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HomeMy WebLinkAboutMinutes Fire Pension 111411PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD November 14, 2011 A meeting of the Board of Trustees was called to order at 9:05A.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Ed Morej on, Chair Tom Murphy, Secretary Donna Wisneski Mark Joyce Rick Rhodes MINUTES OTHERS Margie Adcock, Audrey Ross, Administrator Pedro Herrera, Attorney Troy Brown, Investment Monitor Steve Stack, Investment Manager The Board reviewed the minutes of the regular meeting held on September 20, 2011. A motion was made by Rick Rhodes to approve the minutes of the September 20, 2011 regular meeting. The motion was seconded by Tom Murphy and carried 5 -0. INVESTMENT MANAGER REPORT: ICC CAPITAL (STEVE STACK) Mr. Stack commented that it was a challenging quarter on the equities side, although through November 9, 2011 the fund was up 8.62 %. For the fiscal year ending September 30, 2011 the total equity fund was down -18.63 versus the benchmark at - 15.28. He reviewed the sectors that were leading during the quarter such as health care and staples, but since the end of October they were already down. Mr. Stack explained that equities were hit very hard during the quarter, and all the negative surrounding Europe did not help either. In addition people still have a lot of fear which leads to uncertainly and volatility in the market place. Mr. Rhodes questioned whether or not the Russell 3000 index is the best and most accurate index that we should be using to compare too. Mr. Stack replied and explained that the Russell 3000 index is the most accurate index in comparison with this fund. He briefly reminded the Board of ICC's investment philosophy and stated that this portfolio is a sector attribution portfolio that is directed into where they think growth will occur. There is no model that drives this portfolio, although they do have some systems that help them choose what stocks they want in their portfolio. Lastly Mr. Stack commented that they are starting to slightly see things turn around in the market place, and that the funds portfolio is a in a great position to take advantage of the growth opportunities out there. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY BROWN Mr. Brown updated the board on the return as of November 11, 2011 and commented that the fund is up 6.6 %, which is a huge turn around since September 30, 2011. Mr. Brown briefly updated the board on the current market environment and reiterated that the 3rd quarter 2011 was extremely difficult for equities as well as all other market segments as well. Both fixed income managers in the portfolio underweighted Treasuries mostly due to the downgrade and all other active managers were short duration. Also yields tanked during the quarter which had a huge impact on equities. Mr. Brown reviewed the sector breakdown during the quarter and stated that they are inline with their policy. The total fund (net of fees) was negative and behind the benchmark for the quarter at - 11.29% 2 versus - 10.23% and the total equities were in the same position at - 18.56% versus - 15.83 %. The total fixed income was in a better position but still lagging the benchmark at 1.15% versus 2.30 %, and last the total real estate was almost inline with the benchmark at 3.17% versus 3.30 %. Mr. Brown briefly commented on each Mangers performance and pointed out the different investment styles between Dana Advisors and ICC Capital. ICC Capital does sector rotation as Dana Advisors does stock selection and is stock neutral. Mr. Brown reported that for the fiscal year ending September 30, 2011 the fund did not meet their assumed rate of return, but they still were in a better position then most pension plans at -.42% net of fees. He commented that although fear is what is driving the volatility in the market, the fund overall had a great year and just a bad quarter. Lastly he reported that he does not have any recommendations at this time regarding any of the managers, but he does have a recommendation to transfer $100K from the R &D account to ICC Capital. Mr. Brown explained that the plan took $100K from ICC during the quarter to pay out benefit payments and now he would like to give it back to them. Also he stated that he has made other arrangements for the future so that we do not have to withdraw money from ICC again. A motion was made by Donna Wisneski to approve and authorize the transfer of $100K from the Plan's receipt and disbursement account to ICC Capitals account per the Investment Consultants recommendation. The motion was seconded by Rick Rhodes and carried 5 -0. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera reviewed the revised travel expense policy and stated that it will be sent over to the administrator to be executed. Mr. Herrera briefly commented on the memo regarding the mandatory local law pension plan revisions. He explained that these changes were part of the SB 1128 that was recently passed and the biggest change had to due with the definition of pensionable compensation /salary. Mr. Morej on noted that he has asked the City to include these mandatory changes in the Ordinance that is still pending. Ms. Wisneski requested at the next meeting a list of all the pending Ordinance changes /revisions so that we can keep track of them all at this point. The board discussed the status of the study that is in the process of being completed by GRS regarding the proposed amendments to the pension plan. Ms. Ross commented that she has not received anything back from the Actuary as of yet, but as soon as she does she will forward it to all parties involved. Mr. Herrera reported that the IRS Determination Letter has been submitted and we are still waiting on a response. He commented that he was told that the entire process would take about 6 -8 months to complete. Mr. Morej on wanted to discuss the recent pension report that was issued regarding the grading of the pension plans. He explained that this article that was produced by a Firm named Leroy Collins, and he went through and graded each Florida Public pension plan with an A thru F solely based off their funded ratio. The Trustees discussed the article and commented that the article is very misleading and they would like their Actuary to prepare some kind of response to this Firm educating them that this pension fund is well funded despite the funded ratio number, which is an actuarial computed number. Lastly Mr. Herrera explained that his office receives many investment manager performance reports and inquiries on almost a daily basis, so therefore his office is trying to come up with a data base to track all the necessary information that is needed for each fund. Sugarman & Susskind is asking their client's permission to access their Custodial Statements to get the information they need to be able to put together this data base. Mr. Herrera noted that there is no cost associated with this. The Trustees discussed and commented that they consent to this and will allow Sugarman & Susskind access to the Plan's Custodial statements. ADMINISTRATIVE REPORT: RESOURCE CENTERS (MARGIE ADCOCK & AUDREY ROSS) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. The Trustees' had a question regarding the Auditors bill and asked that the language regarding the State Annual Report be removed since they do not provide that service for the board. Ms. Ross acknowledged that she will contact Steve Gordon to get this error fixed going forward. A motion was made by Rick Rhodes to approve the disbursements that were Presented by the Administrator. The motion was seconded by Tom Murphy and carried 5 -0. OTHER BUSINESS Ms. Ross commented that she had the Regions authorized signors form here today for execution as we needed to remove Ms. Adcock as a signor and add myself. Ms. Adcock handed out the disability pension review and commented that the last time we reviewed this was in November 2010. The board directed the Administrator to send out the letters in May /June 2012. Ms. Wisneski asked that the minutes be sent out earlier then one week prior to a meeting. She stated that about one month after the conclusion of a meeting would be reasonable. The board confirmed the 2012 meetings dates which have also been confirmed with the City as well. Lastly Mr. Herrera briefly updated the board on the HB 365 that was recently filed regarding Chapter 175 & 185 disability pensions. He stated that he will keep the board informed as more information develops regarding this bill. There being no further business, the meeting adjourned at 10:59AM. Respectfully submitted, Tom Murphy, Secretary