HomeMy WebLinkAboutAgenda Fire Pension 031212THE RESOURCE CENTERS, LLC
4360 Northlake Boulevard, Suite 206 ❖ Palm Beach Gardens, FL 33410
Phone (561) 624 -3277 ❖ Fax (561) 624 -3278 ❖ www.RESOURCECENTERS.COM
PALM BEACH GARDENS FIREFIGHTERS'
PENSION FUND
Meeting of Monday, March 12, 2012
Location: Council Chambers, Palm Beach Gardens City Hall
10500 North Military Trail
Palm Beach Gardens, FL 33410
Time: 9:00 A.M.
AGENDA
1. Call Meeting to Order
2. Presentation of the September 30, 2011 Actuarial Valuation Report: Gabriel,
Roeder, Smith & Company - GRS (Brad Armstrong)
3. Investment Manager Report: Dana Investment Advisors (John Hamlin)
4. Investment Monitor Report: The Bogdahn Group (Troy Brown)
• Discussion Regarding Changing the Fiscal Year End Date From September 30
to December 31
5. Minutes:
• Regular Meeting Held on January 23, 2012
• Special Meeting Held on February 7, 2012
6. Attorney Report: Pedro Herrera
• Memo Regarding Status Update on the IRS Determination Letter
• SFMS Securities & Litigation Reports for January & February 2012
7. Administrative Report: Resource Centers (Audrey Ross)
• Disbursements
• Benefit Approvals
• GRS Studies — Current Fees Paid Out
8. Other Business
• Review of Auditors Contract
• Update Regarding the Status of Negotiations
• 9/30/2011 Share Account Allocations
9. Schedule Next Meeting: Monday, May 21, 2012 at 9:00 A.M.
10. Adjourn
PLEASE NOTE:
Should any interested party seek to appeal any decision made by the Board with respect to any matter considered at such meeting or hearing, he will need a
record of the proceedings, and for such purpose he may need to insure that a verbatim record of the proceedings is made, which record includes the testimony
and evidence upon which the appeal is to be based. In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodation
to participate in this meeting should contact The Resource Centers, LLC no later than four days prior to the meeting.
DANAI Investment
Advisors
THE WISE CHOICE
15800 WEST BLUEMOUND ROAD
SUITE 250
P.O. BOX 1067
BROOKFIELD, WISCONSIN 53008 -1067
www.Danalnvestment.com
Table of Contents
Page
3 Client Portfolio Summary
4 Client Performance & Allocation
5 Dana Strategies Update & Review
22 Economic Outlook & Review
29 Holdings as of 12 -31 -11
33 Broker Commission Report
34 Portfolio Summary Disclosure
•rr-
DANA Advisors nvestment
Portfolio Summary
From: September 30, 2011 to February 29, 2012
715comp - City of Palm Beach Gardens Firefighters' Retirement System - Comp
Account Activity Summary
Portfolio Value on 0913012011
Contributions NVithdrawaIs
Investment Income
Unrealized Gain /Loss
Realized Gain /Loss
Change in Accrued Income
Portfolio Value on 0212912012
Total Gain
$10,493,603.46
$600,000.00
$113,862.97
$2,221,660.77
$331,189.88
$6,264.44
$13,766,471.61
$2,671,868.06
Performance Summary-Time Weighted Returns
Portfolio Performance ( %) Gross of Fees
Through February 29, 2012
Feb '12 Fiscal YTD YTD
Total 4.44 25.20 10.31
RUSSELL 3000 4.23 22.76 9.49
Account Value ($) Over Last 12 Months
$25,000,000
$20,000,000 —
$15,000,000 —
$10,000,000 — — — — — — — — — -
$5,000,000 — — — — — — — — — -
$o — r-
r
w CN
N M T (O r— 00 M O N � N
r r r
Portfolio Allocation Summary
Market
% of
Estimated
Current
02129112
Assets
Income
Yield
Cash 74,169
0.6
7
0.01 Equity Related(99.5 %) Cash(0.5 %)
Equity Related 13,691,312
99.6
313,762
2.30
Total Portfolio 13,766,472
100.0
313,769
2.28
Account Activity Summary
Portfolio Value on 0913012011
Contributions NVithdrawaIs
Investment Income
Unrealized Gain /Loss
Realized Gain /Loss
Change in Accrued Income
Portfolio Value on 0212912012
Total Gain
$10,493,603.46
$600,000.00
$113,862.97
$2,221,660.77
$331,189.88
$6,264.44
$13,766,471.61
$2,671,868.06
Performance Summary-Time Weighted Returns
Portfolio Performance ( %) Gross of Fees
Through February 29, 2012
Feb '12 Fiscal YTD YTD
Total 4.44 25.20 10.31
RUSSELL 3000 4.23 22.76 9.49
Account Value ($) Over Last 12 Months
$25,000,000
$20,000,000 —
$15,000,000 —
$10,000,000 — — — — — — — — — -
$5,000,000 — — — — — — — — — -
$o — r-
r
w CN
N M T (O r— 00 M O N � N
r r r
Palm Beach Gardens Firefighters' Retirement System
Account Profile
Investment Objectives: Achieve a return over 3 -5 years in excess of target index. Rankin top 40% of representative portfolios
over 3 -5 years. Vol atiIityof fund's total return is expected to be similar to target index.
Comparative Indices July 2005 to Current: Russell 3000 Index
(adjusted accordingly) Inception to June 2005: S &P 5001ndex
Investment Restrictions: No more than 3% of assets in anyone iss uing company.
Fiscal Year End 9 -30
H Dana Lrg Core
$9,544,434
80.1%
• Dana Small Cap
$2,217,409
18.6%
Money Market
$123,101
1.0%
W Receivables
$25,190
0.2%
The information set forth above is based upon information believed to be accurate and reliable but we do not guarantee its
Total Return
Fiscal 2012 Calendar
Equity Only Average Annual
1st Quarter •
2011
Since Inception
9 -30-11 to 12 -31 -11
12 -31 -10 to 12 -31 -11
6 -10 -02 to 12 -31 -11
Palm Beach Gardens Firefighters'
Retirement
1
Russell 3000 Index
12.12%
1.03%
4.35%
Fiscal Year End 9 -30
H Dana Lrg Core
$9,544,434
80.1%
• Dana Small Cap
$2,217,409
18.6%
Money Market
$123,101
1.0%
W Receivables
$25,190
0.2%
The information set forth above is based upon information believed to be accurate and reliable but we do not guarantee its
Large Cap Peer Group Performance
Active large-cap managers had a difficult time beating their respective benchmark
in 2011
■ Dana strategies performed well versus benchmarks and extremely well
versus peers
r Managers blamed high correlations for the underperformance
■ Our research reflects that peers took sector bets during the year,
underweighting some of the best performing sectors
Dana's sector neutral portfolio construction reduces volatility and maintains our
focus on stock selection
2.6%
2.2%
1.S%
0.9",
I. TI
Core Managers Growth Managers
*Russell index Returns 1.5% 2.6%
_mo._7_ %-- - - - - -,- - - - - - - - - - - - - - A-41
* Average Fund
a Dana Strategy 29% 22%
Manager data and index returns are through December 31, 2011
Source: Lipper Analytical Services; BofA Merill Lynch US Quantitative Strategy
Value Managers
OA%
- ---------
-2.3%
0.9%
ALL Managers
15%
-1.4%
S &P 500 Historical Performance by Sector
Dana's sector neutral strategy minimizes the volatility associated with wide swings
in sector performance from year -to -year and intra year
All major sectors within the S &P 500 had positive returns in Q4 2011
■ Utilities was the only sector to show positive return in Q3 2011
The market showed a strong preference for more economically sensitive sectors in
Q4 2011
■ This reversed the trend favoring more defensive sectors in Q2 and Q3
Leaders
■ Q3 2011- Utilities, Consumer Staples and Information Technology
■ Q4 2011- Energy, Industrials and Materials
Laggards
• Q3 2011- Materials, Financials, Industrials
• Q4 2011 - Telecom, Utilities, Information Technology
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1011
5 &P 500 Total Return Source: FactSet Data Systems
Cons Disc
. ,
Energy
Energy
' ,
Energy
. .
. - ,
Cons Dls
2.0%
,
28.8%
29.1°%
` '
32.4%
0
'
27.6%
Cons Disc
HealthCare
R19.1
Cons Disc
Energy
FNrre
24.1%
35.6%
36.'%
23.1 °%
-24.1%
Financials
Energy
Telecom
HealthCare
Cons Disc
HealthCare
23.40')
- 13.356
16.0%
4.9%
38.8%
12.7%
•
•
Financials
.
Financials
Cons Disc
Info Tech 1
.
Energy
IS
�'.
- 16.4°%
3.7%
19.8°%
'HealthCare
19.7°%
Energy
Financials
HealthCare
Financial:
Cons Disc
FinanciallsS
Cons Disc
Cons Disc
13.2°%
- 10.5°%
-2n.0%
27.9%
12.1%
19.5%
'4.7°%
17.1°%
6.1°%
Energy
Energy
Cons Disc
Energy
Materials
CO
Energy
financials
•+
Energy
16.0%
I
-12.3%
-24.5%
22.4%
I 10.8%
-35.9%
14.8%
4.7%
Financials
F'ea"Car'
financials
.
. .
Energy
Fin, ncials
Info Tech
2.3%
- 13,.096'
$.2%
] i.3'%
12 2 °%
HealthCare
Ccns Disc
Utilities
ilfhCar
Info Tech
-11.6%
-10.7%
'. �
V.3%
f'
1
5,4%
1 ,
Cons Disc
Info Tech
Cons Disc
MERE
• Telecom
-7.4%
- 14.3°%
Cons Stpl
Inf.T,,h
E
.
- .
HealthCare
E
HealthCare
Financials
Financials
.
HealthC,+nr
Financials
0'
I
0.2%
/
°
7.$%
- °
20.$%
-57.0%
..
2.�'S
°
-17.1%
5 &P 500 Total Return Source: FactSet Data Systems
Dana Large Cap Core — Q4 Performance Attribution
Q4 Sector Contributors
�- Consumer Discretionary: strong performance from Wyndham Worldwide (WYN)
and Macy's, Inc. (M)
Energy: strong rebound from Helmerich & Payne (HP)
Utilities: both of our holdings, NextEra Energy Inc. (NEE) and Xcel Energy Inc. (XEL),
had Q4 returns well above the S &P 500 sector average
Q4 Sector Detractors
Financials: poor performance from Sun Life (SLF) and lack of exposure to property
REITs
Information Technology: not owning Google (GOOG), Cisco Systems (CSCO) and
Hewlett- Packard (HPQ) cost us 30, 20 and 7 basis points respectively relative to
the S &P 500. Poor quarterly results from Oracle (ORCL) also detracted from our
portfolios
• Health Care: not owning Pfizer (PFE) and Merck (MRK) led to 31 and 15 basis
points of relative underperformance respectively
Top Individual Contributors
Individual Laggards
• Helmerich & Payne Inc.
+43.9%
■ Sun Life Financial
-20.7%
• Wyndham Worldwide
+33.3%
■ Avago Technologies Ltd.
-11.6%
• Union Pacific Corporation
+30.5%
■ Oracle Corporation
-10.6%
• Philip Morris International
+27.1%
■ Herbalife Ltd.
-3.3%
• Macy's Inc.
+22.7%
■ Cardinal Health Inc.
-2.5%
Dana Large Cap Core - Selected Additions / Deletions
Additions:
Cisco Systems Inc. (CSCO) — after two years of poor performance, relative valuation
is attractive; earnings estimates have reversed a negative trend and are now
moving higher
ACE Ltd (ACE) — pricing firmed in 2011, with positive pricing trends expected to
continue; attractive 2.7% yield, and dividend recently boosted 34 %; 60% of
premiums earned outside of North America, with strong volume increases in Asia
and Latin America; ACE holds $6.5 billion in excess capital
Qualcomm Inc. (QCOM) — high return on equity (ROE) driven by intellectual
property; good earnings momentum; design wins in current and future
smartphones (led by the iPhone) bode well; company sees exceptional growth
opportunities in China
Deletions:
• Coca -Cola Enterprises Inc. (CCE) — concentration of business in Europe a negative
given Euro weakness and possibility of recession; likely tax hike on sugar drinks in
France also a headwind
Sun Life Financial Inc. (SLF) — in October, Sun Life preannounced a Q3 loss due to
declines in equity markets and weak underwriting results; ROE has been declining
and forecasts indicate further declines
Herbalife Ltd. (HLF) — after very strong performance in the first half of 2011, we
removed Herbalife from our model portfolio due to relative valuation; company
continues to perform well fundamentally, but 2012 estimates have been declining
recently
Dana Investment Advisors Inc.
Dana Large Cap Core - Portfolio Characteristics
Consistent Portfolio Characteristics
Lower Valuation + Higher Growth + Higher Profitability
= Better Returns With Less Risk
15
it
6
5
25
20
Dana LC S &P 500
Dana LC S&P 500
Dana LC S&P 500
13
5
0
Dana LC S&P500
EPS Growth Rate
(Historical 3 Years)
Dana LC S&P S00
Market Cap
(Weighted Average / Median)
1.91
- -AllL
Dana LC S &P 500
Actual composite holdings as of 12/31/11
Dana Large Cap Core - Higher Dividend Yield and Growth
Dana's process seeks out companies with strong, sustainable free cash flow and
management teams that are shareholder friendly
Dana Large Cap Core portfolios typically generate a higher dividend yield versus
their benchmarks
Dana holdings also tend to grow their dividends much faster than the benchmark
average. Large Core holdings have increased their dividends at an annualized
growth rate almost 2.5 times that for the S &P 500
Annualized 3 year dividend growth for Dana holdings was over 9.3% per year
versus 3.9% for the S &P 500
A number of portfolio holdings are also using their free cash flow in other methods
that benefit shareholders, such as retirement of debt and share repurchases
■ Share buy -back activity has increased substantially for portfolio holdings
that currently do not pay substantial dividends
2.6
1.6
Dana LC
S &P 500
1.88
10 Yr US
Treasury
9.5
3.5
Dana LC
3.92
S &P S00
Actual composite holdings as of 12/31/11
Dana Large Cap Core - 2011 Dividend Increases
Marathon Petroleum
2.37%
Dividend
Company
Yield
20.00%
JPMorgan Chase & Co
3.16%
Increase
Marathon Petroleum
2.37%
Dividend
Company
Yield
20.00%
JPMorgan Chase & Co
3.16%
Increase
Marathon Petroleum
2.37%
Initiated
ConocoPhillips
3.94%
20.00%
JPMorgan Chase & Co
3.16%
400.00%
Oracle Corp
0.77%
20.00%
PNC Financial Services Gr
2.73%
250.00%
Avago Technologies Ltd 4000,97%
17.86%
Discover Financial Svcs
0.99%
200.00%
Deere & Co
2.35%
17.14%
Wells Fargo
1.84%
140.00%
Intel Corp
3.59%
15.86%
Helmerich & Payne
1.12%
116.67%
Intl Bus. Machines
1.61%
15.38%
Macy's Inc
1.41%
100.00%
Unum Group
1.81%
13.51%
Herbalife Ltd.
1.43%
60.00%
Coviden PLC
1.99%
12.50%
Cummins Inc
1.68%
52.38%
Mattel, Inc
3.31%
10.84%
Intl Paper
2.92%
50.00%
Cardinal Health
2.07%
10.26%
CVS Caremark Corp
1.44%
42.86%
NextEra Energy
4.03%
10.00%
Ross Stores
1.06%
37.50%
Abbott Laboratories
3.68%
9.09%
ckheed Martin
5.23%
33.33%
Coca -Cola Enterprises
2.03%
8.33%
UnitedHealth Group
1.40%
30.00%
Chevron Corp
3.19%
8.33%
Union Pacific
2.11%
25.00%
Exxon Mobil
2.46%
6.82%
Wyndham Worldwide
1.94%
25.00%
Kimberly -Clark
3.92%
6.06%
Microsoft Corp
2.94%
25.00%
BCE Inc.
5.38%
5.08%
Wal -Mart Stores
2.65%
20.66%
Xcel Energy
4.21%
2.97%
Philip Morris Intl
4.64%
20.31%
Verizon Communications
5.40%
2.56%
Source: Standard & Poors
Yield as of 1/5/12
Dana Large Cap Core - Execution and Sales Growth
17
r
0
t7
h
d
M
m
r
A
100
m
c
�o
c
io
a
E
0
U
w
0
d
m
m
r
c
m
u
m
d
a
r Companies held in Dana's Large Cap Core Strategy are executing well with year
over year sales growing at an attractive pace.
Q1 2010 Q2 2010
ODana Large Cap Core o S&P 500
11.5 1"
9.4
Q4 2010 Q1 2011 Q2 2011 Q3 2011
0Dana Large Cap Core
■ S&P 500
12.5
10.1
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
Dana Large Cap Core - Historical Up /Down Market Capture
Annualized Up Market Return
Dana LC S &P 500
30 Up Market Quarters
Annualized Upside Capture Ratio: 102.9%
5%
0%
Dana LC S &P 500
23 Growth Market Quarters
Growth Market Beta: 0.98
84% -
0%
0%
-30%
Dana LC S &P 500
20 Down Market Quarters
Annualized Downside Capture Ratio: 79.43%
6%
-1%
Dana LC
50 Market Quarters
-0.02%
Dana LC S &P 500
27 Value Market Quarters
Value Market Beta: 0.83
15.03%
S &P 500
Based on quarterly returns from Inception to 12/31/11
Up and Down Market defined by S&P S00 Index Return
Growth and Value market defined by Russell 1000 Growth versus Russell 1000 Value index returns
Beta is calculated for the Dana Large Core composite against the S&P 500 index
Dana Large Cap Core - Better Returns With Less Risk
Al Although the past decade was challenging for equity investors, Dana Large Cap
Core portfolios have significantly outperformed most major U.S. equity indices
since inception of the strategy with lower risk.
Portfolio
S &P 500 Index
LRussell 1000 Index K_
usse n ex
NASDAQ Composite In
Russell 1000 Value Inc
Total Return - Inception 06 /29/99
Annualized I Cumulative
1.13° 15.03%
4.58% PF21.61%
;1.849/a 25.66;.
,�24 %_ - 2.99%
40.79%
Time Period: 7/1/1999 to 12131/2011
6.0
5.0 A
4.0
3.0
2.0
C 1.0
W -0.0
12.0 13.0 14.0 15.0 16.0 17.0 18.0
Std Dev
Dana Large Cap Equity S&P 500 TR
Time Period: 7/1/1999 to 12/31/2011
Return Std Dev Alpha Beta R2
Dana Large Cap Equity 4.98 16.88 3.56 0.88 92.71
S&P 500 TR 1.13 18.32 0.00 1.00 100.00
Source: Morningstar Direct
Dana Small Cap Core Performance Attribution
Q4 Sector Contributors
Information Technology — relative outperformance in 7 of 8 industry groups;
strongest relative outperformance came from electronic instruments &
components industry holdings OSI Systems (OSIS) and FEI Company (FEIC) and
from internet software industry holding Perficient (PRFT)
Industrials — strong relative results from machinery industry holdings DXP
Enterprises (DXPE) and Titan International (TWI) and from marine industry holding
Textainer Group (TGH)
Energy — exploration & production (E &P) industry holdings returned 62% versus
benchmark E &P industry return of 22%
Q4 Sector Detractors
• Health Care — disappointing quarterly results and guidance from health care
provider & service industry holdings Catalyst Health (CHSI) , MWI Veterinary
(MWIV) and Hanger Orthopedic (HGR); weak relative performance from
pharmaceutical industry holdings Jazz Pharma (JAll) and Medicis (MRX)
Consumer Discretionary — underperformance from specialty retail holding
Designer Shoe Warehouse (DSW) and textiles & apparel industry holding
Maidenform Brands (MFB)
Top Individual Contributors
Individual laggards
• DXP Enterprises
+71.0%
■ Maidenform Brands Inc.
-21.2%
• GeoResources Inc.
+64.8%
■ Walter Investment Mgmt
-10.6%
• W &T Offshore Inc.
+59.6%
■ Catalyst Health
-9.9%
• OSI Systems Inc.
+45.5%
■ Medicis Pharma
-8.6%
• Textainer Group Holdings
+45.5%
■ DSW Inc.
-3.9%
Dana Small Cap Core Selected Additions / Deletions
Additions:
• Arctic Cat Inc. (ACAT) — successfully gaining market share; experiencing sales and
earnings per share (EPS) growth as well as margin expansion; nearly $100 million
in cash ($5.50 / share) with no debt
Centene Corp. (CNC) — significant organic revenue growth; industry leading margin
trends; 15 consecutive positive earnings surprises gives confidence in
management's ability to manage investor expectations
LTC Properties Inc. (LTC) — acquisition activity driving earnings growth; low
leverage decreases likelihood of dilutive equity raise; 5.6% dividend yield with
history of increases (maintained payout in 2008); trading at a discount to Health
Care REIT peers
Deletions:
Maidenform Brands Inc. (MFB) — material earnings miss and lowered guidance
pushed earnings revisions lower; rising inventory levels and stagnant sales growth
point to margin compression
Impax Laboratories Inc. (IPXL) — stock appeared fully valued; FDA warning letter
received in June 2011 weighing on share price
Invesco Mortgage Capital (IVR) — company over - hedged mortgage portfolio into a
fixed income rally; book value erosion; dividend cut in two consecutive quarters
Dana Small Cap Equity - Portfolio Characteristics
Consistent Portfolio Characteristics
Lower Valuation + Higher Growth + Higher Profitability
= Better Returns With Less Risk
1s
11
11
6
is
9
Dana SC Ru2000
M. --
Dana SC Ru2000
9.43
Dana SC Ru2000
10
is
14
7
Dana SC Ru2000
Dana SC Ru2000
1.08
0.45
0 - - - --
Dana SC Ru2000
Actual composite holdings as of 12/31/11
Dana Small Cap Equity — Higher Dividend Yield and Growth
• Dana's process seeks out companies with strong, sustainable free cash flow and
management teams that are shareholder friendly.
• Dana Small Cap portfolios offer a yield advantage of 14 basis points over the
Russell 2000 Index.
Despite a severe recession, Dana Small Cap holdings grew their dividends 2.67%
over the past three years while dividends in the benchmark index fell -1.43% over
the same time period.
1.6
1.2 4--
Dana SC Ru2000
Dana Investment Advisors Inc.
2.7
-1S
Dana SC Ru2000
Actual composite holdings as of 12/31/11
Dana Small Cap Equity - Strong Execution and Sales Growth
21
L
r
3
0
N
f0
4A
L
!O
d
o�
1
L
W
0
Companies held in Dana's Small Cap Equity Strategy are executing well with year
over year sales growing at an attractive pace.
•Dana Small Cap Y Russell 2000
100
a�
N
C
CL
E
S
m
c
m
CL.
L
Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
Q2 2010
■ Dana Small Cap M Russell 2000
Q3 2010 Q4 2010
Q4 2011
� 77.01
1 1
1 1
Q1 2011 Q2 2011 Q3 2011 Q4 2011
Source: Bloomberg
Dana Small Cap Equity — Historical Up /Down Market Capture
43%
0%
Dana SC
42.48%
31 Up Market Quarters
Annualized Upside Capture Ratio: 92.87%
180%
[P
DILI
-34%
Dana SC Ru2000
18 Down Market Quarters
Annualized Downside Capture Ratio: 79.06%
Dana SC Ru2000
49 Market Quarters
Based on quarterly returns from Inception to 12/31/11
Up and Down Market defined by Russell 2000 Index Return
Dana Small Cap Equity - Outperformance, Less Risk
Since inception, Dana Small Cap portfolios have outperformed most major U.S.
equity indices with lower risk than its benchmark.
771'�IC7
Russell 2000 In ex
Russell 3000 Index
S &P 500 Index
Dow Jones Industrial Average
Total Return - Inception 07/31/99
Annualized I Cumulative
5.56% 95.90%
2.11% 29.59%
1.39% 18.74%
1.03% 13.62%
I Aowwd
Time Period: 101111999 to 12/31/2011
10.0
9.0
A
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
� 0.0
11.0 12.0 13.0 14.0 15.0
16.0 17.0 18.0 19.0 20.0 21.0 22.0
23.0 24.0
Std Dev
Dana Small Cap
• Russell 2000 TR USD
Time Period: 10/1/1999 to 12/3112011
Return
Std Dev Alpha Beta
R2
Dana Small Cap 8.74
21.41 3.20 0.83
8181
Russell 2000 TR USD 5.97
23.51 0.00 1.00
100.00
Source: Morningstar Direct
Dana Investment Advisors Inc. ,
Equity Market Summary- 4th Quarter 2011
The S &P 500 had a total return of +11.82% in Q4 after correcting almost 14% in Q3
Value outperformed Growth across all market cap categories in Q4
• Value experienced marked outperformance in the month of December
• Information Technology was the worst performing sector in December,
driven by a number of negative earnings reports and pre- announcements
primarily within the semiconductor and software industries
Small and midcap stocks led large caps in Q4 after underperforming in Q3
■ The Russell 2000 underperformed the S &P 500 by 800 basis points in Q3, but
outperformed by 365 basis points in Q4
• European debt issues and fears over slowing growth in most emerging markets
allowed U.S. markets to widen their lead over most diversified international indices
Index Returns Through December
YQ42011 ■2011
Russell 2000 ( -
Russell 1000 Value '
l 0.39%
S &P M idCap
-1.73%0
Russell 3000 � w
1.03% NMI
S&P 500 I "2.1
Russell 1000 Growth
2.64%
NASDAQ
-0.79%
MSCI Emerg Mkts
MSCI EAFE
Source: FactSet
Data Systems
Source: Bloombera
S &P 500 Sector Performance Summary - 4th Quarter 2011
All major sectors within the S &P 500 had positive returns in Q4
■ Utilities was the only sector to show positive return in Q3
The market showed a strong preference for more economically sensitive sectors in Q4
■ This reversed the trend favoring more defensive sectors in Q2 and Q3
Leaders
■ Q3 — Utilities, Consumer Staples and Information Technology
■ Q4 —Energy, Industrials and Materials
r Laggards
Energy
Industrials
Materials
Cons Disc
S &P 500 INDEX
Financials
Cons Stpl
Health Care
Info Tech
Utilities
Telecom
• Q3 — Materials, Financials, Industrials
■ Q4— Telecom, Utilities, Information Technology
S &P 500 Sector Returns Through December 31, 2011
•-
win I
91'X_
Source:Fact5et
Data Systems
Macroeconomic Background 1S1 Quarter 2012
r 4th quarter economic data mostly surprised to the upside
■ Employment is arguably improving
What will happen in 2012, will momentum persist?
■ Europe is showing signs of recession, story will not go away
■ U.S. economy still fragile
■ While the economy is weak, it is still growing and if the U.S. escapes
recession then current equity prices probably reflect current weakness
Uncertainty keeping confidence low for businesses and consumers
■ U.S. government debt ceiling drama endures in policy debates
■ Europe needs to show a clear direction on sovereign debt issues
■ Globally, there is a debate over near term stimulus needs and the long
term needs for austerity
Irl Economy is showing stress of running growth too close to zero
GDP - Actual and Forward Forecasts
(% 10 Ann) Crass Domestic Product. Bil. Chained 2005 S. SAAR • United States
4.0% 3.80 3.93 3 'r 9
2.51 2 35 2.75 2.40 2.80l
20% 1.09 1.81 2.10 2.Z0
1.33
00% -0.C7 —e-9 0.36
-2.0%
-40%
Gap IESOMMO
-6.096
Q1 09 Q2 09 03 09 04 09 01 10 02 10 03 10 Q4 10 01 11 Q2 11 03 11 04 11 Q1 12 Q2 12 03 12 Q4 12
�Kt$tI RIN�K�.�i..lY'V. .i.L`G•aL{'j'S..^ _
Equity Market Valuations are Attractive
Despite record high S &P 500 EPS in 2011, on 17% expected growth, trailing PE
multiples contracted 13% during the year
■ Volatility, macro risks pushed multiples lower
Equities look attractive against alternatives
■ Equity risk premium remains elevated and is at levels not seen since 2008
■ Equities are historically cheap versus treasuries
Equity Risk Premium
The Equity Risk Premium reflects equity richness /cheapness relative to risk -free bonds.
— (S &P 500 - Price to Earnings' 100) - US Benchmark Bond - 10 Year - Yield
Recession Periods - United States
10%I --- Trendline: Average
8%
6%
6.00
4%
2%
-- --- ---- -- ----- ------- --- - - - - - -- v
0%
-2%
-4%
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 r 10 11
CFacdet Research Systems
Corporate Cash
Dividend and buyback activity is increasing, however robust cash flow continues to
push liquid assets higher
Year - over -year growth in capital expenditures is positive and not showing signs of
deceleration
We expect cash deployment to continue to be an important theme in 2012 along
with accelerating M &A activity
Corporate Liquid Assets vs. Capital Expenditures
— Domestic Nonfinancial Sectors - Capital Expenditures - Nonresidential - United States
— Nonfarm Nonfinancial Corporate Business - Total Liquid Assets, L.102 - Levels - United States
2,200 Recession Periods - United States
2,000
1,800
1,600
1,400
1,200
1,000
800
600
4001 T T-
97 '98 '99 100 '01 r '02 103 104 '05 '06 '07
Dana Investment Advisors Inc.
'08 109 110 '11
SI'actSet Research Systems
Merger & Acquisition Activity
Screening for U.S. activity, deal size exceeding $100 million:
■ 1,316 deals announced in 2011, an increase of 4% year- over -year
■ Dollar volume increased 15% to $1.2 trillion
■ Average premiums paid increased to 39% from 34%
Private equity and Cross Border activity has accelerated
• Private equity deal volume +10% year over year, dollar volume +22%
• Cross Border volume +7% year over year, dollar volume +5%
• Deal volume has accelerated over the past three years but remains well below
peak levels experienced in 2007
M&A Deal Volume
In Billions of US Dollars - Calendar Year to date
2,500 I Deal Volume
2,000
1,500
1,000
500
2001 2002 2003 2004 2005 2006 2007 2006 2009 2010 2011
wwve. 8tambera D&WIMG01irtAdtcort. Fortwt
Market Bull and Bear Arguments
Bull Case:
Broad equity market valuations appear attractive both historically and relative to
alternatives
Expected sales growth, continued productivity improvements and margin
expansion helping to boost corporate earnings
Record amounts of cash leading to shareholder friendly actions
Strong demand for both consumer and capital goods in emerging markets
Continued economic growth into 2012
Global monetary policy remains accommodative
Bear Case:
Volatility and sovereign debt fears have fueled a flight to quality and are
pressuring equity multiples
"Muddle through" economic growth is uninspiring
High unemployment and energy prices limit growth in U.S. disposable household
income
U.S. residential real estate prices remain under pressure
Credit availability difficult given tougher loan underwriting criteria
Dana Investment Advisors Inc.
Dana Investment Advisors, Inc. D A
PORTFOLIO HOLDINGS
Report as of: 12/3012011
Portfolio: 715comp - City of Palm Beach Gardens Firefighters' Retirement System - Comp
Shares/ PAR Identifier Description Price Market Value Pct. Assets Accruals Cur.
