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HomeMy WebLinkAboutMinutes Police Pension 120822Palm Beach Gardens Police Officers' Pension Fund Minutes of the Meeting Held: December 8, 2022 1. Chair Jay Spencer called the regular Quarterly Meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund to order at 9:00 AM in the Council Chambers and called roll. Those persons present included: 2. TRUSTEES PRESENT Jay Spencer, Chairman Brad Seidensticker, Secretary Marc Glass, Trustee Greg Mull, Trustee 3. REPORTS OTHERS PRESENT Scott Baur & A.C. Lovingood (Resource Centers) Bonni Jensen (Klausner Kaufman Jensen & Levinson) Jennifer Gainfort, Consultant (AndCo Consulting) Steve Stack, Investment Manager (Highland Capital) Highland Capital Investment Manager (Steve Stack, Highland Capital) Steven Stack reported that the Federal Reserve Rate increases should begin to gradually impact Gross Domestic Product and expects another 0.50% rate increase. Mr. Stack then reviewed the Consumer Price Index history since 2016 in detail with the Board, noting that the Federal Government continues to run high deficits by historic standards and that the yield curve is inverted the most it has been in the past 40 years. The Highland Capital Team has harvested some gains and moved durations neutral to the Benchmark and the Portfolio Manager expects bonds to rally some in 2023. Growth has outperformed value over the past year and Mr. Stack concluded his presentation by noting that the current fixed income portfolio has higher quality holdings than the portfolios benchmark. Investment Consultant (Jennifer Gainfort. AndCo Jennifer Gainfort reported that the markets provided many challenges and proved to be a difficult year for all asset classes with the exception of Real Estate posting losses for the fiscal year ending June 30, 2022. The Plan's Total Fund Composite from June 30, 2022, through September 30, 2022, was reviewed with the Board. For the quarter ending September 30, 2022, the net returns were -3.32% net, compared to the benchmark of-4.25%. The Fiscal - Year -To -Date returns were-11.49% net compared to the benchmark rate of-11.47%. The Three -Year trailing returns were 5.27% compared to the benchmark of 5.32%. The Five -Year returns were 5.79%, compared to the benchmark rate of 6.04%, and since inception the Plan has an 7.35% net return on investments compared to the benchmark rate of 8.19%. Miss. Gainfort then reviewed each investment manager in detail, noting that ARA Core Property Fund had net earnings of 1.38% and American Strategic Value Realty earned 1.43% for the quarter and were the investments that performed well throughout the fiscal year at 24.41% and 16.15% respectively. Mrs. Gainfort concluded her presentation by informing the Board that the City's Annual Contributions were invested in short term bonds with infrastructure to call capital soon. Miss Gainfort informed the Board that the Investment Policy Statement had to be modified and reviewed the changes in detail with the Trustees. Attorney Bonni Jensen informed the Board that the updates are typical for a collective investment trust. Marc Glass made a motion to approve the modified Investment Policy Statement as Presented. The Motion received a second from Brad Seidensticker, approved by the Board 4-0. Attorney Report (Bonni Jensen, Klausner Kaufman Jensen & Levinson) Jensen Memo — Delaware Law Change Permits Companies to Insulate Corporate Officers from Liability for Reckless Conduct: Attorney Bonni Jensen discussed the Delaware Law change that permits companies to insulate corporate officers from liability for reckless conduct. Mrs. Jensen stated that one of the main reasons for bringing this law up to the Board has to do with the fact that majority of businesses are incorporated in the State of Delaware due to favorable, business friendly laws within that state. Jensen Memo — PTSD BSOB Benefits: Mrs. Jensen reviewed the PTSD memo with the Board in detail, noting the criteria of the new Act and that the benefit is retroactive to 2019 for Public Safety Officers diagnosed or seeking treatment. Jensen Memo — Required Minimum Distributions (RMD) Final Regulations: Attorney Bonni Jensen provided the Board of Trustees with updated guidance on Required Minimum Distributions. The Board and Mrs. Jensen had a detailed discussion regarding the purpose of the