Ordinance. He stated that he forwarded it to the City Attorney and did talk to him. However, he has not heard back from the City Attorney. As such, he is not sure where the matter stands in the process. It 3 was noted that in the disbursement packet there is an invoice for $8,500 for the IRS Determination Letter process. Mr. Herrera stated that the fee is not payable until their work is completed. He stated that the $1,000 user fee should be approved today, as the fee is needed in order to file the Determination Letter. Mr. Herrera stated that the City Attorney is aware of the time frame requirements on the Board for the Ordinance to be passed and agreed the changes to the Ordinance needed to be made. Ms. Wisneski asked Mr. Herrera to put the timeframe the Board is working with in writing to the City Attorney. Mr. Herrera discussed the Form 2848, which is a Power of Attorney that needs to be signed by the Chair. Also there is a Notice for Interested Parties that needs to be posted wherever usual postings go. The Board directed the Administrator to have the Notice posted accordingly. ADMINISTRATIVE REPORT Ms. Adcock presented the list of disbursements to be made. It was noted that the listing on the invoice for the Attorney for the $8,500 related to the IRS Determination Letter should be held until the work has been completed. A motion was made, seconded and carried 3 -0 to approve the disbursements listed with the exception of the $8,500 related to the IRS Determination Letter. Tom Murphy re- entered the meeting. There was discussion on interest elections made by DROP applicants. Ms. Adcock advised that interest elections are part of the DROP application. Mr. Murphy stated that Scott Fetterman told him that he did not think he made an interest election. Ms. Adcock noted that Mr. Fetterman's benefit calculation and election were approved at the September meeting and such an election would have had to be made prior to approval. She advised that she would provide Mr. Fetterman and the Board with a copy of Mr. Fetterman's interest election. Ms. Adcock noted that she provided the revised Checklist for the Participants to the Chair as directed at the last meeting but had not heard anything back as of yet. Mr. Morejon stated that he forwarded the revised Checklist to Mr. Murphy for review. Mr. Murphy stated that he reviewed the revised Checklist and it was fine. Ms. Adcock stated that she would post the Checklist on the website as requested. Ed Morej on departed the meeting. OTHER BUSINESS The Board reviewed the response received to the disability review process from Kevin Mitchell's doctor. Mr. Herrera noted that the Board was provided with a letter from Dr. William Prickett. Dr. Prickett's analysis is that Mr. Mitchell remains disabled. If the Board is satisfied with this response, there is nothing further to do at this time. If the Board feels the response is inadequate or unresponsive, then the board will need to do some sort of follow up. Mr. Herrera noted that the response received is similar to the other responses received regarding other disability recipients. A motion was made, seconded and carried 3 -0 to receive and file Dr. Prickett's letter regarding Kevin Mitchell. Ms. Wisneski noted that Mr. Rhodes was doing to draft a form to be used for the disability review process. Mr. Rhodes stated that he was still working on the form. Joe Bogdahn departed the meeting. 4 The Board reviewed the current agreement between the Fund and the Administrator. There was a lengthy discussion. Mr. Herrera noted that the agreement is about ten years old. He noted that his office does have a standard agreement with other plans with the Administrator and could draft a new agreement rather easily. He stated that he would coordinate with the Administrator in drafting a new agreement so as to include all of the tasks that are performed. Ed Morej on re- entered the meeting. A motion was made to authorize the Attorney to draft a new agreement for the Administer that specifically addresses the services that are provided to the Board with the stated fee. Mr. Rhodes stated that since it has been about ten years since the Board looked at any other options here, he would like to issue a RFP to make sure that the Board is getting the best option that is available. Mr. Morejon stated that he did not disagree with the motion, but since a Trustee has raised a concern and the Board has issued a RFP for other service providers, that he thinks it would be appropriate to see what else is out there to make sure they are getting the best for the members of the Plan. The motion was called to authorize the Attorney to draft a new agreement and failed 2 -2, with Mr. Morejon and Mr. Rhodes voting against the motion. Mr. Rhodes stated that he was all for rewriting the agreement, but he thought the Board should do its due diligence to make sure the members of the Plan are getting what they need. He stated that he intended to request a RFP for legal services and the auditor when those come before the Board next. A motion was made, seconded and carried 3 -1 to authorize the Attorney to issue a RFP for administrative services with responses to be provided at the January meeting. Ms. Wisneski opposed the motion. Ms. Adcock provided the meeting schedule for 2011. It was noted that the term for Roy 011iff is due to expire on December 31, 2010. Ms. Adcock stated that she would start the election process in December. Mr. Murphy stated that he received an invoice in the amount of $100 to renew his certification status with the FPPTA. He provided the information to the Administrator to process. There was a lengthy discussion on the most recent FPPTA School. There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary