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HomeMy WebLinkAboutMinutes GEPB 111405General Employees Pension Fund November 14, 2005 The General Employees Pension Board met on November 14, 2005 in the City of Palm Beach Gardens, Council Chambers located at 10500 N. Military Trail, Palm Beach Gardens, Florida. The meeting was called to order at 2:00 P.M. I. ROLL CALL Members Present: Stephen Parella, Dindial Laljie and Allan Owens, Jamie Smith, Members Absent: Kenneth Steele Also Present: Joseph Bogdahn of Bogdahn Consulting, Andrew Holtgrieve from Rockwood Capital and Attorney Scott Christiansen, Sarah Varga, Accountant H. APPROVAL OF MINUTES The Board approved the minutes from the August 8, 2005 and the August 15, 2005 meetings with the exception of correcting the spelling of two names. III. NEW BUSINESS Report from Rockwell Capital Andrew Holtgrieve from Rockwell Capital thanked the Board for hiring them for the equity portfolio. He went over the highlights of the third quarter of 2005. He stated that the economy is doing well. He went through each page of the equity portfolio and discussed maximizing the exposure on the equity side of the portfolio. He went through the different sectors stating that energy did well but has taken a step back in the last few weeks. Long term, they believe that this sector will do well. The financial sector has improved and healthcare and utilities are also doing well. He added that even though they have a very small percentage in the international sector this has started to do better over the past few weeks. He went over the securities that were bought for this portfolio. There were 38 names on the list including the price purchased, the principal amount, the commission paid, which was 2 cents per share and the total amount that was invested into each holding. The total came out to about 1.4 million dollars. He stated the trading and analysis and stated that is done once a month on the first week of the month. He added that that even though Rockwell has only been managing the portfolio for a short period of time there was a small profit made. There was discussion about how the reports will be presented to the board. Andrew stated that they will receive monthly and quarterly reports. Andrew stated that there have been changes within their company that will have no effect on this Pension Fund. He stated that the former Chief Investment Officer has taken a leave of absence and there has been a new person appointed as the Chief Investment Officer. He reiterated that this has no effect of this fund but he did want to make the board aware of this since they are announcing it to all their clients. Report by Joseph Bogdahn of Bogdahn Consulting Mr. Bogdahn gave a report on the progress of the entire fund. He stated that the fund was up 8.15% in the last fiscal year. The fund slightly beat the 8% assumption. He feels it was a good move to switch companies because Trustco's growth product had under performed the I O`h consecutive quarter. He explained that the funds transferred from Trustco to Salem on October 26, 2005 and they began investing the money soon after. The Board needs to update their investment policy statement. He discussed the recommended changes to the statement, which included bringing them up to current by going to investment rate on the bonds and taking the equity value line ratings out. He stated that the Board they will be meeting with each fund manager every other meeting. Stephen Parella made a motion to enter the Investment Policy Statement as the Board's legal policy. The motion was seconded by Allan Owens and passed 4 -0. Fiduciary Insurance for Pension Plan Scott Christiansen addressed the question that was asked about the Fiduciary Insurance at a prior meeting. Mr. Christiansen stated that there is Fiduciary Insurance through Gibson and Wirt and is Travelers Insurance. He is very familiar with their policy and feels it is fine for this fund. He stated there is $1 million coverage with a $5,000 deductible. There was discussion about where the money is being held and the type of coverage they have. Report from Scott Christiansen Mr. Christiansen reported that all the contracts have been completed with the new companies and everything looks good. The actuarial evaluation has been completed. There was question as whether Allan Owens was officially appointed as the fifth member by City Council. Allan stated he will follow up on that and get back with him. The board needs to do an annual report to City Council on the progress of the pension fund. He asked Sarah Varga to take the reports from Trustco and Bogdahn and attach them to Pension Letter Number Two and send it to City Council and the City Manager. He went on to discuss updates that need to be made to the plan because of changes that were made in the Internal Revenue Code. The changes he is proposing are: To change where the plan states it is mandatory for an employee to cash out will be chanted to read that it is non - mandatory to cash out. This will give the person a choice on whether to get a lump sum or roll it over. If they don't make a choice the money stays in the plan until they do. The other modification would be to change the minimum distribution rules to states by the time you are 70 and a half you have to start taking the funds out or be taxed on the money. 2 Stephen Parella made a motion to authorize Scott Christiansen to make the stated changes to the plan. Allan Owens seconded the motion and it passed 4 -0. Scott asked Allan to give the board an update on the progress of the City starting a new pension plan. Allan stated that during the budget process City Council discussed the possibility of reestablishing a new defined benefit plan. The majority of City Council was not in favor of a defined benefit plan, but they have directed staff to come back with alternatives as far as enhancing the pension program to general employees. Report from Foster and Foster Allan Owens stated that Patrick from Foster and Foster called and said that Doug is having car trouble and cannot make the meeting. They will reschedule Foster and Foster's report until the next meeting on February 13, 2006. Approval of Bills The Board approved the bills for SunTrust for $5,162.77, Christiansen and Dehner for $2,438.22 and for Bogdahn Consulting for $6,100.00. Joseph Bogdahn stated that since this account is usually 45 days past due, he suggested that pursuant to the contract, they can have a trustee look at the bill prior to the next meeting and pay the bill on time. Mr. Christiansen agreed that this procedure is already in their contract. They agreed to send the bill directly to the custodian and a copy to the City. Mr. Bogdahn is going to send a Letter of Authorization to Allan Owens to sign for permission to pay bills prior to the quarterly meeting. Mr. Christiansen asked that Sarah and Allan check the bills carefully before approving. Allan Owens thanked Sarah Varga for helping him with the agendas and the Pension Fund business. Stephen Parella added that he would also like to thank Sarah for being so helpful. Future Meeting Dates: The future meetings are scheduled for February 13, 2006, May 8, 2005, August 7, 2006 and November 18, 2006. IV. ADJOURNMENT With no further business to discuss the meeting adjourned at 2:49 PM. Public Information/Recording Coordinator 3