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HomeMy WebLinkAboutMinutes Police Pension 102011City of Palm Beach Gardens Po /ice Officers' Pension Fund Minutes of the Meeting Held October 20, 2011 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 Wayne Sidey in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT OTHERS PRESENT Jay Spencer, Chair (arrived 9:47AM) Audrey Ross (Resource Centers) David Pierson, Secretary Bonni Jensen (Law Offices of Perry & Jensen) Brad Seidensticker, Trustee Donna Kramer (PBG Clerk's Office) Wayne Sidey, Trustee Steve Stack (ICC Capital Management) John McCann (Thistle Asset Consulting) INVESTMENT MANAGER REPORT ICC Capital Management — Presented by Grant McMurray Mr. Stack reported that it was a challenging quarter for equities as all sectors were down. On the bond side, things were a little bit better. He commented that looking back the last 6 months were kind of expected due to the junk rally that lead up to the more recent events, like the down grading of the credit ratings. Mr. Stack stated that ICC will remain in Treasuries as they just recently moved out of Corporates. Also they will keep some risk in the portfolio and they will continue to stay about 20% duration to the benchmark. For the quarter ending September 30, 2011 the bond portfolio did out perform the benchmark at 4.09% versus 3.82 %, but on the growth side things were complete opposite and the fund was behind the benchmark at - 19.90% versus - 13.14 %. He explained that during the quarter they over weighted sectors that were more negative and underweighted sectors that were more neutral, which lead to there underperformance. Mr. Stack reviewed the current position of the growth portfolio and commented that is now on the more conservative side, but still very well diversified. INVESTMENT CONSULTANT REPORT Thistle Asset Consulting — Presented by John McCann Mr. McCann reviewed the plans aggregate chart for the fiscal year ending September 30, 2011. He explained that there are 3900 stocks in the portfolio and then reviewed the plans investment style box. There is 55% in large cap, 27% in mid cap and 19% in small cap which is inline with the S &P500. Mr. McCann commented that this fund is nicely diversified between all sectors as well. Mr. McCann presented the board with the report for the quarter and the fiscal year ending September 30, 2011. He stated that we were having a great quarter until September came along and then all sectors went negative. He reviewed the plans compliance checklist and confirmed that we are still inline with the policy, although we do need to rebalance. Mr. McCann recommended taking $2,580,000 from ICC fixed income as they are over weighted, and split evenly ($860K each) between the 3 S &P Rhumbline accounts. Minutes 10- 20- 11.doc Page 1 of 4 MOTION: Mr. Pierson made a motion to approve and authorize the transfer of $2,580,000 from ICC Capital's fixed income account to the 3 Rhumbline S &P funds, and then to be evenly disbursed ($860K each) between the 3 Rhumbline accounts to be inline with the Plan's policy as recommend by the Plans Investment Monitor. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 3 -0. The total fund was negative for the quarter but did outperform the benchmark at -9.64 versus -9.74. For the fiscal year the plan did not meet its actuarial assumed rate of return, but the fund was still positive and did a lot better then a lot of other funds at .22% versus 1.76 %. He commented that equities had a horrible quarter and one year, but all the Rhumbline accounts are doing great in which they actually outperformed their index for all time periods. Mr. McCann reiterated that it was not a good quarter and things have since changed, but he does not have any recommendations to any of the managers at this time. He reviewed the funds risk versus reward chart and stated that this plan takes a lot less risk then the funds policy, but is still inline with the policy. Mr. McCann handed out a separate report regarding an allocation to Real Estate. He reviewed the samples he did in which he took the current portfolio and added different amounts of Real Estate into it and then projected what the plans return would have been for that time period. Adding Real Estate into the portfolio further diversifies it and would fit nicely into this portfolio. Mr. McCann also reviewed the reasons why it is a good time to get into Real Estate