Owed Yield
Cash
Short Term Investments
CVS
CVS Caremark Corp
40.78
179,432.00
1.51
.00
000009
Cash -Money Fund
DAR
123,101.15
1.04
.00
.01
.00
Total Short Term Investments
2,140
123,101.15
1.04
.00
.01
Stocks
1,498.00
3.81
4,960
KFT
Kraft Foods Inc
37.36
Domestic Equity Strategy
1.56
1,438.40
3.10
821
NUS
Nu Skin Enterprises Inc
Consumer Discretionary
39,875.97
.34
.00
1.32
2,290
PEP
1,500 ANN
Ann Inc
24.78
37,170.00
.31
.00
.00
1,945 ACAT
Arctic Cat Inc
22.55
43,859.75
.37
.00
.00
1,350 ASNA
Ascena Retail Group.
29.72
40,122.00
.34
.00
.00
1,700 CAB
Cabala's Inc
25.42
43,214.00
.36
.00
.00
858 DSW
DSW INC
44.21
37,932.18
.32
.00
1.36
1,106 HSNI
HSN Inc.
36.26
40,103.56
.34
.00
1.38
7,171 M
Macy's Inc
32.18
230,762.78
1.94
717.10
1.24
2,300 MAT
Mattel Inc
27.76
63,848.00
.54
.00
3.31
3,139 PBY
Pep Boys -Manny Moe & Jack
11.00
34,529.00
.29
.00
1.09
4,680 ROST
Ross Stores Inc
47.53
222,440.40
1.87
.00
.93
1,117 TEN
Tenneco Inc
29.78
33,264.26
.28
.00
.00
1,200 VFC
VF Corp
126.99
152,388.00
1.28
.00
2.27
4,665 VIAB
Viacom Inc -Class B
45.41
211,837.65
1.78
1,166.25
2.20
3,300 WYN
Wyndham Worldwide Corp
37.83
124,839.00
1.05
.00
1.59
31,031.20
Total Consumer Discretionary
.00
1,316,310.58
11.08
1,883.35
1.41
Consumer Staples
4,400
CVS
CVS Caremark Corp
40.78
179,432.00
1.51
.00
1.59
2,709
DAR
Darling International Inc
13.29
36,002.61
.30
.00
.00
2,140
KMB
Kimberly -Clark Corp
73.56
157,418.40
1.32
1,498.00
3.81
4,960
KFT
Kraft Foods Inc
37.36
185,305.60
1.56
1,438.40
3.10
821
NUS
Nu Skin Enterprises Inc
48.57
39,875.97
.34
.00
1.32
2,290
PEP
Pepsico Inc
66.35
151,941.50
1.28
.00
3.10
3,380
PM
Philip Morris International
78.48
265,262.40
2.23
2,602.60
3.92
2,818
WMT
Wal -Mart Stores Inc
59.76
168,403.68
1.42
1,028.57
2.44
Total Consumer Staples
1,183,642.16
9.96
6,567.57
2.90
Energy
1,539
APA
Apache Corp
90.58
139,402.62
1.17
.00
.66
834
ATW
Atwood Oceanics Inc
39.79
33,184.86
.28
.00
.00
2,032
CVX
Chevron Corp
106.40
216,204.80
1.82
.00
3.05
2,707
COP
Conocophillips
72.87
197,259.09
1.66
.00
3.62
2,450
XOM
Exxon Mobil Corp
84.76
207,662.00
1.75
.00
2.22
1,199
GEOI
GeoResources Inc
29.31
35,142.69
.30
.00
.00
3,300
HAL
Halliburton Cc
34.51
113,883.00
.96
.00
1.04
1,964
HLX
Helix Energy Solutions
15.80
31,031.20
.26
.00
.00
2,200
HP
Helmerich & Payne
58.36
128,392.00
1.08
.00
.48
3,840
MRO
Marathon Oil Corp
29.27
112,396.80
.95
.00
2.05
2,360
MPC
Marathon Petroleum Corp.
33.29
78,564.40
.66
.00
3.00
1,823
WTI
W &T Offshore Inc
21.21
38,665.83
.33
.00
.75
Total Energy
1,331,789.29
11.21
.00
1.95
Financials
620
ACE
ACE Ltd.
70.12
43,474.40
.37
.00
2.68
1,200
AFSI
Amtrust Financial Services
23.75
28,500.00
.24
108.00
1.52
11,000
NLY
Annaly Capital Management In
15.96
175,560.00
1.48
6,270.00
14.29
4,343
AHT
Ashford Hospitality Trust
8.00
34,744.00
.29
434.30
5.00
1,125
OZRK
Bank Of The Ozarks Inc
29.63
33,333.75
.28
.00
1.35
29
Dana Investment Advisors, Inc. `' DANA
PORTFOLIO HOLDINGS
Report as of: 1213012011
Portfolio: 715comp - City of Palm Beach Gardens Firefighters' Retirement System - Comp
Shares/ PAR Identifier Description Price Market Value Pct. Assets Accruals Cur.
Owed Yield
5,492
BGCP
BGC Partners Inc
5.94
32,622.48
.27
.00
11.45
2,355
CLNY
Colony Financial Inc
15.71
36,997.05
.31
800.70
8.66
1,447
CBU
Community Bank System Inc
27.80
40,226.60
.34
376.22
3.74
1,333
CTBI
Community Trust Bancorp Inc
29.42
39,216.86
.33
413.23
4.21
7,300
DFS
Discover Financial Services
24.00
175,200.00
1.47
730.00
1.67
5,000
JPM
JP Morgan Chase
33.25
166,250.00
1.40
.00
3.01
1,215
LTC
LTC Properties Inc
30.86
37,494.90
.32
.00
5.44
3,449
MIG
Meadowbrook Insurance Group In
10.68
36,835.32
.31
.00
1.87
1,868
OHI
Omega Healthcare Investors Inc
19.35
36,145.80
.30
.00
8.27
3,800
PNC
PNC Financial Services Group 1
57.67
219,146.00
1.84
.00
2.43
3,300
PRU
Prudential Financial Inc
50.12
165,396.00
1.39
.00
2.89
1,618
TCAP
Triangle Capital
19.12
30,936.16
.26
.00
9.83
7,800
UNM
Unum Group
21.07
164,346.00
1.38
.00
1.99
1,743
WAC
Walter Investment Management C
20.51
35,748.93
.30
.00
.00
6,500
WFC
Wells Fargo 8 Cc
27.56
179,140.00
1.51
.00
1.74
1,894
WSBC
WesBanco Inc
19.47
36,876.18
.31
303.04
3.29
507
WRLD
World Acceptance Corp
73.50
37,264.50
.31
.00
.00
Industrials
Total Financials
1,785,454.93
15.02
9,435.49
4.11
Health Care
3,800
ABT
Abbott Laboratories
56.23
213,674.00
1.80
.00
3.41
4,000
A
Agilent Technologies Inc.
34.93
139,720.00
1.18
.00
.00
4,515
ABC
AmerisourceBergen Corp
37.19
167,912.85
1.41
.00
1.40
5,760
BMY
Bristol -Myers Squibb Cc
35.24
202,982.40
1.71
.00
3.86
1,232
CMN
Centel Medical Corp
27.93
34,409.76
.29
.00
.50
4,500
CAH
Cardinal Health Inc.
40.61
182,745.00
1.54
967.50
2.12
583
CHSI
Catalyst Health Solutions Inc
52.00
30,316.00
.26
.00
.00
853
CNC
Centene Corp
39.59
33,770.27
.28
.00
.00
1,289
ENSG
Ensign Group
24.50
31,580.50
.27
77.34
.98
1,540
HGR
Hanger Orthopedic Group Inc
18.69
28,782.60
.24
.00
.00
623
JAZZ
Jazz Pharmaceuticals Inc
38.63
24,066.49
.20
.00
.00
755
MRX
Medicis Pharmaceutical Corp
33.25
25,103.75
.21
60.40
.96
518
MWIV
MWI Veterinary Supply Inc.
66.44
34,415.92
.29
.00
.00
787
SIRO
Sirona Dental Systems Inc
44.04
34,659.48
.29
.00
.00
4,100
UNH
Unitedhealth Group Inc
50.68
207,788.00
1.75
.00
1.28
Total Health Care
1,391,927.02
11.71
1,105.24
1.78
Industrials
1,048
ASTE
Astec Industries Inc
32.21
33,756.08
.28
.00
.00
1,060
ATRO
Astronics Corp
35.81
37,958.60
.32
.00
.00
1,660
CMI
Cummins Inc.
88.02
146,113.20
1.23
.00
1.82
2,260
DE
Deere $ Co
77.35
174,811.00
1.47
926.60
2.12
1,117
DXPE
DXP Enterprises Inc
32.20
35,967.40
.30
.00
.00
1,753
DY
Dycom Industries
20.92
36,672.76
.31
.00
.00
9,800
GE
General Electric Cc
17.91
175,518.00
1.48
1,666.00
3.80
1,755
KAI
Kadant Inc
22.61
39,680.55
.33
.00
.00
1,980
LMT
Lockheed Martin Corp
80.90
160,182.00
1.35
.00
4.94
647
TDY
Teledyne Technologies Inc
54.85
35,487.95
.30
.00
.00
746
TNB
Thomas and Betts Corp
54.60
40,731.60
.34
.00
.00
3,900
TKR
Timken Co.
38.71
150,969.00
1.27
.00
2.07
1,850
TWI
Titan International Inc
19.46
36,001.00
.30
9.25
.10
586
TGI
Triumph Group Inc
58.45
34,251.70
.29
.00
.27
1,900
UNP
Union Pacific Corp
105.94
201,286.00
1.69
1,140.00
2.27
Total Industrials
1,339,386.84
11.27
3,741.85
2.15
'E
Dana Investment Advisors, Inc. , y DANA
PORTFOLIO HOLDINGS THE WISE CHOI('
Report as of: 12/30/2011
Portfolio: 715comp - City of Palm Beach Gardens Firefighters' Retirement System - Comp
Shares/ PAR Identifier Description Price Market Value Pct. Assets Accruals Cur.
Owed Yield
Information Technology
r
1,820
ADS
Alliance Data Systems Corp
103.84
188,988.80
1.59
.00
.00
584
AXE
Anixter International Inc
59.64
34,829.76
.29
.00
.00
560
AAPL
Apple Inc
405.00
226,800.00
1.91
.00
.00
505
CACI
CACI International Inc
55.92
28,239.60
.24
.00
.00
9,750
CSCO
Cisco Systems Inc
18.08
176,280.00
1.48
.00
1.33
7,960
EMC
EMC Corp
21.54
171,458.40
1.44
.00
.00
768
FEIC
FEI Co.
40.78
31,319.04
.26
.00
.00
1,391
HPY
Heartland Payment Systems Inc
24.36
33,884.76
.29
.00
.66
10,200
INTC
Intel Corp
24.25
247,350.00
2.08
.00
3.46
1,250
IBM
International Business Machine
183.88
229,850.00
1.93
.00
1.63
1,643
KEYN
Keynote Systems Inc
20.54
33,747.22
.28
.00
1.17
3,530
KLAC
KLA- Tencor Corp
48.25
170,322.50
1.43
.00
2.90
7,800
MSFT
Microsoft Corp
25.96
202,488.00
1.70
.00
3.08
937
OPNT
OPNET Technologies Inc
36.67
34,359.79
.29
.00
1.31
6,700
ORCL
Oracle Corp
25.65
171,855.00
1.45
.00
.94
651
OSIS
OSI Systems Inc
48.78
31,755.78
.27
.00
.00
1,559
PMTC
Parametric Technology Corp
18.26
28,467.34
.24
.00
.00
4,020
PRFT
Perficient Inc
10.01
40,240.20
.34
.00
.00
2,737
SMCI
Super Micro Computer Inc
15.68
42,916.16
.36
.00
.00
1,119
SNX
Synnex Corp
30.46
34,084.74
.29
.00
.00
Total Information Technology
2,159,237.09
18.17
.00
1.32
Materials
774
BKI
Buckeye Technologies Inc.
33.44
25,882.56
.22
.00
.72
3,640
DD
Du Pont (E. I.) De Nemours
45.78
166,639.20
1.40
.00
3.58
489
IPHS
Innophos Holdings Inc
48.56
23,745.84
.20
.00
2.06
6,180
IP
International Paper Co.
29.60
182,928.00
1.54
.00
3.55
132
NEU
Newmarket Corp
198.11
26,150.52
.22
99.00
1.51
410
SWM
Schweitzer- Maud uit Internatlon
66.46
27,248.60
.23
.00
.90
Total Materials
452,594.72
3.81
99.00
3.04
Telecommunication Services
4,200
T
AT &T Inc
30.24
127,008.00
1.07
.00
5.82
1,312
CNSL
Consolidated Communications Ho
19.05
24,993.60
.21
00
8.14
4,560
VZ
Verizon Communications Inc
40.12
182,947.20
1.54
.00
4.99
Total Telecommunication Services
334,948.80
2.82
.00
5.54
Utilities
1,700
AVA
Avista Corp
25.75
43,775.00
.37
.00
4.27
3,040
NEE
NextEra Energy Inc
60.88
185,075.20
1.56
.00
3.61
1,219
UIL
UIL Holdings Corp
3537
43,116.03
.36
526.61
4.89
7,040
XEL
Xcel Energy Inc.
27.64
194,585.60
1.64
1.830.40
3.76
Total Utilities
466,551.83
3.93
2,357.01
3.86
Total Domestic Equity Strategy
11,761,843.26
98.96
25,189.51
2.42
Total Stocks
11,761,843.26
98.96
25,189.51
2.42
Total Portfolio
11,884,944.41
Paydown Receivable
0.00
Interest Accrued
0.00
Dividends Accrued
25,189.51
Total Portfolio with Accruals & Receivables
11,910,133.92
31
Dana Investment Advisors, Inc.; DANA
PORTFOLIO HOLDINGS 1HE WISE CHOICE
Report as of: 1213012011
Portfolio: 715comp - City of Palm Beach Gardens Firefighters' Retirement System - Comp
The market prices shown on these pages represent the last reported sate on the stated report date as to Listed securities or the bid price in the case of
over- the - counter quotations. Prices on bonds and some other investments are based on round lot price quotations and are for evaluation purposes only
and may not represent actual market values. Bonds sold on an odd lot basis (less than $1 million) may have a dollar price lower than the round lot quote.
Where no regular market exists, prices shown are estimates by sources considered reliable by Dana Investment Advisors. While the prices are obtained
from sources we consider reliable, we cannot guarantee them. Dana Investment Advisors is not a custodian. Clients should be receiving detailed
statements from their custodian at least quarterly. While Dana Investment Advisors regularly reconciles to custodian information, we encourage clients
to review their custodian statement(s).
32
Palm Beach Gardens Firefighters' Retirement System
Broker Commissions Report 10-1 to 12-31-11
Broker Name Shares Comm Rate Net Amount Commission
Capital Institutional Services 38,742 0.0150 $ 1,208,862.16 $ 581.15
Weeden 48,070 0.0150 $ 1,146,197.40 $ 721.14
DANA l
* * * Disclosure
Dana Investment Advisors, Inc. is an independent federally registered investment adviser providing equity
and fixed income investment management services to a broad range of clients. All data is presented in U.S.
Dollars. Portfolio Characteristics, Performance Report, Portfolio Holdings, and Sector Distributions reflect
applicable investment holdings as of market close on the date indicated. Returns presented are exclusive of
investment management and custodial fees, and net of transaction costs. Investment management fees
would reduce the returns presented, for example: on a one - million dollar portfolio with an advisory fee
of .75% earning a 10% return, the total compounded advisory fee over a five year period would be $50,368.
The resulting average annual return for the period would therefore be 9.17 %. All returns were calculated on
a time weighted total return basis. Performance does include the accrual of income and the reinvestment of
dividends and interest received.
During various market cycles, the strategies discussed herein have demonstrated portfolio characteristics
and returns that have been both more and less volatile than that of the comparable index. Indices shown
were selected because they demonstrated a broad range of characteristics, some of these characteristics
being deemed useful for limited comparison purposes only. Historical performance results for investment
indices and /or categories have been provided for general comparison purposes only, and generally do not
reflect the deduction of transaction and /or custodial charges, the deduction of an investment management
fee, nor the impact of taxes, the incurrence of which would have the effect of decreasing historical
performance results. It should not be assumed that your account holdings do or will correspond directly to
any comparative indices.
While data contained herein was gathered from sources deemed reliable, the accuracy of the data presented
can not be guaranteed. Please remember that past performance may not be indicative of future results.
Different types of investments involve varying degrees of risk, and there can be no assurance that the future
performance of any specific investment or investment strategy made reference to directly or indirectly in this
report, will be profitable, equal any corresponding indicated historical performance level(s), or will continue to
be suitable for your portfolio. Due to various factors, including changing market conditions, the content of
this report may no longer be reflective of current opinions, positions, investments or account allocations.
Moreover, you should not assume that any discussion or information contained in this report serves as the
receipt of, or as a substitute for, personalized investment advice from Dana Investment Advisors, Inc.
Dana Investment Advisors is not a custodian. Clients should be receiving detailed statements from their
custodian at least quarterly. While Dana Investment Advisors regularly reconciles to custodian information,
we encourage clients to review their custodian statement(s). The market prices shown on these pages
represent the last reported sale on the stated report date as to listed securities or the bid price in the case of
over - the - counter quotations. Prices on bonds and some other investments are based on round lot price
quotations and are for evaluation purposes only and may not represent actual market values. Bonds sold on
an odd lot basis (less than $1 million) may have a dollar price lower than the round lot quote. Where no
regular market exists, prices shown are estimates by sources considered reliable by Dana Investment
Advisors, Inc. While the prices are obtained from sources we consider reliable, we cannot guarantee them.
Please remember to contact Dana Investment Advisors, Inc. at (800) 765 -0157, or P.O. Box 1067 Brookfield,
WI 53008 with any questions or if there are any changes in your personal financial situation or investment
objectives for the purpose of reviewing, evaluating, and revising any previous recommendations or
investment services. Please also advise Dana if you would like to impose, add, or modify any reasonable
restrictions to your account. A copy of Dana's current Form ADV Brochure detailing a complete list of Dana's
advisory services and fees continues to remain available for your review upon request.
34
PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
MINUTES OF MEETING HELD
January 23, 2012
A meeting of the Board of Trustees was called to order at 9:01.M. at Council Chambers,
Palm Beach Gardens, Florida. Those persons present were:
TRUSTEES
Tom Murphy, Secretary
Donna Wisneski
Rick Rhodes
OTHERS
Audrey Ross, Administrator
Pedro Herrera, Attorney
Troy Brown, Investment Monitor
Steve Stack, Investment Manager
Steve Gordon, Auditor
It was noted that Mr. Morejon was reelected and the selection of the Chair and Secretary
is tabled until the next meeting when all Trustees are present.
MINUTES
The Board reviewed the minutes of the regular meeting held on November 14, 2011 and
the special meeting held on November 30, 2011.
A motion was made by Rick Rhodes to approve the minutes of the November 14,
2011 regular meeting as amended. The motion was seconded by Donna Wisneski
and carried 3 -0.
A motion was made by Rick Rhodes to approve the minutes of the November 30,
2011 special meeting. The motion was seconded by Donna Wisneski and carried 3-
0.
ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS)
DISBURSEMENTS
The Board reviewed the disbursements presented for approval by the Administrator. The
Trustees' had a question regarding the Auditors bill. Ms. Ross was asked to recalculate
the current fees owed.
A motion was made by Rick Rhodes to approve the disbursements that were
presented by the Administrator. The motion was seconded by Donna Wisneski and
carried 3 -0.
BENEFIT APPROVALS
The Board reviewed the application for retirement for Steven Ensinger.
A motion was made by Donna Wisneski to approve the application for retirement
for Steven Ensinger. The motion was seconded by Rick Rhodes and carried 3 -0.
2 4
PRESENTATION OF THE 9/30/2011 AUDITED FINANCIAL STATEMENTS:
(STEVE GORDON)
Mr. Gordon noted that he has issued an unqualified clean opinion regarding the audit,
which is the highest level that can be issued. He reviewed the management discussion
and analyst letter and Ms. Wisneski notified Mr. Gordon that the she does not believe that
he brought the correct copy of the report with him today as the numbers do not match the
draft that was previously emailed out. Mr. Gordon apologized for the inconvenience and
commented that the draft copies that were circulated electronically where correct,
although the report he has here today is not. Mr. Gordon stated that he will reprint the
correct copies and will re- circulate out. The board discussed the situation and agreed that
they will hold a special meeting to approve the audit once the revised reports are issued.
INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY
BROWN)
Mr. Brown reviewed the performance report for the quarter ending December 31, 2011
and stated that this is still a preliminary report because it is still too early to collect all the
data for the end of the year. As of December 31, 2011 we were inline with policy. There
was 50.7% in domestic equity, 27% in domestic fixed income, 8.6% in International
Equity, 8.4% in real estate, 3.5% in global fixed income and 1.8% in cash. He noted that
ICC Capital had a rough quarter because AMR went bankrupt and ICC had a huge
holding in them. ICC still carries them in their portfolio, although during the quarter ICC
allocated another $600K to them about 2 weeks before they filed for bankruptcy.
Therefore ICC has underperformed that last 2 quarters due to bad stock selection and they
are on a warning. For the quarter ending December 31, 2011 the preliminary return for
the total fund was 5.69 %, as total equities were 9.29 %, and the total domestic equity had
a great quarter at 10.60 %. Mr. Brown reviewed the fixed income portfolio and
commented that they had a great turn around this quarter because they were out of
Treasuries.
Lastly Mr. Brown reviewed the flash performance handout through January 19, 2012.
The fund is up 3.5% FYTD and noted that there is a lot of excess cash sitting on the
sides. In addition, both fixed income managers are underweighted compared to the
Policy. Therefore Mr. Brown recommended transferring $600K from cash to the Dana
core fund, and $300K from cash to the Manning and Napier fund to rebalance and be
inline with the Plan's policy. The board agreed and gave Mr. Brown the direction to
rebalance according to the Plan's policy.
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 reviewed the letter and email from his office regarding the Division of
Retirements thoughts on the City's proposal to opt out of the Chapter 175 monies. He
commented that the Chapter 175 rules and regulations does have an opt -out clause that
would have to be decided on by the City. Or the City can reduce their benefit levels
below the Chapter 175 statutes and then they would not be eligible to receive State
money. Ms. Wisneski questioned what would happen to the City's portion of the 175
money if they did not accept it. Mr. Herrera explained that the State of Florida would
keep the money and it would be redistributed to all the other pension plans. In addition
the City's insurance carries would still have to pay the assessment fees. The board
discussed the City's proposals and the changes that could happened if implemented.
Ms. Wisneski asked for an update next time as to the status of negotiations and where
they currently are in the process.
Mr. Herrera briefly reviewed the memo he created outlining the pending Ordinance
changes. The board reviewed the pending changes and commented that the 3%
guaranteed fixed rate of return on DROP accounts can be removed because City Council
already denied this.
OTHER BUSINESS
There being no further business, the meeting adjourned at 10:59AM.
Respectfully submitted,
Tom Murphy, Secretary
PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
MINUTES OF SPECIAL MEETING HELD
FEBRUARY 7, 2012
A special meeting of the Board of Trustees was called to order at 2P.M. at Council
Chambers, Palm Beach Gardens, Florida. Those persons present were:
TRUSTEES OTHERS
Ed Morejon, Trustee Audrey Ross, Administrator
Tom Murphy, Secretary Steve Gordon, Auditor (joined via teleconference)
Donna Wisneski Pedro Herrera, Attorney (joined via teleconference)
Mark Joyce
Rick Rhodes
APPROVAL OF REVISED SEPTEMBER 30, 2011 AUDITED FINANCIAL
STATEMENTS
The Trustees reviewed the revised financial statements that were provided by Mr.
Gordon. Ms. Wisneski commented that she had some questions pertaining to the dates
listed under the subsequent events disclosure footnote. She stated that the dates were
incorrect because the subsequent events disclosure was dated after the financial
statements where issued. Mr. Gordon stated that he will revise the subsequent events
disclosure date to reflect either before the date of the when the Audit was issued or the
exact date of it being issued. The Trustees reviewed and discussed the remainder of the
financial statements and noted that they feel comfortable with approving them with the
corrected date to the subsequent event disclosure, and also contingent on Ms. Wisneski's
final review of the revised report.
A motion was made by Rick Rhodes to approve the September 30, 2011 Audited
Financial Statements with the noted date revision to the subsequent events
disclosure, and also contingent on Donna Wisneski's review of the final report (as
well as the Chair's final approval to release the document). The motion was
seconded by Tom Murphy and carried 5 -0.
OTHER BUSINESS
Ms. Ross presented the board with the Fiduciary Liability Insurance renewal fee for the
period of March 10, 2012 to March 10, 2013. She commented that the quoted fee this
year was $6,327.13, which is $17.56 lower than expiring premium. The board discussed
the current premium coverage which is $1 M, and also asked Ms. Ross to obtain quotes
for $2M, $3M, $4M and $5M for future reference.
A motion was made by Rick Rhodes to bind coverage for the Plan's Fiduciary
Liability Insurance coverage effective March 10, 2012 thru March 10, 213, at the
quoted premium amount of $6,327.13. The motion was seconded by Donna
Wisneski and carried 5 -0.
Mr. Morejon explained that he received an email from Mr. Herrera regarding an active
members pending divorce. Both the husband's and the wife's attorneys' are contacting
Mr. Herrera requesting a conference call to be schedule with him. Mr. Herrera stated that
he would like to get permission from the board as to whether or not he can hold such
conference call, and if so then who would be responsible for the costs associated. Also
he commented that he would like to make some rules and /or policy regarding these types
of situations for future reference. He also noted that he has already sent both parties
copy the "divorce packet" which contains a lot of helpful information pertaining to the
Plan and also divorces under this type of Plan. Mr. Herrera stated that if he were to hold
the conference call then he will be billing at his hourly rate and he needs to know who
will be responsible for that payment, the pension board or the member.
The board discussed the situation and explained that they have reviewed a similar case
like this in the past and agreed that they would continue in the same manner as before.
The member is responsible for paying the cost for any additional documents, information,
etc. that they may need and /or want and is not already provided in the divorce packet that
they are furnished with.
Mr. Morejon noted that this particular divorce case that Mr. Herrera was recently
approached about were relatives of his. He commented that this does not change any of
his perspectives on the board policies or regulations, but only that he wanted it
documented so there is no conflict of interest going forward.
A motion was made by Donna Wisneski approving that the Pension Plan will only
incur expenses on behalf of individual members when they retire for benefit
calculations and all other expenses and /or calculations will be paid for by the
member. The motion was seconded by Rick Rhodes and carried 5 -0.
Mr. Morejon reported that the most recent study GRS completed was incorrect. Ms. Ross
stated that she has since asked the Actuary to revise the study and noted that there will be
no additional charges for the revision.
Lastly Ms. Ross notified the board that they needed to reselect the Chair and Secretary
since Mr. Morejon term's recently expired and he was reelected.
A motion was made by Rick Rhodes to select Tom Murphy as Secretary. The
motion was seconded by Mark Joyce and carried 5 -0.
A motion was made by Mark Joyce to select Rick Rhodes as Chairman. The motion
was seconded by Tom Murphy and carried 5 -0.
There being no further business, the meeting adjourned at 2:52PM.
Respectfully submitted,
Tom Murphy, Secretary
0
?r
� .
.
-
.
�4 F
WPLUMIng Beau r-141111A11 VC4Y1111CD
Conclusion
Introduction and Summary
We are pleased to present you with this monthly report regarding securities and corporate
governance litigation. Within this report, we provide a list of securities cases that have settled and a
list of all recently filed securities class actions. We will continue to inform you and highlight if the
Fund purchased stock during the Class Period in any filed class actions. Should you have any questions
at any time, please do not hesitate to contact us.
Shepherd, Finkelman, Miller & Shah, LLP
Market Analysis
U.S. stocks were lower this month out of fear of a recession in Europe. Germany's economy
slowed down toward the end of 2011 and is expected to shrink in the first quarter of 2012.
Economic indicators suggest that 2012 will be a tough year for Germany, as well as the rest of
Europe. The European Commission has commented that Hungary has not taken any "effective"
action to correct its deficit. Fitch Ratings ( "Fitch "), one of the largest credit rating agencies,
downgraded Italy's single -A -plus credit rating. Italy is scheduled for a series of offerings to fund about
$69 billion of debt during the first quarter. With respect to Greece, Fitch indicated that Greece's
financial problems could get worse if it did not work out a debt reduction deal with its creditors. In
March, Greece hopes to receive approximately 30 billion euros from the European Union and the
International Monetary Fund.
Dividend payments on stocks to shareholders are forecasted to set a record of over $252
billion in 2012, according to data from Standard & Poor's. In 2011, companies that paid high dividends
were some of the best performers in the market. Economists have suggested that paying more in
dividends may yield higher stock prices and better benefits to shareholders. McDonald's has
increased its dividends to shareholders over the years, and recently had stock returns of over 30 %.
The Mortgage Bankers Association has reported that mortgage applications rose during the
first week of January, as demand for purchases and refinancing increased. This increase came despite
a slight increase in fixed interest rates this month.
In corporate news, Hostess Brands, Inc. ( "Hostess "), maker of Twinkies and Wonder Bread,
sought bankruptcy protection this month. Hostess cited its pension and medical benefits obligations,
increased competition and tough economic conditions as reasons for its decision to file for
bankruptcy.
The following chart shows the changes in the major world financial indices during the last month.
December January
Markets 2 9 16 23 30 6 % Difference
Argentina (MERV)
2,630
2,558
2,433
2,467
=
_
5.33
Australia (AORD)
4,346
4,264
4,219
4,192
4i ' .:'.
==
-4.18
Austria (ATX)
1,854
1,853
1,793
1,882
;k3 'r
1.50
Belgium (BFX)
2,077
2,078
2,004
2,054
' ' '
09 `
0.78
Brazil (BVSP)
57,886
58,236
56,097
57,701
1.23
Canada (S&P TSX)
12,075
12,035
11,635
11,927
0.94
France (FCHI)
3,165
3,172
2,972
3,102
" " =
�Z, °.T' %
-0.87
Germany (GDAXI)
6,081
5,987
5,702
5,879
-0.37
Hong Kong (HSI)
19,040
18,586
18,285
18,629
__,
-2.35
India (BSESN)
16,847
16,213
15,491
15,739
_
w
-5.81
Israel (TA -100)
983
974
N/A
982
1.69
Italy (FTSE)
5,552
5,529
5,387
5,513
1.75
Malaysia (KLSE)
1,489
1,460
1,466
1,496
1.69
Mexico (IPC)
36,756
37,227
36,055
37,041
0.13
Netherlands (AEX)
303
305
294
308
3.44
Singapore (STI)
2,773
2,695
2,659
2,676
-2.08
Spain (IGBM)
858
867
821
855
-3.47
Switzerland (SSMI)
5,719
5,794
5,734
5,894
5.16
Taiwan (TWIT)
7,141
6,893
6,785
7,111
-0.28
U.S. (Dow Jones)
12,019
12,184
11,866
12,294
2.83
U.S. (NASDAQ)
2,627
2,647
2,555
2,619
1.80
U.S. (S &P 500)
1,244
1,255
1,220
1,265
2.69
Upcoming Settlement Claim Deadlines
The following is a chart of upcoming settlement claim deadlines. We provide you with this
information first in this Report because the settlements reflected below may present an opportunity
for the Fund to increase its assets with little or no expense. Although institutional investors such as
the Fund should automatically receive notice of all securities class action settlements so that claims
can be timely submitted, statistics demonstrate that many shareholders fail to submit claims for
monies to which they are entitled. In a number of cases, it has been documented that the percentage
of eligible shareholders submitting claims is less than 50 %.
