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HomeMy WebLinkAboutMinutes GEPB 050806General Employees Pension Fund May 8, 2006 The General Employees Pension Board met on May 8, 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 by Chairperson, Stephen Parella at 2:15 p.m. I. ROLL CALL Members Present: Stephen Parella Dindial Laljie Kenneth Steele Jami Smith Members Absent: Allan Owens Additional Attendees: Sarah Varga, Accountant Scott Christiansen, Pension Board Attorney Dave West — Bogdahn Consulting Andy Holtgrieve — Rockwood Capital Advisors 11. Approval of Minutes The Board approved the minutes from the February 13, 2006 Meeting. Kenneth Steele pointed out that on the second page of the minutes the duration should be in years not percentages. It was also pointed out that Rockwood was spelled as Rockwell. The minutes were approved with the above - mentioned corrections. III. Report from Rockwood Capital Advisors Andy Holtgrieve presented the Report for Rockwood Capital Advisors. He reported that January was a good month, February was just so -so and March brought things back to life. He went through the market values for the stocks, cash, and the percentage of the estimated annual income. He stated that the change for the quarter was a positive $57,000 which was made up of net dividends /interest of $6,000, contributions of almost $2,000, disbursements, $22,000 and realized and unrealized gains of $72, 000 which ended with a market value of a little over $1.7 million for the first quarter of 2006. Mr. Holtgrieve explained to the Board that there was a large concentration in industrial stocks and went over some of the stocks involved in this concentration. He spoke about the number of stocks in the portfolio and the amount of mid cap and small cap stocks and explained the stocks that did the best and the worst for the quarter. Mr. Holtgrieve also spoke about the equity holdings and the market value for the equity holdings and talked about interest rates that should be going up in the near future. He added that he would to have like to seen the performance of the portfolio do better but he feels it is on the upswing for next quarter. IV. Report by Bogdahn Consulting Dave West presented the Report for Bogdahn Consulting. He went over the cash flow of and the beginning market value was $2,779,000, there was a net outflow of $42,000 and there was an investment gain of $75,000. The ending market value is $2,812,000. Mr. West talked about the funds returns which delivered 2.71 % and the policy was 2.25% and 1 they are 46 basis points for the policy. He spoke about long term numbers which includes the average for 1 year is 8.70 %, 3 years is 10.48% and 5 years is 4.38% and the down market wherein the fund captured 79 %. Mr. West spoke about the asset allocation which is at 60% equity, 37% fixed income and 3% cash. Mr. West presented the bonds section of the portfolio. He spoke about the allocations, the benchmarks, aggregate bonds and stated that the fund was down minus less than !/2%, the bond market as a whole was down .6 %. He stated that the beginning value of the equities is $1, 696, 000 and the investment gain is $79,000. There was a 4.69% gain for the quarter and the S &P 500 returned 4.21 %. Kenneth Steele had a question regarding what is Rockwood's "charge" and he asked if they are fully invested or can they do what they want. Scott Christiansen replied that the Ordinance provides that they can't be more than 65% of cost in equities. There is also the provision of the investment policy statement that is put together by Bogdahn Consulting which puts them at 60% at cost. That amount can be increased because the Ordinance says 65% and 5% could be moved from the bond side to the equity side. Discussion ensued about whether the Board should add an extra 5% to the equity side of the portfolio and the types of investments that could be purchased. Kenneth Steele made a motion that the Board increases the policy at cost to 65% as opposed to 60% and keeps the market value at 70 %. There was discussion regarding the motion and the board agreed that they wanted to take 5% from the bonds and put it toward international funds. Scott Christiansen stated there will now be two changes to the investment policy, Section A will now be 60% S &P 500, 5% International and under Section B, Equity performance will now include international at 5% and they are going to look at 100% equity which will be a combination of S &P 500 and benchmark. Kenneth Steele agreed that the statement that Scott Christiansen made will be his motion and Stephen Parella seconded the motion. The vote passed 5 -0. Discussion Regarding Commission Restructure Program Scott Christiansen stated that his company sent out a memorandum encouraging the use of an additional Commission Recapture Firm. He talked about the use of the commission recapture and explained what commission recapture is. He said that if the manager of the fund does a trade they are under the obligation to do the best job they can and get the best price. The commission dollars belong to the plan and need to be accounted for. The purpose of the commission recapture broker is to keep a handle on what the commissions are and the money manager is authorized to trade through the commission recapture firm. Discussion ensued about the commission recapture program and the expectations needed to be established for the program. Motion to incorporate Bogdahn Consulting addition to our commission in the recapture program with Kapis, and need to be followed through. Motion was seconded, passed unanimously. 2 Attorney Report: Scott Christiansen reported that the Ordinance regarding the IRS changes that was approved at the last meeting has been sent. He provided clarification on a returning retired employee on which plan they would be eligible for. It was determined that they would go into the Defined Contribution and this language has been incorporated into the Ordinance. It is getting legal review. It's time to re -do the summary plan description, it was last updated in May of 2004. The requirement is to update it every two (2) years. He will review and make updates as necessary and bring them back to the next meeting. Motion to authorize Scott to update the summary plan description. Motion was seconded, passed unanimously. Members were reminded to file the Financial Disclosure forms with the Supervisor of Elections by July 1, 2006. Scott addressed that the re- election of Officers of the Board is every two (2) years. Current Officers are Steve Parella as Chairman and Allan Owens as Secretary. Scott asked for consensus to re- appoint these members as Chairman and Secretary. Motion was made, seconded and pass unanimously. Discussion of renewing the fiduciary. The premium has gone up $112.00 from last year. Motion was made to accept the bill for Gibson & Wirt, Broker, fiduciary liability insurance with an aggregate limit of liability of $1,000,000 with a $5,000.00 deductible, the annual premium of $2, 290.00. Motion was made, seconded and passed unanimously. Discussion of terms for Dindial Laljie and Jami Smith who have accepted another term to serve on the board. Their terms were expiring in 2006. They will renew for three (3) more years. The Chairperson thanked them for their participation and appreciates their service. Approval of Bills. Motion to pay Rockwood Capital Advisors in the amount of $3,073.62 through March 31 st, seconded and passed unanimously. Next bill is for Sawgrass. Quarterly payment of $930.00 through March 31St. Motion was made to pay the bill, motion seconded and passed unanimously. Christiansen and Dehner in the amount of $1098.96 through February 28t ". Motion was made to pay the bill, motion seconded and passed unanimously. Bogdahn Consulting has the standard quarterly fee; motion made to approve the payment of $2,000.00, motion seconded and passes unanimously. Last bill is for Salem Trust. This bill reflects a minimum quarterly payment of $750.00. There is a charge of $3,000.00 annually. Motion was made to pay the bill, motion seconded and passed unanimously. IV. ADJOURNMENT 3 With no further business to discuss the meeting adjourned at 3:35 PM. APPROVAL: tephen Parella Dindial Laljie Allan Owens -)t(- (� L64<5 IX4 Kenneth �e Jamie Smith Submitted By: Z--, a, I Ray Ellis, qeputy City Clerk Note: These summary minutes are prepared in compliance with 286.011 F.S. and are not verbatim transcripts of the meeting. A verbatim audio record is available from the Office of the City Clerk. 0