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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
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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.
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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
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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
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