Although we will endeavor to separately notify you if we discover that you own securities for
which a claim can be submitted, since we do not have an historical record of all securities ever held
by the Fund, it is best if you provide the person responsible for overseeing the submission of claims
with a copy of this Report to ensure that any claims to which the Fund is entitled can be promptly
submitted. If, at any time, the Fund's staff or others require assistance in submitting a claim or
following up regarding the status of a claim, please contact us and we will be pleased to assist you.
SETTLEMENT
COMPANY
CLASS PERIOD PROOF OF CLAIM
AMOUNT
DEADLINE
Gallucci Fund: $2.12M
1/31/2012
Digital Equipment Corp:
sold stock on 1/16/98
Common Stock
DSC Communication Corp.
sold stock on 3/4/98, 3/30/98,
Common Stock
6/2/98 and 6/3/98
Chock Full O'Nuts Corp.
sold stock on 6/24/98, 7/17/98,
Common Stock
8/25/98, 10/29/98 and 10/30/98
Orion Capital Corp.
sold stock on 6/24/99, 6/25/99,
Common Stock
7/2/99 and 7/6/99- 7/9/99
Nielsen Media Research, sold stock on 7/27/99, 7/28/99,
Inc. Common Stock and 8/6/99 - 8/13/99
NexCen Brands, Inc. $4M 3/13/07- 5/18/08 1/31/2012
Del Monte Foods Company $89AM 11/25/10- 3/8/11 2/1/2012
(record holders)
(Continued on page 4)
(Continued from page 3)
PROOF OF CLAIM
COMPANY
SETTLEMENT AMOUNT
CLASS PERIOD
3/9/2012
10/24/00-2/15/01
DEADLINE
JAMDAT Mobile, Inc.
$4.75M
12/8/05- 2/15/06
2/6/2012
Merix Corporation
$1.5M
10/6/09- 2/16/10
2/8/2012
MBIA,Inc.
$68M
7/2/07- 1/9/08
2/9/2012
Sadia S.A.
$27M
4/30/08- 9/25/08
2/10/2012
Medicis Pharmaceutical Corp.
$18M
10/30/03- 9/23/08
2/18/2012
TeleNav, Inc.
$3.8M
5/13/10- 9/2/10
2/27/2012
Colonial Bancgroup, Inc.
$10.5M
4/18/07 - 8/6/09
2/29/2012
Redline Communications Group, Inc.
$3.46M
12/6/06- 3/15/10
3/5/2012
National City Corporation
$168M
4/30/07- 4/21/08
3/9/2012
10/24/00-2/15/01
Nortel Networks Corporation
$35.5M
and /or
3/16/2012
4/24/03- 4/27/04
Acura Pharmaceuticals
$1.5M
2/21/06- 4/22/10
3/19/2012
Beckman Coulter, Inc.
$5M
7/31/09- 7/22/10
4/12/2012
Apollo Group, Inc.
$145M
2/27/04- 9/14/04
5/2/2012
Merit Securities Corp.
$7.5M
2/7/00- 5/13/04
6/4/2012
(Dynex Capital, Inc.)
Recommendation
We have identified the following stocks in your portfolios for which you should file a proof of
claim form: NONE IDENTIFIED.
Upcoming Lead Plaintiff Deadlines
We continue to evaluate whether it is appropriate to recommend that the Fund participate in
any filed securities class actions (to the extent that the Fund purchased any of the securities at issue
during the proposed class periods or during any alternative class periods that our investigation and
evaluation determines could be appropriate) or any corporate governance litigation. For your review
and information, a chart of the currently pending securities class actions that we are evaluating
appears below:
PERCENTAGE LEAD PLAINTIFF
COMPANY TICKER DECLINE DEADLINE
Pain Therapeutics, Inc. PTIE 43% on 6/24/11 1/31/12
The Bank of New York Mellon Corpora- BK N/A 2/13/12
tion
Focus Media Holding Limited FMCN N/A 2/13112
GLG Life Tech Corporation
GLGL
42%
2/13/12
China Medical Technologies, Inc.
CMED
24%
2/17/12
Pacific Biosciences of California, Inc.
PACB
43%
2/27112
Veolia Environnement S.A.
VE
22%
2/27/12
Recommendation
An analysis of each of the above cases, as well as our recommendations, appears in the case
specific summaries that appear at Exhibit "A." Based upon our review, although the Fund purchased
shares of BK Mellon during the class period, the Fund actually made money on BK Mellon during the
class period when all class period purchases and sales are considered.' Therefore, we do not
recommend that the Fund seek lead plaintiff status at this time.
Concision
If you have any questions or would like to discuss any of these matters, please do not hesitate
to contact us.
Calculations were performed using the "last -in, first out' ( "LIFO ") accounting method. Under the LIFO method, sales of the stock
during the class period are matched against the last shares purchased, resulting in an off -set of class - period gains from a plaintiffs
ultimate losses. In addition, to the extent that the Fund sold more shares than it purchased during the class period and, therefore,
would be considered a "net seller," those additional class period sales also are considered in determining whether the Fund
suffered losses under this methodology. In the event the Fund has made money on the stock during the class period either as a net
seller or otherwise, we generally would not recommend that the Fund seek lead plaintiff status. As a net seller or institution
otherwise profiting based upon class period transactions may be deemed to have profited from any alleged stock inflation during
the class period, courts generally consider such institutions atypical and ineligible to serve as lead plaintiffs.
Securities; and Corporate, Governance Litigation; Report
C'afifidentia Subject Attorney- Client Privilege
Updated Thrau&january[5,d 2 (trZ
Shepherd. Fknkefmas ,„ Milte^`&Shak ELP
Pain Therapeutics, Inc.
January 15, 2012 A securities class action was filed in the United
States District Court for the Western District of Texas on behalf of a class
consisting of all purchasers of Pain Therapeutics, Inc. ( "PTI" or the
"Company ") securities during the time period of February 3, 2011 through
June 23, 2011 (the "Class Period "). The Complaint seeks remedies under the
Securities Exchange Act of 1934.1
1. ALLEGATIONS OF THE COMPLAINT
PTI is a Delaware corporation with its principal place of business in Austin,
Texas. The Company engages in research and development of novel drugs.
REMOXY, an abuse - resistant formulation of oxycodone is PTI's lead drug
candidate. PTI has a strategic alliance with King Pharmaceuticals, Inc. ( "King ")
for the development and commercialization of REMOXY and other abuse -
resistant product candidates. Pfizer, Inc. ( "Pfizer ") acquired King in February
2011. Since February 3, 2011, PTI continued to make positive remarks
regarding their development of REMOXY. However, the Complaint alleges
that, during the Class Period, PTI and its officers (collectively "Defendants ")
issued materially false statements regarding their new drug. The truth was,
REMOXY was not approvable by the U.S. Food and Drug Administration
( "FDA ") due to chemistry, manufacturing, and control deficiencies that cause
inconsistent result during laboratory tests. On May 3, 2011, in a conference
call with analysts, Pfizer disclosed some issues they were facing. Upon this
news, PTI shares declined more than 7 %. On June 24, 2011, PTI announced
that it received a Complete Response Letter from the FDA, whereby the FDA
delayed approval of REMOXY for a second time. As a result, PTI's shares
declined 43 %. On June 27, 2011, the Company further provided information
regarding FDA's letter, which raised concerns regarding the chemistry,
manufacturing, and controls section of the NDA for REMOXY. Upon this
revelation, PTI shares declined an additional $1.37 per share or nearly 26 %,
damaging investors.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
III. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either
very good or excellent, we would be hesitant to recommend that our
institutional clients take an active role in the case at this stage.
W
C
O
3-
f
2.5 -- - -- .- - - - -- Oil - -- M a
li I
2
1.5 IIw,w4�U�li IrD�4yi�411
nlhll�lld _
0.5
Charles Southey v. Pain Therapeutics, Inc., et al., Civil Action No. 1 1 -01034 (W.D.Tx.— filed December 2, 201 1 (Judge Sam Sparks)).
The Bank of New York Mellon Corporation
January 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of The Bank of New York Mellon Corporation
( "BNY Mellon" or the "Company ") securities during the time period of
February 28, 2008 through August 11, 2011 (the "Class Period ") and securities
traceable to the Company's initial public offering ( "IPO ") on or about May 11,
2009 and June 3, 2010. The Complaint seeks remedies under the Securities
Exchange Acts of 1933 and 1934.'
I. ALLEGATIONS OF THE COMPLAINT
BNY Mellon is a Delaware corporation with its principal place of business in
New York, New York. The Company, a financial service company, provides
various products and services worldwide, such as safeguarding, maintaining, and
managing its clients' assets. The Complaint alleges that, during the Class Period,
BNY Mellon and its officers (collectively "Defendants ") issued a series of false
and misleading statements, and omitted to disclose material information
regarding its fraudulent practices to artificially inflate its reported financial
results. Specifically, the Complaint alleges that the Company failed to disclose
that: (1) the Company manipulated foreign currency exchange ( "FX ") trades to
extract illicit profits from its custodial clients; (2) engaged in unlawful practices
to artificially increase its FX fee revenue; (3) presented a misleading picture of
the Company's business model and its actions taken to earn FX fee revenue;
(4) failed to inform investors that withholding full transparency from its clients
was critical to maintaining the profitability of its FX programs; and (5) lacked
adequate internal and financial controls. BNY Mellon's deceptive practices
began to surface in January 2011 when two whistleblower lawsuits against BNY
Mellon were unsealed. As of today, both the N.Y. Attorney General and the
U.S. Department of Justice have filed against the Company and the SEC has
launched an investigation into BNY Mellon. As a result, the Company's shares
plummeted and continues to fall.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
Jurisdiction/Venue
X
Overall Ranking
X
Ili. RECOMMENDATIONS
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
recommend that our institutional clients seek lead plaintiff status in this matter
if they have suffered significant losses. If you have any questions concerning this
recommendation, please do not hesitate to contact us.
I Louisiana Municipal Police Employees' Retirement System v. The Bank of New York Mellon
Corporation , et al., Civil Action No. 11-9175 (S.D.N.Y. — filed December 14, 201 I
(Judge Lewis A. Kaplan )).
CUSIP 1064058100
ISIN US0640S81007
Business Location New York, New
York
f Delaware
2.28.08 to 8.1 1.1 1
Class Period (and related to
5/09 and 6/10
judge Lewis A. Kaplan
Lead Plaintiff
2.13.12
Deadline
w,
0 60
50
Date 12117/2009 12/152010
Focus Media Holding Limited
January 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of Focus Media Holding Limited ( "Focus
Media" or the "Company ") securities during the time period of September 25,
2007 through November 21, 2011 (the "Class Period "). The Complaint seeks
remedies under the Securities Exchange Act of 1934.1
I. ALLEGATIONS OF THE COMPLAINT
Focus Media is a Cayman Islands corporation with its principal place of
business in Shanghai, the People's Republic of China. The Company, a multi -
platform digital media company, operates LCD network using audiovisual
digital displays in China. Focus Media sells out -of -home television advertising
time slots on its network of flat -panel television advertising displays located in
high traffic areas. Since September 25, 2007, Focus Media continuously issued
reports claiming that they had engaged in several acquisitions to further expand
its business. On November 21, 2011, a research firm, Muddy Waters, LLC
( "Muddy Waters ") reported that the Company deliberately overpaid for these
acquisitions, writing down $1.1 billion out of $1.6 billion in acquisitions since
2005. Further, the Report accused that certain Focus Media insiders were
engaging in massive insider trading. Muddy Waters also alleged that Focus
Media materially overstated the number of screens in its LCD network by
approximately 50 %. The Complaint alleges that, during the Class Period, the
Company and its officers and directors (collectively "Defendants ") knew or
recklessly disregarded the foregoing material information regarding the
Company's financial results and operations. Following the issuance of Muddy
Waters' Report, Focus Media's ADRs dropped significantly from a close of
$25.50 per ADR on November 18, 2011 to a close of $15.43 per ADR on
November 21, 2011, a drop of approximately 40 %.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation/Injury
X
Jurisdiction /Venue
X
Overall Ranking
X
131. RECOMKMENDA71ONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either
very good or excellent, we would be hesitant to recommend that our
institutional clients take an active role in the case at this stage.
I Tom Palny v. Focus Media Holding Limited, et al., Civil Action No. 11-9051 (S.D.N.Y. —
filed December 12, 2011 (Judge Colleen McMahon)).
GLG life Tech Corporation
January 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of GLG Life Tech Corporation ( "GLG" or the
"Company ") securities during the time period of February 1, 2011 through
November 13, 2011 (the "Class Period "). The Complaint seeks remedies
under the Securities Exchange Act of 1934.1
1. ALLEGATIONS OF THE COMPLAINT
GLG is headquartered in Vancouver, Canada an conducts its business through
various subsidiaries located in the People's Republic of China. The Company
engages in the research and development, production, and distribution of stevia
extra, a natural sweetener extracted from the stevia plant, to the food and
beverage industry worldwide. In 2010, GLG also entered into a joint - venture
agreement with China Agriculture and Healthy Foods Company Limited called
All Natural and Zero Calorie Beverage and Foods ( "ANOC ") to sell and
distribute zero calorie beverage and food products in China that are
sweetened with GLG's stevia extracts. On February I, 2011, GLG issued its
financial guidance for 2011, forecasting $90 to $100 million CAD in revenue
from stevia sales and $70 to $100 million CAD in revenue from ANOC
revenue. The same day, GLG also announced that it had entered into an
agreement with a syndicate of underwriters to raise capital through a securities
offering to fund the ANOC's joint- venture. During the Class Period, GLG and
its officers (collectively "Defendants ") touted ANOC's business development
and growth. However, the Complaint alleges that Defendants' statements were
falsely and materially misleading. Specifically, the Complaint alleges that
Defendants failed to disclose: (a) the truth surrounding GLG's production
issues; (b) the poor consumer response to GLG's ANOC and stevia products;
and (c) that the Company would not meet its earnings projections. On
October 6, 2011, the Company shocked investors when they revealed the
truth regarding the production issue, the backlog of ANOC inventory, and
aftertaste issues causing a decrease in demand. Upon this news, the
Company's common stock declined approximately 42 %. The following day, a
research firm Geolnvesting published a report claiming that GLG may have
misrepresented information for most of 2011. On November 14, 2011, the
Company announced its financial results for the fiscal year ended September
30, 2011; the Company produced only $0.7 million CAD in revenue and
ANOC sales produced only $1 million in revenue, which was extremely far
from their projections. Upon this news, the stock dropped 82% from the Class
Period high.
Il. THE Sr—MS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
urisdiction/Venue
X
Overall Ranking
X
H
C
O
= 1.2
E
r l
Ill. RECOMMENDATIONS I Date 4/26/Ml 9/15/111
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
recommend that our institutional clients seek lead plaintiff status in this matter if they have suffered significant losses. If
you have any questions concerning this recommendation, please do not hesitate to contact us.
Joseph Lardy v. GLG Life Tech Corporation, et al., Civil Action No. 1 1 -09150 (S.D.N.Y. — filed December 14, 2011 (Judge Barbara S.
Jones)).
China Medical Technologies, Inc.
January IS, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of China Medical Technologies, Inc. ( "China
Medical" or the "Company ") securities during the time period of November
26, 2007 through December 12, 2011 (the "Class Period "). The Complaint
seeks remedies under the Securities Exchange Act of 1934.'
1. ALLEGATIONS OF THE COMPLAINT
China Medical is a Cayman Islands corporation with its principal place of
business in Beijing, the People's Republic of China. The Company, a medical
device company, develops, manufactures, and markets immunodiagnostic and
molecular diagnostic products using ECILA, FISH and SPR technologies for
detection of various cancers, diseases, and disorders. On November 26, 2007,
the Company issued a press release announcing its definitive acquisition
agreement to purchase the entire equity interest of Beijing Bio -Ekon
Biotechnology Co., Ltd. ( "BBE "), a fast - growing ECILA player in China.
Subsequent to the acquisition, the Company continued to issue positive
financial results. However, the Complaint alleges that, during the Class Period,
China Medical and its officers (collectively "Defendants ") made false and /or
misleading statements, and failed to disclose material adverse facts about the
Company's business, operations, and prospects. Specifically, the Complaint
alleges that Defendants failed to disclose that: (a) the Company's acquisition of
BBE was from a third -party seller connected to China Medical's Chairman; (b)
the Company overpaid for BBE by approximately $20 million; (c) the
Company's acquisition of BBE involved the use of fraudulent shell companies;
(d) BBE was suffering operating losses prior to the acquisition; (e) the
Company overstated accounts receivable to inflate reported sales and net
income; and (f) the Company's reported profit margins were inflated. On
September 7, 2011, a blog on GEO Investing exposed to the public gaping
discrepancies between the Company's SEC and SAIC filings and suspicious
transactions. On December 6, 2011, Glaucus Research Group published a
report claiming that: (1) China Medical's CEO was embezzling money through
sham acquisitions; (2) the Company's reported profits and net income were
inflated as they were inconsistent with comparable competitors; and (3) the
majority of the Company's accounts receivable was in excess of 120 days. The
same day, China Medical's shares declined nearly 24 %. On December 13, 2011,
Defendants stated that the Company planned to implement a debt
restructuring plan to improve its balance sheet. Upon this news, China
Medical's shares further declined nearly 13% to close at $2.87 per share,
causing investors to suffer significant losses.
11, THE SF MS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
recommend that our institutional clients seek lead plaintiff status in this matter if they have suffered significant losses. If
you have any questions concerning this recommendation, please do not hesitate to contact us.
Vyacheslav M. Burdman v. China Medical Technologies, Inc., et al., Civil Action No. 11-9297 (S.D.N.Y. —filed December 19, 2011 (Judge
Katherine B. Forrest)).
Pacific BioSciences of California, Inc.
January 15, 2012 A securities class action was filed in the United
States District Court for the Northern District of California on behalf of a
class consisting of all purchasers of Pacific BioSciences of California, Inc.
( "PacBio" or the "Company ") securities during the time period of October 27,
2010 through September 20, 2011 (the "Class Period "). The Complaint seeks
remedies under the Securities Exchange Act of 1934.
1. ALLEGATIONS OF THE COMPLAINT
PacBio is a Delaware corporation with its principal place of business in Menlo
Park, California. The Company develops, manufactures, and markets an
integrated platform for genetic analysis. PacBio engages in commercializing a
platform, a single molecule real time technology (SMRT) for the detection of
biological events. In its Prospectus, PacBio claimed to have developed a third
generation of DNA sequencing technology that would reduce or even
eliminate the limitations of first and second generation sequencing.
Subsequently, PacBio continued to tout about its product, PacBio RS, a
sequencing platform that conducts, monitors, and analyzes biochemical
sequencing reactions. The Complaint alleges that, during the Class Period,
PacBio and its officers and directors (collectively "Defendants ") hid from the
public the significant problems regarding their human genome sequencing
technology that were causing operational and financial issues. The Complaint
alleges that Defendants statements regarding their plan to commercially launch
the PacBio RS was materially false and misleading because the Company never
had plans to develop and could not introduce them commercially. On
November 30, 2010, the truth began to emerge when the Company disclosed
to the public net losses of $40.7 million for the third quarter ending September
30, 2010. On August 5, 2011, JP Morgan downgraded its rating of PacBio due
to a significantly lower projection of orders in 2012, projecting that PacBio
would not become profitable until 2015, and it lowered its target price for
PacBio shares down to $10. Moreover, on September 20, 2011, PacBio
further announced that it was reducing its workforce by approximately 130
employees. The Company finally admitted that its products were not selling at
the rate it had projected. Further, with the cuts to its research and
development department, the hopes to improve its new and still developing
technology were dim. Upon this news, the Company's shares, declined
significantly.
11. THE 5 5C0REC,ARD.
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
H
07
X61
simply rank this case as good. Since we do not rank this case overall as either
very good or excellent, we would be hesitant to recommend that our institutional clients take an active role in the case at
this stage.
Thomas J. Prima v. Pacific BioSciences of California, Inc., et al., Civil Action No. 11-06599 (N.D. Cal. — filed December 21, 2011 (Judge
Claudia Wilken)).
Veolia Environnement S.A.
January 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of Veolia Environnement S.A. ( "Veolia" or the
"Company ") securities during the time period of April 27, 2007 through
August 4, 2011 (the "Class Period "). The Complaint seeks remedies under the
Securities Exchange Act of 1934.
I. ALLEGATIONS OF THE COMPLAINT
Veolia is a French corporation with its principal place of business in Paris,
France. The Company purports to be the world leader in environmental
services. Veolia, together with its subsidiaries, provides customized solutions
to municipal and industrial customers in four segments: water, environmental
services, energy services, and passenger transportation. Since April 27, 2007,
Veolia acquired multiple groups worldwide and continued to report about its
increased revenue and internal growth of the Company. The Complaint alleges
that, during the Class Period, Veolia and its officers and directors (collectively
"Defendants ") misrepresented and failed to disclose the following adverse
facts, which were known or recklessly disregard by Defendants that: (1) Veolia
was overstating its financial results by engaging in improper accounting
practices; (2) the Company lacked adequate internal controls; (3) Veolia failed
to timely record an impairment charge for its Transport business in Morocco,
Environmental Services businesses in Egypt, and Marine Services business in the
United States and Southern Europe; and (4) the Company's revenue were
being hampered by the renewal of some of its major concession contracts. On
August 4, 2011, during its half year results, the Company finally revealed to
the public the foregoing issues. Upon the news, the price of Veolia ADSs
dropped $4.66 per share, or over 22 %.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
Jurisdiction /Venue
X
Overall Ranking
X
111. RECOMMENDATIONS
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
recommend that our institutional clients seek lead plaintiff status in this matter
if they have suffered significant losses. If you have any questions concerning this
recommendation, please do not hesitate to contact us.
C
O
3.5
E
I Barbara L. Mclay Trust v. Veolia Environnement S.A., et at, Civil Action No. 11-09526 (S.D.N.Y. — filed December 27, 2011 (Judge
Victor Marrero)).
of 11
m t.14%
. n�,--
a
i
j
i
I
3
PP-min '1 Fund
�' S^
w
i
!' # R Y. � � Y =�+M M�
4� � �� 3'y
�?6.
"iF i` � � �� `. -� "L' 1 •�
—}
� 3
of 11
m t.14%
. n�,--
a
i
j
i
I
3
PP-min '1 Fund
�' S^
. -1rj
ni 4,
!' # R Y. � � Y =�+M M�
4� � �� 3'y
�?6.
"iF i` � � �� `. -� "L' 1 •�
—}
� 3
J,y
3
. -1rj
f r. �
Conclusion
Introduction and Summary
We are pleased to present you with this monthly report regarding securities and corporate
governance litigation. Within this report, we provide a list of securities cases that have settled and a
list of all recently filed securities class actions. We will continue to inform you and highlight if the
Fund purchased stock during the Class Period in any filed class actions. Should you have any questions
at any time, please do not hesitate to contact us.
Shepherd, Finkelman, Miller & Shah, LLP
Market Analysis
U.S. stocks were lower this month as Greece continues to struggle with debt. Talks
continued over a new package that is required if Greece wishes to receive a bailout. Leaders of the
parties backing Greece's coalition government were hosting emergency talks over measures that
creditors are demanding in return for additional money. The decline in the U.S. markets can partly be
attributed to fear that a deal will not emerge from the recent discussions. The parties oppose cuts in
private sector pay, which are being demanded by the euro zone and the International Monetary Fund
( "IMF "). However, the parties need the backing of the euro zone and IMF to achieve a deal for the
bailout before Greece would enter into bankruptcy. The bailout also depends on Greece's progress
in talks with banking institutions and other private bondholders with respect to 100 billion euros in
Greek debt.
As a result of a historic low on U.S. Treasury yields, some investors are turning to dividend -
paying stocks or dividend - focused mutual funds. However, analysts have commented that dividend -
paying stocks do not always behave like other stocks. Companies that pay dividends are often larger,
established companies, meaning that they are not always viewed as having the same potential for
earnings as smaller companies. Often, when the overall market is up, dividend payments are often
lower.
In corporate news, Xstrata plc ( "Xstrata ") announced this month that it may enter into an $80
billion merger with Glencore Intl. ( "Glencore "). Xstrata is the world's fourth - largest miner.
Glencore is Xstrata's single largest shareholder. The two are expected to combine forces and look
for deals with other mining companies. It is expected that Xstrata would take a majority of seats on
the board, and would retain its current chairman, John Bond, as well as its chief executive, Mick Davis,
and its chief financial officer, Trevor Reid.
The following chart shows the changes in the major world financial indices during the last month.
January February
Markets 6 13 20 27 3 '/ Difference
Argentina (MERV)
2,770
2,753.52
2,867.59
2,831.58
? a .
1.47
Australia (AORD)
4,165
4,255.40
4,303.00
4,348.50
7 °
_.. _.
3.74
Austria (ATX)
N/A
1,923.64
2,019.73
2,126.66
2,71 .'
15.18
Belgium (BFX)
2,093
2,125.34
2,199.08
2,237.59
2,3v5a w52
10.09
Brazil (BVSP)
58,600
59,147.00
62,312.00
62,904.00
== :;5,21'.0=':
11.29
Canada (S &P TSX)
12,189
12,231.06
12,397.10
12,466.50
12,577,2 =
3.19
France (FCHI)
3,137
3,196.49
3,321.50
3,318.76
327,: -
9.26
Germany (GDAXI)
6,058
6,143.08
6,404.39
6,511.98
11.70
Hong Kong (HSI)
18,593
19,204.42
20,110.37
20,501.67"
11.64
India (BSESN)
15,868
16,154.62
16,739.01
17,233.98
g y
10.95
Israel (TA -100)
N/A
1,022.02
1,026.57
1,014.14
-
-0.77
Italy (FTSE)
5,650
5,636.60
5,728.50
5,733.50
4.45
Malaysia (KLSE)
1,514
1,523.07
1,522.66
1,520.90
1.63
Mexico (IPC)
36,804
36,548.56
37,384.21
37,184.71
3.50
Netherlands (AEX)
311
309.28
320.31
319.36
4.89
Singapore (STI)
2,716
2,791.54
2,849.38
2,916.26
7.45
Spain (IGBM)
828
846.03
858.44
869.37
7.63
Switzerland (SSMI)
6,014
5,996.30
6,122.70
6,033.50
2.32
Taiwan (TWII)
7,121
7,181.54
N/A
N/A
7.79
U.S. (Dow Jones)
12,360
12,422.06
12,720.48
12,660.46
_
4.06
U.S. (NASDAQ)
2,674
2,710.67
2,786.70
2,816.55
8.65
U.S. (S &P 500)
1,278
1,289.09
1,315.38
1,316.33
5.25
Upcoming Settlement Claim Deadlines
The following is a chart of upcoming settlement claim deadlines. We provide you with this
information first in this Report because the settlements reflected below may present an opportunity
for the Fund to increase its assets with little or no expense. Although institutional investors such as
the Fund should automatically receive notice of all securities class action settlements so that claims
can be timely submitted, statistics demonstrate that many shareholders fail to submit claims for
monies to which they are entitled. In a number of cases, it has been documented that the percentage
of eligible shareholders submitting claims is less than 50 %.
Although we will endeavor to separately notify you if we discover that you own securities for
which a claim can be submitted, since we do not have an historical record of all securities ever held
by the Fund, it is best if you provide the person responsible for overseeing the submission of claims
with a copy of this Report to ensure that any claims to which the Fund is entitled can be promptly
submitted. If, at any time, the Fund's staff or others require assistance in submitting a claim or
following up regarding the status of a claim, please contact us and we will be pleased to assist you.
COMPANY
SETTLEMENT
CLASS PERIOD
PROOF OF CLAIM
AMOUNT
DEADLINE
TeieNav, Inc.
$3.8M
5/13/10- 9/2/10
2/27/2012
Colonial Bancgroup, Inc.
$10.5M
4/18/07 - 8/6/09
2/29/2012
Cadence Design Systems, Inc.
$38M
4/23/08- 12/10/08
3/1/2012
Redline Communications Group,
$3.46M 12/6/06- 3/15/10 3/5/2012
Inc.
National City Corporation $168M 4/30/07- 4/21/08 3/9/2012
Nortel Networks Corporation $35.5M 10/24/00- 2/15/01 and /or 3/16/2012
4/24/03- 4/27/04
(Continued on page 4)
(Continued from page 3)
PROOF CLAIM
COMPANY
SETTLEMENT AMOUNT
CLASS PERIOD
DEADLINE
D
Acura Pharmaceuticals
$1.5M
2/21/06- 4/22/10
3/19/2012
9/18/06
Westland Development Company,
$3.77M
(those holding shares
4/2/2012
Inc.
as of close of
business)
Focus Media Holding Limited (2007)
$2M
9/27/07- 11/19/07
4/5/2012
Beckman Coulter, Inc.
$5M
7/31/09 - 7/22/10
4/12/2012
Fidelity Ultra -Short Bond Fund
$7.5M
6/6/05- 6/5/08
4/27/2012
Apollo Group, Inc.
$145M
2/27/04- 9/14/04
5/2/2012
Lehman Brothers Holdings, Inc.
$90M
6/12/07- 9/15/08
5/17/2012
(D &O Settlement)
Lehman Brothers Holdings, Inc.
$426.2M
See Notice
5/17/2012
(Underwriter Settlement)
Merit Securities Corp.
$7.5M
2/7/00- 5j13104
6J4J2012
(Dynex Capital, Inc.)
Recommendation
We have identified the following stocks in your portfolios for which you should file a proof of
claim form: NONE IDENTIFIED.
Upcoming Lead Plaintiff Deadlines
We continue to evaluate whether it is appropriate to recommend that the Fund participate in
any filed securities class actions (to the extent that the Fund purchased any of the securities at issue
during the proposed class periods or during any alternative class periods that our investigation and
evaluation determines could be appropriate) or any corporate governance litigation. For your review
and information, a chart of the currently pending securities class actions that we are evaluating
appears below:
COMPANY
Camelot Information Systems, Inc.
Chemed Corporation
MetLife, Inc.
Career Education Corporation
CPI Corporation
Netflix, Inc.
Health Management Associates, Inc.
TranS1, Inc.
Walter Energy, Inc.
K -Sea Transportation
Columbia Laboratories, Inc.
Hecla Mining Company
K12, Inc.
An analysis of each of the above cases, as well as our recommendations, appears in the case
specific summaries that appear at Exhibit "A." Based upon our review, it does not appear that the
Fund purchased any of the above - referenced stocks during the respective class periods.
Conclusion
If you have any questions or would like to discuss any of these matters, please do not hesitate
to contact us.
PERCENTAGE
LEAD PLAINTIFF
TICKER
DECLINE
DEADLINE
CIS
26% on 8/18/11
3/5/12
CHE
11%
3/12/12
MET
N/A
3/12/12
CECO
Almost 50% on 11/2/11
3/13/12
CPY
63% as of 12/22/11
3/13/12
32% on 10/27/11 and 73%
NFLX
3/13/12
from Class Period high
HMA
N/A
3/26/12
TSON
40% on 10/18/11
3/26/12
WLT
N/A
3/26/12
KSP
33.5% on 1/28/10
3/27/12
CBRX
54%
4/2/12
HL
21%
4/2/12
LRN
34%
4/2/12
An analysis of each of the above cases, as well as our recommendations, appears in the case
specific summaries that appear at Exhibit "A." Based upon our review, it does not appear that the
Fund purchased any of the above - referenced stocks during the respective class periods.
