HomeMy WebLinkAboutMinutes Fire Pension 051605PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND
MINUTES OF MEETING HELD
May 16, 2005
A meeting of the Board of Trustees was called to order at 11:04 A.M. at Station 3, Palm
Beach Gardens, Florida. Those persons present were:
TRUSTEES
Ed Morejon
Philip Buttaravoli
Steve Rogers
Richard Beladino
Tom Murphy
TRUSTEE APPOINTMENTS
OTHERS
Margie Adcock, Pension Resource Center,
Administrative Manager
Mike Welker, Bogdahn Consulting,
Investment Monitor
Robert Sugarman & Pedro Herrera,
Attorney
Mike Dana, Dana Investment Advisors,
Investment Manager
It was noted that the terms for Richard Beladino and Tom Murphy is up. Mr. Beladino
advised that the City told him that they were both going to be reappointed at the June
Council meeting. Bob Sugarman advised that the Trustees continue with their position on
the Board until another appointment is made.
DISABILITY REVIEW
Mr. Sugarman advised that the Board was going to consider the disability review of
Kevin Mitchell. Mr. Sugarman stated that the Ordinance provides that disability
applicants are periodically re- evaluated. He reminded the Board that Mr. Mitchell was
re- examined and the physician stated that Mr. Mitchell was not totally and permanently
disabled. Mr. Sugarman stated that he sent Mr. Mitchell a letter advising of the Board's
decision to start the process to discontinue the disability pension of Kevin Mitchell based
on the IME and Mr. Mitchell is present at the meeting.
Kevin Mitchell addressed the Board. He discussed the background of his disability and
the process when his disability application was granted. He noted that a functional
capacity test was done during his disability application process and found that he was
unable to lift over 100 pounds as was required by the job description. He stated the he
wanted a functional capacity test to be done now rather than just an IME. He stated that
before the Board decides his entitlement to a continued disability benefit, he was
requesting to have a functional capacity test done based on the job criteria. Ed Morejon
stated that the job requirement has been changed to eliminate the requirement to lift over
100 pounds. Mr. Sugarman stated that it was the Board's choice of whether to send Mr.
Mitchell for a functional capacity test. Mr. Sugarman discussed the IME and the physical
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exam given to Mr. Mitchell. Mr. Mitchell said he had full range of motion but could not
lift anything over his head. He was requesting the same test that was given that found
him entitled to the disability. Dr. Buttarolvi stated that a functional capacity test would
advise the Board what Mr. Mitchell could do. He recommended that it be done at a
different medical center than the medical center where the original functional capacity
test was done. Mr. Sugarman stated that the Board has three choices: discontinue his
disability based on the IME; send him for a functional capacity test with the new job
description; or take the report and send it to the City and recommend that Mr. Mitchell be
returned to duty. He noted that the City may want to do some exams of their own and if
the City determines that Mr. Mitchell cannot be a firefighter, than that will resolve the
matter. Mr. Sugarman stated that Mr. Mitchell would lose his disability pension payment
in the interim. If the City determines that he cannot do the job, then Mr. Mitchell will get
his disability pension back. The matter will depend on the reason the City does not hire
him back. There was a lengthy discussion on the matter. A motion was made, seconded
and carried 5 -0 to move forward with a functional capacity test.
DISABILITY APPLICATION: KATHLEEN BUSH
Bob Sugarman reminded the Board that Ms. Bush has applied for a service - connected
disability. He stated that Ms. Bush's attorney, Richard Sicking, is also present at the
meeting. Mr. Sugarman reviewed the IME and noted that the physician questioned
whether Ms. Bush was at MMI, leaving the question of whether her injury was
permanent. Mr. Sugarman stated that Ms. Bush's attorney has provided the Gaines case;
a letter from the City which terminated Ms. Bush; and a recent report from her workers'
compensation doctor. Mr. Sugarman requested that Ms. Bush discuss with the Board
what she has or has not done since the February Board meeting.
