Loading...
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. i Respectfully submitted, DAVID PIERSON, Secretary