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HomeMy WebLinkAboutMinutes Police Pension 020906v E PALM BEACH GARDENS POLICE PENSION FUND MINUTES OF THE MEETING HELD FEBRUARY 9, 2006 A regularly scheduled meeting for the Pension Board was called to order at 1:05 P.M., by Chairman Spencer in the Commission Chambers at the Palm Beach Gardens City Hall, Palm Beach Gardens, Florida. Those Board Members present were: Barone, Pierson, Sidey, Spencer and Seidensticker. Also present were: Bonni Jensen, Board Counsel; John McCann of GRS Asset Consulting, Inc., and Joseph E. Mastrangelo, representing Administrative Services, Inc. Chairman Spencer began the meeting by documenting the letter of resignation received from Administrative Services, Inc., and expressing to Mr. Mastrangelo their appreciation for his years of service to the Board. The Minutes of the meeting held on December 6th, 2005 were approved as submitted on a motion which was duly made, seconded and unanimously carried. Mr. Mastrangelo reviewed the Statement of Income and Expense whereupon a motion was duly made, seconded and unanimously carried ratifying all disbursements made subsequent to the last regularly scheduled meeting. Mr. Mastrangelo confirmed that there were no pension applications requiring the Board's attention at this meeting. Chairman Spencer requested Ms. Jensen to present her report as Board Counsel. Ms. Jensen noted that as an ongoing educational process for the City Council as well as the Oversight Committee, she and Chairman Spencer were planning to attend a meeting with the City Council to respond to the various items raised by the Oversight Committee and to respond to any questions which the City Council may have as well. Chairman Spencer requested that Mr. McCann plan on attending to review the historical returns of the Plan as related to the assumed actuarial rate of return which appears to be of concern to all parties. Mr. McCann confirmed that he would be pleased to attend and provide the City Council and Oversight Committee with in -depth information regarding the Plan's investment returns and diversification. Ms. Jensen reported that the ordinance amending the normal retirement, annual adjustments and monthly supplemental benefits' sections had been passed on first reading. Subsequent to the first reading, certain Plan Participants had raised 10 N PALM BEACH GARDENS POLICE PENSION FUND MINUTES OF THE MEETING HELD February 9, 2006 questions regarding the language relating to the monthly supplemental benefits and it had been requested that the language be changed to reflect that it is the intent of the Board of Trustees to raise the dollar amount of the benefit when the Chapter 185 monies increase sufficiently to fund the cost of a raise. After a thorough discussion, a motion was duly made, seconded and unanimously carried approving the revised ordinance incorporating that language. Ms. Jensen then presented to the Board a Statement of Policy regarding buy -back of Police /Non- intervening Military Service which she reviewed in its entirety. After a thorough discussion and certain recommended changes, Ms. Jensen was requested to incorporate those changes and revise the policy for the Board's final approval at the next regularly scheduled meeting. Ms. Jensen presented to the Board a draft of the Request for Proposal to be sent to prospective administrative managers and a listing of those candidates. Ms. Jensen confirmed to the Board by way of full disclosure that Hansen Perry & Jensen to have an ownership interest in The Pension Resource Center, however that ownership interest is being divested and the closing with respect to that matter should be accomplished within thirty (30) days. Ms. Jensen documented that she does not feel that there is any conflict of interest inherent thereto and the Board after some discussion agreed. The Board reviewed the various candidates concurring that there were only two who they would consider. A motion was duly made, seconded and unanimously carried to provide the Request for Proposal would be sent to Benefits USA and The Pension Resource Center with a special meeting to be held on March 30th, 2006 to interview the prospective candidates. The Board then discussed the various forthcoming educational conferences, recommending that any Board Member who can make every concerted effort to attend. Chairman Spencer requested Mr. McCann to present his report to the Board. Mr. McCann presented to the Board his firm's report for the quarter ending December 31St, 2005, beginning his report by reviewing the compliance checklist noting that only the areas concerning ICC's fixed income returns had some negative responses. Mr. McCann noted that ICC did not beat the index and were not in the top fifty percentile and just slightly lags the index over the last five (5) years. The Board inquired of Mr. McCann as to whether or not he would recommend any change in managers with Mr. McCann responding that he feels that there should be no change in managers since ICC Capital Management is close to the average manager in their returns. 