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HomeMy WebLinkAboutMinutes GEPB 021306General Employees Pension Fund February 13, 2006 The General Employees Pension Board met on February 13, 2006 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 2:10 P.M. I. ROLL CALL Members Present: Stephen Parella, Dindial Laljie, Allan Owens, Kenneth Steele, and Jami Smith Also Present: Joseph Bogdahn of Bogdahn Consulting, Dave West of Bogdahn Consulting, Brad Heinrichs, Foster and Foster, Chris Greco of Sawgrass Investments, Attorney Scott Christiansen, and Sarah Varga, Accountant, City of Palm Beach Gardens H. APPROVAL OF MINUTES The Board read and approved the minutes from the November 14, 2005. III. OLD BUSINESS Stephen Parella inquired about the status of Allan Owens reinstatement to the Board. Allan confirmed that a resolution was signed by City Council to reinstate his appointment. III. NEW BUSINESS Report from Foster and Foster Brad Heinrichs, actuary from Foster and Foster, gave his report to the Board. He went over the contribution requirement and how the contribution requirement is developed. He stated that the investment return failed to meet the 8% assumption value and therefore the contribution requirement will be higher for the next year. He went over the funding status of the plan and talked about the assets. He explained that if the plan was going to shut down today there would be just about enough money to do so. He discussed the liabilities which are 3.3 million dollars and stated that the plan needs to continue to be funded because of the liabilities. He stated there was an actuarial loss of $49,610 but this loss can be amortized over 30 years. There was also discussion regarding the 8% assumption and the long term effect. There was also discussion regarding how well funded the plan is and what the standards in the industry are. A motion was made by Kenneth Steele to approve the report by Foster and Foster. Allan Owens seconded the motion. The motion passed 5 -0. Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes Report from Joseph Bogdahn from Bogdahn and Bogdahn Mr. Bogdahn introduced Dave West who has recently joined the firm as the chief investment officer. The account reconciliation showed that $19,000 more went out of the fund than came in. Since this is a closed plan this is normal activity. The investment gain for the quarter was $60,000 and the ending value is $2,779,000. The fund was up 2.07% for the quarter and the indexes were up 1.5 %. He talked about the Sawgrass portfolio and stated this was up 1.48% and the indexes were at 1.42 %. Rockwell's report is up 6.71% and the index is up 3.54 %. He stated that the transition to the new companies went very well. Report from Chris Greco of Sawgrass Investments Mr. Greco announced that Sawgrass is now 100% employee owned. He went over the report. He showed the board how the portfolio is invested including the contributions and losses. He said the duration is 4.4% and the benchmark is 5.2 %. He said the average maturity bond they hold is 7.2% and the benchmark is 7.6 %. He added that that the fund is a little light in corporate and they want to bring it up to about 40% going forward and would like to add put bonds as well. They are looking to buy the right bonds at the right price and yield. He talked about the different charts that are in the report and how they have the fund structured by quality. He stated that Sawgrass does not see a value in adding a lower grade over long time frames. He also went over the maturity of the portfolio, the holdings, and the mortgage security that has a yield of 5.3 %. He summed up the report by showing a chart of the fixed income including what long bonds are doing compared to short bonds and their percentages. There was discussion regarding the cash part of the portfolio and how that should be handled in the future. Joseph Bogdahn stated that this subject will be brought up again at the next meeting because he is working with the custodian to decide how much cash should be maintained in the receipts and disbursement account. Attorney Scott Christiansen's Report Mr. Christiansen recommended making a motion that states that based on the actuary report, the Board expects to get an 8% investment return for the next year. Stephen Parella made the motion and Allan Owens seconded it. The motion passed 5 -0. Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes Mr. Christiansen said that Pension Letter Number One has to be completed with a copy to the State, the Actuary, Allan Owens, Finance Director and the City Manger. This letter declares the 8% assumption. There was discussion about the terms of the board members because Mr. Christiansen feels that when Jami Smith and Din Laljie came on the Board they filled positions of board members whose terms are expiring. Allan will check on the terms and bring this back at the next meeting. Allan is also going to check on the schedule for appointing new officers because this Board appoints new officers every 2 years. Mr. Christiansen talked about an Ordinance he put together that has to do with the Internal Revenue and the mandatory cash outs within the plan. The number of provisions in the plan have been changed to eliminate the mandatory cash out feature and set up a situation where people will have to make a choice on what to do with their money when cashing out of the plan. He also said there is a paragraph in the ordinance regarding distribution rules and what is required by the IRS. He discussed reemployment after retirement. He recommended that if a person retires and then comes back to work they not be able to rejoin this plan, unless they left under early retirement. Stephan Parella made a motion to approve Scott Christiansen's Ordinance and send it forward to the City Council. Allan Owens seconded the motion and it passed 5 -0. Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes Bills to be Paid There was discussion about the bills that were being paid prior to the Board meeting to approve them. Sarah Varga stated that it has been approved to prepay bills to Bogdahn, Sawgrass, Rockwell and Salem. There was discussion about Scott Christiansen's bill also being prepaid and it was determined that there is a provision in the operating report that states that any company with a contract can be paid prior to the Board meeting to approve the bill. Allan is going to look over the bills from Scott Christiansen first, sign them, and then have them prepaid along with the other contractual bills. The following bills were approved by the Board: 1) The final bill from Suntrust for $1340.69 to close account and transfer. Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes 2) Statement fee from Sawgrass for $675.00 Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes 3) Salem Trust bill for quarterly fees for $750.00 Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes 4) Bill from Foster and Foster for $3410.00. Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes 5) Quarterly fee from Rockwood on 70 basis points in the amount of $2180.59. Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes 6) Bill for services of Scott Christiansen in the amount of $743.58 Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes 7) Bill for Bogdahn Consulting for quarterly fee of $2,000.00 per contract. Motion made by Stephen Parella and seconded by Allan Owens. Passed 5 -0 Parella Yes Steele Yes Owens Yes Laljie Yes Smith Yes IV. ADJOURNMENT With no further business to discuss the meeting adjourned at 3:35 PM. Submitted w S an Bell, Public Information/Recording Coordinator