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Agenda Police Pension 102011
Agenda City of Palm Beach Gardens Police Officers’ Pension Fund M EETING OF O CTOBER 20, 2011 LOCATION: City Council Chambers’ 10500 North Military Trail Palm Beach Gardens, FL 33410 TIME: 9 AM 1. Call Meeting To Order 2. Roll Call: • Lt. Jay Spencer, Chairman • David Pierson, Secretary • Brad Seidensticker, Trustee • Wayne Sidey, Trustee 3. Investment Manager Report – ICC Capital (Grant McMu rry) 4. Investment Consultant Report – Thistle Asset Consul ting (John McCann) • Real Estate & Infrastructure Asset Allocation 5. Attorney Report – Law Offices of Perry & Jensen (Bo nni Jensen) • Revised Buyback Policy • Statement of Policy Regarding Expenses Associated w ith Public Orders, Class Actions, and Domestic Relations Orders • Updated SPD • Memo - Form 1 Reporting: Disclosure of "Intangible Personal Property" 6. Administrator Report – Resource Centers (Audrey Ross) • 2012 Meeting Dates • Insurance Quote Regarding General Liability & Hired /Non-Owned Auto 7. Approval of Minutes • July 21, 2011 Regular Meeting • August 16, 2011 Special Meeting 8. Disbursements 9. Financial Statements 10. Old Business 11 Other Business • GRS Plan Design Study • GRS Actuarial Valuation Report Fee Increase 12 Public Comments 13 Adjourn Next Meeting Date: Thursday January 19, 2012 @ 9AM PLEASE NOTE: Should any interested party seek to appeal any deci sion of this Board with respect to any matter consi dered at such meeting or hearing, s/he will need a record of the proceedings and for such purpose may need to ensure that a verbatim record of the proceedings is made, which record inc ludes the testimony and evidence upon which the app eal is to be based. In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodatio n to participate in this meeting should contact the The Pension Reso urce Center, LLC no later than four days prior to t he meeting. C I TY OF P A LM B EACH G ARDENS Pol i ce Of f i cer ’s Pens i on Fu nd Sum mar y P la n Descri pti on J ULY 2011 Intr oduct ion As a pa rticipant in the Pa lm Be ach Ga rden s Police Of f icer’s Pension Fund, y ou a re inc lud ed i n a p ro g ra m of benefits to hel p y ou meet y our financ ia l needs i n r eti re ment, or in the e v ent o f dis abi lit y o r death. The pu rp ose of this book let i s t o g iv e y ou a br ief desc ri pti on of benefit s a v ail abl e to y ou unde r y our pens ion pl an. Pl anni ng for re ti re ment beg ins now . This bookl et can be a v alu abl e tool in pr epar ing for y our reti re ment and f ina nci al future. If y ou need any furth er i nformati on on any of the top ics present ed in this boo klet, please contact the Fund Adm inistrato r, Resou rce Cente rs, LLC , or the Boar d of Trus tees . They w il l answ er a ny q uest ion s t o hel p y ou bet ter und erstan d y our be nef its. The in formati on pr esent ed i s a summary of the p ensi on pl an as pr ov ide d i n the C it y of Palm B each Gar dens Cod e of Or din ances w hic h gov er ns y our Pens ion F und. The l eg al cit a ti o n f o r you r Pl a n is Ch a p te r 50 , A rt icl e I II , Se ct io n 5 0 -6 1 e t se q., a s a m e n d e d th ro u gh Feb ru ary 18, 2010 C it y o f Palm B each Gar dens Cod e. Any di sc re panci es betw een infor mati on in thi s bookl et and the Pl an w il l be g ov er ned by the Pl an. A c opy of the P lan can be obtai ned from the F und Ad mini str ator , Resourc e Centers, LLC . Th eir addre ss is: Res our ce Cen ter s, LLC 436 0 Northlake Boule v ard Sui te 20 6 Pal m Beac h Gar dens, F L 33410 (5 61) 624-3277 - Telep hone (5 61) 624-3278 - F acs imi le w w w .res ourcec enters .com Boar d of Trus tees Pal m Beac h Gar dens Pol ic e Pens ion F und Jay Sp ence r, Ch airm an Dav id Pie rso n, Secr et ary Jul es B aro ne, T ru st ee Br ad Seid enst icker , T ru st ee Way ne Sid ey , T ru st ee TA BLE OF CONTENTS D E F I N I T I O N S .........................................................Pa ge 1 P A R T I C I P A T I O N I N T H E P E N S I O N F U N D ..................................Pa ge 2 E L I G I B I L I T Y F O R N O R M A L R E T I R E M E N T ..................................Pa ge 2 A M OU N T OF A N OR M A L R E TIR E M E N T P E N S ION ...........................Pa ge 2 E A R L Y R E T I R E M E N T P E N S I O N ..........................................Pa ge 4 M O N T H L Y S U P P L E M E N T A L B E N E F I T S ....................................Pa ge 4 F O R M S O F P A Y M E N T O F A P E N S I O N .....................................Pa ge 4 N o r m a l F o r m ....................................................Pa ge 4 O p t i o n a l F o r m s o f P a y m e n t .........................................Pa ge 5 SURVIVO R BENEFIT S - DEATH BEFO RE RETI REM ENT ......................Pa ge 6 D u t y R e l a t e d D e a t h s ..............................................Pa ge 6 N o n -D u t y R e l a t e d D e a t h s ..........................................Pa ge 6 D I S A B I L I T Y R E T I R E M E N T...............................................Pa ge 7 D u t y D i s a b i l i t y R e t i r e m e n t ..........................................Pa ge 7 N o n -D u t y D i s a b i l i t y R e t i r e m e n t ......................................Pa ge 8 ENDING EM PLO YM ENT BEFORE RET IREMEN T .............................Pa ge 8 AN NU AL P EN SION AD JUS TM EN TS (no n-guaran teed ).........................Pa ge 9 F I L I N G F O R R E T I R E M E N T ..............................................Pa ge 9 DEFERRED RETI REM ENT OPT IO N PLAN (DRO P)..........................Pa ge 10 T R U S T E E T O T R U S T E E T R A N S F E R .....................................Pa ge 10 C O S T O F T H E P E N S I O N F U N D .........................................Pa ge 11 A D M I N I S T R A T I O N O F T H E P E N S I O N F U N D ...............................Pa ge 11 I N V E S T M E N T S ......................................................Pa ge 11 A C T U A R I A L S O U N D N E S S .............................................Pa ge 11 F O R F E I T U R E O F P E N S I O N ............................................Pa ge 12 R E V I E W P R O C E D U R E ................................................Pa ge 13 AGENT FOR SERVICE OF LEG AL PROCESS .............................Pa ge 13 P L A N Y E A R .........................................................Pa ge 13 P E R T I N E N T A C T U A R I A L D A T A .........................................Pa ge 14 Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 1 DEFINITIONS A ccum ul at ed con tr ib ut io ns - the total of al l amounts co ntr ibu ted b y a pa rt ic ipa nt to t he Pal m Beac h Gar dens Off ic er ’s Pol ic e Pens ion F und. A v erag e M on th ly Ear ni ng s - t h e m o n t h ly a ve ra ge o f sa la ry d u ri n g t h e la s t f ive y ear s o f employ ment. Ben ef iciar y - an ind iv idu al w ho i s r ecei v ing a s ur v iv or benefit from t he Pen si on Fund foll ow ing the death of a par ti ci pant. Bo ard - the Boar d of Trus tees w hic h admi n ister s, manag es and ope ra tes the Pens ion F und. Cr edi te d serv ice - A participan t's y ears of serv ice as a police o f f icer in Palm Be ach Gar dens Pol ic e D epar tment and i ncl udes thos e y ear s w hic h a p ar ticip a nt ha s pur chas ed by maki ng a c ontr ibu ti on to the pla n. Y ear s o f ser v ic e c an be pur chas ed for y ear s or fract ion al par ts of y ear s that a pol ic e off ic er ser v ed i n the U nit ed St ates Mi li tar y se rv ic e, or se rv ic e w it h anot her muni ci pal , c ounty , s tate, or federal l aw e n f o rc ement ag ency . M em b er s m ay al so b e en t it le d t o cr ed it ed se r v ice for militar y serv ice w hich interrupts employ ment. Partic ipant - a Pa lm B e ach Gar dens pol ic e off ic er par ti ci pati ng i n the Pens ion Fund . Sa lary - A v e r a g e m o n t h l y e a r n i n g s a s r e p o r t e d t o I n t e r n a l R e v e n u e S e r v i c e for inc ome tax pur poses , plus deferr ed c ompensat ion . A dd it io nal ly , sal ary in clu des amou n t s p ai d b y t h e C it y as d if f er en t ia l w ag es w h il e t h e m em b er is abs ent fr om emp lo y men t w hi le i n qu alif ied mi lit ary ser v ice. Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 2 PA RTICIPA TION IN THE PENSION FUND Each pol ic e off ic er empl oy ed i n the C it y of Pal m Beac h Gar dens Pol ic e D epar tment is a P e n s io n F u n d participan t. A police of f icer is a f ull-time e mp loyee w ho is certif ied as a law e nf orcem ent o f f icer a s a co nditio n of e mp loyment in accorda nce w it h the pr ov is ion s o f §943.10, Fl or ida Stat utes . The Pol ic e C hie f may el ect not to par ti ci pate in the P lan . ELIGIBILI TY FOR NORM A L RETIREMENT A pol ic e off ic er w ho ei ther has 20 o r more y ear s o f c re dit ed ser v ic e or i s a g e 52 or old er and has 10 or more y ear s of cre dit ed s er v ic e i s e li g ibl e for nor mal re ti re ment. An app li cat ion for n or mal re ti re ment mus t be filed w it h the F und Ad mini str ator and app rov ed b y the Bo ard of Trust ees. A MO UN T OF A N OR MA L RE TI RE ME NT PEN SION The amount of a nor mal reti re ment pen si on i s b ased on a par ti ci pant's c re dit ed serv ice, average mon thly earn ings and pe nsion multip lier. Average M ont hly Earnin gs is the m ont hly average of salary during the last f iv e y ears o f e m p lo ym e n t p ro d u c in g t h e h i gh e s t a ve ra ge . Sa la ry i n c lu d e s b a s e sa la ry, o ve rt im e , lo n ge vit y p a y a n d m a y in c lu d e o t h e r t yp e s o f p a y. Credited serv ice is g ene rally a participa nt's p e ri o d o f e mp loyment as a police of f icer in the Po lice Departm ent of the City of Palm Beach Garden s, me asure d in y ear s a nd c omplet ed month s o f a y ear . Spec ial co ndi ti o n s a p p ly if a par ti ci pant has a br eak in ser v ic e as a po li ce off ic er . In c er tai n c ir cums tanc e s, l imi ted per iod s o f mili tar y se rv ic e and pol ic e s er vi ce w it h anot her F lor ida muni ci pal it y may be r ecog niz ed as cr edi ted s er v ic e. Pr omptl y co ntac t t he F und Ad min ist ra tor if any of thes e s it uati ons appl y and y ou hav e not al re ady r esol v ed th e q uest ion . The pens ion mul ti pli er i s 3 .5%. Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 3 Sampl e Benefit Calcula tion T he fo llow ing examp le illustrates how average mo nth ly ear n in gs are cal cul ated. T h is i s a n ex ample for pl anni ng pur poses onl y and does not ind ic ate t he ac tual benefit for a ny par ti ci pant. Year Bef ore Sam ple Sa lary Ret ir ement for Y ear 5th 25,0 00 4th 26,0 00 3r d 27,0 00 2nd 28,0 00 1st 29,0 00 To cal cul ate fin al av er ag e s ala ry , t otal the las t fiv e y ear s s ala ry and div ide by 60: $25,000 + $26,000 + $27,000 + $28,000 + $29,000 = $2,2 50 60 T he m ont hly norm al retireme nt pe nsion is calculated as f ollows: 3.50% of av er ag e monthl y e a rn ing s mul ti pli ed by cr edi ted s er v ic e up to a max imum of 100%. T he f ollowi ng is an illustratio n of a norm al retireme nt pe nsion cal c u la t io n . Th is is an e x am ple f or plann ing purpose s only and doe s not ind icate the act ual be nef it for any par ti ci pant. (1) T ota l credited se rv ice 20.0 y rs. (2 ) Av er ag e monthl y ear nin g s $2,250 (3 )3.50% of li ne (1).035 x 2 0 70% (4 )Lin e (3) ti mes l ine (2)70% x 2 ,250 $1,575.00 Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 4 EA RL Y R ETI RE ME NT PEN SION A polic e of f icer w ho is age 50 an d ha s 10 years of serv ice is elig ible f or early retirem ent . Th e ea rly retireme nt be nef its that are payable to a p o li c e o f f icer are deter mined in the s ame manner as the nor mal re ti re ment be n e f it b u t are re duced by 3 % f o r e ach year by w hich th e me mb er’s age at retireme nt prece ded the m em ber’s nor mal re ti re ment ag e to tak e int o acc ount the pol ic e off ic er ’s y oung er ag e and the earlier com me ncem ent of retireme nt inco me paymen ts. MONTHLY SUPPLEMENTA L BENEFITS Beg inn ing Oc tober 1, 2004, all r eti re es in pay ment s tatus ar e e n ti tl ed to a mo nth ly supp lem en t a l p e n sion be nef it equal to $1 2.5 0 pe r y ear of serv ice. Th is bene f it is pay abl e monthl y for t he l ife of the re ti ree . This benefit i s p ay abl e to a s ur v iv ing benefic iar y of a r eti re e on a monthl y bas is for t he per io d o f time t hat t he s ur v iv ing benefic iar y i s in r ecei pt of a p ensi on i n ac cor dance w it h the form of benefit ch osen at the t ime that benefits beg in. FO RM S OF PA Y ME NT OF A PEN SION No rma l F or m T he sta nda rd f orm o f paymen t f or the p ensio n de scribed ab ove is a be nef it payable f or 10 years certain, in oth er w ord s , yo u a re guarante ed 1 20 m ont hly pay ments. The r eti re e w il l re cei v e a b enefit for l ife. How ev er , i f t h e r e ti re e di es pr ior to re ceivin g 1 20 pay ments, then pens ion pay ments w il l cont inu e unt il a t otal of 120 pay ments hav e been made. A p a rt ic ip a n t m a y d e s ig n a t e a b e n e f i c ia ry t o re c e ive t h e b e n e f it p a ya b le , if a n y, u p o n t h e d e a t h o f t h e r e t i r e d p a r t i ci pant. A ret ired p art icip ant may also chang e t he desi gn at ed j oi nt p ensi on er o r su rv iv or u p to t w o ti mes af te r retire ment w ith certain res trictions. Ple ase see the admi nistrator for details . This change may affect the amount of t he benefit. W hen t her e i s n o benefic iary n amed, t he bene fit w il l be pai d to the s pouse , dep end ent children, o r depe nde nt liv ing parents o f the po lice of f icer, o r if t h e re is no s uch sur v iv or , t hen t o the dec eased pol ic e off ic er ’s es tate. IT IS IM PORTA NT T O KEEP YO UR BENEFICIA RY DESI GNA TION UP TO DA TE Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 5 Optional Forms of Pay ment Opti onal forms of pay ment ar e av ail abl e i n l ieu o f t h e nor mal form des cr ibe d abov e. The amount of pensi on unde r each opti onal form h a s the same ac tuar ial v a l u e a s t h e n o r m a l fo r m o f p a y m e n t . T h e n o r m a l fo r m o f p a y m e n t i s a l i fet i me benefit pay abl e to the re ti re e, w it h 120 pay ments g uar anteed (i n the ev ent that the r eti re e di e s a f te r recei v ing onl y 100 pay ments, the re maini ng 20 p ay ments w ill be p aid to the na me d be nef iciary or to the e state of the retiree ). C Op ti on I - Joint and 100 % Surv iv or - T he joint and 100 % sur vivo r f orm of pay ment pay s th e r eti re d par ti ci pant a r educe d monthl y pens ion for l ife. Upo n the r eti re d par ti ci pant's d eath, the benefic iar y (a s pouse or r ela ti v e) desi g n a t e d w h e n t h e fo r m o f p a y me n t w a s e l e c t e d w i l l b e p a i d 1 00% of the r educe d monthl y pens ion for l ife. C ·Op ti on II - Jo in t an d 75 % Su r v iv o r - T h e j o in t and 75% sur v iv or form of pay ment pay s t he r eti re d par ti ci pant a r edu ce d m o nthl y pens ion w hil e the re ti re d par ti ci pant is al iv e. The re duct ion is not as g re at as under Opt ion I. Upo n the r eti re d par ti ci pant's d eath, the benefic iar y (a s pou se or r ela ti v e) w il l be pai d 75% of the r educe d monthl y pens ion for l ife. C Option III - Joint and 66-2/3% Su r v iv or - The jo int and 66-2/3% su rv iv or f o rm o f pay ment pay s t he r eti re d par ti ci pant a r educe d monthl y pens ion w hil e the re ti re d par ti ci pant is ali v e. The re duct ion is not as g re a t as und er Option II. Upon th e retired p a rt ic ipan t's dea th th e be nef iciary (a spous e or r e l a t i v e ) w i l l b e p a i d 6 6 -2 /3 % o f t h e r e d u c e d m o n t h l y p e n si on for l ife. C Option IV - Joint and 50% Surv iv or - The jo int and 50% sur v iv or form of pay ment pay s t he r eti re d par ti cip a n t a r educe d monthl y pens ion w hil e the reti re d par ti ci pant is al iv e. The r educt ion i s n ot as g re at as under Opt ion III . Upo n the r eti re d par ti ci pant's d eath, th e benefic iar y (a s pouse or re lat iv e) w il l be pai d 50% of the r educe d monthl y pens ion for l ife. •O p ti on V - Life A nnuity - Th e s t r a i g h t l i fe fo r m o f p a y me n t pay s t he re ti re d par ti ci pant an i ncr eased monthl y pens ion for l ife. The am o u n t of this be nef it is more tha n the norm al f orm a nd o the r option al f o rm s. No monthl y pens ion i s e v er pai d a s pou se, ch il d, de pendent par ent o r other benefic iar y under thi s for m of pay ment. Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 6 C Op t io n VI - Other - In l ieu of the o ther opti onal forms, benefit s may be pai d i n any f o rm a p p ro v ed by the Boar d s o l ong as i t i s t he ac tuar ial eq uiv ale nt of the benefit s o ther w is e pay abl e. The Fun d Admi nis tr ator can g iv e y ou an est imat e of the amount o f y our pens ion under any of the o pti onal forms of pay ment. A r eq uest for a n opt ion al form of pay ment mus t be submi tted in w ri ti ng to the B oar d before the e f f ect iv e dat e of re t ir e m e n t . An opt iona l fo rm of paymen t cann ot be chan ged af ter the f irst pensi on c heck i s cas hed. The ele cti on of O pti ons I, II, III and IV s hal l be nul l and v oid i f the des ig nated benef ici a ry di es before t he member ’s pay ments commenc e. SURVIVO R BENEFITS - DEA TH BEFORE RETIREMENT Duty Related Deaths Th e s u r v i v i n g s p o u s e , o r i n c e r t a i n c i r c u ms t a n c e s s u r v i v i n g c h i l d r e n , o f a par ti ci pant w ho di es w hil e em p lo yed in the Pol ic e D epar tment as a pol ic e off ic er w il l be pai d a d uty deat h pens ion i f the Boar d fin d s the dea th t o be the r esul t of caus es ar is ing out o f a n d i n the cour se of the par ti ci pant's p er formance of duty as a po lice of f icer. A surv iv ing spouse is paid a mo nth ly pen sion, f or life , of 50% of the pa rticipa n t's average mon thly earn ings. An unmar ried chi ld under the ag e of 18, or ag e 24 if a full ti me st udent, i s p aid a mo nth ly pen sion in the a m o u n t o f an equal sha re of 50% of the pa rticipant 's av er ag e monthl y ear nin g s if a sur v iv ing spous e is not bei ng paid a p e n sion. Pay me n t t e r mi n a t e s u p o n t h e e a r l i e r o f a d o p t i o n , ma r r i a g e , a t t a i n me n t o f a g e 18 (a g e 24, i f a full ti me st udent, or l oss of full ti me st udent sta tus ) or deat h. The de a t h b e n e fi t i s p a i d t o t h e e s t a t e i f t h e p a r t i c i p a n t l e a v e s n e i t h e r a s u r v i v ing spou se no r an eligib le s u rvi vin g child. In any of these cases, th e bo ard m ay, i n its sole discretion , direct tha t the actua rial v alue of the m ont hly p a ym e n t be pa id as a l um p s um . Non-D uty Related Deaths If a par ti ci pant w ho h a s 5 o r more y ear s o f cr edi ted s er v ic e di es w hil e empl oy ed in the P oli ce Dep ar tment as a pol ic e o f f ice r a n d the death is not in the l ine of Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 7 duty , t he bene fici ar y i s p aid a pe nsi on eq ual to the b enefits othe rw is e pay abl e at ear ly or nor mal re ti re ment ag e. I f n o p e n s i o n i s p a i d o r w i l l b e come p a y a b l e o n a c c o u n t o f t h e d e a t h o f a p a rt ic ipan t, the participan t's accum ulate d con tributio ns are pa id to the parti- ci pant's d esi g nated benefic iar y or to the p ar ti ci pant's e sta te i f ther e i s n o d e s ig n a t e d b e n e f ic ia ry. DISA BILITY RETIREMENT A pen sion m ay be p ayable to a p articipan t w ho b e c o m e s disable d w hile employ ed i n the pol ic e dep ar tment as a pol ic e off ic er . El ig ibi li ty and the a mount of the pens ion ar e depen dent on w hether or not the d is abi lit y o cc u rre d i n the l ine o f d u t y. T he d isability mu st arise f rom a men tal or physical il lness, d isease or injury w hich total ly and per manentl y pr ev ents the par ti ci pant from per forming us eful and ef f icient service as a police of f icer in the Pa lm Be ach Ga rden s Police Dep ar tment. N o pol ic e off ic er sh all be permi tted to r eti re under a di sabi li ty re ti re men t unt il ex amined by a du ly q ual ified phy si ci an or su rg eon t o be sel ect ed by the Boar d of Trus tees and the p hy si ci an o r sur g eon finds the par ti ci pant to be dis abl ed from p er forming the functi ons of a pol ic e off ic er . The fi nal deter minat ion of dis abi li ty i s made by the Boar d. If dis abi li ty r esul ts from ex ces si v e an d habi tual us e of dr ug s, int ox ic ants or nar cot ic s, w il lful and i ll eg al par ti ci pati on i n fig hts , r iot s o r ci v il i nsur re cti on, o r w hil e c ommitt ing a c ri me, or i nju ry or di seas e s ust ain ed w hil e s erving in an ar med forc e, no disabi li ty pens ion ca n be aw ar ded. This ex cl usi on does not af f ect m em bers w ho h ave becom e disab led as a resu lt of in t e rve n in g military ser v ic e under th e f eder al Her oes Ear nin g s A ss is tanc e and Rel ief Tax Ac t of 200 8 (H.R. 6081 ; P.L. 100 -245 ). A participa nt w ho is retired f or dis a b il it y may be required to un dergo period ic me dical examina tion u nde r the direction of the Bo ard of Trust ees to d ete rmine if the r eti re d par ti ci pant is ca pabl e of per forming the duti es of a pol ic e off ic er i n the Dep ar tment. Duty Disabili ty Retirement If the B oar d finds the dis abi li ty to hav e ar is en out of and i n the co ur se of the par ti ci pant's p er formance of duty as a Palm B each Gar dens pol ic e off ic er , t he Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 8 amount o f pensi on i s e q ual to 60% of the par ti ci pant’s ra te of pay at the t ime of dis abi li ty or the acc ru ed pens ion bene f it , w hic hev er i s g re ater pr ov ide d the disab ility has con tinue d f or a period of six mon ths. Non-D uty Disabili ty Retirement There is a 10 y ear cr edi ted ser v ic e re q uir ement for dis abi li ty re tire m e n t if the disab ility is not the result of perf ormin g dut y as a Palm Beac h G a rd e n s police off ic e r . A d d i t i o n a l l y , t h e r e i s n o n o n -l i n e o f d u t y d i s a b i l i t y fo r a me mb e r w h o has re a c h e d o r p a s s e d n o rm a l r e t ir e m e n t e li gi b il it y. The amount o f pens ion i s c alc ula ted t he s ame as a no rmal r eti re ment pen si on b a s e d o n a ve ra ge m o n t h ly e a rn in gs a n d cr e d it e d se rvi c e a t t h e t i m e o f d is a b il it y. The mini mum pensi on is 25% of av er ag e monthl y ear nin g s o r th e ac crued pen sion be nef it, w hiche v er is g reate r. T here is no non -duty disability pen sion i f a police of f icer's credited se rv ice is less than 10 y ear s. In that ev ent, acc umulat ed c ontr ibu ti ons ar e r efunded. ENDING EMPLOYMENT BEFORE RETIREMENT If a par ti cipa n t w it h l ess than 10 y ear s o f cr edi ted s er v ic e q uit s o r is fir ed from employ ment as a P alm Beac h Gar dens pol ic e off ic er , t he par ti ci pant shal l be e n t it le d t o a re t ir e m e n t b e n e f it su b je c t t o t h e ve s t e d p e rc e n t a ge s b e lo w: Y ear s o f cr edi ted Ser v ic e Vest ed % Und er 5 0% 5 2 5 6 4 0 7 5 5 8 7 0 9 8 5 10 or mor e 100 A par ti ci pant may el ect to re cei v e the r etur n o f a ll contri buti ons in li eu of al l other benefits under the pla n. If a participa nt ha s at least 1 0 y ears of credited serv ice w hen emp loyment as a police o f f icer termina tes, th e rig ht to a def erred no rmal re t ir e m e nt is retaine d so lon g as ac cumul ated cont ri buti ons ar e l eft on depo si t i n the Pens ion F und. Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 9 T h e a m o u n t o f de f e rre d no rm a l re ti re m e n t p e n sio n is ca lcu la te d us in g ave ra ge monthl y ear nin g s a nd c re dit ed s er v ic e at the t ime of ter minat ion of employ ment as a po lice of f icer. Normal retirem ent and paymen t of a pen sion is available upon ap pli cat io n o n o r a fter a g e 52. The amoun t of pens ion may be s ubj ect to ear ly r eti re ment r educt ion i n ac cor dance w it h the ch ar t on pag e 4. Cr edi ted se rv ic e w il l be r ein sta ted i f re-employ ment as a P alm Beac h Gar dens police o f f icer occurs and any w ithdra w n acc u m u lated contribu tions a re repaid w it hin 5 y ear s o f re-employ ment. The r epay ment mus t i ncl ude i nter est from t he da te o f w i th dr aw al t o th e da te o f r ep ay me nt . Th e el ec ti on t o pu r c ha se s uc h ti me must be made w it hin si x m o n th s o f date of hir e. Addi ti onal ly , s er v ic e ti me w it h the mi li tar y , ano ther federal , sta te, count y or munic ipa l pol ic e depar tment may be pur chas ed. A NNUA L PENSION A DJUSTMENTS (non-g uar anteed) Re t ir e d p a rt ic ip a n t s (i n c lu d in g D RO P m e m b e r s ) a n d b e n e f ic ia ri e s wh o h a ve been i n r ecei pt of a p ensi on bene fit for at l east one y ear on t he d ist rib u ti o n dat e ma y receiv e an adjust me nt to their pen sion be nef it amo unt as of Jul y 1 o f each st y ear i f the pensi on fund as set s h av e ear ned mor e tha n 8.5 % as of September 30 and the p ensi on fund has pos it iv e ac tuar ial ex per ien ce. th T he p ote ntial to tal distrib u t io n i s base d up on a n actu arial f ormu la w hich is cont ain ed i n the pens ion pl an doc ument. Es se n tiall y , t he r eti re es and benefic iar ies sh ar e i n the pos it iv e i nv est ment ex per ien ce of the r eti re e por ti on of the p ensi on fund ov er 8.5%. Al l pensi on r eci pie nts monthl y pens ion benefit s w il l be i ncr eased on a perce nta ge basis a n d t h e percen tage w ill be th e sam e f or all pensio n recipien ts. The per cent ag e i ncr ease w il l be det er mined by the act uar y and w il l e qual the ear nin g s a bov e 8 .5% on t he as set s r eser v ed to pay pens ion r eci pie nts . The distribut ion is limited to a 4 % i n c re a s e in any one year. A retiree mu st be in re cei pt of a p ensi on f o r a t least one y ear on J uly 1 t o be enti tl ed to an adj ust ment. Con v er sel y , i f the F u n d d oes not e ar n mor e tha n 8.5 %, ther e w il l be no pensi on adj ust ment. FILING FOR RETIREMENT In or der t o e n su re that y ou r ecei v e y our pens ion on t ime, y ou s houl d fil e y our app lication wi th th e Fund Adm in is t ra tor at lea st 30 da y s bef ore retirem ent . All Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 10 forms c an be obtai ned from the Fun d A d m inis tr ator at the a ddr ess on t he Intr oduct ion pag e. Penal ti es w il l be i mposed for mak ing a fals e or mis lea din g sta tement to ob tai n a p ensi on bene fit. It c a n t a ke u p to 60 day s a fter y our date of retireme nt to receiv e y our f irst pension check. DE FER RE D RE TI RE ME NT OPT ION PL A N (D RO P) A par ti ci pant may ele ct DR OP par ti ci pati on pr ior to compl eti ng 25 y ear s of cr edi ted s er v ic e i f the par ti ci pant is el ig ibl e f o r nor mal re ti re ment. D RO P p a r t i c i p a t i o n e n d s a t t h e fi r s t t o o c c u r o f: 1) ter minat ion of employ ment, 2)30 years of credited serv ice, or 3)5 y ear s o f part ic ipa ti on. Upon the ef f ective date of DROP participatio n a pa rticip ant 's pensio n am oun t is cal cul ated based on c re dit ed s er v ic e and f in a l a v er ag e s ala ry at that ti me and the amo unt rema in s p e rm a n ent ly f roz en. The participan t's DROP accoun t is cr edi ted w it h monthl y amounts eq ual to the f ro z en pens ion dur ing the per iod of DROP participa tion. DROP accou nts are credite d w ith investme nt ea rnings each September 3 0 d u r i n g t h e D R O P p e r i o d . M e mb e r s m a y c h o o s e b e t w e e n t h e r ate o f ret u rn on th e pe n sio n f u n d or a f ixed rat e o f 6 .5 % a s t h e in ves tm e n t e a rn in gs credi t. N o i nv est ment ear nin g s o r monthl y cr edi ts ar e made a fter t he end of the DR OP p er iod , i f the member r emains empl oy ed. Par ti ci pant DR OP a cc ounts ar e s ubj ect to admini str ati v e c har g es. A par ti ci pant may ele ct pay ment of t he DR OP acc ount at any ti me f o llo w ing term inatio n of emp loyment but no t later tha n age 70 ½. Paymen t is available und er several options. Detailed inf orma tion is available f rom th e ad min istrator. TR US TEE T O T RU STE E T RA NS FER T o m in im ize t he ta x co nseq uence s o f rol li ng D RO P ac count s o v er to an IR A or a n o t her qualif ied pla n, direct trust ee-to -trustee transf ers are available. Plea se see th e ad min istrator f or the a ppro priate f orms. Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 11 COST OF THE PENSION FUND Par ti ci pants ar e r eq uir ed t o c o n trib ute 8 .60% of cov er ed s ala ry . Con tr ibu ti ons ar e deduc ted from each pay chec k and cr edi ted to the par ti ci pant's Pensio n Fund acc ount. The Ci ty of Pal m B e a ch Gar dens als o c ontr ibu tes to the P ensi on F und. The am o u nt of C it y co ntr ibu ti on i s mat hemati cal ly dete rmi ned i n ac cor dance w it h Stat e s tatut es to fina nce Pens ion F und ben efits as they ar e ear ned. A DMINISTRA TION OF THE PENSION FUND T he Pension Fund is adm inistered by a Boa rd of T rustee s w hi c h is re s pon sible for ov er seei ng the inv est ment of Pens ion F und as set s a nd appl ic ati on of the pr ov is ion s o f the Pens ion P lan doc ument c ontai ned i n the Pal m Beac h Gar dens Cod e. The Boar d has auth or it y ov er di str ibu ti on of al l pensi ons and mak es final deci si ons on c la ims and appeal s. F iv e tr ust ees compr is e the Boar d: t w o l eg al residen ts of the City a p p o in ted by the City Com mission , tw o f ull-time p olice off ic er s e lec ted b y Pens ion F und par ti ci pants and a tr ust ee c h o sen by the ma jority of the ot her f our truste es. Pens io n Fund as set s a re mai ntai ned and i nv est ed ent ir ely se par ate fr om C it y ass ets and canno t be used for any pur pose othe r th a n t hose spec ified i n the Pl an. INVES TMENTS The ass ets of t he Pl an ar e pr esent ly inv est ed by Inv est ment Coun se l Co mpany and Rhum bline u nde r inv estm ent g uide lines ad opt e d b y t h e Board of Trust ees in consu ltation w ith the ir i nvestme nt ad v isors. A CT UA RI A L SOU ND NE SS The act uar y for t he Pl an has dete rmi ned t hat t he Pl an i s a ctu ar ia lly s ound an d can adeq uatel y f und t he bene fits based upon pr oje cte d c ontr ibu ti ons to t he Pl an and inv estm ent earnings. Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 12 FO RF EIT UR E OF PEN SION Any M ember w ho i s c onv ic ted o f any of the b elo w off enses co mmitt ed pr ior to re ti re ment s hal l f o rf e it all ri g hts and benefits under thi s F und, ex cept for a r efund of accu mulat ed c ontr ibu ti ons. The s peci fied offenses a re : (1)Com mitt ing, aiding or abettin g of an em bezz lem ent of pub lic fu nds; (2 ) Commi ttin g, a id in g or abett ing of any theft by a publ ic off ic er or empl oy ee f rom e mp loyer; (3 ) Br ibe ry i n c onnec ti on w it h the empl oy ment of a pu bli c o ff ic er or empl oy ee; (4) Any fe lony specif ied in Chap ter 838 , Florida Sta tute s; (5) T he co mm itting of impe acha ble of f ense (6) T he com mi tt i ng of an y fel on y by a pu bl i c offi c er or em pl oy ee w ho , w illfu lly and w it h i ntent to defraud the p ubl ic or the publ ic a gen cy for w hic h the publ ic off ic er or empl o yee ac ts or i n w hic h he or sh e i s e mploy ed of the rig ht to receiv e the f aithf ul perf orma nce o f his or her duty as a public off ic er or empl oy ee, r eal iz es or obta in s, or att empts to r eal iz e or obta in, a pr ofit, g ain , or adv antag e for hims elf or her sel f or for so me other per son throu g h th e us e or a tt em pt ed u s e of t he p ow er , r i g ht s , pr i v i l eg es , duties, or pos it ion of his or her publ ic off ic e or empl oy ment pos it ion . (7)T he co mm itting on or af ter Octob er 1, 20 08, of any f e lo n y d ef ined in §800.04, Flor ida Sta tutes , ag ain st a v ic ti m y oung er than 16 y ear s o f age , or any fe lony def ined in Chapte r 794, Florida Sta t u t e s against a v ictim y oung er than 18 y e a rs of ag e, by a pu bli c o ff ic er or empl oy ee th ro ug h the us e or at te mp te d us e of po w er , r i g ht s , pr i v i l eg es , du ti es , or po s i ti on of his or her publ ic off ic e or empl oy ment pos it ion . Any M em ber w ho h as received ben ef its f rom th e Pl a n i n e xc e ss of his a cc u m u lat ed c ontr ibu ti ons shal l be r eq uir ed to r epay the Fund . The Boar d may impl ement l eg al act ion nec ess ar y to re cov er su ch funds. Add itiona lly , a Memb er w ho m akes a f alse or m isleadin g state me nt to obta in retirem ent ben ef its shall com mit a m isdem ean or of the f irst degree and if conv ic ted, the M ember sh all forfeit hi s/h er benefit . Palm B each Gar den s Jul y 2011 Polic e Pens ion Fund Pag e 13 REVIE W PROCEDURE A n y m e m b e r, f o rm e r m e m b e r, o r b e n e f ic ia ry wh o h a s b e e n d e n ie d a b e n e f it b y a d e c is io n of the Bo ard sha ll be entitle d to request in w riting tha t the Board g ive further co nsi der ati on to the cl aim. This r eq uest , t og ether w it h a w ri tten sta tement of the r eason s w hy the appl ic ant b eli eves h is claim shou ld be al low ed, s hal l be filed w it h the Board n o l a te r than 20 day s a fter r ecei pt of the w ri tten noti ficat ion of the deni al. I f no appeal i s fil ed w it hin thi s t ime p e ri od, t he pr opose d or der shall be f inal. The Boar d s hal l then condu ct a hear ing w it hin 45 d a ys o f t h e r ecei pt of the appeal . W ri tten noti ce of the hear ing w il l be s ent b y c er ti fied mai l to t he appl ic ant 1 0 day s p rior to the h ear ing . The appl ic ant may be r epr esent ed at the hear