Conclusion
If you have any questions or would like to discuss any of these matters, please do not hesitate
to contact us.
Securities ands Corporate. Governance, Litigation Report
C(Inftdentia&—Sub ect to Attorney- Client Privilege
Updated Through February 15, 20'1,2
r
�Il'- .� l4 -
I� {hi
r.
yLL
I
M1I
_ h
ti t
Y
Y
s
� vlr I
i
R
a1;
i k � 9
f V N
-
Camelot Information Systems, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of Camelot Information Systems, Inc.
( "Camelot" or the "Company ") American Depositary Shares ( "ADSs ") in or
traceable to the Company's initial public offering ( "IPO ") on or about July 21,
2010 and Secondary Offering ( "Secondary Offering ") on or about December
10, 2010, as well as purchasers of the Company's ADSs between July 21, 2010
through August 17, 2011 (the "Class Period "). The Complaint seeks remedies
under the Securities Exchange Act of 1933 and 1934.1
I. ALLEGATIONS OF THE COMPLAINT
Camelot is incorporated in the British Virgin Islands, with its principal place of
business in the People's Republic of China. The Company, through its
subsidiaries, provides enterprise application services and financial industry
information technology (IT) services. On or about July 21, 2010, Camelot
announced the pricing of its IPO and gained net proceeds of $89.8 million.
Camelot then announced its Secondary Offering on or about December 9,
2010, selling ADSs for net proceeds of $19.9 million. Further, during the Class
Period, Camelot and its officers and directors (collectively "Defendants ")
continued to make positive remarks, claiming that the Company had
competitive advantages with respect to its highly trained personnel that would
permit it to continue to take advantage of China's growing economy. However,
on August 15, 2011, Seeking Alpha published a report questioning key
components of Camelot's business. Upon this news, Camelot's stock dropped.
Subsequently on or about August 18, 2011, the Company released its second
quarter 2011 financial results, with lower- than - expected guidance. Upon this
news, Camelot's ADSs dropped once again, with a one -day decline of 26 %. The
Complaint alleges that, during the Class Period, Defendants concealed from the
public that: (1) the Company's IT professionals were not a competitive
advantage to the Company; (2) the Company was suffering from undisclosed
attrition of employees, which had a negative impact on the Company's ability
to attract new customers; (3) the Company did not have a large number of
highly trained professionals, as it had represented; and (4) the Company's
contract with IBM was not as solid as represented. The Complaint therefore
alleges that, because of Defendants' false statements, Camelot's stock traded
at inflated levels during the Class Period. When the truth was revealed, the
Company's stock declined 76% from its Class Period high, damaging investors.
II. THE SFAS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causationlinjury
X
urisdictionlVenue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
recommend that our institutional clients seek lead plaintiff status in this matter
if they have suffered significant losses. If you have any questions concerning this
recommendation, please do not hesitate to contact us.
I Michael Fox v. Camelot Information System, Inc., et al., Civil Action No. 12 -00086 (S.D.N.Y. — filed January 5, 2012 (Judge Paul G.
Gardephe)).
Chemed Corporation
February 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of Ohio on behalf of a class
consisting of all purchasers of Chemed Corporation ( "Chemed" or the
"Company ") securities during the time period of February 15, 2010 through
November 16, 2011 (the "Class Period "). The Complaint seeks remedies
under the Securities Exchange Act of 1934.1
I. ALLEGATIONS OF THE COMPLAINT
Chemed is a Delaware corporation, with its principal place of business in
Cincinnati, Ohio. The Company, through its subsidiaries, provides hospice
care, and repair and cleaning services, in the United States. Chemed operates
in two segments: Vitas and Roto- Rooter. While the Vitas segment offers
hospice services to terminally ill patients, the Roto- Rooter segment provides
repair and cleaning services to residential and commercial customers. The
Complaint concerns the Vitas segment, which accounts for more than 70% of
the Company's revenue. Ninety per of the revenues generated from this
segment consisted of payments from Medicare and Medicaid programs.
Throughout the Class Period, Chemed and its officers (collectively
"Defendants ") made positive remarks regarding the Company's revenue
growth. However, the Complaint alleges that, during that time, Defendants
were engaging in a fraudulent scheme to: (1) enroll and keep patients in
hospice, even though those individuals were not eligible for hospice; and (2)
fraudulently obtain payments for hospice services from the federal government.
On or about July 18, 2011, the Office of Inspector General published a report
regarding concerns raised about Medicare hospice care for nursing facility
residents, including inappropriate enrollment and compensation. The
Defendants were indifferent about this report and reassured Company
investors that Chemed was in a comfortable position. On or about November
16, 2011, a Bloomberg article was disclosed, claiming that a former VITAS
manger accused Chemed of defrauding the federal government by conspiring
with health insurers to enroll Medicare patients who were not dying into
hospice. In response, the Company's stock fell $6.87 per share, or I I %, to
close at $50.56 per share on November 16, 2011.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
I11. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter since based on the cat- ories in the SFMS scorecard we
C
0
3.5
E
3
I
25 =
2
1.5 —
0.5 '- — - -- - —.
as
i
Date 9130/2010 71182011
g
simply rank this case as good. Since we do not rank this case overall as either very good or excellent, we would be
hesitant to recommend that our institutional clients take an active role in the case at this stage.
I Greater Pennsylvania Carpenters Pension Fund v. Chemed Corp., et al., Civil Action No. 12 -00028 (S.D. Ohio — filed January 12, 2012 (Judge
Michael R. Barrett)).
MetLife, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Southern District of New York on behalf of a
class consisting of all purchasers of Metlife, Inc. ( "MetLife" or the "Company ")
securities during the time period of February 2, 2010 through October 6, 2011
(the "Class Period "). The Complaint seeks remedies under the Securities
Exchange Act of 1934.'
1. ALLEGATIONS OF THE COMPLAINT
MetLife is a Delaware corporation, with its principal place of business in New
York, New York. The Company, through its subsidiaries, provides insurance,
annuities, and employee benefit programs throughout the world. The Class
Period begins on February 2, 2010, when the Company issued a press release
announcing its fourth quarter 2009 and fiscal year 2009 financial results.
MetLife boasted about its incredible earnings due to its strong business growth
and equity market improvements. However, on July 5, 2011, Reuters reported
that the New York Attorney General issued subpoenas to several insurance
companies, including MetLife, demanding information on their procedures for
identifying beneficiaries of life insurance policies and compliance with relevant
state escheatment laws. Regardless, the Company continued to make positive
remarks. The Complaint alleges that, during the Class Period, MetLife and its
officers and directors (collectively "Defendants) made statements that were
materially false and misleading regarding its current and future financial
condition and its potential liability to policyholders, their beneficiaries, or
relevant state authorities, for millions of dollars in benefits that should have
been paid out to policyholders or escheated to the states. On August 5, 2011,
the Company finally disclosed to the public that the regulatory investigations
into its death benefits practices had expanded and that it might be subject to
additional escheatment to the states and that the costs could be substantial.
Subsequently, the Company's stock began to decline; between October 6 and
October 7, 2011, the Company's stock dropped from $30.69 to $28.80.
11. THE S -MS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
C
2160
140
120
100
80
20
3 k •s' t : 9 '$ i
0 � 2
i
Date 9/172010 7/5/2011
i
recommend that our institutional clients seek lead plaintiff status in this matter if they have suffered significant losses. If
you have any questions concerning this recommendation, please do not hesitate to contact us.
I City of Westland Police and Fire Retirement System v. MetLife, Inc., et al., Civil Action No. 12 -00256 (S.D.N.Y. —filed January 12, 2012 (Judge
Lewis A. Kaplan)).
Career Education Corporation
February 15, 2012 A securities class action was filed in the United
States District Court for the Northern District of Illinois on behalf of a class
consisting of all purchasers of Career Education Corporation ( "CECO" or the
"Company ") securities during the time period of January I, 2009 through
November I, 2011 (the "Class Period "). The Complaint seeks remedies under
the Securities Exchange Act of 1934.1
I. ALLEGATIONS OF THE COMPLAINT
CECO is a Connecticut corporation with its principal place of business in
Schaumburg, Illinois. The Company operates colleges, schools, and universities
that provide education services in career - oriented disciplines throughout the
United States. The Complaint alleges that, during the Class Period, CECO and
its officers and directors (collectively "Defendants "), misrepresented and /or
failed to disclose that: (a) CECO was materially overstating its retention and
employment placement rates following graduations ( "Placement Rates "); (b)
CECO lacked adequate internal controls; (c) the Company failed to disclose
that its Placement Rates were achieved through an improper course of
conduct and a manipulative use of the term "employment'; and (d) these
Placement Rates were being reported in violation of CECO's accreditation
status, which is in violation of its Title IV funding requirements. On or about
May 17, 2011, CECO was subpoenaed by the Attorney General of the State of
New York requesting documents concerning student employment outcomes
and Placement Rates. Two days later, the news about the subpoena was
mentioned in the New York Times. Subsequent to this revelation, the CECO
common stock declined, damaging investors.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
urisdiction/Venue
X
Overall Ranking
X
181. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either
N
C
O
25
E I
20
i
I
10
5 — _-
Date 3/25/2010 8/12/2011
i
i
very good or excellent, we would be hesitant to recommend that our institutional clients take an active role in the case at
this stage.
I Thurman Ross v. Career Education Corporation, et at, Civil Action No. 12 -00276 (N.D. III. — filed January 13, 2012 (Judge Matthew F. Kennelly)).
CPI, Corporation
February 15, 2012 A securities class action was filed in the United
States District Court for the Eastern District of Missouri on behalf of a class
consisting of all purchasers of CPI Corporation ( "CPI" or the "Company ")
securities during the time period of April 20, 2010 through December 21, 2011
(the "Class Period "). The Complaint seeks remedies under the Securities
Exchange Act of 1934.'
1. ALLEGATIONS OF THE COMPLAINT
CPI is a Delaware corporation with its principal place of business in St. Louis,
Missouri. The Company, through its subsidiaries, engages in the manufacture
and sale of professional portrait photography of young children, individuals, and
families. From the beginning of the Class Period, CPI and its officers and
directors (collectively "Defendants ") boasted about its significant advancements
on customer acquisitions and retention programs. Defendants continued to
make positive remarks regarding the Company's prospects, leading the public
to invest in its stock. On one occasion, CPI experienced a one -day increase of
more than 20% on high volume. However, the Complaint alleges that, during
the Class Period, Defendants concealed from the investing public material facts.
Specifically, the Complaint alleges that Defendants did not disclose that: (a)
CPI's business was performing much worse than Defendants acknowledged; (b)
CPI's initiatives to grow the business were not working at the levels
represented by Defendants; (c) CPI's stock was not a good investment and the
Company's stock buy -back was intended solely to project false confidence in
the Company's prospects; and (d) CPI's cash flows would continue to
deteriorate due to poor revenue growth such that CPI's capital structure was
not as strong as Defendants represented. On or about December 22, 2011,
the Company announced its financial results from its third fiscal quarter. This
announcement was a disappointment, as it reported a net loss of $7.25
million. Upon this news, CPI's stock precipitously declined - a one -day decline
of nearly 63 %.
Il. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
Jurisdiction /Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either very good or excellent, we would be
hesitant to recommend that our institutional clients take an active role in the case at this stage.
I IBEW Local 98 Pension fund v. CPI Corporation, et al., Civil Action No. 12 -00075 (E.D. Mo. — filed January 13, 2012 (Judge Audrey G. Fleissig)).
Netflix, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Northern District of California on behalf of a
class consisting of all purchasers of Netflix, Inc. ( "Netflix" or the "Company ")
securities during the time period of December 20, 2010 through October 24,
2011 (the "Class Period "). The Complaint seeks remedies under the Securities
Exchange Act of 1934.'
I. ALLEGATIONS OF THE COMPLAINT
Netflix is a Delaware corporation, with its principal place of business in Los
Gatos, California. The Company provides subscription -based internet services
for television shows and movies internationally. On December 20, 2010, in
response to an article posted in Seeking Alpha regarding several concerns about
the Company, Netflix and its officers (collectively "Defendants ") reassured its
position to the public. Following this communication, the Company's stock
jumped 4% in one day. Netflix continued to boast about their business
practices and contracts with content providers. However, the Complaint
alleges that Defendants concealed negative trends about Company business.
Specifically, the Complaint alleges that Defendants failed to mention to the
public that: (1) Netflix had short -term contracts with content providers and
Defendants were aware that Netflix faced the choice of renegotiating the
contracts in 2011 at much higher rates, or not renewing them at all; (2)
content providers were already demanding much higher license fees, which
would dramatically alter the Company's business; (3) Netflix's pricing would
have to dramatically increase to maintain profit margins; and (4) Netflix was
not on track to achieve the earnings forecasts made by and for the Company
for 2011. The Complaint further alleges that while Netflix stock was trading at
an artificially inflated price due to its concealment of material facts, Company
insiders were selling shares of their own Netflix stock for proceeds of
approximately $90.2 million. On October 24, 2011, Netflix issued its third
quarter 2011 shareholder letter, in which it reported a net loss of 810,000
U.S. subscribers, translating into a cumulative loss of $5.5 million subscribers.
Upon this disclosure, the Company's stock dropped significantly, from
$118.84 per share on October 24, 2011 to $80.86 per share on October 27,
2011, on volume of 76 million shares over three days.
II. THE S MS SC'ORSCARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
Jurisdiction /Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we simply rank this case as good. Since we do
not rank this case overall as either very good or excellent, we would be hesitant to recommend that our institutional
clients take an active role in the case at this stage.
I City of Royal Oak Retirement System v. Netflix, Inc., et al., Civil Action No. 12 -0225 (N.D. Cal. — filed January 13, 2012 (Judge Samuel Conti)).
Health Management Associates, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Middle District of Florida on behalf of a class
consisting of all purchasers of Health Management Associates, Inc. ( "HMA" or
the "Company ") securities during the time period of July 27, 2009 through
January 9, 2012 (the "Class Period "). The Complaint seeks remedies under the
Securities Exchange Act of 1934.1
I. ALLEGATIONS OF THE COMPLAINT
HMA is a Delaware corporation, with its principal place of business in Naples,
Florida. The Company, through its subsidiaries, operates general acute care
hospitals and other healthcare facilities throughout the United States. Since July
27, 2009, HMA and its officers (collectively "Defendants ") continued to tout
about the Company's financial performance and growth. Defendants
announced that HMA's net revenues, admissions, and emergency room visits
were increasing. The Complaint alleges that these positive remarks were
materially false and misled investors. On August 3, 2011, Defendants
announced that HMA had received a subpoena from the U.S. Department of
Health and Human Services, Office of Inspector General, requesting
information on physical referrals and ownerships and management at whole -
hospital physician joint ventures. On this news, the Company's shares dropped.
Further, on January 9, 2012, an analyst from CRT Capital Group issued a
scalding report on the Company, claiming that HMA's former director filed a
Whistleblower Act against the Company. The former director was a 30 -year
veteran of the FBI, Healthcare Fraud Unit. Upon this news, HMA's stock
further dropped, damaging investors.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
Jurisdiction /Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either
0 80
E
70
I IL
60 -
50 -
40
30
20 - -- - -
Date 71612010 811U2011
very good or excellent, we would be hesitant to recommend that our institutional clients take an active role in the case at
this stage.
I Milen Sapssov v. Health Management Associates, Inc., et al., Civil Action No. 12 -00046 (M.D. Fla. — filed January 26, 2012 (Judge John E.
TranS1, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Eastern District of North Carolina on behalf of a
class consisting of all purchasers of TranS 1, Inc. ( "TranS I " or the "Company ")
securities during the time period of February 21, 2008 through October 17,
2011 (the "Class Period "). The Complaint seeks remedies under the Securities
Exchange Act of 1934.1
I. ALLEGATIONS OF THE COMPLAINT
Trans I is a Delaware corporation, with its principal place of business in
Wilmington, North Carolina. The Company, a medical device company,
designs, develops, and markets products that implement its proprietary surgical
approach to treat degenerative conditions of the spine. Throughout the Class
Period, the Company and its officers (collectively "Defendants ") consistently
vouched that they gave accurate information and disclosed any material
changes to the Company's internal control over financial reporting. However,
the Complaint alleges that, during this time, Defendants withheld adverse facts
from investors, including that: (1) the Company was not in compliance with the
federal healthcare fraud and false claim statutes; (2) TranS I engaged in
improper reimbursement practices; and (3) TranS I lacked adequate internal and
financial controls. On October 17, 2011 after the market closed, Defendants
filed a form with the SEC disclosing that the Company had received a subpoena
issued by the Department of Health and Human Services, Office of Inspector
General, seeking documents for the period 2008 through 2011. Defendants
claimed that allegations may have been made by a disgruntled former
employee, or regarding reimbursement communications, but nothing too
serious. Regardless, TranS I's securities precipitously declined more than 40 %,
to close at just $1.86 per share on October 18, 2011.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
191. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either
very good or excellent, we would be hesitant to recommend that our
institutional clients take an active role in the case at this stage.
I Joel Coplin v. TronS 1, Inc., et A, Civil Action No. 12 -00023 (E.D.N.C. — filed January 24, 2012 (Judge James C. Fox)).
Walter Energy, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Northern District of Alabama on behalf of a class
consisting of all purchasers of Walter Energy, Inc. ( "Walter" or the
"Company ") securities during the time period of April 20, 2011 through
September 21, 2011 (the "Class Period "). The Complaint seeks remedies
under the Securities Exchange Act of 1934.1
I. ALLEGATIONS OF THE COMPLAINT
Walter is an Alabama corporation, with its principal place of business in
Birmingham, Alabama. The Company produces and exports metallurgical coal
for the global steel industry, but primarily in the United States. On April I,
2011, Walter acquired all outstanding common shares of Western Coal. Upon
these acquisitions, Walter began managing its business operations
geographic_ ally through the United States, Canada, and the U.K. Since then, the
Company and its officers (collectively "Defendants ") continued to make
positive remarks, leaving investors with only one conclusion: that the
Company's outlook was very positive. However, the Complaint alleges that,
during the Class Period, Defendants failed to disclose and /or concealed from
investors that: (1) the Company was experiencing so- called "squeeze" events
in Alabama and lower coal transportation rates in Canada that significantly
reduced its coal production; (2) the Company's commitment to ship more than
700,000 tons of coal in the second quarter, at first quarter sales prices, would
result in a material adverse effect on the Company's average sales prices and
operating results during the second quarter; and (3) Walter was experiencing a
significant decline in its margins and profitability. On August 3, 2011, the
Company issued a press release disclosing operating results for its 2011 fiscal
second quarter. The Company's net income was significantly less than Wall
Street estimates. Upon this news, the Company's stock declined
approximately 30 %. Subsequently, on September 21, 2011, Walter issued
another report informing investors regarding its attempt to enhance its
historical statistical disclosure and its revisions to its 2011 second half sales
expectations. In response, the Company's shares declined once more.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
III. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good Since we do not rank this case overall as either
very good or excellent, we would be hesitant to recommend that our institutional clients take an active role in the case at
this stage.
I Peter]. Rush v. Walter Energy, Inc., et al., Civil Action No. 12 -00281 (N.D.AI. —filed January 26, 2012 (Judge Virginia Emerson Hopkins)).
K -Sea Transportation Partners, L.P.
February 15, 2012 A securities class action was filed in the United
States District Court for the District of New Jersey on behalf of a class
consisting of all purchasers of K -Sea Transportation Partners L.P. ( "K -Sea" or
the "Company ") securities during the time period of January 30, 2009 through
January 27, 2010 (the "Class Period "). The Complaint seeks remedies under
the Securities Exchange Act of 1934.1
1. ALLEGATIONS OF THE COMPLAINT
K -Sea is a Delaware limited partnership, with its principal place of business in
East Brunswick, New Jersey. The Company provides marine transportation for
refined petroleum products to locations throughout the United States. The
Complaint alleges that, throughout the Class Period, K -Sea failed to disclose,
among other things, that: (a) it was allowing its customers to renew contracts
on very short terms in order to sustain its utilization rates; (b) the lack of a
lease renewal option on its Norfolk, VA, water treatment facility would require
the Company to overpay for the purchase of the facility by $13M in order to
keep its oily water disposal business; and (c) K -Sea's debt situation was worse
than reported, so that a planned equity offering would be insufficient to
protect the Company from breaching its financial covenants. On January 28,
2010, before trading commenced, the Company revealed that K -Sea had
incurred a $17M charge in connection with overpaying for its water treatment
facility due to lack of lease renewal options; the Company's vessel utilization
was the lowest in a decade; and K -Sea's dividend was suspended. As a result of
these revelations, K -Sea units plummeted $4.99 or 33.5 %, to close at $9.89 on
January 28, 2010, on exceptionally heavy trading volume.
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
III. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and Class will prevail in this case, based upon
the alleged violations of the Exchange Act, we do not recommend that our institutional clients seek lead plaintiff status in
this matter, since, based on the categories in the SFMS scorecard, we simply rank this case as good. Since we do not rank
this case overall as either very good or excellent, we would be hesitant to recommend that our institutional clients take
an active role in the case at this stage.
Rescue Mission o(EI Paso, Inc. v. Nicola, et al., Civil Action No. 12 -00509 (D.N.J.) — filed January 26, 2012 (Judge William H. Walls)).
Columbia Laboratories, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the District of New Jersey on behalf of a class
consisting of all purchasers of Columbia Laboratories, Inc. ( "Columbia" or the
"Company ") securities during the time period of December 6, 2010 through
January 20, 2012 (the "Class Period "). The Complaint seeks remedies under
the Securities Exchange Act of 1934.
I. ALLEGATIONS OF THE COMPLAINT
Columbia is an international pharmaceutical company that develops and
markets women's health care and endocrinology products. The Complaint
alleges that, throughout the Class Period, Columbia conditioned investors to
believe that the Company's PROCHIEVE progesterone gel 8% ( "PROCHIEVE
8 % "), a gel intended to prevent pre -term births in women with short cervices,
would receive Food and Drug Administration ( "FDA ") approval through a host
of materially false and misleading statements regarding the safety and efficacy of
the product, as well as reportedly positive results from PROCHIEVE's clinical
trials. On January 17, 2012, the FDA published information ahead of a meeting
by the Advisory Committee for Reproductive Health Drugs of the FDA
scheduled for January 20, 2012. The FDA documents revealed that
PROCHIEVE 8% did "not support the efficacy of progesterone gel compared
with placebo in reducing the risk of preterm births before 33 completed weeks
of gestation among women with a short cervical strength." Moreover, the
safety of the gel was similar to a placebo as "[n]o maternal deaths occurred
and the rates of fetal, neonatal and infant deaths were similar in both
treatment arms."
11. THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
III. RECOMMENDATIONS
We believe that, during the Class Period, it is likely that we can prove
violations of the Exchange Act and, since we rank this as a very good case, we
recommend that our institutional clients seek lead plaintiff status in this matter
if they have suffered significant losses. If you have any questions concerning this
recommendation, please do not hesitate to contact us.
I Floyd Wright v. Columbia Laboratories, Inc., et al., Civil Action No. 12 -00614 (D.N.J. — filed February I, 2012 Qudge Faith S. Hochberg)).
Hecla Mining Company
February 15, 2012 A securities class action was filed in the United
States District Court for the District of Idaho on behalf of a class consisting of
all purchasers of Hecla Mining Company ( "Hecla" or the "Company ")
securities during the time period of October 26, 2010 through January 11,
2012 (the "Class Period "). The Complaint seeks remedies under the Securities
Exchange Act of 1934. '
1. ALLEGATIONS OF THE COMPLAINT
Hecla is engaged in discovering, acquiring, developing, producing and marketing
silver, gold, lead and zinc and is organized into two segments: the Greens
Creek and Lucky Friday units. The Company is a wholly -owned subsidiary of
Hecla Alaska LLC. The Complaint alleges that, throughout the Class Period,
the Company and its officers (collectively "Defendants ") issued a series of
materially false statements regarding Hecla's business and financial results. Due
to a series of accidents at Hecla's Lucky Friday mine during 2011, the Mine
Safety and Health Administration ( "MSHA ") engaged in a close inspection of
the mine and, in early December, issued an accident report accusing Hecla of
safety failures that led to a miner's death in April of 2011. Thereafter, on
January 5, 2012, MSHA issued a closure order for the Lucky Friday mine for
the removal of built -up material in the shaft that had been leaking from a pipe
into the shaft for a number of years. On January 11, 2012, Hecla announced
the mine would be closed for up to a year based upon MSHA's order. As a
result of the closure, Hecla reduced its estimated silver production for 2012
from more than 9M ounces to around 7M ounces. The Complaint alleges that
Defendants knew, but concealed, the following adverse facts, among others: (a)
Hecla was not in compliance with safety regulations at its Lucky Friday mine;
(b) following the December 2011 closure, Hecla would be unable to
reestablish mining operations at the mine by February of 2012, as it had
previously represented; (c) the Company improperly accounted for its
contingent liabilities, in violation of Generally Accepted Accounting Principles;
and (d) based on the foregoing, Defendants lacked a reasonable basis for their
positive statements regarding Hecla's operations and its expected silver
production.
IL THE SFMS SCORECARD
Category
1
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
Jurisdiction /Venue
X
Overall Ranking
X
Ill. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either very good or excellent, we would be
hesitant to recommend that our institutional clients take an active role in the case at this stage.
1 Bricklayers of Western Pennsylvania Pension Plan Y. Hecla Mining Company, et al., Civil Action No. 12 -00042 (D. Id. — filed February 1, 2012
(Judge B. Lynn Winmill)).
K12, Inc.
February 15, 2012 A securities class action was filed in the United
States District Court for the Eastern District of Virginia on behalf of a class
consisting of all purchasers of K12 Inc. ( "KIT' or the "Company ") securities
during the time period of September 9, 2009 through December 16, 2011 (the
"Class Period "). The Complaint seeks remedies under the Securities Exchange
Act of 1934.1
1. ALLEGATIONS OF THE COMPLAINT
K12 is a Delaware corporation with its headquarters in Herndon, Virginia. The
Company offers proprietary curriculum, software systems and educational
services designed to facilitate individualized learning for students primarily in
kindergarten through 12th grade. The Complaint alleges that on December
12, 2011, The New York Times released an article, entitled "Profits and
Questions at Online Charter Schools," which chronicled a myriad of improper
practices at K12's main virtual charter schools, including: (i) high - pressure sales
strategies aimed strictly at enrolling students, irrespective of the students'
suitability for online education; (ii) administrative pressure to pass enrolled
students, regardless of academic performance; and (iii) overall failure of K12
students to maintain grade -level performance in math and reading. The
Complaint alleges that the true facts, known by Defendants but concealed from
the investing public during the Class Period, were that the Company: (i)
misstated and failed to disclose it had engaged in improper and deceptive
recruiting and sales strategies; (ii) misstated and failed to disclose the
administrative pressure from upper management levels to pass students
despite poor (or nonexistent) academic performance, so as to maintain high
enrollment levels and, in turn, receive continued government payments; and
(iii) failed to maintain overall math and reading performance levels of its
students equal to statewide, grade -level performance.
11. THE SFMS SCORECARD
Category
I
Poor
2
Fair
3
Good
4
Very Good
5
Excellent
Factual Allegations
X
Legal Claims
X
Loss Causation /Injury
X
jurisdiction/Venue
X
Overall Ranking
X
111. RECOMMENDATIONS
Although we believe that there is a reasonable possibility that the Plaintiff and
Class will prevail in this case, based upon the alleged violations of the Exchange
Act, we do not recommend that our institutional clients seek lead plaintiff
status in this matter, since, based on the categories in the SFMS scorecard, we
simply rank this case as good. Since we do not rank this case overall as either
very good or excellent, we would be hesitant to recommend that our
institutional clients take an active role in the case at this stage.
I Hoppaugh v. K12 Inc., et al., Civil Action No. 12 -00103 (E.D. Va. —filed January 30, 2012 (Judge Claude M. Hilton)).
Robert A. Sugarman*
Howard S. Susskind
Kenneth R. Harrison, Sr.
D. Marcus Braswell, Jr.
Pedro A. Herrero
Noah Scott Warman
Ivelisse Berio LeBeau
*Board Certified Labor
& Employment Lawyer
To
SUGARMAN & SUSSKIND
PROFESSIONAL ASSOCIATION
ATTORNEYS AT LAW
Status Update on IRS Determinations
Board of Trustees
Date: February 10, 2012
F��t- It
100 Miracle Mile
Suite 300
Coral Gables, Florida 33134
(305) 529-2801
Broward (954) 327 -2878
Toll Free 1 -800- 329 -2122
Facsimile (305 ) 447-8115
We write to inform you of the status of your application for a favorable
determination letter from the Internal Revenue Service.
The IRS has acknowledged the timely filing of your application and has
requested certain amendments to the compliance language in your plan. We are
working with the IRS agent to which your plan has been assigned in order to come to a
final agreement on the language. Once the IRS has completed its review and approved
the language, the plan will be protected against any future IRS audits and /or penalties
related to any current qualification requirements.
We have been in contact with several IRS agents who have informed us that the
large number of first -time filings by governmental plans has created a significant
backlog in the processing of applications. According to the information that we have
received, the IRS expects to clear the backlog within the next 12 -18 months.
Since your determination request was timely filed, the backlog will not have any
impact on the qualified status of your plan.
We will continue to update you as we receive information from the IRS.
PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
DISBURSEMENTS
March 12, 2012
• AGINCOURT
$
3,334.43
(Investment Management Fee for QE 12/31/11)
• DANA INVESTMENT ADVISORS — Acct. #715cb
$
3,574.94
(Investment Management Fee for the QE 12/31/11)
• DANA INVESTMENT ADVISORS —Acct. #715cc
$
15,415.26
(Investment Management Fee for the QE 12/31/11)
• GARCIA, HAMILTON & ASSOCIATES
$
3,534.50
(Investment Management Fee for the QE 12/31/11)
• RBC GLOBAL ASSET MANAGEMENT
$
4,295.97
(Investment Management Fee for QE 12/31/11)
• REGIONS MORGAN KEEGAN TRUST
$
2,566.83
(Custodial Fees for December 2011 & January 2012)
• RESOURCE CENTERS
$
3,266.73
(Administrator Fees for February & March 2012)
• SUGARMAN & SUSSKIND
$
2,522.25
(Legal Fees for January 2012)
Total Disbursements for Approval $ 38,510.91
(Trustee)
(Trustee)
C,:11'1 "Cll, 1�'lANAG1i;1'l3iN (', L4.C'
Date: 1/31/2012
Invoice: Ms. Margaret M. Adcock
City of Palm Beach Gardens Firefighters' Retirement
System
The Pension Resource Center, Inc.
