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HomeMy WebLinkAboutMinutes Fire Pension 031212PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD March 12, 2012 A meeting of the Board of Trustees was called to or der at 9:01.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 Brad Armstrong, Actuary Ed Morejon Troy Brown, Investment Consultant John Hamlin, Investment Manager PRESENTATION OF THE 9/30/2011 ACTUARIAL VALUATION R EPORT: (BRAD ARMSTRONG) Mr. Armstrong explained that he was here today to r eport the contributions requirements for the fiscal year beginning October 1, 2012. The City’s contributions increased this year by 2.86% of payroll for a total of 39.61% of c overed payroll. He explained that the increase this year was due to the following losses; loss of approximately $1.1M due to average salary increase of 7.2% versus 5.1% as expe cted, the loss of approximately $2.3M due to the rate of return on the value of ass ets of 1.1% versus the projected 8.25%, and the loss of approximately $0.6M due to 1 termin ation versus the 3.5 that was expected. Mr. Armstrong reviewed the Plan’s curren t assumptions and methods and stated that they should be reviewed again prior to the September 30, 2012 Valuation for any changes if needed. Also the funded ratio has s lightly decreased this year to 61.6% from 63.2% last year. The Trustees’ questioned the unanticipated salary i ncrease resulting in the approximate loss of $1.1M because there were no promotions or “step increases” due this year. Mr. Armstrong stated that the payroll did increase this year, but that he would have to go back and get together with the City to research it some more. The board agreed to table the approval of the Valuation until further research wa s done regarding the payroll increase for the fiscal year ending September 30, 2011. INVESTMENT MANAGER REPORT: DANA INVESTMENT ADVISORS (JOHN HAMLIN) Mr. Hamlin introduced himself to the board and gave a brief overview of Dana’s investment philosophy. He stated that they do not take sector beats as they are sector neutral, and this strategy minimizes the volatility associated with wide swings in sector performance from year to year. In addition they on ly buy stocks that are at a discount to the market, move with the index, and are paying div idends and yields as much as the index. Also they don’t overweight any sectors or stocks at any one time. Mr. Hamlin reported that as of February 29, 2012 th at portfolio’s value was $13,765,471.51, which was a gain of $2,671,868.06 s ince September 30, 2011. For the fiscal year to date they are ahead of the benchmark at 25.20% versus 22.79%, and for the year to date they are also ahead at 10.31% versus t he benchmark at 9.49%. He reviewed the sectors that contributed the most during the qu arter such as consumer discretionary, 2 energy, and utilities. The sectors that were laggi ng during the quarter were financials, information technology, and health care. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY BROWN) Mr. Brown reviewed the total funds performance for the quarter ending December 31, 2011 and also as of date. For the 1 st quarter of the new fiscal year the fund was slight ly behind the index net of fees at 5.96% versus 7.48%, but it was a huge come back from the previous last quarter. Although as of Februar y 29, 2012 things have increased even more and the fund is now up another 3.13% for the 1 month. Mr. Brown commented that there are no compliance issues at this time an d he does not have any recommendations at this time either. Mr. Brown stated that they had ICC Capital in their office last Friday to review their holding in AMR, which they took a big hit on recent ly. He reported that after their meeting he determined that there were no compliance issues with them and therefore they are still comfortable with ICC Capital at this time . The board discussed the effects (if any) of moving their fiscal year end date from September 30 to December 31. Mr. Brown stated that ultimately it does not matter in the end and reviewed his handout comparing the differen t historic fiscal year end performances. The handout reflected that when you compare different fiscal year ends over a long time period, they all work to equal the same return at the end. Lastly Mr. Brown commented that Intercontinental Re alty asked if they could attend the next meeting to give an update. The Trustees concu rred. MINUTES The Board reviewed the minutes of the regular meeti ng held on January 23, 2012 and the special meeting held on February 7, 2012. A motion was made by Ed Morejon to approve the minu tes of the January 23, 2012 regular meeting as amended. The motion was seconde d by Donna Wisneski and carried 4-0. A motion was made by Ed Morejon to approve the minu tes of the February 7, 2012 special meeting as amended. The motion was seconde d by Tom Murphy and carried 4-0. 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 the Attorney’s i nvoice for the double charge in drafting the Ordinance changes. Mr. Herrera commen ted that it was a mistake and he will revise invoice #79586 and resubmit. A motion was made by Ed Morejon to approve the disb ursements that were presented by the Administrator with exception to th e Sugarman & Susskind invoice #79586 in the amount of $2,522.25. The motion was seconded by Tom Murphy and carried 4-0. 3 BENEFIT APPROVALS The Board reviewed the application to enter the DRO P for Anthony Vazquez. A motion was made by Tom Murphy to approve the appl ication to enter the DROP for Anthony Vazquez. The motion was seconded by Ed Morejon and carried 4-0. Ms. Ross presented that board with the 2011 share a llocations. She commented that the Actuary will have the 2011 share statements complet ed within the next couple of weeks. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA ) Mr. Herrera notified the Trustees that in between m eetings he received a draft income deduction order from a member, in which he has revi ewed and commented on. Mr. Herrera briefly reviewed the outcome of the Leg islative session that recently concluded. He stated that no bills were passed tha t would impact 175/185 Plans or the FRS. Mr. Herrera reviewed the class action reports from January and February 2012. He commented that there were no filings or settlements ; therefore no action is needed at this time. Lastly Mr. Herrera stated that they received commun ication from the IRS regarding the determination letter that they filed quite sometime ago. The IRS has acknowledged the timely filing of the application and has requested certain amendments to the compliance language in the Plan. Mr. Herrera explained that t hey are working with the IRS agent that was assigned to the Plan to come to a final ag reement on the language. He noted that he will keep the board informed of any status chang e. OTHER BUSINESS Mr. Morejon updated that board on the current negot iations and commented that impasse was declared and they will have a union meeting and special masters meeting coming up soon. The board reviewed the Auditor’s engagement letter. They discussed the process of engaging in other Auditor’s and Mr. Herrera recomme nded issuing an RFP, although they are not legally required too. The Trustee’s discus sed whether they want to issue an RFP for Auditing services and also what their intention s were for issuing it. A motion was made by Donna Wisneski to assemble a l ist of Auditors and a RFP for next meeting. The motion was seconded by Tom Murph y and carried 4-0. Mr. Morejon noted that he would also like to look a t a list of Actuarial firms for a future RFP at the next meeting. Lastly the board discussed the process of selecting a Chair and Secretary. The board recently reselected the Chair and Secretary due to the Chairs term being expired, and it was noted that this has never been a practice in th e past. The Trustees’ stated that they would like to make a policy regarding this and disc ussed the stipulations and guidelines that would apply. 4 A motion was made by Donna Wisneski to direct the P lan’s Attorney to create a policy regarding the reselection of the Chair and S ecretary. The motion was seconded by Ed Morejon and carried 4-0. A motion was made by Donna Wisneski to amended her previous motion to include that the reselection of the Chair and Secretary be held on an annual basis every January. The motion was seconded by Ed Morejon an d carried 4-0. There being no further business, the meeting adjour ned at 11:58AM. Respectfully submitted, Tom Murphy, Secretary