ing by a n a ttor ney or othe r re pr esent ati v e of hi s/h er ch oosi ng . Dur ing the hear ing the appl ic ant s hal l hav e the oppor tuni ty to submit written and or al evidence a n d argumen ts in supp ort of his/he r claim. Th e ap plicant shall also hav e the oppor tuni ty to re v iew the Bo a rd’s fil e at or pr ior to the h ear ing . Ei ther the a ppl ic ant o f the Boar d may r eq uest that a c our t r epor ter r ecor d the proce edin gs. In th is ev ent a com plete w ritten tran script o f t h e p ro ceed ings shall be furni shed to bo th p a rt ies at the ex pense of the p ar ty r eq uest ing the atten dance of the c our t r epor ter . W it hin 20 d ay s a fter r ender ing i ts o rd er , t he Boa rd w il l send by a met hod pr ov idi ng pr oof of deli v er y , a copy of the o rd er to the a ppl ic ant. A GEN T FO R SER VIC E OF L EGA L PR OC ESS Boar d of Trus tees j R esour ce Cen ter s, LLC 436 0 Northlake Boule v ard Sui te 20 6 Pal m Beac h Gar dens, F lor ida 33410 P L AN Y E AR T he p lan year is the tw elve mont h pe riod beginnin g each Octob er 1. Records are kept on a f iscal y ear ba sis. Resource Centers LLC – Omega Recordkeeping Group LL C Pension Resource Center LLC – Financial Resource Ce nter LLC THE R ESOURCE C ENTERS , LLC 4360 Northlake Boulevard, Suite 206 Palm Beach Gardens, FL 33410 Phone (561) 624-3277 Fax (561) 624-3278 WWW .R ESOURCE C ENTERS .COM PALM BEACH GARDENS POLICE OFFICERS’ PENSION FUND 2012 MEETING DATES THE BOARD MEETS ON THE LAST THURSDAY OF THE 1 ST MONTH FOLLOWING THE END OF THE QUARTER @ 9AM January 19, 2012 April 19, 2012 July 19, 2012 October 18, 2012 Portfolio Summary Report Page 1 of 2 For internal and/or client reporting purposes only.Release Date: 09-30-2011 ý 9-30-2011 Primary Rank: Ö Holding Holding Ticker Security Type Allocation % Number of shares Price Final Market Value Portfolio ------100.00 499747.02 ---24300011.14 AMR Corp AMR STOCK 0.29 24100.00 2.96 71336.00 Abbott Laboratories ABT STOCK 0.32 1500.00 51.14 76710.00 Affiliated Managers Group Inc AMG STOCK 0.42 1300.00 78.05 101465.00 Albemarle Corp ALB STOCK 0.28 1700.00 40.40 68680.00 American Tower Corp AMT STOCK 0.27 1200.00 53.80 64560.00 Apple, Inc. AAPL STOCK 0.71 450.00 381.32 171594.00 Astex Pharmaceuticals Inc ASTX STOCK 0.04 4850.00 1.92 9312.00 Atwood Oceanics, Inc. ATW STOCK 0.31 2200.00 34.36 75592.00 Becton Dickinson & Co BDX STOCK 0.33 1100.00 73.32 80652.00 BorgWarner Inc BWA STOCK 0.57 2300.00 60.53 139219.00 Broadcom Corporation (BRCM) BRCM STOCK 0.44 3200.00 33.29 106528.00 CIGNA Corp CI STOCK 0.38 2200.00 41.94 92268.00 CSX Corp CSX STOCK 0.35 4500.00 18.67 84015.00 CVS Caremark Corp CVS STOCK 0.35 2500.00 33.59 83975.00 Carbo Ceramics, Inc. CRR STOCK 0.17 400.00 102.53 41012.00 Cerner Corporation CERN STOCK 0.45 1600.00 68.52 109632.00 Clearwire Corp CLWR STOCK 0.10 10800.00 2.33 25164.00 Concho Resources, Inc. CXO STOCK 0.47 1600.00 71.14 113824.00 ConocoPhillips COP STOCK 0.18 700.00 63.32 44324.00 Darden Restaurants Inc DRI STOCK 0.62 3500.00 42.75 149625.00 EMC Corporation EMC STOCK 0.32 3700.00 20.99 77663.00 Expeditors International of Washington, Inc. EXPD STOCK 0.35 2100.00 40.55 85155.00 Exxon Mobil Corporation XOM STOCK 0.60 2000.00 72.63 145260.00 First Republic Bank (San Francisco, CA) FRC STOCK 0.29 3000.00 23.16 69480.00 Franklin Resources BEN STOCK 0.20 500.00 95.64 47820.00 General Electric Co GE STOCK 0.19 3100.00 15.22 47182.00 Hasbro, Inc. HAS STOCK 0.48 3600.00 32.61 117396.00 Idex Corporation IEX STOCK 0.36 2800.00 31.16 87248.00 JDS Uniphase Corp (CA) JDSU STOCK 0.25 6200.00 9.97 61814.00 Mead Johnson Nutrition Company MJN STOCK 0.71 2500.00 68.83 172075.00 Micron Technology, Inc. MU STOCK 0.30 14600.00 5.04 73584.00 Microsoft Corporation MSFT STOCK 0.74 7200.00 24.89 179208.00 NV Energy Inc NVE STOCK 0.48 7900.00 14.71 116209.00 NetApp, Inc. NTAP STOCK 0.41 2950.00 33.93 100093.50 ONEOK, Inc. OKE STOCK 0.38 1400.00 66.04 92456.00 Occidental Petroleum Corporation OXY STOCK 0.41 1400.00 71.50 100100.00 Parker Hannifin Corporation PH STOCK 0.39 1500.00 63.13 94695.00 PepsiCo Inc PEP STOCK 0.82 3200.00 61.90 198080.00 Rock-Tenn RKT STOCK 0.18 900.00 48.68 43812.00 Sanofi SNY STOCK 0.00 0.00 32.80 0.00 Southwest Airlines Co LUV STOCK 0.40 12100.00 8.04 97284.00 Stryker Corporation SYK STOCK 0.29 1500.00 47.13 70695.00 Target Corp TGT STOCK 0.83 4100.00 49.04 201064.00 The Interpublic Group of Cos Inc IPG STOCK 0.37 12500.00 7.20 90000.00 Thomas & Betts Corporation TNB STOCK 0.66 4000.00 39.91 159640.00 Timken Company TKR STOCK 0.41 3000.00 32.82 98460.00 Toro Company TTC STOCK 0.47 2300.00 49.27 113321.00 © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 Morningstar is an independent provider of financial information. Morningstar does not endorse any broker/dealer, financial planner, or fund company. Reprints are available in quantity, 312-696-6100. Principia™ß Portfolio Summary ReportPage 2 of 2For internal and/or client reporting purposes only.Release Date: 09-30-2011 ý 9-30-2011 Primary Rank: Ö Holding Holding Ticker Security Type Allocation % Number of shares Price Final Market Value Portfolio ------100.00 499747.02 ---24300011.14 Vanguard Global Equity Inv VHGEX MF 4.25 67735.18 15.24 1032284.14 Vanguard International Growth Adm VWILX MF 4.43 21485.15 50.16 1077694.90 Vanguard International Value Inv VTRIX MF 4.01 37220.59 26.15 973318.38 Walter Energy Inc WLT STOCK 0.25 1000.00 60.01 60010.00 Whiting Petroleum Corporation WLL STOCK 0.27 1900.00 35.08 66652.00 iShares S &P 500 Index IVV MF 40.10 85713.54 113.69 9744772.36 iShares S &P MidCap 400 Index IJH MF 14.35 44716.73 77.99 3487457.77 iShares S &P SmallCap 600 Index IJR MF 14.03 58225.83 58.54 3408540.09 © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 Morningstar is an independent provider of financial information. Morningstar does not endorse any broker/dealer, financial planner, or fund company. Reprints are available in quantity, 312-696-6100. Principia™ß Resource Centers Accounts Payable Check Register FOR: PALM BEACH GARDENS POLICE Check Number DatePayee and DescriptionAmount 2344July 15, 2011Jay Spencer $226.98 Trustee Travel Reimbursement 6/26-6/29 2345July 22, 2011H. Bradley Seidensticker $246.60 Trustee Travel Reimbursement 6/26-6/29 2346August 1, 2011 City of Palm Beach Gardens $8,422.49 Retiree Insurance 2347August 3, 2011 Pension Resource Center $2,275.00 Administration Fee- August 2011 2348August 3, 2011FPPTA $100.00 Trustee Re-Certification fee -2007 thru 2009 2349August 3, 2011Perry & Jensen, LLC $633.65 Legal Services Rendered thru 7/15/11 2350August 3, 2011Thistle Asset Consulting Inc $4,151.00 Performance Monitoring thru 06/30/11 2351August 3, 2011Rhumbline Advisers $4,272.00 Investment Management Fee- 2nd Qtr 2011 2352August 3, 2011Gabriel Roeder Smith & Company$2,276.00 Actuarial Services thru 4/30/11 2353August 3, 2011ICC Capital Management $23,029.18 Investment Management Fees 2nd Qtr 2011 2354PRINTER ERROR 2355August 17, 2011FPPTA $800.00 Trustee Conference Registration-Spencer 2356September 1, 2011City of Palm Beach Gardens $8,422.49 Retiree Insurance 2357September 1, 2011Pension Resource Center $2,275.00 Administration Fee- September 2011 2358September 8, 2011Gabriel Roeder Smith & Company$2,949.00 Actuarial Services thru 7/31/11 2359September 8, 2011 Perry & Jensen, LLC $2,741.40 Legal Services Rendered thru 8/15/11 2360October 1, 2011City of Palm Beach Gardens $8,422.49 Retiree Insurance 2361October 5, 2011Pension Resource Center $2,289.32 Administration Fee- October 2011 2362October 7, 2011 Perry & Jensen, LLC $1,960.83 Legal Services Rendered thru 9/15/11 2363October 7, 2011Intercontinental New York Barclay$1,446.15 Trustee Hotel Reservations-Spencer 2364October 7, 2011Gabriel Roeder Smith & Company$27,329.00 Actuarial Services thru 9/30/11 2365October 11, 2011Pension Resource Center $501.36 Administration Fee- October 2011 Total $104,769.94 Chairman __________________________ Secretary___________________________ Date_______________________________ Portfolio Summary Report Page 1 of 2 For internal and/or client reporting purposes only.Release Date: 09-30-2011 ý 9-30-2011 Primary Rank: Ö Security Name Security Name Ticker Equity Style Box Industry Tot Ret 3 Mo Tot Ret 12 Mo Tot Ret Annlzd 3 Yr Abbott Laboratories ABT È Drug Manufacturers - Major -1.90 1.42 -0.82 Affiliated Managers Group Inc AMG Ì Asset Management -23.07 0.05 -1.97 Albemarle Corp ALB Ê Specialty Chemicals -41.38 -12.34 10.91 American Tower Corp AMT É Telecom Services 2.81 4.96 14.36 AMR Corp