4360 Northlake Blvd., Ste. 206
Palm Beach Gardens, FL 33410
Re: City of Palm Beach Garden Firefighters' Retirem
Account #: 3350000104
Per our Investment Management Agreement, the fees to Agincourt Capital Management in payment for
investment services rendered from 10/ 1 /2011 - 12/31/2011:
Monthly Market Values:
10/31/2011 $5,331,677.89
11/30/2011 $5,301,550.30
12/31/2011 $5,372,028.93
Average Market Value: $5,335,085.71
$5,335,085.71 X 0.2500% _ $13,337.71
Tolal Annual Fee:
Total Quarterly Fee:
* Agincourt Capital Management, LLC Federal Tax ID: 54- 1947440
CC: Joe Bogdahn
$13,337.71
$3,334.43 fi
Payment Due Within 30 Days to: Agincourt Capital Managment, LLC
Wire/ACH. Branch Banking Trust (BB T) or Agincourt Capital Management, LLC
901 East Byrd Street ATTN. Laura Haynie
Richmond, VA 23219 200 South 10th Street, Suite 800
ABA# 051404260 Richmond, VA 23219
Account# 5131720132
FBO: Agincourt Capital Management, LLC
Please let us know if you would like a copy of the latest SEC Form AD or our Code of Ethics
AGINCOUWr CANTA1. NiANAGP'.M :NT,11C
sot <tr r „rFj Snrri' son • Rr� 23219
`Investment
. wtt D A a Advisors
January 18, 2012
Invoice No: 21726
Margie Adcock
Administrator
Pension Resource Centers
4360 Northlake Blvd
Suite 206
Palm Beach Gardens, FL 33410 United States
STATEMENT OF MANAGEMENT FEES
Account: 715cb City of Palm Beach Gardens Firefighters' Retirement System - SC
Custodian Account #: 3350000113
Billing Period: FROM 10/01/2011 TO 12/31/2011
Account #: 715cb - City of Palm Beach Gardens Firefighters' Retirement System - SC
Portfolio Value ............................ ............................... $2,242,107
Combined Portfolio Value for 715c:......... $11,910,134
For the Accounts: City of Palm Beach Gardens Firefighters' Retirement
System - LC (715cc)
City of Palm Beach Gardens Firefighters' Retirement
System - SC (715cb)
FEE CALCULATION
Amount Based X.2f % of Rate Amount Due
Rate Applied: For Assets Under Management on Rate Applied Family Period fincl. a ustm.)
0.7500% On the first: 3,000,000 22,500.00
0.6000% On the remainder: 8,910,134 53,460.80
Total Fee: 75,960.80 18.83% 25.00% 3,574.9
Amount Due, PAYABLE UPON RECEIPT: ...................................... $3,574.94
Please sign & forward as necessary to custodian for payment
Signature Dated _
Please feel free to contact us if you have any questions or would like further information:
(262) 782 -3631
Dana Investment Advisors, Inc.
Attn: Jennifer
P.O. Box 1067
Brookfield, WI 53008 -1067
a Investment
L�Al V.A Advisors
January 18, 2012
Invoice No: 21727
Margie Adcock
Administrator
Pension Resource Centers
4360 Northlake Blvd
Suite 206
Palm Beach Gardens, FL 33410 United States
STATEMENT OF MANAGEMENT FEES
Account: 715cc City of Palm Beach Gardens Firefighters' Retirement System - LC
Custodian Account #: 3350000088
Billing Period: FROM 10/01/2011 TO 12/31/2011
Account #: 715cc - City of Palm Beach Gardens Firefighters' Retirement System - LC
Portfolio Value ............................ ............................... $9,668,027
Combined Portfolio Value for 715c::......... $11,910,134
For the Accounts: City of Palm Beach Gardens Firefighters' Retirement
System - l -C (715cc)
City of Palm Beach Gardens Firefighters' Retirement
System - SC (715cb)
FEE CALCULATION
Rate Applied:
0.7500%
0.6000%
For Assets Under Management
On the first: 3,000,000
On the remainder: 8,910,134
Total Fee:
Amount Based
on Rate Aonlied
22,500.00
53,460.80
75,960.80 81.17% 25.00% 15,415.26
Amount Due, PAYABLE UPON RECEIPT: ...................................... $15,416.26
IL0 % of Rate Amount Due
Family Period jincl. adiustm.1
Please sign & forward as necessary to custodian for payment
Signature Dated.
Please feel free to contact us if you have any questions or would like further information:
(262) 782 -3631
Dana Investment Advisors, Inc.
Attn: Jennifer
P.O. Box 1067
Brookfield, WI 53008 -1067
INVOICE # 23136
(11 A
GARCIA HAMILTON ASSOCIATES, L.P.
5 HOUSTON CENTER
1401 MCKINNEY, SUITE 1600
HOUSTON, TX 77010
January 23, 2012 TEL: (713) 853 -2322
CITY OF PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND FAX: (713) 853 -2308
(3350000097) palmti
W W.GARCIAHAMILTONASSOCIATES.COM
Attn: Margie Adcock
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, FL 33410
GARCIA HAMILTON & ASSOCIATES
STATEMENT OF MANAGEMENT FEES
For The Period October 1, 2011 through December 31, 2011
Portfolio Valuation with Accrued Interest as of 12 -31 -11
5,655,197 @ 0.250% per annum
Quarterly Management Fee
TOTAL DUE AND PAYABLE
none
►A.N 3 (1 11117
$ 5,655,196.72
3,534.50
$ 3,534.50
i
$ 3,534.50
RBC Global
-~ Asset Management"
Margaret M. Adcock
The Resource Centers, LLC
4360 Northlake Blvd., Suite 206
Palm Beach Gardens FL 33410
Invoice Number
18065
Invoice Date:
01/20/2012
Billing Period:
10/01/2011 - 12/31/2011
Custodian Account Number:
CF -RSY8
Account Number:
P703000
INVESTMENT MANAGEMENT FEE
For the Arrears Period of l0 /01/2011 to 12/31/2011
Account Name:
City of Palm Beach Gardens Firefighters Pension Trust Fund
Ending Market Value for Account P703000:
October 2011: 2,026,877.50 USD
November 2011: 1,945,734.26 USD
December 2011: 1,885,534.06 USD
Average Market Value 1,952,715.27 USD
Market Value Based Fees
1,952,715.27 @ 0.8800% x 90 / 360
Total Current Period Fees
Total Amount Due Upon Receipt
.`
4,295.97
4,295.97 USD �l
4,295.97 USD
If you have any questions, please call Portfolio Administration at 612- 376 -7151 or 1- 866- 759 -9083 or send an email to rbcgamusbilling @rbc.com.
[Keep this portion for your financial records]
Invoice Number:
18065
Invoice Date:
01/20/2012
Billing Period:
10/01/2011 - 12/31/2011
Custodian Account Number:
CF -RSY8
Account Number:
P703000
Account Name:
City of Palm Beach Gardens Firefighters Pension Trust Fund
Wire Instructions:
Bank: US Bank
Payment Mailing Address:
ABA: 091000022
RBC Global Asset Management (U.S.) Inc.
Account: 1- 602 - 3318 -3526
PO Box 9195
RBC Wealth Management
Minneapolis, MN 55480 -9934
Rcferencc: I nvoicc 18065
Amount Due 4,295.97 USD Remittance Amount USD
Mail this portion with your payment. Thank you for your business.
l� REGIONS
TRUST
Post Office Box 12385
Birmingham, Alabama 35202 -2385
STATEMENT OF TRUSTEES FEES
INVOICE DATE 01/11/2012
ACCOUNT # 3320005077 ACCOUNT NAME: PB GARDENS FIRE
.IAN .Y 9 111i�
J. SCOTT BAUR
PENSION RESOURCE CENTER
4360 NORTHLAKE BLVD, SUITE 206
PALM BEACH GARDEN FL 33410
FOR FEE CALCULATION PERIOD 12/01/2011 - 12/31/2011
CONSOLIDATED ACCOUNT PRORATION FOR MASTER ACCOUNT M21485 PALM BCH GARDENS
ACCOUNT
INVOICE NUMBER 75300
$ 3,723.81
PERCENTAGE
SUMMARY OF ACCOUNT
CHARGE /BILL
FEE
2850000140
PB
GAR BERGEL
PREVIOUS BALANCE
2,486.30
BILL
CURRENT FEE:
1,237.5
3320005077
BALANCE DUE
$ 3,723.81
GAR FETTERMAN
FEE CALCULATION DETAIL 12/01/2011 - 12/31/2011
5.79
BILL
TO
DESCRIPTION /
RATE FEE
TOTAL
BASIS
GAR OLSEN
0.35473497%
MARKET VALUE PERIOD
ENDING 12/31/2011
TO
37,125,367.37
0.0000083333 30,937.68
30,937.68
PB
GARDENS FIRE
$ 30,937.68
103.37
FEE CALCULATION DETAIL 12/01/2011 - 12/31/2011
ITEM
AMOUNT
3320010132
-------------------------- - - - - --
DISCOUNT:
- ----- - - - - --
5.01012642%
PERIOD ENDING 12/31/2011
29,700.17 -
TO
TOTAL
$ 29,700.17 -
3350000088
SUMMARY OF FEE CALCULATION DETAIL
GARD FIRE LC
25.98235773%
321.53
BILL
TO
ITEM
- ------------------------- - -
AMOUNT
3350000097
- - --
MARKET VALUE
------ - - - - --
30,937.68
15.10235386%
DISCOUNT
29,700.17 -
TO
TOTAL AMOUNT DUE FOR CURRENT PERIOD
$ 1,237.51
FOR FEE CALCULATION PERIOD 12/01/2011 - 12/31/2011
CONSOLIDATED ACCOUNT PRORATION FOR MASTER ACCOUNT M21485 PALM BCH GARDENS
ACCOUNT
NAME
PERCENTAGE
AMOUNT
CHARGE /BILL
FEE
2850000140
PB
GAR BERGEL
0.94908965%
11.75
BILL
TO
A/C
3320005077
2850000159
PB
GAR FETTERMAN
0.46748679%
5.79
BILL
TO
A/C
3320005077
2850000168
PB
GAR OLSEN
0.35473497%
4.39
BILL
TO
A/C
3320005077
3320005077
PB
GARDENS FIRE
8.35274038%
103.37
BILL
3320010132
PB
GARDENS RBC
5.01012642%
62.00
BILL
TO
A/C
3320005077
3350000088
PB
GARD FIRE LC
25.98235773%
321.53
BILL
TO
A/C
3320005077
3350000097
PB
GARD FIRE FXD
15.10235386%
186.89
BILL
TO
A/C
3320005077
3350000104
PB
GARD FIRE AGN
14.34613004%
177.53
BILL
TO
A/C
3320005077
3350000113
PB
GAR DANA SC
6.03064376%
74.63
BILL
TO
A/C
3320005077
A% REGIONS
TRUST
Post Office Box 12385
Birmingham, Alabama 35202 -2385
STATEMENT OF TRUSTEES FEES
INVOICE DATE 01/11/2012 2
FOR FEE CALCULATION PERIOD 12/01/2011 - 12/31/2011
CONSOLIDATED ACCOUNT PRORATION FOR MASTER ACCOUNT M21485 PALM BCH GARDENS
ACCOUNT NAME PERCENTAGE AMOUNT CHARGE /BILL FEE
3350000186 PB GAR ICC 23.40433640% 289.63 BILL TO A/C 3320005077
ACCOUNT NAME PERCENTAGE MARKET VALUE
2850000140 PB GAR BERGEL 0.94908965% 352,353.02
2850000159 PB GAR FETTERMAN 0.46748679% 173,556.19
2850000168 PB GAR OLSEN 0.35473497% 131,696.66
3320005077 PB GARDENS FIRE 8.35274038% 3,100,985.55
3320010132 PB GARDENS R.BC 5.01012642% 1,860,027.84
3350000088 PB GARD FIRE LC 25.98235773% 9,646,045.76
3350000097 PB GARD FIRE FXD 15.10235386% 5,606,804.35
3350000104 PB GARD FIRE', AGN 14.34613004% 5,326,053.48
3350000113 PB GAR DANA SC 6.03064376% 2,238,898.65
3350000186 PB GAR ICC 23.40433640% 8,688,945.87
FEES ARE DUE WITHIN 120 DAYS OF THE INVOICE DATE.
ANY FEE NOT PAID WILL BE CHARGED TO THE TRUST.
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT
ANDREW SINCLAIR AT 813 - 639 -3328
A REGIONS
TRUST
Post Office Box 12385
Birmingham, Alabama 35202 -2385
STATEMENT OF TRUSTEES FEES
INVOICE DATE 02/10/2012
ACCOUNT # 3320005077 ACCOUNT NAME: PB GARDENS FIRE
- i 16 1017
J. SCOTT BAUR
PENSION RESOURCE CENTER
4360 NORTHLAKE BLVD, SUITE 206
PALM BEACH GARDEN FL 33410
INVOICE NUMBER 75934 $ 5,053.13
SUMMARY OF ACCOUNT
PREVIOUS BALANCE 3,723.81
CURRENT FEE: 1,329.32 1
l�
BALANCE DUE $ 5,053.13
FEE CALCULATION DETAIL 01/01/2012 - 01/31/2012
DESCRIPTION / RATE FEE TOTAL
BASIS
MARKET VALUE PERIOD ENDING 01/31/2012
39,879,785.08 0.0000083333 33,233.02 33,233.02
$ 33,233.02
FEE CALCULATION DETAIL 01/01/2012 - 01/31/2012
ITEM AMOUNT
--------------------------------
------------
DISCOUNT:
PERIOD ENDING 01/31/2012 31,903.70 -
TOTAL $ 31,903.70-
SUMMARY OF FEE CALCULATION DETAIL
ITEM AMOUNT
--------------------------------
MARKET VALUE 33,233.02
DISCOUNT 31,903.70 -
TOTAL AMOUNT DUE FOR CURRENT PERIOD $ 1,329.32
FOR FEE CALCULATION PERIOD 01/01/2012 - 01/31/2012
CONSOLIDATED ACCOUNT PRORATION FOR MASTER ACCOUNT M21485 PALM BCH GARDENS
ACCOUNT
NAME
PERCENTAGE
AMOUNT
CHARGE /BILL
FEE
2850000140
PB
GAR BERGEL
0.90878471%
12.08
BILL
TO
A/C
3320005077
2850000159
PB
GAR FETTERMAN
0.45696081%
6.07
BILL
TO
A/C
3320005077
2850000168
PB
GAR OLSEN
0.35382452%
4.70
BILL
TO
A/C
3320005077
3320005077
PB
GARDENS FIRE
8.99520419%
119.58
BILL
3320010132
PB
GARDENS RBC
4.72839695%
62.86
BILL
TO
A/C
3320005077
3350000088
PB
GARD FIRE LC
26.99947572%
358.91
BILL
TO
A/C
3320005077
3350000097
PB
GARD FIRE FXD
14.32662044%
190.45
BILL
TO
A/C
3320005077
3350000104
PB
GARD FIRE AGN
13.50979081%
179.59
BILL
TO
A/C
3320005077
3350000113
PB
GAR DANA SC
6.01554145%
79.97
BILL
TO
A/C
3320005077
Aft REGIONS
TRUST
Post Office Box 12385
Birmingham, Alabama 35202 -2385
STATEMENT OF TRUSTEES FEES
INVOICE DATE 02/10/2012 2
FOR FEE CALCULATION PERIOD 01/01/2012 - 01/31/2012
CONSOLIDATED ACCOUNT PRORATION FOR MASTER ACCOUNT M21485 PALM BCH GARDENS
ACCOUNT NAME PERCENTAGE AMOUNT CHARGE /BILL FEE
3350000186 PB GAR ICC 23.70540040% 315.11 BILL TO A/C 3320005077
ACCOUNT NAME PERCENTAGE MARKET VALUE
2850000140 PB GAR BERGEL 0.90878471% 362,421.39
2850000159 PB GAR FETTERMAN 0.45696081% 182,234.99
2850000168 PB GAR OLSEN 0.35382452% 141,104.46
3320005077 PB GARDENS FIRE 8.99520419% 3,587,268.10
3320010132 PB GARDENS REC 4.72839695% 1,885,674.54
3350000088 PB GARD FIRE LC 26.99947572% 10,767,332.89
3350000097 PE GARD FIRE FYD 14.32662044% 5,713,425.44
3350000104 PB GARD FIRE AGN 13.50979081% 5,387,675.54
3350000113 PB GAR DANA SC 6.01554145% 2,398,985.00
3350000186 PB GAR ICC 23.70540040% 9,453,662.73
FEES ARE DUE WITHIN 120 DAYS OF THE INVOICE DATE.
ANY FEE NOT PAID WILL BE CHARGED TO THE TRUST.
IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT
ANDREW SINCLAIR AT 813 - 639 -3328
Resource Centers, LLC
4360 Northlake Blvd., Suite 206
Palm Beach Gardens, FL 33410
Bill To
Palm Beach Gardens Firefighters'
Pension Fund
Invoice
Date
Invoice #
1/31/2012
11668
Tax ID
Financial Resource Center 87- 0800465
Pension Resource Center 36- 4504183
Resource Centers 87- 0800468
Description
Qty
Rate
Amount
Palm Beach Gardens Firefighters' Pension Monthly Administrator
Fee for February 2012
1,625.00
1,625.00
Total Amount Due $1,625.00
L9)
Mail Payments to:
Resource Centers, LLC at Palm Beach Gardens address OR ACH Payment to:
First Southern Bank
Pension Resource Center
ABA #: 067012895
Account #: 8063659206
If you have any questions concerning this invoice, please contact Bonnie Lindberg at Resource Centers, LLC
Phone 561.459.2959 or email - Bonnie @ResourceCenters.com
Resource Centers, LLC
4360 Northlake Blvd., Suite 206
Palm Beach Gardens, FL 33410
Bill To
Palm Beach Gardens Firefighters
Pension Fund
Invoice
Date
Invoice #
2/29/2012
11723
Tax ID
Financial Resource Center 87- 0800465
Pension Resource Center 36- 4504183
Resource Centers 87- 0800468
Description
Qty
Rate
Amount
Palm Beach Gardens Firefighters' Pension Monthly Administrator
1,625.00
1,625.00
Fee for March 2012
FED -EX Overnight Shipping
16.73
16.73
Total Amount Due $1,641.73
Mail Payments to:
Resource Centers, LLC at Palm Beach Gardens address OR ACH Payment to:
First Southern Bank
Pension Resource Center
ABA #: 067012895
Account d: 8063659206
If you have any questions concerning this invoice, please contact Bonnie Lindberg at Resource Centers, LLC
Phone 561.459.2959 or email - Bonnie @ResourceCenters.com
SUGARMAN & SUSSKIND
PROFESSIONAL ASSOCIATION
ATTORNEYS AT LAW
Robert A. Sugarman
100 Miracle Mile
Howard S. Susskind
Suite 300
Kenneth R. Harrison, Sr.
Coral Gables, Florida 33134
D. Marcus Braswell, Jr.
(305) 529 -2801
Pedro A. Herrera
Broward 763 -2566
Ivelisse Berio- LeBeau
Toll Free 1- 800 -329 -2122
Noah S. Warman
Facsimile (305) 447 -8115
February 7, 2012
City of Palm Beach Gardens Firefighters' Pension Fund
c/o Margaret M. Adcock, Administrator
The Pension Resource Center, Inc..
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, Florida 33410 Ir F .1 (+ !n1?
CURRENT FEES:
CURRENT COSTS:
PREVIOUS BALANCE:
PAYMENTS RECEIVED
TOTAL AMOUNT DUE:
2,522.25
0.00
3,448.50
3,448.50 -ck #277909
2,522.25
SUGARMAN & SUSSKIND
100 Miracle Mile
Suite 300
Coral Gables, Florida 33134
Telephone: 305- 529 -2801
Fax: 305 - 447 -8115
www.sugarmansusskind.com
City of Palm Beach Gardens Firefighters' Pension Fund February 07, 2012
c/o Margaret M. Adcock, Administrator Invoice # 79586
The Pension Resource Center, Inc.
4360 Northlake Boulevard, Suite 206
Palm Beach Gardens, FL 33410
Client:Matter PBGF:ACCT
In Reference To: Accountant's Inquiry Letters
Professional Services
Hrs /Rate Amount
1/11/2012 Draft Audit Inquiry Response letter. Review and edit 1.40 $399.00
$285.00/hr
For professional services rendered 1.40 $399.00
Previous balance $342.00
2/6/2012 Payment - Thank You. Check No. 277909 ($342.00)
Total payments and adjustments ($342.00)
Balance due $399.00
ClientAlatter PBGF :ACTU
In Reference To: Actuarial Services
Amount
Previous balance $199.50
2/6/2012 Payment - Thank You. Check No. 277909 ($199.50)
Total payments and adjustments ($199.50)
City of Palm Beach Gardens Firefighters' Pension Fund Page 2
Amount
Balance due $0.00
Client:Matter PBGF:ADMN
In Reference To: Administrative Manager
Professional Services
Hrs /Rate Amount
1/18/2012 Review and edit Administrative Services Agreement. 0.40 $114.00
$285.00/hr
Review and edit Admin Services Agreement. 0.60 $171.00
$285.00/hr
For professional services rendered 1.00 $285.00
Balance due $285.00 /
Client:Matter PBGF:MEET
In Reference To: Meeting
Amount
Previous balance $1,938.00
2/6/2012 Payment - Thank You. Check No. 277909 ($1,938.00)
Total payments and adjustments ($1,938.00)
Balance due $0.00
Client:Matter PBGF:MISC
City of Palm Beach Gardens Firefighters' Pension Fund Page 3
In Reference To: Miscellaneous
Professional Services
Hrs /Rate Amount
1/4/2012 Receipt and review of email regarding trustee term lengths. Review
0.20
$57.00
ordinance.
$285.00/hr
1/5/2012 Telephone conference with Chairman, Police Pension attorney and Police
0.70
$199.50
Pension Plan Trustee regarding City's proposed changes to 175/185 Plans.
$285.00/hr
1/13/2012 Draft Opinion letter regarding DOR response to benefit changes.
0.80
$228.00
$285.00/hr
1/16/2012 Review and edit Opinion letter regarding DOR response.
0.40
$114.00
$285.00/hr
1/17/2012 Draft Memo to Board regarding outstanding ordinance amendments.
0.60
$171.00
$285.00/hr
1/18/2012 Review and edit Travel and Expense Policy.
0.80
$228.00
$285.00/hr
1/20/2012 Draft memo regarding pending ord amendments
0.40
$114.00
$285.00/hr
For professional services rendered
Previous balance
2/6/2012 Payment - Thank You. Check No. 277909
Total payments and adjustments
Balance due
Client:Matter PBGF:ORDN
In Reference To: Ordinances
Previous balance
2/6/2012 Payment - Thank You. Check No. 277909
3.90 $1,111.50
$228.00
($228.00)
($228.00)
$1,111.50
Amount
$342.00
($342.00)
City of Palm Beach Gardens Firefighters' Pension Fund Page 4
Amount
Total payments and adjustments ($342.00)
Balance due $0.00
Client:Matter PBGF:PLAN
In Reference To: Plan
Professional Services
Hrs /Rate Amount
1/4/2012 Telephone conference with Chairman regarding proposed changes to benefit 0.80 $228.00
structure. Telephone conference with Division of Retirement regarding same. $285.00/hr
Receipt and review of City's proposed changes to benefit structure. Legal 0.90 $256.50
research regarding 175 statutory minimums and "opt -out" provision. $285.00/hr
Telephone conference with B. Jensen on revisions 0.25 $71.25
$285.00/hr
1/5/2012 Receipt and review of Division of Retirement opinion regarding proposed City 0.60 $171.00
benefit changes and loss of premium tax monies. $285.00/hr
For professional services rendered 2.55 $726.75
Previous balance $399.00
2/6/2012 Payment - Thank You. Check No. 277909 ($399.00)
Total payments and adjustments ($399.00)
Balance due $726.75 /
PALM BEACH GARDENS FIREFIGHTERS'
PENSION FUND
Meeting of March 12, 2012
Name Application to Enter the DROP
Anthony Vazquez Years Of Credited Service: 20 Years
Total Monthly Benefit: $5,148.35
DROP Entry/Retirement Date: January 17, 2012
Type Of Benefit: DROP
Form Of Benefit: 50% Joint & Survivor Annuity
Action:
(Chairman)
(Secretary)
I.D. 10/5/11
EF 12/16/11
Steven I. Gordon
Certified Public Accountant
American Institute of
cn;tified Public Accammuts
Florida Institute. of
Certified PublicAceountaats
September 8, 2011.
Board of Trustees
City of Palm Beach Gardens Firefighters' Pension Fund.
Palm Beach Gardens; Florida
I ain pleased to confirra my understanding.of the services I .am to provide for City of
Palms Beach Gardens :Firefighters' Pension 'Fund for the year ended September 30,
2011. I. will audit the net assets available for benefits of Finatreial Statements of City of
Palm Beach Gardens .Firefighters' Pension Fund as of September 30, 2011 and the
related statements of changes in net assets. for the year then ended.
Accounting standards generally accepted in the United States provide for certain
required supplementary information (RSI) to supplement City of Palm Beach Gardens
Firefighters' Pension Fund's basic financial statements. Such information, although
not apart of the basic financial statements, is required by the Governmental Accounting
Standards Board who considers it to be an essential part of financial reporting. for
placing the basic financial statements in, an appropriate operational, economic, or
historical context. As part of our engagement, we will apply certain limited procedures
to City of Palm Beach Gardens Firefighters' Pension Fund's RSI in accordance with.
auditing standards generally accepted in the United 'States of America. These limited
procedures will consist of inquiries of management regarding the methods of preparing
the information and comparing the information for consistency with management's
responses to our inquiries, the basic financial statements, and other knowledge we
obtained during our audit of the basie financial statements. We will not express an
opinion or provide any assurance on the information because the limited procedures do
not provide us with sufficient evidence to express an opinion or provide any assurance.
The following RSI is required by generally accepted'accoun ing principles and will be
subjected to certain limited procedures, but will not be audited: Management's
Discussion and Analysis, Schedule of Funding Progress and Schedule of Contributions
fromEmployer and Other Contributors..
The objective of my audit is the expression of an opinion as to whether your financial
statements are fairly presented, in all material respects, in conformity with U.S.
generally accepted_ accounting principles and whether the supplemental schedules are
fairly stated in all material respects in relation to the basic financial statements taken as
a whole. My audit will be conducted in accordance with U:S. generally accepted
auditing standards and will include tests of the .accounting records of City of Palm
Beach Gardens Firefighters' Pension Fund and other procedures I consider necessary to
enable me to express such an opinion.
If my opinion is other than unqualified, I will discuss the reasons with you in advance.
If for any reason, I am unable to complete the audit or am unable to form or have not
formed an opinion, I may decline to express an opinion or to issue a report as a result of
this engagement.
46W W. Corgaserdal`Blvd, Suit* 5 Taman; PL 33319
Vance (454) 485.5186 Pax (954) 4854988
Audit Procedures
Our procedures will include tests lof documentary evidence supporting the transactions
recorded in the accounts and direct confirmation of investments, benefit obligations,
and certain other assets and liabilities by correspondence with financial institutions, and
other third parties. I will also request written representations from your attorneys as part
of the engagement, and they may bill you for responding to this inquiry. At the
conclusion of my audit, I will require certain written representations from you about the
financial statements and related matters.
An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, therefore, my audit will involve judgment about
the number of transactions to be examined and the areas to be.tested. Also, I. will plan
and perform the audit to :obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether from errors, fraudulent financial
reporting, misappropriation of assets, or violations of laws or governmental regulations,
that are attributable to the plan or to wets by management or employees acting on behalf
of the plan. Because an audit is designed to provide reasonable, but not absolute,
assurance and because I will not perform a detailed examination of all transactions,
there is a risk that material misstatements may exist and not be detected by me.: In
addition, an audit is not designed to detect immaterial misstatements or violations of
laws or governmental regulations that do not have a direct and material. effect on the
financial statements. However, I will inform. you of any material errors that come to my
attention, and I will inform you of any fraudulent financial reporting or
misappropriation of assets that comes to my attention. I will also inform you of any
violations of laws or governmental regulations.that come to my attention, unless clearly
inconsequential. My responsibility as auditor is limited to the period covered by my
audit and does not extend to any later periods for which I am not engaged as auditor.
My audit will include obtaining an understanding of internal control sufficient to plan
the audit and to determine the nature, timing, and extent of audit procedures to be
performed. An audit is not designed to provide assurance on internal control or to
identify reportable conditions, that is, significant deficiencies in the design or operation
of internal control. However, during the audit, if I become aware of such reportable
conditions, I will communicate them to the board of trustees in a separate letter.
In addition, I will perform certain procedures directed at considering the Plan's
compliance with applicable Internal Revenue Service (JR.S) requirements for tax-
exempt status. However, you should understand that my audit is not specifically
designed for and should not be relied upon to disclose matters affecting plan
qualifications or compliance with IRS requirements. If during the audit I become aware
of any instances of any such matters or ways in which management practices can be
improved, I will communicate them to you.
Management Responsibilities
You are responsible for making all financial records and related information available to
me acid for the accuracy, and. completeness of that information. I will advise you about
appropriate accounting principles and their application and will assist in the preparation
of your financial statements, but the responsibility for the financial statements remains
with you. This responsibility includes the establishment and maintenance of adequate
records and effective internal controls over financial reporting, the selection and
application of accounting principles, and the safeguarding of assets. You are responsible
for adjusting the financial statements to correct material misstatements and for
confirming to me in the management representation letter that the effects of any
uncorrected misstatements aggregated by me during the current engagement and
pertaining to the latest period presented" are immaterial, both individually and in the
aggregate, to the financial statements taken as a whole. You are also responsible for
identifying and ensuring that the plan complies with applicable laws and regulations.
Fees and Other
My fees for these services will be $5,600. You will also be billed for travel and other
out -of- pocket costs, if any. Should you request me to prepare the state annual report I
would charge $1,000 for the service. The fee estimate is based on anticipated
cooperation. from your personnel and the assumption that unexpected circumstances will
not be encountered during the audit: If significant additional time is necessary, I will
discuss it with you and arrive at anew fee estimate before I incur the additional costs.
My invoices for these fees will be rendered each month as work progresses and are
payable on presentation. In accordance with my firm policies, work may be suspended
if your account is overdue and will not be resumed until'your account is paid in full. If I
cleat to terminate my services for nonpayment, my engagement will be deemed to have
been completed upon written notification of termination, even if I have not completed
my report. You will be obligated to compensate me for all time expended and to
reimburse me for all out-of-pocket expenditures through the date of termination.
4
I appreciate the opportunity to be of service to the City of Palm Beach Gardens
Firefighters' Pension Fund and believe this letter accurately summarizes the significant
terms of my engagement. If you have any questions, please let me know. If you agree
with the terms of my engagement as described in this letter, please sign the enclosed
copy and return it to me.
Ve trul yours,
V
Steven 1. Gordon, CPA
RESPONSE:
This letter correctly sets forth the understanding of City of Palm Beach Gardens
Firefighters' Pension Fund.
For the Plan:
Title: ` (p2 �Z�
Date:
�. H W
M O O r r m 0 N O N r m 0 m y m 0 m
W n N N N m N m N O O r N m N d r 0 011N11.0 m O N r O M m m N W.0 O O m M 0 N m d N r r m d M N O r N
'.