RMD requirements. Jensen Memo — SEC Proxy Voting Disclosure Rules: Mrs. Jensen reviewed the SEC Proxy Voting disclosure Rules in detail with the Board and recommended that the Board request that the Investment Managers vote against any provisions that would insulate corporate officers from liability for reckless misconduct. This discussion resulted in the Plan's Investment Monitor, Burgess Chambers to suggest a review of Atlanta Capital's proxy voting policy. Ordinance Update: Mrs. Jensen provided the Board with an update on the pending changes to the Plan Ordinance replacing the reference of the 8.5% rate of return to state the Actuarial Assumed Rate of Return. Greg Mull made a motion to approve the recommendation of the Plan Attorney to change the Plan Ordinance from stating 8.5% Assumed Rate of Return to the Actuarial Assumed Rate of Return when referencing the threshold for the 13th Check within the Plan Ordinance as Presented. The Motion received a second from Marc Glass, approved by the Board 4-0. Chairman Jay Spencer inquired about how the buyback provisions might relate to the annual adjustment provisions. It was noted that the earning assumption set by the Board does affect the buyback cost for the member. Administrator Report (Scott Baur & AC Lovingood, Resource Centers) Resource Centers — SOC1 Type 2 Audit: Albert Lovingood presented the Board with a memo regarding the Resource Centers SOC1 Type 2 Audit. Mr. Baur explained to the Board in detail what the purpose of the SOC1 Type 2 Audit is, noting that this is the Resource Centers 15th year of having the SOC1 Type 2 Audit done and for 15 years in a row, his firm has had no findings. 2023 Conference List: Scott Baur and Albert Lovingood presented the Board with the 2023 Trustee Conferenced List and reminded the Board to let Mr. Lovingood know if they are interested in attending any of the conferences so that he could register them for the event. Trustees Marc Glass, Greg Mull, and Chairman Jay Spencer stated that they will be attending the FPPTA 2023 Winter Trustee School, and the Trustees discussed attending the NCPERS Annual Conference in May of 2023. Share Accounts: Mr. Baur presented the Board with the October 1, 2022, Annual Share Allocations. The Trustees discussed the ability of a member to have a standing direction for rollover eligible distributions. It was mentioned that after 30 days, the Plan can make a cash distribution to the member by default, Trustee Marc Glass recommended that the Plan allow members 45 days to respond. 4. MINUTES The Trustees reviewed the draft Minutes for the September 8, 2022, Board Meeting. Marc Glass made a motion to approve the Minutes for the September 8, 2022, Quarterly Meeting as amended, The Motion received a second from Brad Seidensticker, approved by the Board 4-0. 5. DISBURSEMENTS AND FINANCIAL STATEMENTS The Board reviewed the Warrant dated December 8, 2022, for payment of expenses. Marc Glass made a motion to approve the expenses on the Warrant dated December 8, 2022, as presented. The Motion received a second from Brad Seidensticker, approved by the Board 4-0. Minutes: December 8, 2022 Page 2 The Board received, reviewed, and filed the interim financial statement through September 30, 2022. 6. BENEFIT APPROVALS The Benefit Approvals Dated December 8, 2022, were presented to the Board for review. The Board discussed the small account balances of some DROP Accounts. Greg Mull made a motion to approve the Benefit Approvals dated December 8, 2022. The Motion received a second from Marc Glass, approved by the Board 4-0. 7. OTHER BUSINESS Jay Spencer inquired about allowing electronic signatures for Plan Documents and what would be needed to do so. Attorney Bonni Jensen noted that she is working on a memo regarding internal controls, policies, and procedures to protect against fraud. The Trustees and Attorney Jensen had a detailed conversation regarding fraud risks and how to mitigate any fraudulent activities from occurring within the Plan. 8. ADDITIONAL REPORTS The Board received the SEI October 31, 2022, Monthly Performance Report issued by Aristotle. 9. PUBLIC COMMENTS No members of the public had any comment. fi1i�_11I91U."i, There being no further business, Chairman Jay Spencer adjourned the meeting at 11:55 AM. Respectfully submitted, Brad Seidensticker, Secretary Minutes: December 8, 2022 Page 3