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HomeMy WebLinkAboutMinutes GEPB 111306General Employees Pension Fund November 13, 2006 The General Employees Pension Board met on November 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 by Chairperson, Stephen Parella at 2:00 p.m. L ROLL CALL Members Present: Members Absent Stephen Parella Dindial Laljie Kenneth Steele Allan Owens Jamie Smith Chair Additional Attendees: Sarah Varga, Accountant Scott Christiansen, Pension Board Attorney Dave West — Bogdahn Consulting Andy Holtgrieve — Rockwood Capital Advisors Joseph Bogdahn — Bogdahn Consulting Brad Heinrichs — Actuary, Foster & Foster 11 Approval of Minutes The Board approved the minutes from the August 7, 2006 Meeting by a unanimous vote of 4 -0. M. Report from Rockwood Capital Advisors Andy Holtgrieve presented the report for Rockwood Capital Advisors. He reported that there has been a pause in the rate hike policy. The stock and bond market are moving in the same direction. The portfolio summary shows good growth with good returns. The bad news is that the portfolio is trailing the third quarter and year -to -date benchmark. The rate of return for the 11 -month period is 14.1 %. The quarter began with 1.7 million in equity; it ended with $1.8 million in the portfolio. This is a $156,000.00 change with $73,000.00 in gains. There is a "theme" change in the equity markets from small -mid cap to large cap growth type of a market. The emphasis is now being placed on larger companies. The energy stocks and healthcare stocks did not do well. The portfolio was helped by the financial and consumer stocks. Mr. Holtgrieve went over what was bought and sold as well as the performance values. Allan Owens asked about the cash allocation ratio. The cash is due to the monies that were shifted from the bond portfolio to be invested in the international markets. This was done as of last week. This is roughly 2% of the portfolio or $30,000.00. IV. Report by Bogdahn Consulting Dave West presented the Report for Bogdahn Consulting. He went over the required rate of return which was 7.79 %. The target rate was 7.93 %. He stated the rate of return will be measured on the benchmark of 5% allocation to international funds. This change will GEPB Minutes 111306 Page 1 allow Bogdahn to be in sync with the allocations stated by Rockwood Consulting. He reviewed the cash flow for the year. The year started with $2,779,000.00 with a net outflow of $97,000.00. The investment gains were $152,000.00. The fiscal year closing balance was $2,834,000.00. The peer group ranking for the rate of return for the year was 7.79 %. The three year ranking was 8.4 %; the five year was 5.53 %. He then reviewed the asset allocations. The equity allocation at close was 61 %; 33% was from fixed income and 6% from cash. Fixed income result $1,000,000.00; 4.52% from Sawgrass fixed income effort. This outperformed the target policy which was the Lehman aggregate bond index at 3.67 %. Equities allocated are 1.7 million. For the year 9.72% net, target is 10.79 %. One year peer group ranking is 60`h percentile for the equity effort. V. Report by Foster & Foster Consulting Brad Heinrichs reported on the revised evaluation report of October 1, 2004. The Division of Retirement Actuary reviewed the report in November 2006. After a series of discussions a compromise was reached allowing for a revision of the report. The revision will now allow hurricane- related overtime to be in the pay for the purpose of projections for those employees within three years of retirement. The contribution requirement for the City has gone up $403.00. He then reviewed the October 1, 2006 report. There was good news to report in that contribution requirements went down in a percentage of payroll. This went from 38.7% to 36.4 %. The 8% benchmark was beat which is favorable. Salary increases were not as high as expected. The pay increase was 5.8% so there is no need to fund for a larger benefit, which is favorable and there were no turnovers which is not favorable. No change in funded status within the last year was reported. The 2006 report servers as the basis for formulating the contribution requirements ending fiscal year for 2008. The funded, status of the plan is improving. Actual value of accrued benefits is $2,868,064.00. We are on target with accrued assets. The fund exceeded the assumed rate of return. The assumed rate was 8% and the rate of return was 8.55% on a four -year average. A motion was made to approve these two actuary evaluation reports. The motion was seconded and passed 5 -0. Attorney Report: Scott Christiansen reported that each time an actuary evaluation report is approved, state law requires an expected rate of return be declared. Joseph Bogdahn declared 8% for the next year, several years and long term. Motion was made, seconded and approved 5 -0. Operating rules and state law require that a report to City Council be done with investments, assets and returns. This is Pension Letter #2 which is required at the end of the fiscal year. Scott sent over a revised list of meetings for 2007: These dates are: February 12; May 14; August 13; November 12, 2007. The Ordinance that Scott sent to the City is going to City Council Agenda, December 7, 2006. Revised Summary Plan Description: Revision is required every two years with redistribution. The changes are as follows: Normal and early retirement payments will commence on the first day off the month following your employment. This states that you need to retire at the end of the month because you will not receive a pension check until the first day of the month. Re- employement after retirement: If you retire early and GEPB Minutes 111306 Page 2 return to work your ability to obtain your benefits could be restricted. Motion made to approve the Revised Summary Plan Description, this was seconded and passed 5 -0. Approval of Bills: Motion to pay Sawgrass. Quarterly payment of $836.00 through September 30, 2006. Motion was made to pay the bill, motion seconded and passed unanimously. Rockwood Capital Advisors in the amount of $3273.37 through September 30, 2006. Motion made to pay the bill, motion seconded and passed unanimously. Christiansen and Dehner in the amount of $511.74 through September 30, 2006. 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. Salem Trust. This bill reflects a minimum quarterly payment of $750.00. Motion made to pay the bill, motion seconded and passed unanimously. Foster & Foster for actuary evaluation and attendance of February 13, 2006 meeting with exhibit fee of $4059.00. Motion was made to pay the bill, motion seconded and passed unanimously. IV. ADJOURNMENT With no further business to discuss the meeting adjourned at 3:30 PM. GEPB Minutes 111306 Page 3 APPROVAL: , A&evA, s Stephen Parella, Ch air Do o (.Qi Dindial Laljie Allan Owens K R 5f �Q2� Kenneth Stee e Jamie Smith Submitted By: Ray hlTis- 7 Deputy 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. All referenced attachments on file in City Clerk's office. GEPB Minutes 111306 Page 4