AMR Í Airlines -45.19 -52.79 -32.95 Apple, Inc.AAPL É Computer Systems 13.60 34.39 49.70 Astex Pharmaceuticals Inc ASTX Ï Drug Manufacturers - Specialty Generic -35.57 -8.13 10.58 Atwood Oceanics, Inc.ATW Ë Oil Gas Drilling -22.14 12.84 -1.90 Becton Dickinson & Co BDX È Medical Instruments Supplies -14.44 1.16 -1.05 BorgWarner Inc BWA Ì Auto Parts -25.08 15.03 22.85 Broadcom Corporation (BRCM)BRCM É Semiconductors -0.77 -4.94 22.06 Carbo Ceramics, Inc.CRR Ì Oil Gas Equipment Services -36.93 27.62 26.63 Cerner Corporation CERN É Health Information Services 12.13 63.16 45.34 Clearwire Corp CLWR Í Telecom Services -38.36 -71.20 -41.90 Concho Resources, Inc.CXO Ì Oil Gas EP -22.55 7.51 37.09 ConocoPhillips COP Ç Oil Gas Integrated -14.91 14.66 -1.58 CSX Corp CSX È Railroads -28.34 3.05 2.54 CVS Caremark Corp CVS È Pharmaceutical Retailers -10.28 8.21 1.01 Darden Restaurants Inc DRI Ë Restaurants -13.22 3.18 17.17 EMC Corporation EMC É Data Storage -23.81 3.35 20.62 Expeditors International of Washington, Inc.EXPD Ì Integrated Shipping Logistics -20.79 -11.31 6.21 Exxon Mobil Corporation XOM Ç Oil Gas Integrated -10.17 20.49 0.06 First Republic Bank (San Francisco, CA)FRC -Banks - Regional - US -28.25 -- Franklin Resources BEN È Asset Management -26.96 -9.60 4.84 General Electric Co GE Ç Diversified Industrials -18.50 -2.77 -12.57 Hasbro, Inc.HAS Ë Leisure -25.09 -24.26 0.66 Idex Corporation IEX Ë Diversified Industrials -31.67 -10.45 1.90 iShares S &P 500 Index IVV È --13.67 1.26 1.03 iShares S &P MidCap 400 Index IJH Ë --19.88 -1.44 3.98 iShares S &P SmallCap 600 Index IJR Î --19.90 0.23 0.65 JDS Uniphase Corp (CA)JDSU Ì Communication Equipment -40.16 -19.53 5.59 Mead Johnson Nutrition Company MJN É Packaged Foods 2.28 22.71 - Micron Technology, Inc.MU Ê Semiconductor Memory -32.62 -30.10 7.56 Microsoft Corporation MSFT È Software - Infrastructure -3.65 4.25 -0.15 NetApp, Inc.NTAP É Data Storage -35.71 -31.85 23.01 NV Energy Inc NVE Ê Utilities - Regulated Electric -3.39 15.51 18.72 Occidental Petroleum Corporation OXY È Oil Gas Integrated -30.83 -6.44 2.55 ONEOK, Inc.OKE Ë Oil Gas Midstream -10.01 51.24 27.62 Parker Hannifin Corporation PH Ê Diversified Industrials -29.24 -7.96 7.86 PepsiCo Inc PEP È Beverages - Soft Drinks -11.38 -3.84 -1.80 Rock-Tenn RKT Ê Packaging Containers -26.32 -0.66 8.08 Sanofi SNY Ç Drug Manufacturers - Major -18.35 2.62 3.71 Southwest Airlines Co LUV Ë Airlines -29.56 -38.35 -17.68 Stryker Corporation SYK É Medical Instruments Supplies -19.39 -4.40 -7.72 Target Corp TGT È Discount Stores 5.18 -6.27 1.64 © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 Morningstar is an independent provider of financial information. Morningstar does not endorse any broker/dealer, financial planner, or fund company. Reprints are available in quantity, 312-696-6100. Principia™ß Portfolio Summary ReportPage 2 of 2For internal and/or client reporting purposes only.Release Date: 09-30-2011 ý 9-30-2011 Primary Rank: Ö Security Name Security Name Ticker Equity Style Box Industry Tot Ret 3 Mo Tot Ret 12 Mo Tot Ret Annlzd 3 Yr The Interpublic Group of Cos Inc IPG Ë Advertising Agencies -41.92 -26.42 -1.62 Thomas & Betts Corporation TNB Î Diversified Industrials -25.89 -2.71 0.71 Timken Company TKR Ê Tools Accessories -34.48 -12.46 6.83 Toro Company TTC Î Tools Accessories -18.23 -10.96 7.66 Vanguard Global Equity Inv VHGEX Ç --19.71 -7.32 0.02 Vanguard International Growth Adm VWILX É --22.31 -12.55 0.97 Vanguard International Value Inv VTRIX Ç --20.73 -13.31 -2.47 Walter Energy Inc WLT Ì Coal -48.07 -25.56 8.95 Whiting Petroleum Corporation WLL Ë Oil Gas EP -38.36 -26.54 -0.52 CIGNA Corp CI È Health Care Plans -18.45 17.33 7.37 © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 Morningstar is an independent provider of financial information. Morningstar does not endorse any broker/dealer, financial planner, or fund company. Reprints are available in quantity, 312-696-6100. Principia™ß For internal and/or client reporting purposes only PB Gardens Police 9-30-2011 ý Data Updated Through: 09-30-2011 Portfolio Fact Sheet: Client SummaryPage 1 of 1 Portfolio Value $ 24,300,011.14 Benchmark: S&P 500 TR Composition %PortfolioBmark Cash0.530.00 US Stocks88.7899.84 Non-US Stocks10.230.16 Bonds0.000.00 Other0.460.00 Current Investment Style Style ValueCoreGrowth Large Size Medium Small 172018 8109 676 Fixed-Income Investment Style % LtdModExt High Quality Medium Low Sector Weightings % of StocksPortfolioBmark h Cyclical30.6926.80 r Basic Materials4.563.10 t Consumer Cyclical11.679.40 y Financial Services11.2212.60 u Real Estate3.241.80 j Sensitive45.1145.20 i Commun Svs3.114.50 o Energy9.9711.50 p Industrials15.4611.60 a Technology16.5717.60 k Defensive24.2528.00 s Consumer Def10.3312.20 d Healthcare10.1911.90 f Utilities3.733.90 %0 5 10 15 20 25 30 35 40 45 50 Regional Exposure % of StocksPortfolioBmark Americas90.5699.80 North America90.0399.80 Latin America0.530.00 Greater Europe5.700.20 United Kingdom1.970.00 Europe dep3.270.20 Europe emrg0.290.00 Africa/Middle East0.170.00 Greater Asia3.740.00 Japan1.480.00 Australasia0.340.00 Asia dev0.950.00 Asia emrg0.980.00 Not Available0.000.00 Trailing Returns Returns Through 09-30-2011 Pre-Tax Portfolio Return +/- Benchmark Return 3 Mo1 Yr3 Yr5 Yr10 Yr -17.21-1.023.421.286.91 -3.35-2.162.202.464.10 TypeHolding Value $% Assets Top 10 holdings out of 55 iShares S&P 500 Index ETF40.10 9744772.36 iShares S&P MidCap 400 Index ETF14.35 3487457.77 iShares S&P SmallCap 600 Index ETF14.03 3408540.09 Vanguard International Growth Adm MF4.43 1077694.90 Vanguard Global Equity Inv MF4.25 1032284.14 Vanguard International Value Inv MF4.01 973318.38 Target Corp ST0.83 201064.00 PepsiCo Inc ST0.82 198080.00 Microsoft Corporation ST0.74 179208.00 Mead Johnson Nutrition Company ST0.71 172075.00 Holdings Best/Worst Time Periods 3 Months1 Year3 Years Return%Return%Return% Best Worst 03-09/05-09 09-08/11-08 03-09/02-10 03-08/02-09 64.02 -42.77 04-03/03-06 03-06/02-09 29.91 -33.46 26.02 -14.33 Risk/Returns Against MF UniverseAverage Star Rating 3 Yr5 Yr10 Yr Return Risk Portfolio Mgd Products Stocks 48 71 47 66 19 64 3.9 Ù(96%)* 3.9 Ù(81%)* 4.0 Ù(15%)* (20570 funds)(18155 funds)(13714 funds) (1=Best, 100=Worst)*percent of portfolio used in average ©2011 Morningstar Inc. All rights reserved. The information, data, analyses and opinions contained herein (1) include the confidential and proprietary information of Morningstar, (2) may include, or b e derived from, account information provided by your financial advisor which cannot be verified by Morningstar, (3) may not be copied or redistributed, (4) do not constitute investment advice offered by Morningstar, (5) are provided sol ely for informational purposes and therefore are not an offer to buy or sell a security, and (6) are not warranted to be correct, complete or accurate. Except as otherwise required by law, Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from, or related to this information, data, analyses or opinions or their use. This report is supplemental sales literature. If applicable it must be preceded or accompanied by a prospectus or equivalent, and disclo sure statement. Please read the prospectus carefully. ß ® Investment Activity Graph 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 35000.0 29800.0 24600.0 19400.0 14200.0 9000.0 Total Market Value: $24,300,011 $ 000 Analysis Performance k 8 s Y p! t. 3 c &? 0 7 .. k m I Y ! a r d a 3 v d L -8 -r m -r m h G z 3 m m C n 5 I 7 d 1 0 n z oc U z a * 2 6 6 0 z 2 w 2 z 4 i? 5 3 -1 a m 9 'f Lo 2 6 09 ? 5 W a Y 6 2 3 2 3 00 ; In 2 m Y ? !& % 6 2 6 2 0 x Lo 2 m 2 I 3 a: 0 1 if E 0 \ i t D E 0 Q) N iij 6 P A Le, L w I- 4 I- Gl W US REIF: Diversification As of December 31,2010 Property Sector Diversification Intercontinental US RElF-Gross Real Estate Market Value (1,2) Olfice 38.1% F r I 2 Senior Lidng 9.5% Student Housing ' 4.8% , Hotel 1.8% \ lndustnal 11 .O% Healthcare 6.9% Pparbnent 11.4% Intercontinental US REIF-Gross Real Estate Market Value (1,2) mce 34.5% South 9.7% East 31.7% 7 lidvest 34.5% NPI (3) Retail 24.4% -3 Pparbnent 24.8% I Hotel 2.2% 'Indusbial 14.1% NPI (3) Midwest 10.5% west 33.9 East 33.2% - South 22.4% Calculakd using US REIF'S proponionate share of assets' market value rn of quater end. To provide a mare &ngful basis for comparison, prom sector and gmgmphic divemifiation doa mt include Operating Company investments See Endwte I. 1210SoldiemFicld Road.Boston'Massachuse(tp.02135-1003 Td: 611.1822600 Fax: 611.782.9442 www..intacontinmtal.nd 16 US REIF: Investment Map I Silicon Vdky lndusitisl PUtlfdk I - Closed Dcals I I 127OSoldiemField Road.Baston'Messachuse(ts'02135-1003 Td: 617.782.2600 Fax: 617.782.9442 www..inhcontinental.nci 17 i Y $ 2 cn r: b E P Q cn 5 . 'I r N & e 0 b P L d ri IQ L l- * - Y d ti d l- R d ,. i .. .. II II II t -, 0 0 v) d o, * 9 b- 0 * 0 €e 0 0 d m fr4 2 ". 0 0 v) a, I\ WI . a hc3 s a WI d. i M k2 M so ? M K M 0 WI ~Ulu!v) m m .a B i; ss ss ss ss ss ss ss 8% dd 2z 2 h P 0 3 I II 1 0 3 3 1 b dt - 'I1 s x 2 x In 2 In 2 In 2 3 8 ae c? 4 m 8 h ; 5 s 3 ,- w F J h - s P 8 ui N t? 0 8 d 8 0 8 0 ;R d . 2 h 3 co i: 0 8 d t? 0 8 $ l? 0 3 M a lii 181 I B Gi Pmfdm fan Sheet Uimt Sunmay Page 1 or 1 ~~ Fo~nteMl~rllsnrspatlngpurposesanly PB Gardens Police 9-30-201 1 Benchmsk SbPSOOTR Oata Updated Thrwgh 09~30-2011 43 Portfolio Value $24.300.011.14 E.mp.iti0" x Porndm Bmark c 0 Cash 0.53 0.00 0 US Stocks 88.78 99.84 0 Non-US Stocks 10.23 0.16 0 Bonds 0.00 0.00 0 Other 0.46 0.00 Cyclical Basic Materials Consumer Cyclical Financial Services Real Estate SehlSitive Commun Svs Energy Industrials Technology Dd#Bl*ra Consumer Del Healthcare Utilities SV18 Value Core Giowth 30.69 26.80 'b =====-I 4.56 3.10 m % I] 5 10 15 20 15 30 35 40 45 9 Fixmblmom laramsm SI@ % Ltd Mod En High Iluali@ Medium LOW nqhi EWXU,. %ofStocki POmOllO Ernark Americas 90.56 99.80 90.03 99.80 North America Latin America 0.53 0.00 Greater Europe 5.70 0.20 1.97 0.00 United Kingdom Europe dep 3.21 0.20 Europe emrg 0.29 0.00 Africa1Middle East 0.17 0.00 Greater Asia 3.14 0.00 Japan 1.48 0.00 Australasia 0.34 0.00 0.95 0.00 Asia dev Asia emrg 0.98 0.00 0.00 0.00 Not Available rri(Mg Mum. ReturnsThr-h 09~30.2011 I~ktivilyGr~pb 3 MO I", 1 ". I", lo", he-Tax Portfolio Return -17.21 -1.02 3.42 1.28 6.91 TDtalMarketValue: $24,300.011 +/-Benchmark Return -3.35 -2.16 2.20 2.46 4.10 $000 35000.0 84m.m nmm Prid, Best 03-09/05-03 29.91 03-09102-10 64.02 04-03/03-06 26.02 Worst 09-08/11-08 ~33.46 03-08102-09 -42.77 03-06/02-03 -14.33 3 Momhs RBNrnS lYear Ram% 3 Years Return% RbWImmr Awinn MF Un- Am.pa Sur Wing I", I". 10". 3.9 (96%)' Risk 71 66 64 Stocks 4.0 t (15%)' Im5lohndai ,lillrihinOr,,ll,ll~ndr, Pl)rtfollo Return 48 47 19 MgdProducts 3.9 (81%)' I=- ,m=won, 'OF-, oillrrio#o"ad#n BmW @ Portfolio Summary Report Page 1 of 2 For internal and/or client reporting purposes onk. Release Date 09-30-201 1 Primary Rank: A Holding 9-30-201 1 ~~~~~ ~ Portfolio AMR Corp Abbott Laboratories Affiliated Managers Group Inc Albemarle Corp American Tower Corp Apple, Inc. Astex Pharmaceuticals Inc Atwood Oceanics. Inc. Becton Oickinson 6 Co BorgWarner Inc Broadcorn Corporation [BRCMl CIGNA Corp CSX Corp CVS Caremark Corp Carbo Ceramics, Inc. Cerner Corporation Cleatwire Corp Concho Resources. Inc. ConocoPhillips Oarden Restaurants Inc EMC Corporation Expeditws International of Washington. Inc Exxon Mobil Corporation First Republic Bank [San Francisco, CAI Franklin Resources General Electric Co Hasbro. Inc. ldex Corporation JOS Uniphase Corp (CAI Mead Johnson Nutrition Company Micron Technology, Inc Microsoft Corporation NV Energy Inc NetApp, Inc. ONEOK. Inc. Occidental Petroleum Corporation Parker Hannifin Corporation PepsiCo Inc Rock-Tenn Sanofi Southwest Airlines Co Stryker Corporation Target Corp The Interpublic Group of Cos Inc Thomas b Betts Corporation Timken Company Tor0 Company - AMR ABT AMG ALE AMT AAPL ASTX ATW BOX BWA BRCM CI csx cvs CAR CERN CLWR cxo COP DRI EMC MPO XOM FRC BEN GE HAS IM JDSU MJN MU MSFl NE NTAP OKE OXY PH PEP RKT SNY LUV SYK TGT IPG TNB TKR TTC s.curiy TW - STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK STOCK Alanim x loo.w 0.29 0.32 0.42 0.28 0.27 0.71 0.04 0.31 0.33 0.57 0.44 0.38 0.35 0.35 0.17 0.45 0.10 0.47 0.18 0.62 0.32 0.35 0.60 0.29 0.20 0.19 0.48 0.36 0.25 0.71 0.30 0.74 0.48 0.41 0.38 0.41 0.39 0.82 0.18 0.00 0.40 0.29 0.83 0.37 0.66 0.41 0.47 Nu- el *res 499147.02 24100.00 1500.00 1300.00 1700.00 1200.00 450.00 4850.00 2200.00 1100.00 2 3 0 0.0 0 3200.00 2200.00 4500.00 2500.00 400.00 1600.00 10800.00 1600.00 700.00 3500.00 3700.00 2100.00 2000.00 3000.00 500.00 3100.00 3600.00 2800.00 6200.00 2500.00 14600.00 7200.00 7900.00 2950.00 1400.00 1400.00 1500.00 3200.00 900.00 0.00 121 00.00 1500.00 4100.00 12500.00 4000.00 3000.00 2300.00 2.96 51.14 78.05 40.40 53.80 381.32 I .92 34.36 73.32 60.53 33.29 41.94 18.67 33.59 102.53 68.52 2.33 71.14 63.32 42.75 20.99 40.55 72.63 23.16 95.64 15.22 32.61 31.16 9.97 68.83 5.04 24.89 14.71 33.93 66.04 71.50 63.13 61.90 48.68 32.80 8.04 47.13 49.04 7.20 39.91 32.82 49.27 Fml Mark Vllr. 243OOO11.14 71336.00 76710.00 101465.00 68680.00 64560.00 171594.00 9312.00 75592.00 80652.00 139219.00 106528.00 92268.00 84015.00 83975.00 41012.00 109632.00 25164.00 113824.00 44324.00 149625.00 77663.00 85155.00 145260.00 69480.00 47820.00 471 82.00 11 7396.00 87248.00 61 814.00 172075.00 73584.00 179208.00 116209.00 100093.50 92456.00 100100.00 94695.00 198080.00 43812.00 0.00 97284.00 70695.00 201064.00 90000.00 159640.00 98460.00 113321.00 Porffolm Summary Reprt Page 2 of 2 For internal and/or client reporting purposes only. Release Date: 09-30-201 1 9-30-201 1 Prirnav Rank: A Holding Tit* Noulin. x F*.l H.m V.b 243W011.14 1032284.14 1077694.90 973318.38 6001 0.00 66652.00 9744772.36 3487457.77 3408540.09 100.00 Portfolio 499741.02 MF MF MF 67735.18 21485.15 37220.59 15.24 50.16 26.15 Vanguard Global Equity Inw Vanguard International Growth Adm Vanguard International Value Inw VHGEX VWILX VTRlX 4.25 4.43 4.01 Wakr Energy Inc Whlting Petroleum Corporation ishares S&P 500 Index iShares SbP MidCap 400 Index ishares SbP SmallCap 600 Index WLT WLL Iw IJH IJR 1000.00 1900.00 85713.54 4471 6.73 58225.83 60.01 35.08 113.69 77.99 58.54 STOCK STOCK MF MF MF 0.25 0.27 40. IO 14.35 14.03 Portfolio Summay Report Page 1 of 2 9-30-201 1 Securw Name Abbott Laboratories Affiliated Managers Group Inc Albemarle Corp American Tower Corp AMR Corp Apple, Inc. Astex Pharmaceuticals Inc Atwood Oceanics. Inc. Becton Dickinson b Co BorgWarner Inc Broadcom Corporatmn (BRCMI Carbo Ceramics, Inc. Cerner Corporation Clearwire Corp Concho Resources. Inc. ConocoPhillips CSX Corp CVS Caremark Corp Darden Restaurants Inc EMC Corporation Expedilors International of Washington, Inc. Exxon Mobil Corporation First Republic Bank (San Francisco. CAI Franklin Resources Genera Electric Co Hasbro. Inc. ldex Corporation ishares SbP 500 Index ishares SbP MidCap 400 Index ishares SbP SmallCap 600 Index JDS Uniphase Corp (CAI Mead Johnson Nutrition Company Micron Technology. Inc. Micros& Corporation NetApp. Inc. NV Energy Inc Occidental Petroleum Corporation ONEOK, Inc. Parker Hannifin Corporation PepsiCo Inc Rock-Tenn Sanofi Southwest Airlines Co Stryker Corporation Target Corp 0 For internal andlor cllent reporting purposes onty Release Date 09-30-201 1 Primary Rank A Security Name Ticker Equity Industry Style Box ABT AMG ALB AMI AMR AAPL ASTX ATW BDX BWA BRCM CRR CERN CLWR cxo COP csx cvs DRI EMC MPD XOM FRC BEN GE HAS IEX IW IJH IJR JDSU MJN MU MSFT NTAP NVE OXY OKE PH PEP RKT SNY LUV SYK TGT :B Drug Manufacturers - Major ':'Asset Management 3 :: Specialty Chemicals :: Telecom Services 4': Airlines !'Computer Systems :'i Orug Manufacturers - Specialts :ii Oil Gas Drilling :?'Medical Instruments Supplies 'Auto Parts !i. Semiconductors !IC Oil Gas Equipment Services !I Health Information Services 211 Telecom Services ig Oil Gas EP boil Gas Integrated if1 Railroads 171 Pharmaceutical Retailers Id1 Restaurants 1:F Data Storage lib Integrated Shipping Logistics nl.Oil Gas Integrated -Banks. Regional- US :ni Asset Management VI DNersified Industrials t' Leisure Itl Diversified Industrials 1'1 - 141. ,$. !lb Communication Equipment !!: Packaged Foods 1 ~ Semiconductor Memory ini Software - Infrastructure in Data Storage 4:; Utililies - Regulated Electric if1 Oil Gas Integrated kl Oil Gas Midstream ill Diversified Industrials I? Beverages - Soft Drinks Y j Packaging Containers l!i Drug Manufacturers - Major .HI Airlines t.1 Discount Stores Medical Instruments Supplies Tot Ret Tot Ret Tot Ret 3Mo 12Mo Annhd -1.90 -23.07 -41.38 2.81 -45.19 13.60 -35.57 -22.14 -14.44 -25.08 -0.77 -36.93 12.13 -38.36 -22.55 -14.91 -28.34 -10.28 -13.22 -23.81 -20.79 -10.17 -28.25 -26.96 -18.50 -25.09 -31.67 -13.67 -19.88 -19.90 -40.16 2.28 -32.62 -3.65 -35.71 -3.39 -30.83 -10.01 -29.24 -11.38 -26.32 -18.35 -29.56 -19.39 5.18 1.42 0.05 -12.34 4.96 -52.79 34.39 -8.13 12.84 1.16 15.03 -4.94 27.62 63.16 -71.20 7.51 14.66 3.05 8.21 3.18 3.35 -11.31 20.49 -9.60 -2.77 -24.26 -10.45 1.26 -1.44 0.23 -19.53 22.71 -30.10 4.25 -31.85 15.51 -6.44 51.24 -7.96 -3.84 -0.66 2.62 -38.35 -4.40 -6.27 3 Yr -0.82 -1.97 10.91 14.36 -32.95 49.70 10.58 -1.90 -1.05 22.85 22.06 26.63 45.34 -41.90 37.09 -1.58 2.54 1.01 17.17 20.62 6.21 0.06 4.84 -12.57 0.66 1.90 1.03 3.98 0.65 5.59 7.56 -0.15 23.01 18.72 2.55 27.62 7.86 -1.80 8.08 3.71 -17.68 -7.72 1.64 Pottfolic Summary Report Page 2 of 2 For internal and/or client reporting purposes only 9-30-201 1 Security Name The lnterpublic Group of Cos Inc Thomas 6 Betts Corporation Timken Company Tor0 Company Vanguard Global Equity Inv Vanguard International Growth Adm Vanguard International Value lnv Walter Energy Inc Whiting Petroleum Corporation CIGNA Corp Primary Rank A Secumy Name Ticker Equity Industry Style Box IPG 9 Advertising Agencies TNB . DNerSified Industrials TKR Tools Accessories TK . Tools Accessories VHGEX WILX \IIRIX WLT 'Coal WLL . Oil GasEP CI Health Care Plans @ Release Date: 09-30-201 1 Tot Ret Tot Ret Tot Ret 3Mo 12Mo Annlzd 3 Yr -41.92 -26.42 -1.62 -25.m -2.71 0.71 -34.48 -12.46 6.83 -18.23 -10.96 7.66 -19.71 -7.32 0.02 -22.31 -12.55 -20.73 -13.31 -48.07 -25.56 -38.36 -26.54 -18.45 17.33 0.97 -2.47 8.95 -0.52 7.37 Palm Beach Gardens Police Review of International Eauitv & Bond Funds Sentember 30,2011 1. Dreyfus International Bond I (DIBRX) [0.82%] SeDtember 30.201 1 Morningstar Rating: ~ ~ ~ ~ Comparative Index: Citi Non US & World Government (out of 240 funds over >years) Quarter mr 3r Fund 0.47% 3.67% 13.43% Policy 0.95% 4.14% 8.09% Universe nla 13 4 Differences -0.48% -0.47% 5.34% June 30.201 1 Morningstar Rating: . * a kft-it (out of 232 funds over 3-years) Comparative Index: Citi Non US 8 World Government Fund Policy Differences Universe Quarter I .99% 3.68% -1.69% n/a -Year 3r 14.08% 11.52% 13.94% 6.20% 0.14% 5.32% 24 4 5r 10.81% 7.77% 3.04% I 5r 11.05% 7.76% 3.29% 3 Excellent rating and review from Morningstar. The fund is managed by David C. Leduc, he has been the portfolio manager since 1995. Brendan Murphy serves as an additional porlfolio manager, a position he has held since February 2010.The fund seeks to maximize total return through capital appreciation and income. The fund normally invests at least 80% of assets in fixed-income securities; 65% of assets in non-US. dollar denominated fixed-income securities of foreign governments. The fund, at times, may invest up to 25% of assets in emerging markets and up to 5% of assets in any single emerging market countryNo change recommended. www.Drevfus.com 2. Oppenheimer International Bond Y (OIBYX) [0.67%] Seotember 30.201 1 Morningstar Rating: * Comparative Index: Citi Non US &World Government (out of 175 funds over 5-years) Fund Policy Differences Universe Quarter -5.72% 0.95% -6.67% nla mr 4.14% -2.63% -6.77% 93 mr 7.69% 8.09% -0.40% 47 June 30.201 1 Morningstar Rating: Comparative Index: Citi Non US & World Government (out of 174 funds over 5-years) Fund Policy Differences Universe Quarter 3.93% 3.68% 0.25% nla mr 14.30% 13.94% 0.36% 20 mr 7.27% 6.20% 1.07% 36 5r 7.71% 7.77% -0.06% 22 mr 9.82% 7.76% 2.06% 6 Good rating and review from Morningstar. This fund is more adventurous than many world-bond offerings. Comanagers Art Steinmetz (who returned to the fund in April 2004) and Sara Zervos actively place currency bets and invest in higher-yielding segments of the market. The fund's internal benchmark has a 30% allocation to emerging-markets bonds, but the managers stake half the fund's assets there currently, as they find their yields and improving credit fundamentals attractive. Within the emerging-markets sleeve, the portfolio includes not just commonly traded bonds from Turkey and Brazil, but also small stakes in frontier markets such as Ghana and Qatar. As a whole the fund has managed its risks well. Since Steinmetz's return to the fund, it has gained 9% annualized through April 11,201 1, outpacing all but two of its peers. No change recommended. www.oDDenheimerfunds.com 3. Vanguard Global Equity (VHGEX) [OM%] SeDtember 30,201 1 MomingStar Rating: (out of 692 funds over 3-years) Comparative Index: World Stock ie. MSCl World Fund Policy Differences Universe Quarter -19.71% -1 6.61 % -3.10% nla June 30,201 1 MomingStar Rating: mr -7.32% -4.35% -2.97% 61 3r 0.02% -0.07% 0.09% 59 Comparative Index: World Stock ie. MSCl World (out of 277 funds over 10-years) Fund Policy Differences Universe Quarter 1.44% 0.47% 0.97% nia mr 34.10% 30.51% 3.59% 22 -r 0.47% -0.28% -0.75% 70 5r -2.95% -2.23% -0.72% 68 Br 2.06% 2.28% -0.22% 64 Received an average rating but a very good review from Morningstar. This fund has been a subpar performer as a multimanager offering. After handily outgaining its average peer over the roughly nine years the Marathon team ran the entire portfolio, this fund has lagged its typical rival since it added a second subadvisor, since it added a third subadvisor, and since it added a fourth subadvisor. That's pretty disappointing, but there still are reasons to hope that this fund will develop into a solid rnultimanager offering. Most of its underperformance as a multimanager offering took place as stocks plunged around the world in the first 11 months after Baillie Gifford was hired, and this fund has comfortably outpaced its average peer since then. The overall quality of its subadvisors is pretty good. And true to its family, it has a low expense ratio, which gives it a significant and ongoing edge over most of its rivals. No change recommended. www.vanguard.com 4. Vanguard International Growth Admiral Shares (VWIU) September 30,201 1 Morningstar Rating: Comparative Index: Foreign Large Blend ie. MSCl EAFE [0.35%] (out of 735 funds over 3-years) Quarter mr Fund -22.31 % -12.55% Policy -19.01% -9.36% Differences -3.30% -3.19% Universe nla 65 June 30,201 1 Morningstar Rating: Comparative Index: Foreign Large Blend ie. MSCl EAFE T (out of 714 funds over 3-years) Quarter 1.62% 34.91% 1.56% 30.36% 0.06% 4.55% ita 13 Fund Policy Differences Universe a 0.97% -1.13% 2.10% 14 mr 2.07% -1.77% 3.84% 8 5r -1.02% -3.46% 2.44% 11 SYear 4.89% 1.48% 3.41 % 9 Received a good rating and review from Morningstar.This fund's aggrassive traits have led to aboveaverage volatility over time. However, much of its volatility has come on the upside. Its aggressiveness has led to consistent outperformance in up markets. But the fund has also regularly lost less in downturns, a side effect of its higherquality bent. Its aggregate profitablilty mettics like return on assets and net margins are aften higher than peers, while its holdings tend to take on less debt. Management's distinctive approach has been effective over time. Its aggressiveness is offset by an emphasis on profitable, well-run firms, creating an attractive riskheward profile. The fund has posted a 12.8% annualized gain since 2003, outpacing more than 80% of its category peers This fund is a keeper. No change recommended. www.vanguard.com 5. Vanguard International Value (VTRIX) [0.39%] September 30,201 1 Morningstar Rating: ~ (out of 307 funds over 3-years) Comparative Index: Foreign Large Value ie. MSCl EAFE Value Fund Policy Differences Universe Quarter -20.73% -19.03% -1.70% nla June 30,201 1 Morningstar Rating: - mr -13.31% -9.99% -3.32% 77 3r -2.47% -1.69% -0.78% 48 (out of 310 funds over 3-years) Comparative Index: Foreign Large Value ie. MSCl EAFE Value Fund Policy Differences Universe Quarter 0.70% 0.98% -0.28% nla ur 29.05% 29.35% -0.30% 65 3r -1.71% -1.74% 0.03% 49 mr -3.37% -4.82% 1.45% 31 5r 2.07% 0.36% 1.71% 29 Average rating but good review from Morningstar. This fund's 201 1 troubles should be kept in perspective, its overall structure remains sound. Managed by four seasoned subadvisors who employ sensible value strategies that complement each other well. The aggregate portfolio is normally both amply diversified and fairly distinctive. Though the managers' country and sector positioning--and stock selection--have done more harm than good of late, there are significant grounds to be optimistic about the future. This fund has outpaced its typical peer since Edinburgh Partners came on as the fourth subadvisor in 2008. It posted consistently strong returns earlier in the 2000s with two or three of the current subadvisors in place. It has outgained a healthy majority of its peers since the Hansberger team, the longest-serving of the four squads, arrived at the end of 2000. And it has a low expense ratio, which gives it a sizeable and ongoing edge. Investors seeking a value-oriented core foreign holding should check out this fund. No change recommended. www.vanauard.com