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HomeMy WebLinkAboutMinutes Police Pension 072111City of Palm Beach Gardens Po /ice Officers' Pension Fund Minutes of the Meeting Held July 21, 2011 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 9:07 AM by Chairman Jay Spencer 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 Donna Cannon (PBG Clerk's Office) Jules Barone, Trustee Grant McMurray (ICC Capital Management) Wayne Sidey. Trustee John McCann (Thistle Asset Consulting) INVESTMENT MANAGER REPORT ICC Capital Management - Presented by Grant McMurray Mr. McMurray updated the Board on the current market environment and stated that there is negative correlation between the bond market and the stock market. Lately more people seem to be moving out of bonds and into stocks, which means interest rates will probably stay low for a while longer. Housing and unemployment are still down, and investors are putting their money into stocks. Mr. McMurray reported that for the quarter ending June 30, 2011 the fixed income portfolio underperformed at 2.03% versus 2.29 %. He noted that he did have some concern about the Treasury market because that is where the traders currently are due to the fact that they can get out of them very easily. The Trustees discussed the Sovereign bonds overseas and Mr. McCann stated that Greece will have an effect on all the Sovereign Countries. On the equity side, the fund also underperformed at -2.25% versus .76 %. Mr. McMurray explained that there is still a lot of cash out there on the sidelines, and that is why he is still hopeful that there are some opportunities still out there. INVESTMENT CONSULTANT REPORT Thistle Asset Consulting - Presented by John McCann Mr. McCann reviewed the Plans compliance checklist which is inline with the Policy, but the total fund is trailing for the 3 year return. As of June 30, 2011 there was 64% in equities, 35% in fixed income and 1% in cash. Mr. McCann then reviewed the asset allocation by Manager and commented that the portfolio is very diversified, but he thinks they should add in some real estate. For the quarter ending June 30, 2011 the total fund was behind the index at .52% versus 1.07 %. The total equities were also negative at -.39% versus .30 %, and the total fixed income did slightly better at 2.19% versus 2.46 %. Also for the fiscal year to date the fund is up 10.91 %. Mr. McCann then briefly reviewed each mangers performance for the quarter: Rhumbline S &P 500 - Right inline with the index for the quarter at .10 %. Rhumbline S &P 400 - Was negative for the quarter, but outperformed the index at -.70% versus -.73. Minutes 7- 21- 11.doc Page 1 of 6 Rhumbline S &P 600 - Also outperformed the index, but still negative at -.10% versus -.16 %. ICC Larae Cap Growth - This fund did not have a good quarter due to the market environments. They were negative and trailing the index at -2.20% versus .76 %. ICC Fixed Income - Had a better quarter, but still slightly trailing the benchmark at 2.23% versus 2.30% International Equity - Slightly underperformed during the quarter, but still positive at 1.25% versus 1.83 %. International Fixed Income - This fund was positive at 2.84% versus the index at 3.68 %. Mr. McCann reviewed the risk versus reward chart and explained that the fund is taking less risk, but it is also receiving less of a return. He reminded the board that the bulk of their assets are in index funds, and he would like to look into some more diversification. The Trustees inquired about Gold and Mr. McCann stated that he is not to fond about gold right now, but he could bring in an asset class that would contain ETF's which are precious metals and diversified metals. He noted that adding a commodity like metals will add more risk to the portfolio, but it will also add more return. Ms. Jensen reminded the board that if they were to buy into ETF's, then there would be no fiduciary responsibility. Also it would be a separate asset class that would need to be added into the portfolio. The Trustees discussed ETF's and decided not to move forward with that type of asset class right now. Mr. McCann explained that he would rather invest in real estate or infrastructure before proceeding with ETF's. He briefly explained to the board the type of real estate that he is interested in, and commented that he will bring back an asset allocation to include this next time. The real estate investment that he is recommending would be commercial buildings and would be actively managed. Also all properties are within the United States ATTORNEY REPORT Law Offices of Perry & Jensen - Presented by Bonni Jensen Ms. Jensen stated that she had the revised buyback policy with her today to be executed, but she will have to revise it again to include an effective date as to when the vesting was not included. She commented that she will bring it back to the next meeting again. Ms. Jensen noted that the IRS mileage rate increase to .555 cents effective July 1, 2011. Ms. Jensen presented that board with a statement of policy regarding expenses associated with public orders, class actions, and domestic relations orders. She reviewed the order and the purposes it serves. The board discussed the order and Ms. Jensen stated that she will bring it back to the next meeting with any revisions that need to be made. Ms. Jensen briefly discussed the fiduciary liability quote that Mr. Spencer wanted the board to obtain for non -owned autos. She stated that we should have the quote back by the next meeting, in which the board can review at that time. Ms. Jensen notified the board that the Union has requested a meeting with her and Jules Barone to look over some items that they need cost out. Ms. Jensen noted that she will notify Union of the new ethnic's law that FL put in place as well. Minutes 7- 21- 11.doc Page 2of6 Ms. Jensen updated the board of the summary plan description and stated that the Trustees need to review it before it is sent out. She explained that the SPD reflects the pension plan as it exists, but we will probably have more changes once the City and the Union agree. Ms. Jensen notified the Trustees that the new ethnic rules have been revised under the law. She commented that she is looking into this to see whether or not the pension board must abide by these rules too. She stated that she sent a letter to the Commissions on Ethnics, so as soon as she receives a response from them she will update the board. ADMINISTRATOR REPORT Resource Centers - Presented by Audrey Ross Ms. Ross notified the board that the 2010 state annual report was approved on June 1, 2011. MINUTES MOTION: Mr. Pierson made a motion to approve the minutes from the April 21, 2011 regular meeting and the June 8, 2011 special meeting. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5 -0. DISBURSEMENTS APPROVALS MOTION: Mr. Seidensticker made a motion to approve the disbursements. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carried unanimously 5 -0. BENEFIT APPROVALS MOTION: Mr. Seidensticker made a motion to approve the applications to enter the DROP for George Clay, Glenn Wright, James Shackelford, Steven Fee, Todd Thomas and William Brandt, and the application for distribution from DROP account for David O'Neill and the application for a refund of contribution for Andrew Rundle. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 5 -0. FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through June 2011. The board received and filed the financial statements through June 2011. Minutes 7- 21- 11.doc Page 3of6 OLD BUSINESS Ms. Jensen reported that the Custodians have sent back their revised see schedule. She reviewed the different fees from the various Custodians, and the board discussed the differences between each Custodian. MOTION: Mr. Pierson made a motion to hire Salem Trust as their new Custodian. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5 -0. OTHER BUSINESS N/A PUBLIC COMMENTS N/A A]OURN There being no further business, and the future meetings are scheduled for the 3rd Thursday of the first month proceeding the quarter. The next regular meeting was scheduled for Thursday October 20, 2011 at 9AM; the Trustees officially adjourned the meeting at 11:18AM. Respectfully submitted, DAVID PIERSON, Secretary Minutes 7- 21- 11.doc Page 4of6