W Q d r m N N M O m W O d O N O N d m m N r M r r m Q N m O O N O N m O m n O m r N M m
���NN�N �Nm ONm OOOmMNO00Q Nmm m ONN d �m N C.Oj OWN �mOQ mNN
C O Z m m m mm m N m N mr NO m mr NaDmm
M O Q N m
N U
n M C W0 O r m N r r M r m N O N W r N M 4 N O m m Q 6,6 m
W M m M
N m O N N m r m m m m m m m N N .-
T Q
° o 0 0 0 x 0 0 0 0 0 0 0 0 0 0 0 Q 0 0 0 0 0 0 0� o�� o 0 0 0 0 0 0 0 0 0 0 o a o-. o v o 0 0 0 0
f N N O O 0 0 0 0 0 p p O O O p O 0 0 0 0 0 N N Q O O O. N O O
N O r O o o 0 0 0 0 0 0 0 o r o 0 0 0 0 o N N d O d m N d r O O N O m 0
CMO and �Q1Nto m O CD NN r m �Q O dOO � Nm V m NOON d OOON ONi m d ENO CmDO a mrn`ro M O-q Nr co M �O mN d
N N N M N O M O O O
O m � 0 m 0 M m r M O O r M m Q N N O m N N M N m Q O N N N d M M O N O 0 r 0 0 O O r - O O N N M O d M M NN - M m m m N m M M r N O O m m N m M r O N Q m m N
W n Q n . d
r
mp m N M N d O r O m O O M N m M O M O r N Q N O m m m d co m N O N m N M O (Ni CN O N O m m Q N m m Q
CDC')
-81-
10
N w N N O O O m O n O M m m d N N O no MM 'To O M N m m m O M O O M 0 0 0 0 M C') r O Q M O M O m m O m 0 0
V IO Ap 2 0 M O m m N N r M O O N CO r� O m N� N� N N m N r d r N N N N m N d m m m N r O m r m
GA N W M M m co m 0 N M d r M m m M O N O m Q r Q Q d Q N m M r N N N m N .- N m d N M d m r N N M M M m O m
N N X n r N r NNN W m d m � tNO� T r N O N � m� N m m m O N d M M m N M N d m N d � C.� F N N
W
N
N Z
of m mr M N � Cp
� mNO.^ mN d MOOm Od N m ^ m mN mM m m mNMm mO Mm M M m
�
Z m
V
LOS,,, q(p '�pp dy' ppm mpO d m m O p m N O m NMNm do p
U¢ Z M Q d O CM') O (M7 O N N O Q N N N Np (d') N O O f`M] OMi V cm0 V N Q N N O N N O N O N O O O N Of
W O N v v d d M m v v r m (r') m m O v M N m N d N M O moo d O M m m M v
O N Q v
Q ^
ff MdD CO �tOd r Orr a cOM M � W aNiO � ER Pa M Bpd a O t01� MCO OCO r <D tDr Of'1p O^ ONC�n C7 C7 � �'- t700P CO
N O M N N r r N N O M N M M N M M N N N r r r N M M
ao vmronvaovm�rn vrnnmrvmvmm v rnvrnvnwv- Vann-- --- -- vmv`7-Z,Z,Z. ,Z.
O
W o $ o N
Corr
n� ^L A D 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
~ A 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
� «Nm LL o000000000000000000000000000000000000000000000000000000000
NA C.
N LL
? 0 W
y
Q
W y N W j 00000000000 0 0000000000000000000000000000000000000000000000
y W W yy m m O o 0 o 0 o 0 o o o 0 N o o o o o 0 0 o o o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o o o o o 0 0 0 0 0 0
y >N 0.000 O O O O O O D O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O o 0 o o o o o o o o o o o o o
2 Z K
i a � > V n
OXWO p
0 W Z W
N M N M N m M d M M M N N d M N M N d M N M M N M m M Q N M N N Q N M N N M d N M Q M Q N N M N N Q Q Q N Q Q M N
M N N m W d m m •- N M M r moo M m m Q O M W M M r r n M Q Q m N
1A�p Cp n M W MM(p N Np (D CO OCO MMCCppN 0,0 COm mm W M MmviMm M mMmmom ppNmmM
O O m O m m M n M M 0 0 0 o U 7 O m O m N O O M O 0 0 m O r t O M O m r m M m m M r O M n M r N O M O O O n n M m
N O W O m m d N Q Q O "'C" N O m O m O N Q O N O m O N m Q N m N m d m m d CN d N d N r N d N N v N N N d m
CO V N V N m M Q M c'7 V Q m CO N d N d N N s{ m M d m V m O V N (M m N d N M N N cM d m M Q M Q N m M m m N N N m d d M N
N M M N d N m W Q r m O O M r Q a N Q a N Q r Q N p m r M m M m Q M d N N O m r m M m m O N r M r d
n n r N N O N m N N M N O N
GO r n N O M m
r Nn W O r N m O NN N O O m O r M r m m N O Q m N n 0 N N O N m O m N O N m O N N m O N O O O O N N M N N N O O M m m m O O m
N OmONON -NOO NNr MN r Nm-r m 0 N
W
M mNN0
O M N N N O N M M M r m d m m O M N m CO r O O M M O r O m m r r N Q Q 0 0 0 m M r W O O W r O n M
pMN W Q N OmN NM M _M HOMO m NNm m O Q m m QN Omm'-O NOmMOCO d O W mr
Z O W C [) N N N r C O m m m C O N O m N O r M r O O
O Q Q O C'� N W m m O d N 0 0 0 m O r N a m r N m Q Q 0 .- N m r Q m m N O Q m m m N N d O O N N m N m Q m 0 0
r 2 M X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
f¢.7 Ol X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
y XXX >x XXX xXx X X X xXx xXx xXx X XXX XXX xXx X X XXX X >>X�� X X X X X XXX X X X X X X XXX X >X>�� xXx X X XXX >X>�� xxX XXX XXX X XXX XXX j>X(� XXX XXX xxX XXX XXX xXx XXX XXX XXX XXX xXx X
O >C X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
*2
L7 Qi
2 i C N N N C Z
a > K C N L N 0 C IT C
m. C^ • N C T C O C N N> U N > O U 3 T T O ._ T N r L d O
i^ S n° V c y y _d o d v a L E o °� Cj rn 5 c Z, °' p° o- g o y a ° LL� Edo m E m
W Z d N O y d U O t0 ° N L N °' U O O W' N N C C ' C V O D U - Z' d '> W U' Y E t0 cLJ Y N T
4 =¢ �_ U' c m U d d W' to = U W E m d o m U E_ y p F -� y> OT v Y T U vi ~ N ._ y¢ r Y
LLOWa tp _ _ O Tm a T 3 O IT N E -Y N- C N N N C S "� F y "O C= d y C C
C C N L ? O N N d Cp U C C O N Oi �: C C T C C 01 N_ N- C N T cu-
0 p
LL a Ol 2 p N Ti 3 O! N Q�'C m C _ a O J O E E> -� 5., N V 'O CDC O y N y U T V N
6' ¢S f0� Lil O O O O Z' O N L T O N .� J O� C N N > O- O O O 6 1 4! N N N o-6 n f0 CO E O d� O N N N
UIYUy ¢�Q Q CO m mmm mmmmmmUUUUOUOUW W LLLLLLLLLLLLC.J U' C7 CCU U' U` C7222222I S
m 0 0 .-- N M d N m r m 0 0 N M d N m r m 0 0 N M d N m r m 0 0 N M Q N m r W
.- � � •- � � - - �- N N N NNN N N N N M M M M M M M M M M d d d d d d d d d d N N N N N N N N N
E
o
b
E
y
rc
Y
D
..
~]
>myd
�{ p pp Nr Q)O)NNO N Om O) N Orr m0) CAm d0 M10A r Q11010 mQ1 m rM r O1mm �
1+j
N
NM
w
K
LLI
0100jmm�N dC0 d °� r 0010 r mm mm0 d d d mOjMM m r Od10 m Q)10 N°jmQ
A QOmm1010N OD
f QQ m �p N V 7 d r 10 m d N N N r m m m d m p N N N (D r
d ONmNMp. -O Nr A d �O d�ONrA M QOD�NNd ��00>N f- Q1AN��. -NO
`.
GZO
NO
a"
m(Om��10��0)r �m�1N pmMN m
mmm1.)NmMrrN10 N d m rN100mmN r M M10M0 NMmMM10rA MmrrNNlOMm rN OD Qmrnr ter
mmd m.- NMm mm.- r mm Nmm .-� m m wommo m d mM mmdmoN 10 .-m mn NNN
�Uam
U
O
m OoM V> d and 10N N
O N O p A Q M m m M r 10 m r M p p O O M p 01 d N M m m p d M M 01 O O O p r M M _m C� O M N p O g r r n o i m
0 O M m M O O O r O r N N 1(1 pp N
JJ (l
aWO
r M
p N r r O f 1 O d M m 0 0 N O N�[ 1 N m N r r O M N N 0) M N O O O O p
Q�� -m m Q) fO pvMm �C�i M 'SZ.NS aMv N
4
W y
K o
[I
°� °e o o o �° o o o 0 0 \° o 0 0 0 \° o 0 0� 0 0 0 o o. o 0 0 o. o 0 0 0 0° o� o 9� o °° o o 6- T o
W
m
T d` 0
=888 m pmm O O O O p cp o cc o oo O M 00 000 Nm� u10 10 001010100
8 80$8 8800 ogo 000000go Soog00088 8 8 88 0
0
N r N m"
W
v
_ o
N d d N m W O (A O d O M M U) r r Cn O N m N N N m M Q M N O d O N N N p O N
a dmQONdmrrnmmolnANdmo� NNOMm Oo• -rmdmm QrMmmNMmOOa QNNOO1mNO�mmmf�Q Yj
'Q010m�Q MmNQmdmo dN�r°i MMom W ov v v wl tp M m m r o vui of oiNOONmMdOaO M(n. r
O�.�}}mm N 10 dr10M N M Nr NNM d m 0 i�rmu> OJOO)O) d N ��}} MMM N M AN M O!
M
m10mr?))w0 rnr d OM .N . MO ��10 V)Mr A pmM N �dr� d 10Nr A dlOmMM d A 10�M Q1°8mrnrnmr O
m f
_
m m m d 10 an d r f V N N d m 0 N 10 m m N r M M 10 M 0 10 d m M M 10 r n M m r N N 10 Q m A N m d m m m o
m m Q m N M M m m m N r m m M m m N N N m 0 m 10 m m 10 m d m M m m d m m M N N 10 ry m N m A N - M M M -- r
N
-21-
V �Orp
N
Z
W
r rm MM �OOaMn�O01 1OM
� � MN M 0 OOMINm mNtO O N m O) rr OmmM � O m OMa m7 N
NLL110 mA 10 rNNNNmO
O M m f V r m 0 p M O r 10 N N 10 M r N m m m N O N N M N m � cn
N
NM
w
K
LLI
p m m N M M 6, M m a d N M M m M� a 10 N N N m 0 d
MMmNNNNmr NN' ,p d tOMNto NN NMd' mM m Om100Nr mm.M -.M-� m� �m d d�N10� d� 10MmmmMN
N z Z
h
2o0
y
m m 10 m N N m O M O N m d m 0 d^ M M N m m N d N p m m M m 01 m N N O^ O O m m d m 10 0 m N m S m p
m M V> t O M 10 m r 0 M O M O N 10 10 N m m N `0
m NMOmM�D7m O hM r m tT .M M�- Mm C1 m10� � �M 10
�Uam
U
Z
m OoM V> d and 10N N
O N O p A Q M m m M r 10 m r M p p O O M p 01 d N M m m p d M M 01 O O O p r M M _m C� O M N p O g r r n o i m
0 O M m M O O O r O r N N 1(1 pp N
JJ (l
aWO
r M
p N r r O f 1 O d M m 0 0 N O N�[ 1 N m N r r O M N N 0) M N O O O O p
Q�� -m m Q) fO pvMm �C�i M 'SZ.NS aMv N
4
W y
K o
�F
.-. .� .-- _ _ .-- _ l..,
Fi o c� o� a a c%l o ch c'10 f� R 1
lo�nlonODMnMAi- 10nmrMrrnrrrn0 )o1nM1n1nM'D1n°J1nmrl�mnn�nn f4jlp�mn� r�p n��o((pp N
d m O d a d d
y1 a
m m O O d _ d p
-- - -- -- ^^...r v V- 07. -rN.mm
0
Viggo W
� -
"� ~rpgSSoSBoSS$
00000000$ 0000$$ �oaSooSo$S0000S$oS8SSS8800$$$08 C? N
ii M N T LL
N
0 0 0 0 0 0 0 0 0 CJ O O O O O O O O O O O O O O O O N O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cl!
n K
v
p
qWW mmo$
r M om)
ooSSBoo�o$ S. oo$ ooSS000000�oo $oo$SoomSooSo$$SSoSoo88S.So$S88 On
z l? F
o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
r M
OILW0 p
M W Z W
r
O d M N d M N M M d d d M Q 10 d N M Q d m M M M d m K) d N f 1 Q N 1 O M 1[ I M d d M d Q M M M Q N M 1 f I M Q M M N M M M N
rr �1°rminm�v,r amnl+�r 1nmQr m o?mmrm Md MMQ 10M � 1'� 1(1rr �rrmmmdlnmMmnom1nm000D 1n
p pip Sp2 M1p mp OD M 0p100 MmOAM MM roui 0 0 07 N(pm Opp S0MMMM MNM MM MM tgi
10 10 8 m 10 (7 m M O r 10 r M U'1 m m m M n m m MMM 1Fi m° rn r m rn n i or, m O O t N 10 0 O 11 N M M M n m M W M 1 f 1 N M m M M V m D
m.-d md010 �1n0 � N � md10� m Q d d �m ONNNN10mNON1� �� O � � d d Q10m
ONQ. -Hama Q V: Oq �
1010dN10MNMddmQMln m1nNMQ 1nm M MM1nm m d mmQNmd m 4 10 10 4 10 10 MMMdNMmM1010MNMMM N O
0)
r D 1 r d aa m M N 01 pp pp r m N m m m d d m r r m 1 f 1 f! m N m Q m N N Q O r m m N Q d r m M N Q M m m m N M
(P CC! dNOrQ m M ON mm O) d Am d NN10 rnr r NmOm. -�m Nr O)�O d 01 '-r r �0100Nd10 Q MNOr rr Q M
n 1° Q .- O tp r m N m O) m m m m O) 0 0 0 m m d m N m m N m m O) M d 0 O) m O O m m O O) f 1 (p m m m
r 10 0 m r N m 8 r M M 10 10 N O O) N N N 10 d an d m N m m N M m d M d d 0 N) 0 m 0 D N m N) 0 N N 8 O O V 1 N M
mmrOOD 100 10NQ10N O)M M p Q 1010Nr 1[)OD mn MN m0 Nm d rro d NNr 10 N� 010N Np �p
m1�Q�mN.- NM1nmin�mrm °DNU>m °NN�mmrrinrrin�mdr mmmd mN. -.-- V)�Nm�mrN�NNN�m �!
N
O d rn r r W 0 10 r M O) m d d d m m � N m O m m M N r N N m N m M d m O) Q O d m 10 10 10 m r LL> O r 10 an d M m
Z 10 10 N001 NNmNA d r f> N M dmr d m0 N ONNO Q)r N dNr Q0�10M x100 Q m mryr
O 0 O r 10Nd 1ntO10mMCD1OOmm mNm'-LL> m 100 M"m 10 0 A1010ODmT r0)m
F =„ X> x> x><><> cxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxx ><xxxxxxxxxxxXX>zXXXXXx
a vi X x X X X X x x x x X x x x x x x x x x x x x x x x x x x x x x >5X x x x x x x x x x X x X x x x x X x x x X X x X X
8 y XXXXXXXx> x>(�> X>(�xXX>�XXXXXXXXXXXXXx? X?CCxxxXXxxXXXXXxXXXxXxXx XX> X>CCx XxX Xx Xxx x>�xXXX>X>(C>X>((XXXXxx>X>CCXXX>X>CXxX>X>CCXXXXXXXXXxx>�X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X x X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
KZf
<0
UQS yy�113� �p L E o o c o
U G "' C a C C y �_ m 3 O N C N C T U 100
ma` ° yym >._ ° aOL° y o gv.LOltLmo-a.. Z wx °° t5O1CC Va�_W ���
f C m o O > ° m v lO u v ° a_ " >. x Y m !� m Cl N 0 U L N 0 m a E> N N m N p ._ c
d1W- ^3 Z. m m oYp�UL� o�w� A E'5 o mY -�=iF -� o�� y m� c ct7 �'_^ m F= mZ� u OCDI- �, =im= mSYi
xm" au1 -rnv0 CC TOYZ c vi c� ui v -A'1V md: ..°rJ y' mix y�� - v ai -, E m o
O O= f LL !0 C m 0 m m .` Ol `O - W o L y y 0 C c °m C> N N c - p f0 O O °' C c c 0' N O j m m m
LL m c 2 c o v c c v v m E 9 A m E c c y
� 3a�i $1010mmmmmmmu °vc' -o i.m N >a�iaiddm mda�i._o uv L5v°1 yrm tEffiE
v LL v< i i i i i i f O O O O a a a a a a a¢¢ tt tt m m n n m in n m io tq C'i 1pq p f r-
PTO NMQ10mr1A 0)O� NMd 10 (0 00 0) O N M 410 mr mma NM 410 mAm0) g 000000000^
1° mlommmmmmlDmrrrrnrrArrmODmmmmmmmmrnrn0 )w 0)O)O)O)O)rn��� ��� � ��������e -�
U
m
E
0
K
0
17
Page 1of1
Audrey Ross
From: Rick Rhodes [rkr64 @aol.com]
Sent: Friday, March 09, 2012 9:43 AM
To: Audrey Ross
Subject: 33rd Annual Police Officers' & Firefighters' Trustees' School May 14 -16
Audrey, please send out and also remind everyone at Monday's meeting,
Hello all!
Attached is a copy of our "invitation" for the 33rd Annual Police Officers' & Firefighters' Trustees'
School. The school is scheduled for May 14 -16, 2012 in Tallahassee at FSU's Center for Professional
Development.
Please pass this information on to your clients and encourage them to attend. This will be the only
program offered this year by the Division, as the Fall Conference will not be offered this year.
We are working on the program and will have it available soon; however, if you have some suggestions
for topics or if you are aware of some issues /concerns /questions that your clients /members would like to
have covered, please let me know and we will try and include as many as possible.
Thank you for your cooperation and support of the Division's programs. I hope to see you all in May!
Sincerely,
Trish
Patricia F. Shoemaker
Benefits Administrator
Municipal Police Officers' and
Firefighters' Retirement Funds
Division of Retirement
E -Mail: trish .shoemakeradms.myfiorida.com
Website: http: / /www.myflorida.com /frs /mpf
Phone Number: 850 - 414 -6320
Fax Number: 850 - 921 -2161
Toll Free Number: 877 - 738 -6737
We Serve Those Who Serve Florida
DISCLAIMER NOTICE:
This email, along with any included attachment(s), is intended for use only by the person(s) or entity to which it is addressed.
This message may contain confidential, proprietary, and/or legally privileged information. If you are not the intended
recipient of this message, we apologize for any inconvenience this may have caused. You are hereby notified that you are
prohibited from printing, copying, storing, disseminating or distributing this communication. If you received this
communication in error, please notify the sender by email or by telephone at (850) 488 -5540 or toll -free at (866) 738 -2366 if
Tallahassee is not a local call for you. All record of the communication you received in error (electronic or otherwise) should
be destroyed in its entirety. Thank you for your cooperation and assistance in this matter.
PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
MINUTES OF MEETING HELD
January 23, 2012
A meeting of the Board of Trustees was called to order at 9:01.M. at Council Chambers,
Palm Beach Gardens, Florida. Those persons present were:
TRUSTEES
Tom Murphy, Secretary
Donna Wisneski
Rick Rhodes
OTHERS
Audrey Ross, Administrator
Pedro Herrera, Attorney
Troy Brown, Investment Monitor
Steve Stack, Investment Manager
Steve Gordon, Auditor
It was noted that Mr. Morejon was reelected and the selection of the Chair and Secretary
is tabled until the next meeting when all Trustees are present.
MINUTES
The Board reviewed the minutes of the regular meeting held on November 14, 2011 and
the special meeting held on November 30, 2011.
A motion was made by Rick Rhodes to approve the minutes of the November 14,
2011 regular meeting as amended. The motion was seconded by Donna Wisneski
and carried 3 -0.
A motion was made by Rick Rhodes to approve the minutes of the November 30,
2011 special meeting. The motion was seconded by Donna Wisneski and carried 3-
0.
ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS)
DISBURSEMENTS
The Board reviewed the disbursements presented for approval by the Administrator. The
Trustees' had a question regarding the Auditors bill. Ms. Ross was asked to recalculate
the current fees owed.
A motion was made by Rick Rhodes to approve the disbursements that were
Presented by the Administrator. The motion was seconded by Donna Wisneski and
carried 3 -0_
BENEFIT APPROVALS
The Board reviewed the application for retirement for Steven Ensinger.
A motion was made by Donna Wisneski to approve the application for retirement
for Steven Ensinger. The motion was seconded by Rick Rhodes and carried 3 -0.
2
PRESENTATION OF THE 9/30/2011 AUDITED FINANCIAL STATEMENTS:
(STEVE GORDON)
Mr. Gordon noted that he has issued an unqualified clean opinion regarding the audit,
which is the highest level that can be issued. He reviewed the management discussion
and analyst letter and Ms. Wineski notified Mr. Gordon that the she does not believe that
he brought the correct copy of the report with him today as the numbers do not match the
draft that was previously emailed out. Mr. Gordon apologized for the inconvenience and
commented that the draft copies that were circulated electronically where correct,
although the report he has here today is not. Mr. Gordon stated that he will reprint the
correct copies and will re- circulate out. The board discussed the situation and agreed that
they will hold a special meeting to approve the audit once the revised reports are issued.
INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY
BROWN
Mr. Brown reviewed the performance report for the quarter ending December 31, 2011
and stated that this is still a preliminary report because it is still too early to collect all the
data for the end of the year. As of December 31, 2011 we were inline with policy. There
was 50.7% in domestic equity, 27% in domestic fixed income, 8.6% in International
Equity, 8.4% in real estate, 3.5% in global fixed income and 1.8% in cash. He noted that
ICC Capital had a rough quarter because AMR went bankrupt and ICC had a huge
holding in them. ICC still carries them in their portfolio, although during the quarter ICC
allocated another $600K to them about 2 weeks before they filed for bankruptcy.
Therefore ICC has underperformed that last 2 quarters due to bad stock selection and they
are on a warning. For the quarter ending December 31, 2011 the preliminary return for
the total fund was 5.69 %, as total equities were 9.29 %, and the total domestic equity had
a great quarter at 10.60 %. Mr. Brown reviewed the fixed income portfolio and
commented that they had a great turn around this quarter because they were out of
Treasuries.
Lastly Mr. Brown reviewed the flash performance handout through January 19, 2012.
The fund is up 3.5% FYTD and noted that there is a lot of excess cash sitting on the
sides. In addition, both fixed income managers are underweighted compared to the
Policy. Therefore Mr. Brown recommended transferring $600K from cash to the Dana
core fund, and $300K from cash to the Manning and Napier fund to rebalance and be
inline with the Plan's policy. The board agreed and gave Mr. Brown the direction to
rebalance according to the Plan's policy.
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 reviewed the letter and email from his office regarding the Division of
Retirements thoughts on the City's proposal to opt out of the Chapter 175 monies. He
commented that the Chapter 175 rules and regulations does have an opt out clause that
would have to be decided on by the City. Or the City can reduce their benefit levels
below the Chapter 175 statutes and then they would not be eligible to receive State
money. Ms. Wisneski questioned what would happen to the City's portion of the 175
money if they did not accept it. Mr. Herrera explained that the State of Florida would
keep the money and it would be redistributed to all the other pension plans. In addition
the City's insurance carries would still have to pay the assessment fees. The board
discussed the City's proposals and the changes that could happened if implemented.
Ms. Wisneski asked for an update next time as to the status of negotiations and where
they currently are in the process.
Mr. Herrera briefly reviewed the memo he created outlining the pending Ordinance
changes. The board reviewed the pending changes and commented that the 3%
guaranteed fixed rate of return on DROP accounts can be removed because City Council
already denied this.
OTHER BUSINESS
There being no further business, the meeting adjourned at 10:59AM.
Respectfully submitted,
Tom Murphy, Secretary
PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
MINUTES OF SPECIAL MEETING HELD
FEBRUARY 7, 2012
A special meeting of the Board of Trustees was called to order at 2P.M. at Council
Chambers, Palm Beach Gardens, Florida. Those persons present were:
TRUSTEES OTHERS
Ed Morej on, Trustee Audrey Ross, Administrator
Tom Murphy, Secretary Steve Gordon, Auditor 0 oined via teleconference)
Donna Wisneski Pedro Herrera, Attorney (joined via teleconference)
Mark Joyce
Rick Rhodes
APPROVAL OF REVISED SEPTEMBER 30, 2011 AUDITED FINANCIAL
STATEMENTS
The Trustees reviewed the revised financial statements that were provided by Mr.
Gordon. Ms. Wisneski commented that she had some questions pertaining to the dates
listed under the subsequent events disclosure footnote. She stated that the dates were
incorrect because the subsequent events disclosure was dated after the financial
statements where issued. Mr. Gordon stated that he will revise the subsequent events
disclosure date to reflect either before the date of the when the Audit was issued or the
exact date of it being issued. The Trustees reviewed and discussed the remainder of the
financial statements and noted that they feel comfortable with approving them with the
corrected date to the subsequent event disclosure, and also contingent on Ms. Wineski's
final review of the revised report.
A motion was made by Rick Rhodes to approve the September 30, 2011 Audited
Financial Statements with the noted date revision to the subsequent events
disclosure, and also contingent on Donna Wineski's review of the final report (as
well as the Chair's final approval to release the document). The motion was
seconded by Tom Murphy and carried 5 -0.
Ms. Ross presented the board with the 2012 Fiduciary Insurance Renewal fee. She
commented that the quoted fee this year was $6,327.13, which is $17.56 lower than
expiring premium. The board discussed the current premium coverage which is $1M and
also asked Ms. Ross to obtain quotes for $2M, $3M, $4M and $5M for future reference.
A motion was made by Rick Rhodes to bind the 2012 Fiduciary Insurance renewal
for $6,327.13. The motion was seconded by Donna Wisneski and carried 5 -0.
OTHER BUSINESS
Ms. Ross presented the board with the Fiduciary Liability Insurance renewal fee for the
period of March 10, 2012 to March 10, 2013. She commented that the quoted fee this
year was $6,327.13, which is $17.56 lower than expiring premium. The board discussed
the current premium coverage which is $1M, and also asked Ms. Ross to obtain quotes
for $2M, $3M, $4M and $5M for future reference.
A motion was made by Rick Rhodes to bind coverage for the Plan's Fiduciary
Liability Insurance coverage effective March 10, 2012 thru March 10, 213, at the
2
quoted premium amount of $6,327.13. The motion was seconded by Donna
Wisneski and carried 5 -0.
Mr. Morejon explained that he received an email from Mr. Herrera regarding an active
members pending divorce. Both the husband's and the wife's attorneys' are contacting
Mr. Herrera requesting a conference call to be schedule with him. Mr. Herrera stated that
he would like to get permission from the board as to whether or not he can hold such
conference call, and if so then who would be responsible for the costs associated. Also
he commented that he would like to make some rules and /or policy regarding these types
of situations for future reference. He also noted that he has already sent both parties copy
the "divorce packet" which contains a lot of helpful information pertaining to the Plan
and also divorces under this type of Plan. Mr. Herrera stated that if he were to hold the
conference call then he will be billing at his hourly rate and he needs to know who will be
responsible for that payment, the pension board or the member.
The board discussed the situation and explained that they have reviewed a similar case
like this in the past and agreed that they would continue in the same manner as before.
The member is responsible for paying the cost for any additional documents, information,
etc. that they may need and /or want and is not already provided in the divorce packet that
they are furnished with.
Mr. Morejon noted that this particular divorce case that Mr. Herrera was recently
approached about were relatives of his. He commented that this does not change any of
his perspectives on the board policies or regulations, but only that he wanted it
documented so there is no conflict of interest going forward.
A motion was made by Donna Wiskneski approving that the Pension Plan will only
incur expenses on behalf of individual members when they retire for benefit
calculations and all other expenses and /or calculations will be paid for by the
member. The motion was seconded by Rick Rhodes and carried 5 -0.
Mr. Morej on reported that the most recent study GRS completed was incorrect. Ms. Ross
stated that she has since asked the Actuary to revise the study and noted that there will be
no additional charges for the revision.
Lastly Ms. Ross notified the board that they needed to reselect the Chair and Secretary
since Mr. Morejon term's recently expired and he was reelected.
A motion was made by Rick Rhodes to select Tom Murphy as Secretary. The
motion was seconded by Mark Joyce and carried 5 -0.
A motion was made by Mark Joyce to select Rick Rhodes as Chairman. The motion
was seconded by Tom Murphy and carried 5 -0.
There being no further business, the meeting adjourned at 2:52PM.
Respectfully submitted,
Tom Murphy, Secretary
GRGabriel S Roeder Smith & Company
Consultants & Actuaries
CITY OF PALM BEACH GARDENS
FIREFIGHTERS' PENSION FUND
ACTUARIAL VALUATION REPORT
SEPTEMBER 30, 2011
OUTLINE OF CONTENTS
REPORT OF SEPTEMBER 30, 2011 ACTUARIAL VALUATION
Pages Items
- - Cover Letter
Valuation Process, Experience, Commentary and Certification
A -1 Actuarial valuation process
A -2 Observed experience
A -3 Comments, conclusion and certification
Actuarial Valuation Process, Summary of Actuarial Assumptions
and Definitions of Technical Terms
D -1/4 Actuarial valuation process in detail
D -5/11 Summary of actuarial assumptions
D -12/13 Definitions of technical terms
Certain Disclosers Required by Statement No. 25 of the
Governmental Accounting Standards Board
E -1 Actuarial accrued liability
E -2 Contributions required and contributions made
E -3 Schedule of funding progress
F -1/5 Summary of Valuation Data Results in State Format
City of Palm Beach Gardens Firefighters' Pension Fund
Detailed Valuation Results
B -1
Funding objective and contribution rates
B -2/3
Contribution requirement
B -4
Experience gain (loss)
B -5/6
Unfunded actuarial accrued liability
B -7
Actuarial balance sheet
Summary of Benefit Provisions and Valuation Data
C -1/5
Summary of benefit provisions
C -6
Financial data
C -7
Funding value of assets
C -8/14
Member data
Actuarial Valuation Process, Summary of Actuarial Assumptions
and Definitions of Technical Terms
D -1/4 Actuarial valuation process in detail
D -5/11 Summary of actuarial assumptions
D -12/13 Definitions of technical terms
Certain Disclosers Required by Statement No. 25 of the
Governmental Accounting Standards Board
E -1 Actuarial accrued liability
E -2 Contributions required and contributions made
E -3 Schedule of funding progress
F -1/5 Summary of Valuation Data Results in State Format
City of Palm Beach Gardens Firefighters' Pension Fund
GRS
March 8, 2012
Gabriel Roeder Smith & Company One Towne Square 248.799.9000 phone
Consultants & Actuaries Suite 800 248.799.9020 fax
Southfield, Ml 48076 -3723 www_gabriciroedercom
The Board of Trustees
City of Palm Beach Gardens Firefighters' Pension Fund
Palm Beach Gardens, Florida
The results of the September 30, 2011 Actuarial Valuation of the City of Palm Beach Gardens
Firefighters' Pension Fund are presented in this report. The purpose of the annual valuation is to
measure the system's funding progress, to determine the City's contribution rate for the fiscal year
beginning October 1, 2012 in accordance with established funding policies, and to determine actuarial
information for Governmental Accounting Standards Board (GASB) Statements No. 25 and No. 27.
The results of the valuation may not be applicable for other purposes.
This report should not be relied on for any purpose other than those described above. It was prepared
at the request of the Board and is intended for use by the Retirement System and those designated or
approved by the Board. This report may be provided to parties other than the System only in its
entirety and only with the permission of the Board.