Mr. Sicking addressed the Board. He reviewed the treatment that Ms. Bush has had over
the last 2 '/Z years. He noted that she was on light duty and then was eventually
terminated. He stated that they took Dr. Sherman's report to the workers' compensation
doctor, Dr. Estes. He stated that Ms. Bush followed up with the Board's requirements
and the workers' compensation doctor declined to provide any of the treatments. Mr.
Sicking made the argument that, under the Gaines case, Ms. Bush was terminated from
employment as a firefighter. Mr. Morejon noted that the memorandum from the City
stated that they were terminating Ms. Bush after one year of receiving workers'
compensation and not because she was unable to perform as a firefighter. Mr. Sicking
argued that common sense says that anyone with a cervical disc cannot be a firefighter.
He also noted that the City and the Union decided that someone needs to get well in one
year. Additionally both Dr. Sherman and Dr. Estes determined that Ms. Bush was totally
disabled. Mr. Morejon stated that the only issue really before the Board is whether her
injury is permanent and stated that there were firefighters working now with cervical
discs and noted that Dr. Sherman's report was not conclusive. Mr. Sicking stated that
Ms. Bush tried to pursue the recommendation of Dr. Sherman by taking it to workers'
compensation but workers compensation will not pursue the treatments. He noted that
Dr. Sherman stated that if she did not pursue the matter, she would be considered at
MMI. He noted that she is not pursing the matter at her choice, but the City's choice. Mr.
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Sugarman stated that he believed that the question of permanency is still there and
questioned whether she has availed herself to all the medical treatments available. Mr.
Sicking stated that Dr. Sherman is not able to testify under workers' compensation and
there is no other way for her to pursue the treatments recommended by Dr. Sherman. He
stated that Ms. Bush is not refusing treatment but rather the City will not provide it. Mr.
Sugarman stated that the Board could deny her disability application because of
permanency and Ms. Bush will be without a job and without a pension. He suggested
that the Board could write to the City and ask them to instruct the workers' compensation
doctor to do the recommended testing. Mr. Sicking stated that he would send the report
of the Dr. Sherman to the workers' compensation doctor and see what he says. A motion
was made, seconded and carried 5 -0 to send a letter to the City regarding the treatments
recommended by Dr. Sherman and to send the report of Dr. Estes to Dr. Sherman for his
comments.
Richard Sicking and Kathleen Bush departed the meeting.
ATTORNEY REPORT
Mr. Sugarman reported on the status of the agreement with Freedom Management. He
stated that they did not tell the Board that they were offering an unregistered security
which is an inappropriate vehicle for the Board to invest in. He stated that he has spoken
with Freedom Management and the Investment Monitor and noted that this Fund would
be their first client in Florida with their international product. They are trying to work
out an alternative product that would be appropriate and he is waiting to hear back from
them. Mr. Sugarman stated that the Board could move forward on another manager or
wait for Freedom to come back with an alternative. Mike Welker stated that he is willing
to wait to see what Freedom comes up with as an alternative. In the interim, he stated
that it would be cost effective for Dana to purchase some equities to give the Fund some
international exposure to diversify the Fund. Mike Dana discussed the ishares with the
Board. Mr. Welker stated that the Fund is at a stage where the Board needs to diversify
the portfolio. However, to put money in international equities, the Board is limited to
commingled funds or mutual funds. Dana can do ishares to get the exposure which will
help the returns going forward. He stated that he was looking at Dana for diversification
and because it was the most cost effective means at the moment. Mr. Welker stated that
he was comfortable with Dana's international product. Mr. Dana stated that he feels
comfortable with the investing guidelines for international equities. There was then a
discussion on real estate. It was noted that the Ordinance has not been passed yet to
allow for real estate investments. Mr. Welker stated that the Board had a lot of questions
on real estate and he asked Richard Cohen from ING to attend the meeting to answer any
further questions the Board has. A motion was made, seconded and carried 5 -0 to invest
in ishares with Dana Investment Advisors.
