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
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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.
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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
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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.
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