2 w PALM BEACH GARDENS POLICE PEN ION FUND MINUTES OF THE MEETING HELD February 9, 2006 Mr. McCann then reviewed the total assets of tl comprised of 55% in equities, 44% in fixed incc and equivalents. Of the equity sector, the assE Rhumbline S &P 600, nine percent (9 %) in the Rh Rhumbline S &P 500. Mr. McCann reviewed reflected that the Plan continues to rank very hi industry. He went on to compare each of tl Rhumbline Advisors and [CC Capital Managemer the industry as well as a risk versus return compa The Board discussed with Mr. McCann their con( assumed actuarial rate of return of eight and on large commitment to a bond portfolio. Mr. Mc historical returns predicated on the asset allocati be in the position to meet the assumed actu emphasized to Mr. McCann he should bring aloe addressing the City Council and Oversight Comr they may have with respect to the Plan attaini return. portfolio which reflected it was ne and one percent (1 %) in cash allocation reflected 10% in the mbline S &P 400 and 36% in the -ie total portfolio returns which h compared to their peers in the assets under management by to the Index and their peers in son. :rns with respect to attaining the -half percent (8'/2 %) with such a ann responded and in review of n which the Board has, it should rial rate of return. The Board g these types of statistics when ittee to allay any fears of which ig his assumed actuarial rate of Pursuant to his discussions with the Board at thE last regularly scheduled meeting, Mr. McCann presented for their consideration a review of International Equity Mutual Funds. Mr. McCann reviewed each of 1he nine (9) candidates at length, with respect to their investment philosophy, fees and returns. The size and the scope of the funds and their ratings were also dis ussed in great detail. The Board felt that an allocation to the Internatio as to further diversify the Plan's portfolio ag allocation to this discipline would be appropriat where the assets for this new allocation would that it should be withdrawn from the fixed incorr McCann reminding the Board that that would chz equity and 35% fixed allocation. ial Equity area should be made so eeing that a five percent (5 %) The Board discussed in detail come from and it was concurred e portion of the portfolio with Mr. nge the asset allocation to a 65% Additionally, Mr. McCann pointed out that thes mutual funds would have to be bought through either ICC Capital Management r Rhumbline since neither he nor the Plan could purchase the mutual fund shares d rectly. After a very thorough and lengthy discussion, a motion was duly made, seconded and unanimously carried to change the asset all cation to one of 65% in equities and 35% in fixed income with five percent (5%) of the equity allocation to be in 3 PALM BEACH GARDENS POLICE PENSION FUND MINUTES OF THE MEETING HELD February 9, 2006 the International Mutual Funds in the sum of $1,000,000 authorizing Rhumbline to purchase the following funds and in their respective amounts: a $100,000 allocation to T. Rowe Price International, Disc. (PRIDX) a $100,000 allocation to T. Rowe Price International Stock (PRITX) a $200,000 allocation to ICAP (ICEUX) a $200,000 allocation to Vanguard International Value (VTRIX) a $200,000 allocation to Vanguard International Growth (VWIGX) a $200,000 allocation to Vanguard Global Equity (VHGEX) Mr. McCann confirmed that he will follow through with the purchase of these mutual fund shares through Rhumbline. Mr. McCann requested the Board's consideration for an increase in his annual fee of $1,000 predicated on the additional work which will be entailed in monitoring the International Mutual Funds. A motion was duly made, seconded and unanimously carried authorizing an increase in the annual consulting fee for GRS Asset Consulting, Inc. Mr. McCann then announced to the Board that Gabriel Roeder Smith & Company, the former parent company of GRS Asset Consulting, Inc., has divested themselves of the consulting business and Mr. McCann has purchased that company and it is now known as GRS Asset Consulting, Inc., with John McCann as President of a wholly separate and independent operating company. Mr. McCann presented in assignment for the Board's consideration in amending the current Consulting Contract to reflect this change and a motion was duly made, seconded and unanimously carried authorizing the Chairman and Secretary to execute the assignment of Mr. McCann's contract. The next regularly scheduled meeting was set for Thursday, March 30th, 2006, to commence at 9:00 A.M., in the City Council Chambers, City Hall, Palm Beach Gardens, Florida. There being no further business to come before the Board, Chairman Spencer duly adjourned the meeting at 3:30 P.M. Respectfully submitted, DAVID PIERSON Secretary N