Mr. Sugarman provided the Board with a letter dated April 26, 2005 regarding the
divorce kit. A motion was made, seconded and carried 5 -0 to adopt the informational
recommendation and corresponding forms for members involved in dissolution
proceedings.
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There was discussion on updating the Summary Plan Description. It was noted that
normally the actuary does this for the pension plans. Mr. Sugarman suggested that the
Board decide what it is going to do with respect to the Actuary and then make a decision
on the Summary Plan Description.
The Board questioned the ability to provide lunch at the Board meetings. Mr. Sugarman
advised that providing meals is a legitimate meeting expense.
ING
Richard Cohen appeared before the Board and discussed further their real estate
investment of the Lion Properties Fund. He stated that it is owned by ING and discussed
the connection to ING. He stated that they are the largest real estate manager in the
world with $68 billion under management. He discussed the investments in the fund
which are comprised of residential, industrial, office and retail. He stated that there are
94 assets in the portfolio and the average asset size is $26 million. They have a very
broad insurance policy that insures all of their properties. They take money on a
quarterly basis and he discussed liquidation.
MINUTES
The Board reviewed the minutes of the meeting held April 7, 2005. A motion was made,
seconded and carried 5 -0 to accept the minutes of the meeting held April 7, 2005.
Tom Murphy departed the meeting.
RESPONSES TO REQUEST FOR PROPOSALA FOR ACTUARIAL SERVICES
The Board reviewed the responses to the request for proposal for actuarial services. The
Board noted that there were some problems with the current Actuary in the past with
getting things done. The Board stated that they would like to hear some new ideas. There
was a very lengthy discussion on the matter. Mr. Sugarman provided his comments on
all of the prospective firms. It was determined that the Board would invite Gabriel,
Roeder, Smith & Company; Public Pension Professionals; DuLaney and Company; and
Stanley, Holcombe & Associates to make a presentation at the August meeting.
Bob Sugarman and Pedro Herrera departed the meeting.
INVESTMENT MONITOR REPORT
Mike Welker appeared before the Board. He discussed the investment performance for
the quarter ending March 31, 2005. The Fund was up .24% for the quarter while the
benchmark was down 1.62 %. The total market value of the Fund as of March 31, 2005
was $11,514,000. The fixed income was down .90% for the quarter while the benchmark
was down .88 %. The total market value of the fixed income portion of the portfolio was
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$3,945,000. Mr. Welker advised that the fixed income is doing fine but is struggling a
little compared to the index. He stated that he was not too concerned. He noted that they
have shortened the duration due to expected interest rate increases. Equities for the
quarter were up .69% versus the S &P 500 which was down 2.15 %. The total market
value of the equity portion of the portfolio was $7,296,000.
DANA INVESTMENT ADVISORS
Mike Dana appeared before the Board. He reported on the performance of the portfolio
for the quarter ending March 31, 2005. He stated that the fixed income was down .62%
while the benchmark was down .88 %. Equities were up .69% while the benchmark was
down 2.15 %. The total portfolio was up .33% while the benchmark was down 1.63 %.
Mr. Dana discussed asset allocation. He noted that there is 64% in large cap equities;
22% in corporate bonds; 5% in federal agencies; 7% in ADRs; and 2% in cash. He noted
that they have put in place the small cap product since the end of the quarter. He noted
that they are invested in all sectors. He reviewed the current holdings of the portfolio. He
then reviewed the compliance material.
Mike Dana and Mike Welker departed the meeting.
ADMINISTRATIVE REPORT
Margie Adcock presented the list of disbursements to be made. A motion was made,
seconded and carried 4 -0 to approve the disbursements listed.
OTHER BUSINESS
There being no further business, and the next meeting being scheduled for Monday,
August 15, 2005 at 11:00 A.M., the meeting adjourned at 2:35 P.M.
Respectfully submitted,
Ed Morejon, Secretary