although it is down. He explained that when you get in on the bottom then you are the first to be in it when it takes off. Also you get income every quarter; although he did explain that it is not a liquid asset and has a long lock up time. He stated that he brought in a search of a couple of active investment mangers for Real Estate if the board was interested in moving forward. The Trustees discussed the investment and concurred that they were interested in learning more about it. Mr. McCann reviewed some of the Real Estate mangers historic performances, investment styles and fees. He commented that the board should narrow their choices down to 2 or 3 managers and then invite them in for a presentation. The board agreed to invite JP Morgan and American Realty to a special meeting to present. Mr. McCann stated that he will contact both firms to set up a meeting, although he did note that JP Morgan had a $5M entry minimum. ATTORNEY REPORT Law Offices of Perry & Jensen - Presented by Bonni Jensen Ms. Jensen reviewed the revised buyback policy and the change that was made regarding adding in a date as to when the non vesting clause was added. MOTION: Mr. Seidensticker made a motion to approve the revised buyback policy as presented. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 4 -0. Ms. Jensen passed out the statement of policy regarding expenses associated with public records, class actions, and domestic relations orders. She explained the purpose of having these guidelines. Minutes 10- 20- 11.doc Page 2 of 4 Ms. Jensen presented the board with the updated summary plan description and briefly reviewed the revisions. Mr. Ross noted she will distribute copies to all active members. MOTION: Mr. Spencer made a motion to approve the revised summary plan description as presented. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4 -0. Ms. Jensen reviewed the memo regarding the Form 1 reporting disclosure of "intangible personal property ". Lastly Ms. Jensen updated the board on the Salem Trust transition and stated that it is still in the process. ADMINISTRATOR REPORT Resource Centers - Presented by Audrey Ross Ms. Ross presented the board with the 2012 meeting dates. Ms. Ross explained to the board that she obtained a quote regarding general liability and hired /non -owned auto insurance which is $575.92 for one year. MOTION: Mr. Spencer made a motion to bind coverage for the general liability and hired /non -owned auto insurance for $575.92 per year. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carried unanimously 4 -0. Ms. Ross presented the board with the September 30, 2011 audited engagement letter. Ms. Jensen commented that she has reviewed it and is ready for execution. MOTION: Mr. Spencer made a motion to approve and execute the September 30, 2011 audited engagement letter as presented. SECOND: Mr. Sidey seconded the motion. CARRIED: The motion carried unanimously 4 -0. MINUTES MOTION: Mr. Spencer made a motion to approve the minutes from the July 21, 2011 regular meeting and the August 16, 2011 special meeting. SECOND: Mr. Pierson seconded the motion. CARRIED: The motion carried unanimously 4 -0. DISBURSEMENTS APPROVALS MOTION: Mr. Pierson made a motion to approve the disbursements. SECOND: Mr. Seidensticker seconded the motion. Minutes 10- 20- 11.doc Page 3 of 4 CARRIED: The motion carried unanimously 4 -0. OLD BUSINESS N/A OTHER BUSINESS The board reviewed the proposed fee increase letter from GRS. Ms. Jensen explained that due to the new requirements that were passed in S131128, the Actuary now has to report additional information in their Actuarial Valuation reports. Due to the extra work GRS is requesting a flat fee increase of $750 for the additional reporting. MOTION: Mr. Spencer made a motion to approve the proposed GRS fee increase of $750 for the additional reporting in the Actuarial Valuation report due to the new SB1128 requirements. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4 -0. PUBLIC COMMENTS N/A A]OURN There being no further business, and the future meetings are scheduled for the 3rd Thursday of the first month proceeding scheduled for Thursday December 8, 2011 scheduled for Thursday January 19, 2012 the meeting at 11:12AM. Respectfully submitted, DAVID PIERSON, Secretary the quarter. The next special meeting is @ 9AM and the next regular meeting was at 9AM; the Trustees officially adjourned Minutes 10- 20- 11.doc Page 4of4