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HomeMy WebLinkAboutMinutes Fire Pension 052112PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD May 21, 2012 A meeting of the Board of Trustees was called to or der at 9:03.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chair Audrey Ross, Administrator Tom Murphy, Secretary Pedro Herrera, Attorney Donna Wisneski Troy Brown, Investment Consultant Ed Morejon Peter Hapgood, Investment Manager Mark Joyce Mr. Rhodes noted that he would like to combine two agenda items into one: The item listed under the Attorney’s report regarding Article 48 ca n be combined with the City’s request listed under other business. INVESTMENT MANAGER REPORT: INTERCONTINENTAL REAL ES TATE (PETER HAPGOOD) Mr. Hapgood welcomed himself back to the Board and stated that they have been servicing this fund since 2010. He noted that this is an open ended commingled real estate vehicle that has a target yield of 6-8%, in which they have been meeting since they were hired. In addition he noted that this fund re ceives their quarterly dividends paid out to them, as they do not reinvest them for this Plan . As of March 31, 2012 the portfolio assets are up to $1,757,688 which was a return of 2 .96% for the quarter, and since inception they are up 14.82%. Mr. Hapgood explaine d that they currently have a queue to get into the fund, but not to exit. He also bri efly reviewed their debt schedule and commented that 99% of their debt is at a fixed rate and their goal is to be 50% leveraged; currently they are at 52.6%. In addition they have 21.8% of their debt maturing in 2012 and 17.2% in 2013. Lastly Mr. Hapgood reviewed the Plan’s portfolio oc cupancy rates and reported that health care buildings are 100% occupied, but office space is only 81.9% occupied. The total portfolio occupancy rate is currently at 88%. He explained that they work with their tenants directly to be able to keep the occupancy r ate up for all their buildings. Mr. Hapgood stated that they had a great recovery in th e 1 st quarter of 2012 which got them off to a great start. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY BROWN) Mr. Brown stated that they currently have an excess amount of cash in the Plan’s receipt and disbursement account which should really be tra nsferred out and invested. He recommended transferring $945K from the receipt and disbursement account to the Dana large cap core account. This would still leave eno ugh money in the receipt and disbursement account to payout benefits for the nex t 3 months. Mr. Brown also noted that he is making this recommendation to move the m oney to the Dana large cap core account because this is the most underweighted fund compared to the Plan’s asset allocation policy. 2 A motion was made by Ed Morejon to approve and auth orize the transfer of $945K from the Plan’s receipt and disbursement account to the Dana Investment Advisors Large Cap Core fund as recommended by the Plan’s In vestment Consultant to be back inline with the Plan’s asset allocation. The motion was seconded by Tom Murphy and carried 5-0. Mr. Brown updated the Board on May’s performance an d commented that it was relatively a good month. All 10 active managers ou tperformed during the month and the total fund gained another 4% since the end of March . Mr. Brown briefly reviewed the funds performance fo r the quarter ending March 31, 2012. He stated that during the quarter the emergi ng markets were up about 3% more than last quarter and there were double digit retur ns for most sectors. Also there were stronger than expected economic numbers due to unem ployment and housing rates dropping. Currently the fund has an overweight to fixed income which protected the portfolio during the down markets. Mr. Brown repor ted that the total fund outperformed the index for the quarter at 9.37% versus 4.54%, an d for they fiscal year to date they are up 15.89% net of fees versus the index at 16.66%. He reviewed each Managers performance during the quarter and stated that all managers and sectors outperformed their indexes. He noted that ICC Capital sold off some more shares of American Airlines which was hit hard, but still has a lot more to sel l off. Mr. Rhodes stated that he would like to see a complete list of ICC Capitals holding s and also an updated on American Airline since January. Mr. Brown commented that he will gather that information and provided to the Board. MINUTES The Board reviewed the minutes of the regular meeti ng held on March 12, 2012. A motion was made by Ed Morejon to approve the minu tes of the March 12, 2012 regular meeting. The motion was seconded by Mark J oyce and carried 5-0. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA ) Mr. Herrera reviewed the class action report from M arch 2012. He commented that there has been a claim issued against Wachovia and that t he claim forms are sent directly to the Plan’s Custodian, Regions Bank, so that they can fi le on behalf of the board. There is no action that needs to be taken by the Board at this time. Mr. Herrera stated that he is still in the process of completing a draft policy regarding selection of the Chair and Vice Chair and will have it available to review for the next meeting. Also he notified the Board that the Ordin ance calls for a Vice Chair, therefore we will put on the next agenda for selection of Vic e Chair. Mr. Herrera reminded the Trustees’ that their 2011 Form 1 Disclosures are due by July 1, 2012. ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROS S) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. The Trustees’ had a question regarding GRS invoice # 11 8075, for the charge of $935 for the additional study request by the Union on 2/23/12. The board stated that they did not 3 think this charge was correct and Ms. Ross commente d that she will contact GRS to get clarification. The Trustee’s differed paying this bill until further research is completed. Also there was a question regarding the Share distr ibution for Glenn Aitken. They noted that it was not his final balance and his remaining balance should have not been paid out to him until later this year when the Actuary compl eted the 2012 Share account statements. Ms. Ross noted that she will send Mr. Aitken a letter explaining this error. A motion was made by Ed Morejon to approve the disb ursements that were presented by the Administrator with exception to th e GRS invoice #1180756 in the amount of $14,670. The motion was seconded by Tom Murphy and carried 5-0. BENEFIT APPROVALS The Board reviewed the application for retirement f or Glenn Aitken. A motion was made by Tom Murphy to approve the appl ication for retirement for Glenn Aitken. The motion was seconded by Donna Wis neski and carried 5-0. Ms. Ross notified the Board that Ms. Wisneski and M r. Murphy were reappointed as Trustees’ and their term is set to expire on Septem ber 30, 2015. Ms. Ross reviewed the additional Fiduciary Liabilit y quotes that she received back for $2M and $5M coverage. Mr. Herrera recommended that the Board that they should increase their annual coverage to $2M when they ren ewal their Fiduciary Liability Insurance next year. The Trustees’ concurred and M s. Ross stated that she obtain a premium quote for $2M in 2013 when their Fiduciary Liability Insurance is set to renew. OTHER BUSINESS The Trustees’ reviewed the sample RFP’s for an Audi tor and Actuary that Ms. Ross provided. In addition the Trustees’ reviewed the l ist of Firm’s that provide Auditing and Actuarial services and narrowed it down to the Firm s that are located in Florida. The Board discussed on how to go about with the results and narrowing them down to only a couple of firms so that they can bring them in to b e interviewed by the Board. Ms. Ross stated that once she receives all the responses bac k, she will create a summary sheet and then the board can go from there and choose who the y would like to bring in to be interviewed. A motion was made by Ed Morejon to authorize the Pl an’s Administrator to send out an RFP for an Auditor and Actuary to the Firms on the revised list on behalf of the Board. The motion was seconded by Tom Murphy a nd carried 5-0. Ms. Ross noted that she received a request from the City’s Finance Director, Alan Owens, to add a couple items to the agenda regardin g the Plan’s pending Ordinance. Mr. Owens thanked the Board for their time and stated t hat he was here today to ask the Boards permission and authorization to have Mr. Her rera draft the revised pension Ordinance. He explained that all changes will be e ffective on the enactment of the approval of the Ordinance which has to go through t wo readings by the City Council. The Board briefly reviewed the revised pension chan ges that were included in this Ordinance and also questioned whether the other pen ding changes (i.e.: alternative DROP account investment option, IRS code provisions, etc .) will be included as well. Mr. Owens stated that he does not have a problem with a dding in the mandatory State 4 changes because the City will accept those, but he was not sure if the City would accept the alternative DROP investment account until they had more information as to what type of alterative they would be using. Per the City’s request, the Board directed Mr. Herrera to draft the revised pension Ordinance so that we c an move forward with getting an impact statement completed by the Plan’s Actuary. Lastly Mr. Murphy updated the board on the recent c onference he attended that was hosted by the Division of Retirement. He stated th at is was very informative, especially during these rough times. There being no further business, the meeting adjour ned at 12:07PM. Respectfully submitted, Tom Murphy, Secretary