The signing actuaries are independent of the plan sponsor.
Future actuarial measurements may differ significantly from the current measurements presented in
this report due to such factors as the following: plan experience differing from that anticipated by the
economic or demographic assumptions; changes in economic or demographic assumptions; increases
or decreases expected as part of the natural operation of the methodology used for these
measurements (such as the end of an amortization period or additional cost or contribution
requirements based on the plan's funded status); and changes in plan provisions or applicable law.
A summary of valuation results, comments, conclusions, and our certification are contained in
Section A.
Detailed valuation results are contained in Section B.
The valuation was based upon information, furnished by the Fund administrator and Auditor
concerning individual members, terminated members, retired members and beneficiaries, plan
benefits and financial transactions and assets. Data was checked for reasonableness and missing
information, but was not otherwise audited. This information is summarized in Section C.
A description of the actuarial valuation process, actuarial assumptions and definitions of technical
terms are contained in Section D.
Governmental Accounting Standards Board Statement No. 25 information is contained in Section E.
A summary of valuation results in the State format is contained in Section F.
2678
Board of Trustees
March 8, 2012
Page 2
This report has been prepared by actuaries who have substantial experience valuing public employee
retirement systems. We certify that the information contained in this report is accurate and fairly
presents the actuarial position of the City of Palm Beach Gardens Firefighters' Pension Fund as of the
valuation date. All calculations have been made in conformity with generally accepted actuarial
principles and practices, and with the Actuarial Standards of Practice issued by the Actuarial
Standards Board. The actuarial assumptions used for the valuation produce results which,
individually and in the aggregate, are reasonable.
The signing actuaries are members of the American Academy of Actuaries and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinions contained herein.
Respectfully submitted,
ir5ad Lee Armstrong, ASA, A, MAAA
BLA:lr
2678
Ran J. Dziubek, ASA, EA, MAAA
SECTION A
VALUATION PROCESS, EXPERIENCE, COMMENTARY
AND CERTIFICATION
ACTUARIAL VALUATION PROCESS
An actuarial valuation is the process by which a balance between revenues (member contributions,
City contributions, Chapter 175 receipts and investment income) and obligations (benefits and
expenses) is determined and the funded condition is measured.
The flow of activity constituting the valuation may be summarized as follows:
A. Covered person information about:
— each person receiving pension payments
— each former member with a vested pension not yet payable
— each former member who is not vested and has not claimed a member contribution
refund
— each active member
B. Financial Information (assets, revenues, and expenditures)
C. Benefit Provisions (Retirement Ordinance)
D. Experience Assumptions about the volume and incidence of future activities
E. Actuarial Cost Method (Projected Unit Credit) for allocating benefit costs to time periods
F. Mathematical linking of the person information, financial information, benefit provisions,
experience estimates and actuarial cost method
G. Determination of:
— contribution rate for the plan year
— current funded condition
Items A, B and C are furnished by the Pension Fund and constitute the current "knowns" about the
Fund. Since the majority of activities will occur in the future, estimates must be made about these
future activities (Item D).
Under the Projected Unit Credit Actuarial Cost Method, each year's differences between projected and
actual Fund activities (experience gains /losses) reduce /increase the Unfunded Actuarial Accrued
Liability. This treatment of experience gains /losses leaves the Normal Cost unaffected by year -to-
year experience fluctuations and thereby more likely to satisfy the level percent of payroll Funding
Objective set out on page B -1. Normal Cost changes occur primarily in response to changes in
benefits, experience assumptions average past service, and age at hire patterns.
City of Palm Beach Gardens Firefighters' Pension Fund A -1
OBSERVED EXPERIENCE AND ASSUMPTION AND METHOD CHANGES
Year -to -year differences between assumed experience and observed experience are inevitable in the
operation of the Fund. Each annual actuarial valuation takes observed experience differences into
account. If on net balance the differences are favorable, the unfunded actuarial accrued liability is less
than projected (an experience gain), otherwise it is more than projected (an experience loss). Specific
activity information is located in Sections C and D.
The principal sources of experience gains /losses during the period from October 1, 2010 to September
30, 2011 were:
• A loss of approximately $1.1M due to average salary increase of 7.2% versus 5.1%
expected.
• A loss of approximately $2.3M due to the rate of return on the value of assets of 1.1%
versus the projected 8.25% (page C -7).
• A loss of approximately $0.6M due to 1 termination versus 3.5 expected.
The City contribution rate requirement increased by 2.86% of payroll to 39.61% of payroll
including administrative and investment expenses. Additional contribution rate detail is provided
on page B -2.
There were no changes in assumptions or methods since the prior valuation.
City of Palm Beach Gardens Firefighters' Pension Fund A -2
COMMENTS
• The Share Accounts totaled $5,730,975 with 116 members having positive balances as of
September 30, 2011.
• The assumptions and methods should be reviewed again prior to the September 30, 2012
actuarial valuation.
The fielding value of assets is $2.3M greater than the market value of assets as of September 30, 2011
because of investment losses not yet recognized. As these losses are recognized over the next three
years, they will put upward pressure on the contribution requirements and slow fielding progress for
the Fund.
CONCLUSION
The finding status described on page E -3 indicates that the accrued obligations of the Fund, as
measured by the method prescribed in Statement No. 25 of the Governmental Accounting Standards
Board, are 61.6% fielded by the fielding value of assets vs. 63.2% one year ago. This is excluding
Share Accounts. Since the Share Accounts are 100% fielded, including them increases the fielded
ratio to 65.1% this year vs. 66.9% last year. It is the actuary's opinion that the required contribution
rate determined by the most recent actuarial valuation is sufficient to meet the Fund's funding
objective, presuming continued timely receipt of required contributions.
STATEMENT BY ENROLLED ACTUARY
This actuarial valuation and /or cost determination was prepared and completed by me or under my
direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge and
belief, the results are complete and accurate, and in my opinion, the techniques and assumptions used
are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. There
is no benefit or expense to be provided by the plan and /or paid from the plan's assets for which
liabilities or current costs have not been established or otherwise taken into account in the valuation.
All known events or trends which may require a material increase in plan costs or required
contribution rates have been taken into account in the valuation.
Bra ree Armstrong, ASA, M AA A [11 -5614]
3/8/2012
Date
00 ofPahn Beach GardetisFzrefzghters'Petisioti Fetid l 4 -3
SECTION B
DETAILED VALUATION RESULTS
FUNDING OBJECTIVE
The funding objective for the Pension Fund is to establish and receive contributions, expressed as
percents of active and DROP member payroll, which are inherently level from year -to -year when
funding assumptions are realized and benefits are unchanged. This objective meets the requirements of
Part VII, Chapter 112, Florida Statutes.
CONTRIBUTION RATES
The Pension Fund is supported by member contributions; City contributions; receipts pursuant to
Chapter 175, Florida Statutes; and investment income on Pension Fund assets.
Contributions which satisfy the funding objective are determined by the annual actuarial valuation and
are sufficient to:
(1) Cover the costs allocated to the current year (normal cost) by the actuarial cost methods
described in Section D ; and
(2) Finance over a period of fixture years the actuarial cost not covered by present assets and
anticipated fixture normal cost (unfunded actuarial accrued liability).
Initial financing periods used for future unfunded liabilities were:
25 years for all unfunded amortization bases attributable to periods occurring after 9/30/07.
Contribution requirements for the fiscal year beginning October 1, 2012 are shown on pages B -2 and
MIN
City of Palm Beach Gardens Firefighters' Pension Fund B -1
CONTRIBUTIONS TO FINANCE BENEFITS OF THE PENSION FUND
FOR THE FUND YEAR BEGINNING OCTOBER 1, 2012
TO BE CONTRIBUTED DURING THE CITY FISCAL YEAR
BEGINNING OCTOBER 1, 2012
Contributions Expressed as Percents
Contributions for of Active and DROP Member Payroll
Normal Cost
Normal and early retirement pensions
24.86 %
Disability pensions
0.25
Survivor pensions
18.38
Pre-retirement
0.13
Post-retirement
0.00
Termination benefits
Deferred service pensions
0.64
Refunds of member contributions
0.38
Total Normal Cost
26.26
Unfunded Actuarial Accrued Liability (1)
Retired members and beneficiaries
0.00
Active and vested terminated members
18.38
Total Unf d. Actuarial Accrued Liability
18.38
Administrative and Investment Expenses
2.88
Total Calculated Contribution Requirement
47.52 %
Adjustments to Calculated Contribution Requirement
Temporary full funding credit
0.00
FS 112.64(5) Compliance
0.00
Total adjustments
0.00
Total Adjusted Contribution Requirement
47.52 %
Member portion
6.00
Chapter 175 portion (based on 2% member payroll with one year lag)
1.91
Additional Premium Tax Revenue portion
0.00
City portion
39.61 %
(1) Please refer to page B -6 for a schedule of financing periods.
FS 112.64 requires City contributions to be deposited not less frequently than quarterly. Member
contributions, which are in addition to the City contributions, must be deposited immediately after each
pay period. FS 112.64 requires that Chapter 175 monies must be deposited within 5 days of receipt
from the State.
Procedures for determining dollar contribution amounts are shown on page B -3.
City of Palm Beach Gardens Firefighters' Pension Fund B -2
DETERMINING DOLLAR CONTRIBUTIONS
For any period of time, the percent -of- payroll contribution rate needs to be converted to dollar amounts.
The Florida Division of Retirement has indicated the legislative intent in Section 112.61, F.S., is to
apply the City portion of the contribution requirement on page B -1 to emerging payroll. To accomplish
this, the City should contribute dollar amounts at the end of each payroll period which are equal to the
39.61% percent -of- payroll contribution requirement multiplied by the active and DROP member
payroll for the period. Adjustments should be made as necessary to exclude items of pay that are not
covered compensation for Fund benefits and to include non - payroll amounts that are covered
compensation.
CAUTION: The base City contribution amount may need to be increased if the amount received under the provisions of
Chapter 185, Florida Statutes, is less than $215,78 7 during the fiscal year ending September 30, 2013 to meet the Total
Public Employer Contribution Requirement.
Illustrative Only. Included in these amounts is the projected salary increase between the valuation date
and the fiscal year in which the contribution will be made. The projection factor used was 1.06825,
(1.04515), which is consistent with the projection used to calculate actuarial liability.
Total Contribution Requirement
Less Member Contributions
Total Employer Contribution Requirement
Less Chapter 175 Prem. "frozen"
Less Chapter 175 Supp. "frozen"
Less Additional Premium Tax Revenue
Base City Contribution
12/13 11/12
$ 5,368,683 $ 4,804,989
648,973 625,004
4,719,710 4,179,985
215,787 205,498
0 0
0 0
$ 4,503,923 $ 3,974,487
The above amounts are assumed to be contributed, on average, halfway through the fiscal year.
City of Palm Beach Gardens Firefighters' Pension Fund B -3
DERIVATION OF EXPERIENCE GAIN (Loss)
FOR THE PERIOD FROM OCTOBER 1, 2010
TO SEPTEMBER 30, 2011
DERIVATION
(1) UAAL at start of year
(2) Normal cost for year
((ER Normal cost + expenses) x valuation pay for 10 /11)
(3) Employer contribution
(4) Interest accrued
.0825 x [(1) +1/2((2) - (3))]
(5) Expected UAAL before changes
[(I) + (2) - (3) + (4)]
(6) Effect of assumption changes
(7) Effect of cost method changes /accounting and timing differences
(8) Effect of benefit changes
(9) Expected UAAL after changes
(10) Actual UAAL
(11) (lain/(Loss) (9) - (10)
UAAL represents Unfunded Actuarial Accrued Liability.
2011
$ 18,097,678
1,982,501
3,745,497
1,420,335
17,755,017
0
0
0
17,755,017
21,945,772
$ (4,190,755)
City of Palm Beach Gardens Firefighters' Pension Fund B -4
UNFUNDED ACTUARIAL ACCRUED LIABILITY
A. Actuarial present value of future benefits
September 30, 2011
Se pte mbe r 30, 2010
$ 75,182,917
$ 67,614,463
(excluding Share Accounts)
B. Actuarial present value of future
normal costs
18,085,248
18,406,404
C. Actuarial accrued liability
57,097,669
49,208,059
D. Net assets available for funding
35,151,897
31,110,381
E. Unfunded actuarial accred liability
$ 21,945,772
$ 18,097,678
City of Palm Beach Gardens Firefighters' Pension Fund B -5
SOURCES AND FINANCING OF UNFUNDED
ACTUARIAL ACCRUED LIABILITY
Remaining
Source of Unfunded Act. Accrued Liability Financing % of Covered
Unfunded Act. Initial Current Period Amortization Payroll FS112.64(5)
Accrued Liab. Amount Fin. Per. Amount 9/30/2011 Factor Payment Contribution Compliance
Changes from experience deviations
Prior combined
n/a
30 yrs.
$ 14,380,004
9/30/2006
$ 687,342
27 yrs.
752,718
9/30/2007
(295,659)
26 yrs.
(316,997)
9/30/2008
1,426,762
25 yrs.
1,499,734
9/30/2009
904,751
25 yrs.
936,970
9/30/2010
479,491
26 yrs.
488,362
9/30/2011
4,190,755
25 yrs.
4,190,755
Changes from actuarial assumption and cost method revisions
9/30/2006 $ (2,157223) 27 yrs. $ (2,362,402)
Changes from amendments to benefit provisions.
9/30/2002 n/a 30 yrs. $ 2,376,628
Totals $ 21,945,772
12 yrs.
9.784669 $
1,469,646
13.90%
0.00%
22 yrs.
15.304816
49,182
0.47%
0.00%
22 yrs.
15.304816
(20,712)
(0.20)%
0.00%
22 yrs.
15.304816
97,991
0.93%
0.00%
23 yrs.
15.757206
59,463
0.56%
0.00%
24 yrs.
16.193924
30,157
0.29%
0.00%
25 yrs.
16.615513
252,219
2.38%
0.00%
22 yrs. 15.304816 $ (154,357)
21 yrs. 14.836192 $ 160,191
(1.46)% 0.00%
1.51% 0.00%
18.38% 0.00%
City of Palm Beach Gardens Firefighters' Pension Fund B -6
ACTUARIAL BALANCE SHEET - SEPTEMBER 30, 2011
Present Resources and Expected Future Resources
A. Net assets available for benefits
1. Market value (page C -7) $32,175,409
2. Funding value adjustment 2,976,488
3. Funding value of assets $35,151,897
B. Actuarial present value of expected
future City and Chapter 175 contributions
1. For normal costs 14,413,328
2. For unfunded actuarial accrued liability 21,945,772
3. Total 36,359,100
C. Actuarial present value of expected
future Member contributions 3,671,920
D. Actuarial present value of Chapter 175 Share Accounts 5,730,975
E. Total Present and Expected Future Resources $80,913,892
Actuarial Present Value of Expected Future Benefit Payments and Reserves
A. To retired members and beneficiaries $ 10,877,378
B. To vested terminated members 501,879
C. To present active members
1. Allocated to service rendered prior
to valuation date 45,718,412
2. Allocated to service likely to be
rendered after valuation date 18,085,248
3. Total 63,803,660
D. Reserve for Chapter 175 Share Accounts 5,730,975
E. Total Actuarial Present Value of Expected
Future Benefit Payments $ 80,913,892
City of Palm Beach Gardens Firefighters' Pension Fund B -7
SECTION C
SUMMARY OF BENEFIT PROVISIONS AND
VALUATION DATA
SUMMARY OF BENEFIT PROVISIONS
AS OF SEPTEMBER 30, 2011
Membership
All full -time certified (F.S.63335) firefighters become members as a condition of employment.
Average Final Compensation
One twelfth (1/12) of the average annual salary for the best five years of the last ten years of credited
service prior to retirement, termination, or death.
Normal Retirement
Eligibility. Age 52 with 10 or more years of credited service; or any age with 25 or more years of
credited service.
Pension Amount. Three percent (3 %) of average final compensation multiplied by credited service,
provided, however, that the benefit shall not exceed 99% of average final compensation. The normal
form of benefit is a benefit payable for life with 120 monthly payments guaranteed. Optional forms
are available on an actuarial equivalent basis.
Early Retirement
Eligibility. Age 50 with 10 or more years of credited service.
Pension Amount. Normal retirement pension earned at time of early retirement but reduced by 3%
for each year early retirement date precedes age 52.
Mandatory Retirement (No Provision)
City of Palm Beach Gardens Firefighters' Pension Fund C -1
SUMMARY OF BENEFIT PROVISIONS (CONTINUED)
Disability - Service Connected
Eligibility. Total and likely to be permanent disability for duties of a firefighter.
Pension Amount. 60% of AFC. Minimum benefit shall be 2% of AFC times credited service.
Disability - Non - Service Connected
Eligibility. 10 or more years of credited service and total and likely to be permanent disability for
duties of a firefighter.
Pension Amount. 2.5% of AFC times credited service. Maximum benefit is 50% of AFC.
Vesting
Eligibility. Members with 5 or more years of credited service but not eligible for any other benefits
under the system.
Vested Percentage. 25% after 5 years, plus 15% per year thereafter to 100% after 10 years of credited
service.
Pension Amount Vested portion of member's accrued benefit payable upon reaching age 50 under
the provisions for Early Retirement or age 52 under the provisions for Normal Retirement provided
the member's accumulated contributions are left in the Pension Fund.
Non - Vested Termination
Members who terminate employment with less than 5 years of credited service are entitled to a refund
of their accumulated contributions.
City of Palm Beach Gardens Firefighters' Pension Fund C -2
SUMMARY OF BENEFIT PROVISIONS (CONTINUED)
Deferred Retirement Option Plan (DROP)
Eligibility. Any member who is eligible to receive a normal retirement pension and who can perform
the full scope of duties assigned to a firefighter. Participation shall cease after the earlier of 5 years in
the DROP or termination of service.
Pension Amount. Calculated as if the member had elected to retire on the date of election to
participate in the DROP, using credited service and final average salary at the date of election. The
monthly retirement benefits, including any future cost -of- living increases, shall be deposited in the
member's DROP account. Earnings of each DROP account shall be credited or debited at the end of
each fiscal year quarter at the actual net rate of investment return achieved by the fund. As an
alternative, the DROP member may elect that his or her DROP account be invested in a fixed rate
money market fund. Disbursements from the account are deferred until termination of employment.
Member Contributions. All contributions on behalf of the member to the fund cease following
election to participate in the DROP.
Pre - Retirement Survivor Benefits
Deceased Member Partially or Fully Vested The member's accrued retirement pension is paid to the
designated beneficiary for 120 months. (Pension is reduced if paid prior to otherwise Normal
Retirement Date.)
Member Not Vested or Eligible for Retirement Refund of accumulated contributions.
Cost -of- Living Adjustments (COLA)
Beginning January 1, 2004, and each January 1 thereafter, all members receiving benefits, excluding
Disability Retirees, shall receive an age based Cost -of- Living increase. The amount will be 1.0% for
members who are age 53, 2.0% for members who are age 54, and 3.0% for members who are age 55
or greater.
City of Palm Beach Gardens Firefighters' Pension Fund C-3
SUMMARY OF BENEFIT PROVISIONS (CONTINUED)
Member Contributions
Each member contributes 6% of salary. An additional 2% of salary will come out of member share
account and credited as member contributions to the defined benefit provisions of the Pension Fund.
Non - Employee Contributions
Chapter 175, Florida Statutes. Premium tax monies received pursuant to F.S. Chapter 175 will be
allocated to individual member share accounts based on years of credited services. On each valuation
date, each individual share account shall be adjusted to reflect the investment gains or losses and to
allocate the costs, fees and expenses of administration of the fund. Each October 1st, beginning with
October 1st, 2003, 2% of the salary shall be deducted from the monies received from F.S. Chapter
175, tax revenues.
City of Palm Beach Garden, Amounts determined actuarially in accordance with Chapter 175 and
Chapter 112, Florida Statutes.
Forfeiture of Retirement Benefits
Retirement benefits granted by the Pension Fund are subject to forfeiture if an employee is convicted
of an offense specified in Sections 112.3173 and 175.195, Florida Statutes, pursuant to the procedures
set forth in the cited statute.
City of Palm Beach Gardens Firefighters' Pension Fund C -4
SUMMARY OF BENEFIT PROVISIONS (CONCLUDED)
Disclaimer
The preceding summary briefly describes the principle benefits of the Pension Fund. Detailed benefit
conditions and limitations are contained in the Palm Beach Gardens Code, Division 2 Firefighters'
Pension Fund, which established the Fund. Interpretations of the Palm Beach Gardens Code are made
by the Board of Trustees. The Internal Revenue Code, Florida Statutes, the Palm Beach Gardens
Code establishing the Fund, and Board interpretations govern the operation of the Fund and prevail
over any conflict with the terms of this Summary of Benefit Provisions and should be consulted
before you take any action concerning your membership or benefits. In case of any conflict between
this Summary and the provisions of the Palm Beach Gardens Code or other applicable law, the Palm
Beach Gardens Code or other applicable law will prevail. Copies are available at the office of the
Administrative Manager.
00 ofPahn Beach GardetisFzrefzghters'Petisioti Fntul C-S
ACCOUNTING INFORMATION SUBMITTED FOR VALUATION
Revenues and Expenditures
Year Ended Year Ended
9/30/2011 9/30/2010
REVENUES:
a. Member contributions
b. City contributions
c. Chapter 175 receipts to member contributions
d. Chapter 175 receipts to Share Accounts
e. Interest and dividends
f. Net appreciation in fair value of investments
g. Miscellaneous income
h. Total revenues
EXPENDITURES:
a. Benefits paid
b. Share Account benefits paid
c. Administrative expenses
d. Investment expenses
e. Total expenditures
NET INCOME:
Total revenues minus total expenditures
Audit Adjustment
SHARE ACCOUNT NET CHANGE
ASSETS (Defined Benefits) BEGINNING OF YEAR
ASSETS (Share Accounts) BEGINNING OF YEAR
ASSETS (Defined Benefits) END OF YEAR
ASSETS (Share Accounts) END OF YEAR
TOTAL ASSETS END OF YEAR
$ 592,131
$ 594,457
3,745,497
3,550,238
196,939
201,112
507,634
457,505
1,092,488
754,800
(1,402,535)
1,771,610
4,310
3,295
4,736,464
7,333,017
871,805
567,897
73,728
88,661
231,215
169,740
1,176,748
826,298
Summary of Assets
Cash & Equivalents
Receivable s /(P ayable s)
Corporate Bonds /Government Securities
Common Stocks
Real Estate
International
Miscellaneous
Mutual Funds
Total Assets
$ 3,559,716
0
274,582
$28,890,275
5,456,393
$32,175,409
5,730,975
$37,906,384
$ 6,506,719
0
792,085
$23,175,641
4,664,308
$28,890,275
5,456,393
$34,346,668
Se pte tube r 30, 2011 Se pte tube r 30, 2 010
Market Market
$ 871,633
$ 3,574,524
582,759
(117,101)
10,736,580
9,174,500
17,791,459
14,222,217
3,175,378
2,269,135
4,748,575
5,223,393
0
0
0
0
$37,906,384
$34,346,668
City of Palm Beach Gardens Firefighters' Pension Fund C -6
W
w
O
z
z
I�
O
O
W
A
W
z
H
U
W
O
0
O
0
N
H
In
cl m
�> �>
cl
id
a� U
to —�
to U �
O
cl
Q �
U C'j —_
p U U
Cl
0 0 cl
to
� •yam '^' � M
Fj
U �
U U O U U
cl
N to cl
N ' U U
E ^^� 2
O [�/] I--I +�-� cl
cl
cl
Q O U
O cl C
cl cl
O
U U �
O cl
�. cl N
U
N
o
�
N
� o
O
N
� � o
O �
0
N
V7
O1
N
00
c
M
�_
M G M 00
l0
01 � 0 0 0
N
FA
v'i
M
O
M
pp
O
l
l 00 N
1p
O O_
N
FA
N
�
cz
bA
cz
u
N cz
cz
-ct
Y
cz
�-- W
<� y y
✓ �y
,�.-yl
�I, I�
C
y
CZ
d
In
w
II
cl m
�> �>
cl
id
a� U
to —�
to U �
O
cl
Q �
U C'j —_
p U U
Cl
0 0 cl
to
� •yam '^' � M
Fj
U �
U U O U U
cl
N to cl
N ' U U
E ^^� 2
O [�/] I--I +�-� cl
cl
cl
Q O U
O cl C
cl cl
O
U U �
O cl
�. cl N
U
H
A
w
w
w
A
Fil
�Q
w
A
w
x
ICI
FBI
A
v
a
wo-
U
O
U
U
O
U
�
o
N
N
N
a
Z
Z
Z
M
M
.O
U
N
oc
oc
o
�
O
.O
OC
O
r�
O
N
OC
N
oc
\O
I
.�
Cl
M
OC
�
V)
O
ILI
0.
�
N
M
M
00
m
O
�
z
O
N
CW
z
M oc N O"C O
Q
O
OC
a
M
M
\O
\O
O
N
M
V
�
oc
�
N
M
m
M
O
N
z
�.
N
CC
CW
N
W
U
O
U
U
O
U
NORMAL AND EARLY RETIRED MEMBERS
City of Palm Beach Gardens Firefighters' Pension Fund C -9
Averages for All Service
New Retired Members
Pension Recipients
During Prior Period
Current
Ave rage s
Ret.
Annual
Plan
Attained
Retirement
Annual
Year
Number
Age
Age
Pension
No.
Age
Serv.
Pension
1998
1
58.7 yrs.
58.7 yrs.
$ 51,471
1
58.7
N/A
$ 51,471
1999
1
59.7
58.7
51,471
2000
1
60.7
58.7
51,471
2001
1
61.7
58.7
51,471
2002
1
62.7
58.7
51,471
2003
1
63.7
58.7
51,471
2004
1
64.7
58.7
52,628
2005
1
65.7
58.7
54,208
2006
1
66.7
58.7
54,605
2007
0
2008
2
55.5
54.8
105,912
2
55.5
18.0
105,912
2009
4
52.5
51.4
336,633
2
48.0
27.9
230,052
2010
5
52.3
50.6
441,434
1
47.5
26.0
104,112
2011
8
52.4
50.4
646,760
3
50.0
20.9
68,206
City of Palm Beach Gardens Firefighters' Pension Fund C -9
RETIRED MEMBER AND BENEFICIARY DATA AS OF SEPTEMBER 30, 2011
TABULATED BY TYPE OF PENSION BEING PAID
Actuarial
Present
Annual Value of
Type of Pension Being Paid No. Pensions Pensions
Ten Year Guaranteed to
Beneficiary
Age and Service Benefits
Ten Year Guarantee
Age and Service Benefits
Joint and Survivor
Disability Benefits
Total Pensions Being Paid
1 $ 31,584 $ 129,526
3 243,390 3,477,719
5 403,371 6,120,056
5 118,217 1,150,077
14 $ 796,562 $10,877,378
City of Palm Beach Gardens Firefighters' Pension Fund C -10
RETIRED MEMBERS AND BENEFICIARIES AS OF SEPTEMBER 30, 2011
TABULATED BY ATTAINED AGES
City of Palm Beach Gardens Firefighters' Pension Fund C -11
Fire Members
Annual
Attain d
Ages
No.
Pension
39
1
$ 35,618
42
1
23,865
48
1
104,112
49
1
109,302
50
2
151,889
51
4
272,686
52
1
21,136
53
1
22,010
64
2
55,944
Totals
14
$796,562
City of Palm Beach Gardens Firefighters' Pension Fund C -11
VESTED TERMINATED MEMBERS AS OF SEPTEMBER 30, 2011
TABULATED BY ATTAINED AGES
Attained
Ages
No.
E s timate d
Annual Pensions
43
1
$ 65,370
55
1
6,196
Totals
1 2
i $ 71,566
City of Palm Beach Gardens Firefighters' Pension Fund C -12
ACTIVE AND VESTED TERMINATED MEMBERS INCLUDED IN VALUATION
Active
Vested and DROP
Valuation Active DROP Term. Member Average
Date Members Members Members Payroll Age Service Pay
9/30/2001
84
1
$ 4,255,524
36.5
9.1
$ 50,661
9/30/2002
92
1
4,839,568
36.9
9.3
52,604
9/30/2003
100
1
6,541,837
37.1
9.5
65,418
9/30/2004
109
1
7,567,887
37.4
9.8
69,430
9/30/2005
114
1
8,774,107
37.1
8.8
76,966
9/30/2006
121
1
9,205,470
37.3
9.2
76,078
9/30/2007
121
1
9,549,410
38.2
10.1
78,921
9/30/2008
117
2
9,852,960
39.0
10.9
84,213
9/30/2009
115 1
2
9,993,789
39.9
11.8
86,153
9/30/2010
114 2
2
10,071,617
40.9
12.8
86,824
9/30/2011
111 3
2
10,575,889
42.0
13.7
92,771
NUMBER ADDED TO AND REMOVED FROM ACTIVE PARTICIPATION
Number
Added
Terminations During Period
Active
During
Norm/Early
Disability
Died -in
Terminations
Members
Period
Period
Retirement
Retirement
Service
Vested
Other
Total
End of
Ended
A E
A
E
A
E
A E
A
A
A
E
Period
9/30/2003
100
9/30/2004
12 0
0
N/A
0
N/A
0 N/A
0
3
3
N/A
109
9/30/2005
6 1
0
N/A
1
N/A
0 N/A
0
0
0
N/A
114
9/30/2006
11 4
0
1.5
0
0.1
1 0.1
0
3
3
10.9
121
9/30/2007
4 4
0
4.2
0
0.1
0 0.1
0
4
4
6.1
121
9/30/2008
0 4
2
5.1
1
0.1
0 0.1
1
0
1
5.4
117
9/30/2009
0 2
2
4.8
0
0.1
0 0.1
0
0
0
4.6
115
9/30/2010
0 1
1
3.1
0
0.2
0 0.1
0
0
0
4.1
114
9/30/2011
1 4
3
5.7
0
0.2
0 0.1
0
1
1
3.5
111
Expected
for 9 -30 -12
8.4
0.2
0.1
3.2
A represents actual number.
E represents expected number.
City of Palm Beach Gardens Firefighters' Pension Fund C -13
ACTIVE AND DROP MEMBERS AS OF SEPTEMBER 30, 2011
TABULATED BY ATTAINED AGE AND YEARS OF SERVICE
Age: 42.0 years.
Service: 13.7 years.
Annual Pay: $92,771
City of Palm Beach Gardens Firefighters' Pension Fund C -14
Years of Service to Valuation Date
Totals
Attaine d
Valuation
Age
0 -4
5 -9
10 -14
15 -19
20 -24
25 -29
30 Plus
No.
Payroll
25 -29
1
8
9
$ 601,941
30 -34
2
10
3
15
1,075,835
35 -39
1
10
3
2
16
1,217,744
40 -44
8
10
7
2
27
2,478,778
45 -49
3
4
12
9
2
30
3,194,423
50 -54
1
5
5
1
1
13
1,531,796
55 -59
1
1
2
4
475,372
Totals
5
40
21
26
18
3
1
114
$ 10,575,889
Age: 42.0 years.
Service: 13.7 years.
Annual Pay: $92,771
City of Palm Beach Gardens Firefighters' Pension Fund C -14
SECTION D
ACTUARIAL VALUATION PROCESS, SUMMARY OF
ACTUARIAL ASSUMPTIONS AND DEFINITIONS OF
TECHNICAL TERMS
ACTUARIAL VALUATION PROCESS IN DETAIL
An actuarial valuation is the mathematical process by which a pension fund contribution requirement
is determined and its actuarial condition is measured.
