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HomeMy WebLinkAboutMinutes Fire Pension 052107PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD May 21, 2007 A meeting of the Board of Trustees was called to order at 10:03 A.M. at Station 3, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Ed Morej on Steve Rogers Tom Murphy Philip Buttaravoli MINUTES OTHERS Margie Adcock, Administrator Ken Harrison, Attorney Dave West, Investment Monitor Mike Dana, Investment Manager The Board reviewed the minutes of the meeting held April 30, 2007. Mr. Morejon requested that the actual assumed rate of return be reflected in the last paragraph of the second page. A motion was made, seconded and carried 4 -0 to accept the minutes of the meeting held April 30, 2007 as amended. DANA INVESTMENT ADVISORS Mr. Dana appeared before the Board to report on the performance for the quarter ending March 31, 2007. He reported that the equity market was good and stronger than expected. He stated that there was low unemployment and a lot of demand for securities. He noted that some companies are buying back their own stock or doing private equity deals. As such, there are less stocks and bonds available and more demand for them. The total market value of the portfolio as of March 31, 2007 was $17,334,610. He discussed the performance for the quarter ending March 31, 2007. The total portfolio was up 2.45% for the quarter while the benchmark was up 1.38 %. The fixed income portfolio for the quarter was up 1.58% while the benchmark was up 1.59 %. Equities for the quarter were up 3.15% while the Russell 3000 was up 1.28 %. Since inception of June 10, 2002, the portfolio was up 8.10% versus the benchmark which was up 7.21 %. Mr. Dana reviewed the bond characteristics. He stated that the portfolio had an AA credit quality rating. The fixed income duration was just a little shorter than the benchmark at 3.12 years versus 3.66. He reviewed the treasury yield curve. He noted that foreign securities have done very well. He stated that it was a great economy worldwide. Mr. Dana stated that they have a growth product that he likes very much. He stated that he sees growth a little less expensive than value. He stated that he would like to blend the portfolio with 50% in growth and 50% in value. He thinks large cap value and growth will outperform temporarily small cap. Mr. West stated that perhaps the Board could talk more about it at the next meeting. Ua Mr. Dana reviewed the asset allocation. As of March 31, 2007 the asset allocation was 49% in large cap equities; 11% in small cap equities; 35% bonds; 2% in ARMs; and 3% in cash. Mr. Dana reiterated that he thought it was time to split growth and value. Mr. West stated that he sees a migration to large cap. He noted that the timing of the shift was the question. He was not sure there was an urgency to do it today. He stated that it was a topic that he would like to bring more information and a recommendation back to the Board on. There was a lengthy discussion. Mr. West stated that he would bring back information and a recommendation. The Board asked Mr. West to bring back options of other managers who manage strictly growth products as well. There was further discussion. The Board stated that they were pleased with the performance of Dana. However, if there were to be discussions on changing things, the Board wants to make sure that they follow their due diligence and look at all options. Mr. Harrison noted that his office provided a letter to be sent to the State on the annual expected rate of return. He noted that the State wants to see that the Actuary, Manager and Monitor had input. There was a lengthy discussion. INVESTMENT MONITOR REPORT Dave West appeared before the Board. He discussed the investment performance for the quarter ending March 31, 2007. The Fund was up 2.63% for the quarter while the benchmark was up 1.67 %. The total market value of the Fund as of March 31, 2007 was $19,375,000. The asset allocation at market was 62% in equities; 33% in fixed income; 2% in REIT and 3% in cash. He stated that he was not suggesting any rebalancing at this time. Equities for the quarter were up 3.37% versus the benchmark which was up 1.71 %. The equity portfolio managed by Dana was up 3.0% for the quarter while the benchmark was up 1.28 %. The total market value of the equity portfolio managed by Dana was $10,389,000. The international equities managed by Voyageur Asset Management, formerly known as Freedom Capital, were up 5.78% for the quarter while the benchmark was up 4.15 %. Since inception of December 31, 2005, the Fund's portfolio was up 32.58% versus the benchmark which was up 24.96 %. The total market value of the international equity portfolio was $1,707,000. The REIT portfolio was up 4.48% for the quarter while the benchmark was up 3.62 %. The total market value of the REIT portfolio was $331,000. It was noted that again American Realty had not called a lot of money for the REIT portfolio but stated that he was expecting a capital call shortly. There was a lengthy discussion on the capital calls. Mr. West stated that there were no compliance issues with the Fund. He provided a revised Investment Policy Statement. Mr. Harrison stated that he just received the Statement and had some initial comments. He stated that he would review the Statement and provide his comments. Mr. Dana departed the meeting. There was a discussion on the appropriate benchmark to use if the equity portfolio is split 50% in growth and 50% in value. Mr. West stated that he would recommend using the Russell 3000 for the total equity portfolio but noted that they would also compare Dana's 3 growth product to the appropriate growth benchmark and the value product to the appropriate value benchmark. ATTORNEY REPORT Mr. Harrison reported on the status of the contract with Galliard. He stated that at the last meeting Galliard said that they had other Florida public pension plan clients and could provide those contracts. However, what they provided was their standard boilerplate contact which he said was not acceptable. They responded back this morning that they could not provide the contracts with any other Florida clients without the permission of those clients. Mr. West stated that he would provide Mr. Harrison with a contract that Galliard has with another Florida public pension plan. Mr. Harrison reported on the status of the Ordinance amendment. He stated that the City indicated that they did not receive the impact statement and that is why the City did not put it on the agenda as of yet. Mr. Morej on stated that the impact statement was sent to the Finance Director. Mr. Harrison stated that he would continue to follow up with the matter. Mr. Harrison provided an update of the legislation. He reported on a survey done by Primus Global regarding risk tolerance. He noted that the survey showed the public plans are becoming more risk tolerant and corporate plans are becoming less risk tolerant. Philip Buttaravoli departed the meeting. Mr. Harrison noted that the Form 1 Financial Disclosures are due on July 1. It was noted that there was a vacancy on the Board from Richard Beladino. There was a lengthy discussion. It was noted that the Administrator should send a letter to the City Clerk regarding the vacancy. ADMINISTRATIVE REPORT Ms. Adcock provided the Board with a copy of the prior billing of the Attorney showing what was considered "miscellaneous" as requested at the last meeting. Ms. Adcock presented the list of disbursements to be made. It was questioned about the billing for travel by the Attorney. It was noted that the Attorney was not supposed to charge for travel if they were already up in the area for another meeting. Mr. Harrison stated that he would follow up on that matter and would make any necessary adjustment. He noted that it would have been an extra charge of $400. A motion was made, seconded and carried 3 -0 to approve the disbursements listed less $400 for travel on the invoice for the Attorney. Ms. Adcock reported that the Actuary would be able to produce the employee benefit statements for the Participants in the Plan. A motion was made, seconded and carried 3 -0 4 to authorize the Actuary to produce the employee benefit statements for the Participants in the Plan. OTHER BUSINESS Lt. Reid appeared before the Board. He inquired about the status of increasing the benefits of the Plan. It was explained to him that the Board authorized the Actuary to perform a study and the results of the study were provided to both parties. The matter is now with the negotiating parties. There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary