HomeMy WebLinkAboutMinutes Police Pension 051407City of Palm Beach Gardens Police Officers'
Pension Fund
Minutes of the Meeting Held
May 14th, 2007
The regular meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers' Pension Fund was called to order at 9:03 AM by Chairman, Jay
Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500
North Military Trail, Palm Beach Gardens, Florida.
TRUSTEES PRESENT
Jay Spencer, Chairman
David Pierson, Secretary
Jules Barone
Brad Seidensticker
Wayne Sidey
MINUTES
OTHERS PRESENT
John McCann (Thistle Asset Consulting)
Steve Stack (ICC Capital Management)
Bonni Jensen (Hanson, Perry, & Jensen, P.A.)
Annette Tucci (Palm Beach Gardens Clerk's Office)
Scott Baur (The Pension Resource Center, LLC)
Sam Nasca (Retiree)
MOTION: Mr. Pierson made a motion to approve the minutes as amended
on page 3.
SECOND: Mr. Barone seconded.
CARRIED: The motion carried unanimously 5 -0.
JAY SPENCER REORDERED THE AGENDA
SAM NASCA
Mr. Nasca began by thanking the Board for their efforts to improve benefits. Now
that he is a retiree, he encourages the Board to fight for health benefits and cost
offsets. Mr. Nasca stated that his medical insurance premiums far exceed what he
receives as a medical stipend. He discussed the fact that his stipend is based on his
14 years of service including his buyback. However, his disability benefit is
equivalent to 20 years of service. Mr. Nasca stated that his situation, as with any
disability retiree, requires extensive medical care. He commented that the philosophy
behind these benefits was that members should always receive full benefit. He then
stated that a new officer would receive such a small amount for medical on a
disability that would cause the member great hardship. Mr. Nasca has two primary
insurances between the City and Medicare. He commented that a full medical stipend
should be included with the pension of a disability retiree. Mr. Sidey recommended
that Mr. Nasca make a presentation to the Palm Beach County Police Benevolent
Association so that the issue would become a priority in bargaining. Mr. Nasca asked
that the Board take some leadership on the issue since the cost to members would
be minimal. The Board briefly discussed the Pension Protection Act (PPA) and the
$3,000 tax free benefit to medical insurance premiums, which helps Mr. Nasca less
because he is a duty disability retiree. The Board thanked Mr. Nasca and requested
Ms. Jensen to send an e-mail to Mr. Nasca in response to the meeting.
The Board briefly discussed past proposals for medical benefits, which members
declined to pay. The cost for a similar benefit today has increased substantially.
Property tax issues may also make dollars for new benefits scarce. The Board then
discussed strategies for increasing benefits but acknowledged that funding is scarce.
The Board asked Bonni to send a letter to Mr. Nasca regarding this discussion by the
Boa rd.
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting — John McCann
Mr. McCann began by stating that Thistle moved their offices to Boynton Beach. He
emphasized that he is accessible if Trustees ever have questions. Mr. McCann
reviewed the performance of major market indices for the quarter ending March 31,
2007. He then reviewed the compliance with the investment policy. Mr. McCann
reported that as of March 31, 2007, the Plan had 59% equities, 41% fixed income &
cash with total assets of $24,802,000. The plan earned 1.73% in compared to 1.89%
for benchmark, ranking in top 12% of peer universe. For 12 months the plan had
returns of 8.27% compared to 9.34% for benchmark. Mr. McCann reported that the
index funds served the plan well for the last seven years. He recommended that the
Board hire an active manager for the large cap portion of the portfolio. He sees
added value for active management in the market going forward and resurgence for
large growth. David Pierson questioned whether the Board could identify a manager
capable of beating the index. Mr. McCann said that he would continue to bring these
issues before the Board. Mr. McCann does not believe that indexing will always
work.
The Plan has an excellent track record of historical returns. Chairman Spencer wants
to look at increasing allocation to foreign investments. Ms. Jensen asked and the
trustees discussed that even the S & P 500 will become growth thick as growth picks
up. The Plan has excellent returns compared to the peer universe, net of fees. Ms.
Jensen asked for the report to include fiscal year numbers 6.02 versus the 7% index
reported by Mr. McCann.
Mr. Seidensticker asked if the report had information regarding the $1.2M allocated
by ICC for the quarter. Even though the international funds underperformed the
index for 6 months, the international allocation performed well on an absolute basis.
Mr. McCann stated that the Board can increase allocation to the international by
$1M. Mr. Seidensticker asked if the Board was not just chasing performance. Mr.
Spencer and Mr. Pierson supported increasing allocation. Mr. McCann recommended
increasing ICC growth allocation, taking $2M from RhumbLine ($1M to ICC growth
and $114 to international). The Board further discussed chasing performance. Steve
Stack commented that international prospects, along with growth, continue to look
good. The Board noted that large growth stocks still create international exposure,
since many of these companies have substantial sales overseas. Mr. McCann thinks
that all of the money should come from S &P 500.
MOTION: Mr. Seidensticker made a motion to move $2M from the S &P
500 ($1M to ICC Growth and $1M split evenly between the four
International Mutual Funds -$250K each).
SECOND: Mr. Sidey seconded.
CARRIED: The motion carried unanimously 5 -0
INVESTMENT MANAGER REPORT
ICC Capital Management — Steve Stack
Mr. Stack reported that ICC began buying large growth stocks at the beginning of
March, reaching close to a $1.2M allocation by March 31, 2007. Mr. Stack also
reported that ICC hired a new fixed income manager with a slightly different
approach than the manager that retired. ICC has a bit of a barbell approach, but
continues to shorten duration. ICC sees inflation staying quiet. ICC is even with the
market on duration, trying to pick up yield on fixed income.
ATTORNEY REPORT
Hanson, Perry & Jensen, P.A. — Bonni Jensen
Ms. Jensen drafted an amendment to the ordinance so buyback does not count
toward vesting. She also included provision linking the allocation to foreign to the
maximum allowed by statute.
MOTION: Mr. Pierson made a motion to approve the proposed ordinance
changes.
SECOND: Mr. Seidensticker seconded.
CARRIED: The motion carried unanimously 5 -0
Ms. Jensen had revised the agreement for Thistle reflecting assignment and name
change. The Board discussed information included in the report on the international
mutual funds.
Ms. Jensen provided a definition of retirement to address questions concerning police
officers serving in the reserves. She does not believe that reserve officers become
city employees, so retired members can serve in reserves. Ms Jensen also said that
members are not subject to windfall elimination with Social Security since members
pay into Social Security.
DISBURSEMENTS APPROVALS
MOTION: Mr. Pierson moved to approve the Disbursements.
SECOND: Mr. Seidensticker seconded.
CARRIED: The motion carried unanimously 5 -0
ADMINISTRATOR REPORT
The Pension Resource Center, LLC — Scott Baur
Mr. Baur reviewed the Balance Sheet and the Income and Expense Statement. There
was a question about the lack of employer contributions and $750K in employee
contributions in April. Mr. Baur will research the April custodial statements. Mr.
Baur updated the Board on the bank change from Bank of America to Bank Atlantic.
Mr. Baur discussed the issues with the payroll data received from the city.
SCHEDULE NEXT MEETING
The date for the next meeting was scheduled for Thursday August 30`h, 2007.
Future meetings will be scheduled for the second month of the quarter on the fourth
Thursday.
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Respectfully submitted,
DAVID PIERSON, Secretary