The flow of activity constituting the valuation may be summarized as follows:
A. Covered Person Data, furnished by the fund administrator including:
- Retired members and beneficiaries now receiving benefits
- Former members with vested benefits not yet payable
- Active members
B. + Asset Data (cash & investments), furnished by the fund administrator
C. + Fund Description Data, furnished by the fund administrator
D. + Assumptions about various future activities of the fund (risk elements)
E. + The Actuarial Cost Method for allocating costs to time periods and determining the long -term
planned pattern for employer contributions
F. + Mathematically combining the Data, the Estimates of Future Activities, and the Cost
Method
G. = Determination of:
Employer Contribution Requirement and Actuarial Condition
Items A, B and C constitute the current "knowns" about the Fund. A good deal of fund activity which
will result in benefit payments has yet to occur. Accordingly, certain assumptions must be made
about future fund activity. These assumptions (Item D) may be classified as demographic or fiscal.
Demographic assumptions include future mortality rates, disability rates, rates of pre- retirement
withdrawal from employment, and retirement ages. Fiscal assumptions consist of future salary
increases and rates of investment return.
City of Palm Beach Gardens Firefighters' Pension Fund D -1
Demographic assumptions are generally selected on the basis of the Fund's historical activity,
modified for expected future differences. Past activity of funds which are similar in nature to the fund
being valued may be utilized if fund data or activities are insufficient to be reliable
Fiscal assumptions, on the other hand, do not lend themselves to prediction on the basis of historical
activity -- the reason being that both salary increases and investment return are impacted by inflation.
Inflation defies reliable prediction. Fiscal assumptions are generally selected on the basis of what
would be expected to occur in an inflation -free environment and then both are increased by some
provision for long -term inflation.
This is a case where two wrongs may make a right. If inflation is higher than expected it will
probably result in actual rates of salary increase and investment return which exceed the assumed
rates. Salaries increasing faster than expected result in unexpected costs. Investment return
exceeding the assumed rate results in unanticipated assets. To a large degree, the additional assets
will offset the additional costs over the long -term.
Once items A, B, C and D are available, the actuarial valuation process begins. The first step is to
determine the plan's total actuarial present value for individuals in each of the 3 covered person
categories.
Retired members now receiving monthly payments;
Vested terminated members not yet at retirement age;
Active members.
The actuarial present value is the value today after taking into account the probabilities of payment
and the effect of time the plan promises to pay benefits in the future on the basis of both service
already completed and projected future service.
The projected unit credit cost method (Item E) was used to establish the actuarial position of the plan
and to determine an appropriate level of contributions.
City of Palm Beach Gardens Firefighters' Pension Fund D -2
This method is designed to fund each participant's projected benefits under the plan as they accrue.
Thus, the total pension to which each participant is expected to become entitled at retirement is
broken down into units, each associated with a year of past or future service. The principle
underlying the method is that each unit is funded in the year for which it is credited. Typically, when
the method is introduced there will be an initial liability for benefits credited for service prior to that
date. To the extent that this liability is not covered by assets of the plan, there is an unfunded liability
to be funded over a chosen period in accordance with an amortization schedule.
An actuarial accrued liability is calculated at the valuation date as the present value of benefits
credited with respect to service to that date.
The unfunded accrued liability at the valuation date is the excess of the actuarial accrued liability
over the assets of the plan. The level annual payment to be made over a stipulated number of years to
amortize this unfunded liability is the past service cost.
The normal cost is the present value of those benefits which are expected to be credited with respect
to service during the year beginning on the valuation date.
Under this method, differences between the actual experience and that assumed in the determination
of costs and liabilities will emerge as adjustments in the unfunded liability, subject to amortization.
The next step in the valuation process is a determination of the contribution rate (Item G) required to
support Fund benefits in accordance with the funding objective (page B -1).
The contribution rate is determined in two basic components:
1. The normal cost component; and
2. The component which will finance (pay off) the unfunded actuarial accrued liability over
the periods indicated on page B -6
Active member payroll was projected to increase 4.5% a year in determining the level percent -of-
payroll component for the unfunded actuarial accrued liability -- which is consistent with base rate of
salary increase used to calculate the total actuarial present value. The characteristics of this method
are shown on page D -4.
City of Palm Beach Gardens Firefighters' Pension Fund D -3
LEVEL PERCENT OF ACTIVE AND DROP MEMBER COVERED PAYROLL
AMORTIZATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITY*
($ AMOUNTS IN THOUSANDS)
Payroll
Year Inflated Constant
Ended Dollars Value
Unfunded
Contribution
Inflated Constant Inflated Constant
Dollars Value Dollars Value
2011
$ 10,576 $
10,576
$ 21,946
$ 21,946
$ 1,944
2012
11,052
10,576
21,689
20,755
2,031
2013
11,549
10,576
21,318
19,521
2,123
2014
12,069
10,576
20,819
18,243
2,218
2015
12,612
10,576
20,177
16,919
2,318
2020
15,717
10,576
14,197
9,553
2,889
2025
19,586
10,576
7,059
3,812
878
2030
24,408
10,576
4,510
1,954
1,094
2035
30,416
10,576
713
248
725
2036
31,785
10,576
0
0
0
* $ 4,190,755
over 25 years
488,362
over 24 years
936,970
over 23 years
(426,947)
over 22 years
2,376,628
over 21 years
14,380,004
over 12 years
$ 21,945,772
Eli
1,944
1,944
1,944
1,944
1,944
1,944
1,944
474
252
0
Level percent -of- payroll financing of unfunded actuarial accrued liability treats each generation of
taxpayers equally during the financing period. The alternative, level dollar financing, produces
declining percent -of- payroll contributions and places a greater relative burden on current taxpayers.
The annual rate of increase in member payroll used to compute the level percent -of- payroll
contribution is the same rate of payroll growth used to compute actuarial liability and costs. It reflects
across - the -board salary increases, not group size increases.
If future payroll growth is less than the assumed rate due to smaller than projected salary increases,
the percent -of- payroll contribution rate for unfunded actuarial accrued liability will tend to decline.
If future payroll growth is less than the assumed rate due to decreases in the number of members, the
percent -of- payroll contribution rate for unfunded actuarial accrued liability will tend to increase but
dollar contributions will be less than indicated in the preceding schedule.
City of Palm Beach Gardens Firefighters' Pension Fund D -4
ACTUARIAL ASSUMPTIONS
The actuarial assumptions regarding the INFLATION rate, REAL INVESTMENT RETURN rate, and
SALARY INCREASE rates are used, in combination with the other assumptions, to (i) determine the
present value of amounts expected to be paid in the future and (ii) establish rates of contribution
which are expected to remain relatively level as a percent of total active and DROP member payroll.
The annual interest rate used in making this valuation was 8.25 %. It is composed of inflation and real
investment return.
INFLATION RATE. 4.5% per annum, compounded annually. This is the rate at which growth in
the supply of money and credit is estimated to exceed growth in the supply of goods and services. It
may be thought of as the rate of depreciation of the purchasing power of the dollar. There are a
number of indices for measuring the inflation rate. The recent inflation rate as measured by the
Consumer Price Index has been:
REAL INVESTMENT RETURN RATE. 3.75% per annum, compounded annually. This is the
rate of return estimated to be produced by investing a pool of assets in an inflation -free environment.
Recent real rates of investment return on the funding value of assets have been:
Period Ended
I Average
9/30/2011
9/30/2010
9/30/2009
9/30/2008
9/30/2007
1 3 Year
1 5 Year
Actual
Assumed
3.9%
4.5%
1.1%
4.5%
-1.31Yo
4.5%
4.91Yo
4.5%
2.8%
4.5%
1.2%
4.5%
2.3%
4.5%
REAL INVESTMENT RETURN RATE. 3.75% per annum, compounded annually. This is the
rate of return estimated to be produced by investing a pool of assets in an inflation -free environment.
Recent real rates of investment return on the funding value of assets have been:
The total investment return rate was computed on the funding value of assets using the approximate
formula i I divided by 112 (A + B - I), where I is actual investment income, A is the beginning of
year asset funding value, and B is the end of year asset funding value.
The preceding investment return rates reflect the particular characteristics of this pension fund and
the method of determining the funding value of assets. They should not be used to measure an
investment advisor's performance or for comparison with other pension funds. Such use will usually
mislead.
City of Palm Beach Gardens Firefighters' Pension Fund D -5
Period Ended
Average
9/30/2011
9/30/2010
9/30/2009
9/30/2008
9/30/2007
3 Year
5 Year
Total Rate
1.1%
3.0%
2.3%
3.8%
9.4%
2.1%
3.9%
less Inflation Rate
3.9%
1.1%
tLan
4.9%
2.8%
1.2%
2.3%
Actual Real Rate
(2.8)%
1.90/0
3.6%
(1.1)%
6.6%
0.90/0
1.6%
Projected Real Rate
3.75%
3.75%
3.75%
3.75%
3.75%
3.75%
3.75%
Projected Total Rate
1 8.25%
8.25%
8.25%
8.25%
8.25%
1 8.25%
8.25%
The total investment return rate was computed on the funding value of assets using the approximate
formula i I divided by 112 (A + B - I), where I is actual investment income, A is the beginning of
year asset funding value, and B is the end of year asset funding value.
The preceding investment return rates reflect the particular characteristics of this pension fund and
the method of determining the funding value of assets. They should not be used to measure an
investment advisor's performance or for comparison with other pension funds. Such use will usually
mislead.
City of Palm Beach Gardens Firefighters' Pension Fund D -5
SALARY INCREASE RATES. Active member salaries are assumed to increase between the date
of hire and date of retirement or DROP. Salary increases occur in recognition of (i) individual merit
and seniority, (ii) inflation - related depreciation of the purchasing power of salaries, and (iii)
competition from other employers for personnel.
A schedule of assumed rates of increases in individual salaries for sample ages follows:
Attributable to:
Annual Rates for Salary Increase for Sample Ages
20 30 40 50 60
Merit & Seniority
3.7% 1.1% 0.7% 0.2% 0.0%
General Increase in
9/30/2009
Wage Level Due to:
9/30/2007
Inflation
4.5% 4.5% 4.5% 4.5% 4.5%
Total
8.2% 5.6% 5.2% 4.7% 4.5%
The valuation is based on the number of active members remaining constant, and the total payroll for
the group increasing at the rate of 4.5% a year (the assumed increase in wage levels due to inflation
and other causes).
A schedule of recent salary change experience, as measured by average reported pay, follows:
(1) Excluding terminations and new members.
(2) Including pays of members electing DROP participation but still working.
City of Palm Beach Gardens Firefighters' Pension Fund D -6
Period Ended
I Average
9/30/2011
9/30/2010
9/30/2009
9/30/2008
9/30/2007
3 Year
5 Year
10 Year
% Change: Actual
Average (1)
7.2%
0.7%
2.8%
8.1%
3.8%
3.6%
4.5%
N/A
Projected
5.1%
5.1%
5.2%
5.3%
5.3%
5.1%
5.2%
5.7%
% Change in
Total Payroll (2)
5.0%
0.8%
1.4%
3.2%
3.7%
2.4%
2.8%
N/A
(1) Excluding terminations and new members.
(2) Including pays of members electing DROP participation but still working.
City of Palm Beach Gardens Firefighters' Pension Fund D -6
In order to achieve the funding objective of a contribution rate which remains level as a percent of
payroll, the total rate of investment return on the funding value of assets must exceed the rate of
average increase in salaries by an amount equal to the projected real investment return rate. The
following schedule illustrates the recent history of the relationship between total investment return
and average pay changes.
MORTALITY TABLE FOR NON - DISABLED LIVES. The mortality tables used to measure
retired life mortality were the RP -2000 Combined healthy mortality table for males and the RP -2000
Combined healthy mortality table for females. No margin for future mortality improvements is
included in these tables.
Value of Future Life
Sample $1 Monthly for Life Expectancy (Years)
Ages Men Women Men Women
50
Period Ended
Ave rage
9/30/2011
9/30/2010
9/30/2009
9/30/2008
9/30/2007
3 Year
5 Year
Total Investment
116.39
121.61
21.74
24.38
65
105.28
111.84
Return Rate
1.1%
3.0%
2.3%
3.8%
9.4%
2.1%
3.9%
Rate of Change
87.57
10.57
12.74
80
63.36
73.53
7.75
in Average Pay
7.2%
0.7%
2.8%
8.1 %
3.8%
3.6%
4.5%
Difference: Actual
(6.1)%
2.3%
(0.5)%
(4.3)%
5.6 %
(1.4)%
(0.6)%
Target
4.5%
4.5%
4.5%
4.5%
4.5 'X�
4.5 %
4.5%
MORTALITY TABLE FOR NON - DISABLED LIVES. The mortality tables used to measure
retired life mortality were the RP -2000 Combined healthy mortality table for males and the RP -2000
Combined healthy mortality table for females. No margin for future mortality improvements is
included in these tables.
Value of Future Life
Sample $1 Monthly for Life Expectancy (Years)
Ages Men Women Men Women
50
$132.61
$135.64
30.80
33.59
55
125.54
129.58
26.18
28.91
60
116.39
121.61
21.74
24.38
65
105.28
111.84
17.61
20.12
70
92.53
100.44
13.88
16.23
75
78.29
87.57
10.57
12.74
80
63.36
73.53
7.75
9.68
The mortality table is used to measure the probabilities of members dying before retirement and the
probabilities of each benefit payment being made after retirement.
City of Palm Beach Gardens Firefighters' Pension Fund D -7
MORTALITY TABLE FOR DISABLED LIVES. The RP -2000 Disabled Mortality Table for
males and females. No margin for future mortality improvements is included in these tables.
Value of Future Life
Sample $1 Monthly for Life Expectancy (Years)
A6es Men Women Men Women
50
$100.11
$118.00
18.21
25.11
55
94.10
111.16
15.94
21.69
60
87.72
103.87
13.81
18.58
65
80.38
95.56
11.76
15.66
70
71.90
86.05
9.77
12.93
75
62.77
75.85
7.95
10.49
80
53.91
65.47
6.39
8.37
The mortality table is used to measure the probabilities of members dying before retirement and the
probabilities of each benefit payment being made after retirement.
RATES OF SEPARATION FROM ACTIVE MEMBERSHIP. The rates do not apply to
members eligible to retire and do not include separation on account of death or disability. Separation
rates are used to measure the probabilities of members remaining in employment.
Sample
Age s
Years of
Se rvice
Percent Separating
Within Next Year
All
0
15.0 %
1
10.0
2
9.0
3
8.0
4
7.0
25
5 & Over
7.0
30
5.9
35
4.4
40
3.0
45
2.1
50
1.7
55
1.0
60
1.0
VESTED MEMBERS who terminate with a benefit worth less than 100% of their own accumulated
contributions were presumed to elect a refund of accumulated contributions and forfeit the vested
benefit.
City of Palm Beach Gardens Firefighters' Pension Fund D -8
RATES OF DISABILITY. Disability rates measure the probabilities of active members becoming
disabled.
Sample
Age s
Percent Becoming
Disabled Within Next Year
25
0.05 %
30
0.06
35
0.09
40
0.12
45
0.27
50
0.43
55
0.43
60
0.43
Fifty percent of disabilities were projected to be duty related.
RATES OF RETIREMENT. Rates of retirement are used to measure the probabilities of an eligible
member retiring during the next year.
Retirement
Age
Percent
Retiring
Service at
Retirement
Percent
Retiring
50
5.00 %
25
100 %
51
5.00
52
50.00
53
10.00
54
10.00
55
100.00
EXPENSES. Administrative and investment expenses are included as an additional employer
contribution to provide for reimbursement of these expenses. Expenses are assumed to be the same as
the preceding year.
ACTIVE MEMBER GROUP SIZE. The valuation was based on a constant active member group
size. This is unchanged from previous valuations.
SALARY. All amounts included in the calculation of benefits were reported and valued in the
actuarial valuation.
City of Palm Beach Gardens Firefighters' Pension Fund D -9
SUMMARY OF ASSUMPTIONS USED
SEPTEMBER 30, 2011
Pensions in an Inflationary Environment
Value of $1,000 /month Retirement Benefit
To an Individual Who Retires at Age 52
In an Environment of 4.5% Inflation
Age
Value
52
$1,000
53
957
54
916
55
877
56
839
57
803
62
644
67
517
72
415
77
333
82
267
87
214
The life expectancy of a 60 year old male retiree is age 82. The life expectancy for a 60 year old
female retiree is age 84. Half of the people will outlive their life expectancy. The effects of even
moderate amounts of inflation can be significant for those who live to an advanced age.
City of Palm Beach Gardens Firefighters' Pension Fund D -10
SUMMARY OF ASSUMPTIONS USED
SEPTEMBER 30, 2011
MISCELLANEOUS AND TECHNICAL ASSUMPTIONS
Marriage Assumption: 100% of males and 100% of females are assumed to be married
for purposes of death -in- service benefits.
Pay Increase Timing: Beginning of (Fiscal) year. This is equivalent to assuming that
reported pays represent amounts paid to members during the
year ended on the valuation date.
Decrement Timing:
Decrements of all types are assumed to occur mid -year.
Eligibility Testing: Eligibility for benefits is determined based upon the age nearest
birthday and service nearest whole year on the date the
decrement is assumed to occur.
Benefit Service: Exact fractional service is used to determine the amount of
benefit payable.
Decrement Relativity: Decrement rates are used without adjustment for multiple
decrement table effects.
Decrement Operation: Disability and withdrawal do not operate during retirement
eligibility.
Normal Form of Benefit: The assumed normal form of benefit is the 10 -year guaranteed
straight life form.
Loads: Age and service benefits were loaded by 4.5% for lump sums of
accumulated annual leave.
Incidence of Contributions: Contributions are assumed to be received halfway through the
fiscal year.
City of Palm Beach Gardens Firefighters' Pension Fund D -11
DEFINITIONS OF TECHNICAL TERMS
Accrued Service. Service credited under the field which was rendered before the date of the actuarial
valuation.
Actuarial Accrued Liability. The difference between the actuarial present value of future benefit
payments and the actuarial present value of future normal costs. Also referred to as "accrued liability"
or "past service liability."
Actuarial Assumptions. Estimates of expected future experience with respect to rates of mortality,
disability, turnover, retirement, rate or rates of investment income and salary increases. Decrement
estimates (rates of mortality, disability, turn-over and retirement) are generally based on past
experience, often modified for projected changes in conditions. Economic estimates (salary increases
and investment income) consist of the underlying rates in an inflation -free environment plus a
provision for a long -term average rate of inflation.
Actuarial Cost Method. A mathematical budgeting procedure for allocating the dollar amount of the
"actuarial present value of future benefit payments" between future normal costs and actuarial accrued
liability. Sometimes referred to as the "actuarial valuation cost method."
Actuarial Equivalent. A single amount or series of amounts of equal actuarial present value to
another single amount or series of amounts, computed on the basis of appropriate actuarial
assumptions.
Actuarial Present Value. The amount of funds currently required to provide a payment or series of
payments in the future. It is determined by discounting future payments at predetermined rates of
interest, and by probabilities of payment. Also referred to as "present value."
City of Palm Beach Gardens Firefighters' Pension Fund D -12
Amortization. Paying off an interest - discounted amount with periodic payments of interest and
principal -- as opposed to paying it off with a lump sum payment.
Experience Gain (Loss). The difference between actual actuarial costs and assumed actuarial costs --
during the period between two valuation dates.
Funding Value of Assets. Also referred to as actuarial value of assets, smoothed market value of
assets, or valuation assets
Valuation assets recognize assumed investment return fully each year. Differences between actual
and assumed investment return are phased in over a closed 4 -year period. During periods when
investment performance exceeds the assumed rate, valuation assets will tend to be less than market
value. During periods when investment performance is less than the assumed rate, valuation assets
will tend to be greater than market value. If assumed rates are exactly realized for 4 consecutive
years, valuation assets will become equal to market value.
Normal Cost. The actuarial cost allocated to the current year by the actuarial cost method.
Sometimes referred to as "current service cost."
Unfunded Actuarial Accrued Liability. The difference between actuarial accrued liability and the
actuarial value of fund assets. Sometimes referred to as "unfunded past service liability," "unfunded
accrued liability" or "unfunded supplemental present value."
Most pension funds have unfunded actuarial accrued liability. It arises each time new benefits are
added and each time an experience loss is realized
The existence of unfunded actuarial accrued liability is not in itself bad, any more than a mortgage on
a house is bad. Unfunded actuarial accrued liability does not represent a debt that is payable today.
What is important is the ability to control the amount of unfunded actuarial accrued liability and the
trend in its amount (after due allowance for devaluation of the dollar).
City of Palm Beach Gardens Firefighters' Pension Fund D -13
SECTION E
CERTAIN DISCLOSURES REQUIRED BY STATEMENT
NO. 25 OF THE GOVERNMENTAL ACCOUNTING
STANDARDS BOARD
This information is presented in draft form for review by the Plan's auditor. Please let us know
if there are any items that the auditor changes so that we may maintain consistency with the
Plan's financial statements.
ACTUARIAL ACCRUED LIABILITY
The actuarial accrued liability is a measure intended to help users assess (i) a pension fund's funded
status on a going- concern basis, and (ii) progress being made toward accumulating the assets needed
to pay benefits as due. Allocation of the actuarial present value of projected benefits between past and
future service was based on service using the projected unit credit actuarial cost method.
Assumptions, including projected pay increases, were the same as used to determine the Fund's level
percent of payroll annual required contribution between entry -age and assumed exit age. Entry -age
was established by subtracting credited service from current age on the valuation date.
The preceding methods comply with the financial reporting standards established by the
Governmental Accounting Standards Board.
The unit credit actuarial accrued liability was determined as part of an actuarial valuation of the plan
as of September 30, 2011. Significant actuarial assumptions used in determining the unit credit
actuarial accrued liability include (a) a rate of return on the investment of present and future assets of
8.25% per year compounded annually, and (b) projected salary increases of 4.5% per year
compounded annually attributable to inflation and other causes, (c) additional projected salary
increases of 3.7% to 0.0% per year, depending on age, attributable to seniority /merit.
At September 30, 2011, the unfunded actuarial accrued liability is $21,945,772 determined as follows:
Actuarial Accrued Liability
Active participants (109 vested and 5 non - vested) $ 45,718,412
Retired participants and beneficiaries currently receiving benefits (14 recipients) 10,877,378
Vested terminated participants not yet receiving benefits (2 inactive) 501,879
Total Actuarial Accrued Liability 57,097,669
Actuarial Value of Assets (market value was $28,890,275) 35,151,897
Unfunded Actuarial Accrued Liability $ 21,945,772
During the period from October 1, 2010 to September 30, 2011, the Fund experienced a net change of
$7,889,610 in the actuarial accrued liability.
City of Palm Beach Gardens Firefighters' Pension Fund E -1
CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE
The City's funding policy provides for periodic employer contributions at actuarially determined rates
that, expressed as percentages of covered payroll, are designed to accumulate sufficient assets to pay
benefits when due. The normal cost and actuarial accrued liability are determined using a projected
unit credit actuarial cost method. Unfunded actuarial accrued liability is being amortized as a level
percent of payroll over periods ranging from 12 -25 years.
During the year ended September 30, 2011 contributions totaling $4,534,567 -- $3,942,436 employer
($3,745,497 from the City and $196,939 from the State under Chapter 175) and $592,131 employee --
were made in accordance with contribution requirements determined by an actuarial valuation of the
Fund as of September 30, 2009. The employer contributions consisted of $1,982,501 for normal cost
and administrative expenses, and $1,959,935 for amortization of the unfunded actuarial accrued
liability. Employer contributions represented 37.28% of covered payroll.
Schedule of Employer Contributions
Fis cal
Year
Valuation
Date
Annual
Re quire d
Contribution*
Percentage
Contributed
9/30/98 -99
9/30/1996
$ 200,759
100%
9/30/99 -00
9/30/1998
227,154
100
9/30/00 -01
9/30/1998
423,628
100
9/30/01 -02
9/30/1998
594,562
100
9/30/02 -03
9/30/2001
731,241
100
9/30/03 -04
9/30/2001
739,310
100
9/30/04 -05
9/30/2003
1,188,002
100
9/30/05 -06
9/30/2004
1,542,934
100
9/30/06 -07
9/30/2005
2,247,828
100
9/30/07 -08
9/30/2006
3,055,991
100
9/30/08 -09
9/30/2007
3,180,731
100
9/30/09 -10
9/30/2008
3,550,238
100
9/30/10 -11
9/30/2009
3,745,497
100
* Since it was stated to the actuary that the City's practice is to contribute at least the percent of payroll employer
contribution rate shown in the actuarial valuation results, the values shown are the actual contributions reported by
the City in the fiscal year.
City of Palm Beach Gardens Firefighters' Pension Fund E -2
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
Actuarial
Valuation
Date
Actuarial
Value of
Assets
(a)
Actuarial
Accrued
Liability
(AAL)
(b)
Unfunded
AAL
(b) -(a)
Funded
Ratio
(a) /(b)
Active
Member
Covered
Payroll
(c)
Unfunded AAL as
a Percentage of
Active Member
Covered Payroll
((b -a) /c)
9/30/1999
$ 3,943
$ 5,313
$ 1,371
74.2%
$ 3,194
42.9 %
9/30/2000
4,810
6,066
1,255
79.3
3,841
32.7
9/30/2001
5,415
6,675
1,260
81.1
4,255
29.6
9/30/2002
5,754
12,577
6,823
45.8
4,840
141.0
9/30/2003
7,183
17,411
10,258
41.2
6,542
156.8
9/30/2004
8,146
21,254
13,108
38.3
7,568
173.2
9/30/2005
10,791
28,083
17,292
38.4
8,774
197.1
9/30/2006 (a)
13,974
29,846
15,872
46.8
9,205
172.4
9/30/2007
18,248
33,826
15,578
53.9
9,549
163.1
9/30/2008
22,307
39,302
16,995
56.8
9,853
172.5
9/30/2009
26,484
44,357
17,874
59.7
9,994
178.8
9/30/2010
31,110
49,208
18,098
63.2
10,072
179.7
9/30/2011
1 35,152
57,098
1 21,946
61.6
10,576
1 207.5
Dollar amounts are in thousands.
* Based on the Entry Age Actuarial Cost Method until 2005, Projected Unit Credit thereafter.
(a) After changes in henefit provisions, actuarial assumptions, or cost methods.
Analysis of the dollar amounts of actuarial value of assets, actuarial accrued liability, or unfunded
actuarial accrued liability in isolation can be misleading. Expressing the actuarial value of assets as a
percentage of the actuarial accrued liability provides one indication of the system's funded status on a
going- concern basis. Analysis of this percentage over time indicates whether the system is becoming
financially stronger or weaker. Generally, the greater this percentage, the stronger the plan. The
unfunded actuarial accrued liability and annual covered payroll are both affected by inflation.
Expressing the unfunded actuarial accrued liability as a percentage of covered payroll approximately
adjusts for the effects of inflation and aids analysis of the progress being made in accumulating
sufficient assets to pay benefits when due. Generally, the smaller this percentage, the stronger the
plan.
City of Palm Beach Gardens Firefighters' Pension Fund E -3
SECTION F
SUMMARY OF VALUATION DATA RESULTS
IN STATE FORMAT
l�
w
rrTOT�
I�
W
L�L
l�
O
W H
�z
a�
0
0
N
O
M
O
C.
rl
rl
O
N
O
M
C.
O
O
Y
u
r
_
N
O
l
O
1p N V7
V7 l
1p 1p
V7 M 00
p 0 01
cz cl
oc�
r-
r-
O; oc�
� �
Li CC
Li
CC
�
N
�
czLi
cz
Y
u
r
_
N
l
,--� 01
1p N V7
V7 l
1p 1p
V7 M 00
p 0 01
oc�
r-
r-
O; oc�
O
cz
cz
ct
71
—ct
In
Al Al
CC
N
N
N N
CZ CZ
i.y
Vi
cz
cn
p
p U
C
�p4
N
O O
C
cz
0
rl
'
V
c�
cd
U
U
ti
a'
O
U
O
O
N
O
M
i.
Y
Y
rl
rl
O
N
O
M
i.
Y
Y
Y
IO 't C, Milt- oc 00 �
69
0 0
0
M l� r— M M�R r- O
N N M M
0 0
0
69
69 � 69
W
O_
O
U N
c
cz
"a �
O �
U y0
U U
cz O
cz v
O cz �
cz
I� H
cz�
cz
q� � O �y--I �y--I O Vl •� � � � ' 0
cz y O cz 7�
m w CZ
C� C� C� cz U
cz
cz cz
cd
c� O a� Q v O �O w a�i �� O a O
cz .0 m s-�
c : w� u v m v O- w `r V-)
m
c� O w
Y 7--I Y Y Y Y Y Sti Sti w U yy Vj 7--I V" W Y y Y C� Y rl cz O
0 0 0 Q + °
� U � rip � O � O � � u —ct v�
a cz ° cz "a
C/� Y Yyy CC Y Yyy Y 3�-I
N
O
O
N
O
M
S.
�7. COO
O
N
O
M
S.
O
�7.
O 0101 O ti 010 0�1
Fos
V') CO M V') l- CO O --i
Fos
O
O
N
O
M
o � �
N O
it t
U ty
O y
ca
ca
C+,
� O
� U
O
OF N U
U � �
� O a
•� U
W �
bA ,i:
N M
ff3 Fos
V')
N
M
d
O
U
N
0
O
M
O
'C
In
N
w
,O
'C
U
'C
w
M
N
M
ff3
Fos
Fos
U
U
3�
U
,to
°
ca
Ca
It
N
�
�
U
O
O
U
�
cn
cn
w
V')
N
M
d
O
U
N
0
O
M
O
'C
In
N
w
,O
'C
U
'C
w
M
1�
1�
N
� a
W
� W
W a
w A
O A
zz
ow
a
V
zz
o�
x
0
w
0
U
0
W)
:i
y
.w
=
(f)
.w
cw
F+I
:i
0
cw ,o
cw.�
M
N
a
N
�
M
A
H
�
CW CW
o
c
E
'D
H
ct
+a
O
V
N
cn
N
N
P-
n
N
�+
W
ct
V1
cn
cn
ct
z
0
U
0
DROP ACTIVITY
FOR THE PERIOD ENDED SEPTEMBER 30, 2011
City of Palm Beach Gardens Firefighters' Pension Fund F -5
9/30/2011
Age
Eligible
Elected
50
1
1
53
1
54
1
55
2
5
1
City of Palm Beach Gardens Firefighters' Pension Fund F -5
March 8, 2012
Ms. Audrey Ross
Resource Centers, LLC
4360 Northlake Boulevard
Suite 206
Palm Beach Gardens, Florida 33410
Dear Audrey:
Enclosed are 10 copies of the September 30, 2011 actuarial valuation of the City of Palm
Beach Gardens Firefighters' Pension Fund. One copy has been sent directly to the
Department of Management Services, Police and Fire Pension Funds, the office from
which Chapter 175 distributions are made.
One copy should be sent within 60 days, to:
Division of Retirement
Bureau of Local Retirement Systems
P.O. Box 9000
Tallahassee, Florida 32315 -9000
Respectfully submitted,
Y�
Brad Lee Armstrong
BLA:lr
Enclosures
cc: Mr. Steven L Gordon, C.P.A. (one report copy)
Mr. Allan Owens, City of Palm Beach Gardens