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Minutes 1-26-12.doc
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City of Palm Beach Gardens Police Officers’
Pension Fund
Minutes of the Meeting Held
January 26, 2012
The regular meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers’ Pension Fund was called to order a t 9:07 AM by Jay Spencer in the
Council Chambers at the Palm Beach Gardens City Hal l at 10500 North Military Trail,
Palm Beach Gardens, Florida.
TRUSTEES PRESENT OTHERS PRESENT
Jay Spencer, Chair Audrey Ross (Resource Ce nters)
David Pierson, Secretary Bonni Jensen (Law O ffices of Perry & Jensen)
Brad Seidensticker, Trustee Donna Kramer (PBG Clerk’s Office)
Marc Glass, Trustee Steve Stack (ICC Capital Ma nagement)
Wayne Sidey, Trustee John McCann (Thistle Asse t Consulting)
Steve Palmquist (GRS)
Jim Burdick (CBH)
Mr. Spencer introduced and welcomed new Trustee Mar c Glass to the Board. He is
the new Trustee that was elected to fill Mr. Barone ’s vacancy.
Discussion with City Regarding the Collective Barga ining Agreement
Changes to the Pension Plan & Chapter 185 Money
Ms. Ross stated that the City had asked the Pension Board to reschedule their
January meeting to today so that the City’s Finance Director could be present to
review and discuss some of the pension changes. It was noted that the board did
comply with the City’s request and rescheduled thei r meeting, although no one from
the City ever attended.
Ms. Jensen explained that the Police Officers did n ot pass the CBA the other day, and
the Board discussed what would happen from here. I t was explained that more than
likely this issue will be taken up in a Special Mas ters. Ms. Jensen reviewed the
process of going though a Special Masters and expla ined what the City “theoretically”
can impose and what they cannot. The board discuss ed the different options that
the City has put on the table in regards to negotia tions, such as a start/stop plan,
merging both the Police & Fire pension funds togeth er, opting out of the Chapter
185/175 Plans, or moving into the FRS. The Plans A ctuary, Mr. Palmquist noted that
he has done a good amount of cost studies for the P lan and parties involved during
this process and he commented that closing out the Plan will cost the City more up
front and will take about 15-20 years for the City to start seeing some savings. Also
the Plan’s unfunded liability would have to be paid off before they can close the Plan.
Lastly Mr. Palmquist stated that benefits can be ch anged going forward, but any
benefits that have already been earned cannot be ta ken away. Mr. Sidey asked what
the motive could be behind opting out of the Chapte r 185 Plan since that is free
money the Plan and City receives each year. Ms. Je nsen commented that the main
motivation for the City would be to have the local control over the pension plans and
then to eventually move into the FRS. Ultimately w e will have to wait for the
outcome of the bargaining units to see what changes will actually be made.
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INVESTMENT MANAGER REPORT
ICC Capital Management – Presented by Steve Stack
Mr. Stack briefly reviewed his firm and what servic e they provide to the board as an
update for new Trustee Mr. Glass. ICC Capital runs the Fund’s fixed income and
equity portfolios.
For the quarter ending December 31, 2011 the fixed income portfolio had a great
quarter and outperformed the benchmark at 1.54% net of fees versus 1.12%. The
Equity side also had a strong quarter and outperfor med the benchmark net of fees at
11.34% versus 10.61%. Mr. Stack reviewed the curre nt market environment and
commented that ICC has started to trade some U.S. T reasuries which has benefited
their portfolio. They also increased their credit quality by moving more into AAA and
AA and out of BB, BBB and A. Also they are taking more risk in duration and are
also trying to keep the barbell effect in the portf olio. Mr. Stack explained that they
are starting to see more value in the Equities, whi ch have already started to rally
and if inflation does hit then ICC might get hurt b ecause they long duration by
lowering the average credit quality.
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting – Presented by John McCann
Mr. McCann stated that he has revised the Plan’s In vestment Policy Guidelines to
reflect an allocation to Real Estate and to also in clude their new Real Estate Manger,
American Realty.
MOTION: Mr. Seidensticker made a motion to approve and accept the
revised Investment Policy Guidelines as presented b y the
Plan’s Consultant to include an allocation to the n ew Real
Estate Manager, American Realty.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 5-0.
Mr. McCann reviewed the total funds performance for the quarter ending December
31, 2011. The total fund net of fees was slightly behind the benchmark at 7.34%
versus 7.70%, which is also the same for their fiscal year to d ate. For the 1 year,
the fund is also behind at 1.59% versus 2.46%. Mr. McCann stated that all
managers outperformed for the quarter with the exce ption of the Rhumbline S&P 500
account, which fell shy of the index at 11.80% vers us 11.82%. He noted that the
fund was behind for the quarter net of fees only, a nd not gross.
PRESENTATION OF THE SEPTEMBER 30, 2012 AUDITED FINA NCIAL
STATEMENTS
Cherry, Bekeart & Holland (CBH) – Presented by Jim Burdick
Mr. Burdick introduced himself to the new Trustee. He commented that the report
here today is the draft report of the Audit and the y are still waiting on a couple more
confirmations before they can release the final cop y. Although Mr. Burdick stated
that he does not think any of the numbers or materi al will change in the final
revision.
Mr. Burdick reported that there were no material we aknesses found while performing
the audit and they have issued an unqualified opini on, which is the highest level of
opinion that can be issued. He reviewed the Plan’s internal controls which are well
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documented in the report, and also the Plan’s asset s which are tracked on a market
value. Mr. Burdick noted that that the Plan does n ot have any liquid or unvalued
assets in the portfolio. Lastly he commented that there were no disagreements or
difficulties with any party involved in the audit p rocess while performing the audit.
The Trustee’s tabled the approval of the Audit unti l all information and confirmations
are received in case anything does change.
ATTORNEY REPORT
Law Offices of Perry & Jensen - Presented by Bonni Jensen
Ms. Jensen reviewed the memo regarding the task for ce on public employee
disability presumptions. She explained that the Di vision of Retirement created a task
force and they were to review the disability presum ptions pursuant to SB 1128. Ms.
Jensen stated that the task force could not reach a consensus on the findings and
recommendations, although they did agree that a wel lness program would help
reduce the cost of group health and worker’s compen sation claims. She noted that
no action is needed at this time.
Ms. Jensen notified the Board that she did receive the American Realty documents
and she reviewed some important materials that need ed to be disclosed to the
Trustees’ before investing. The Trustees reviewed Ms. Jensen’s memo that outlined
the important information that needed to be disclos ed and they commented that
they understood the rules and regulations behind it all.
MOTION: Mr. Sidey made a motion to approve and acce pt the agreements
with American Realty.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 5-0.
Ms. Jensen briefly explained the changes that were proposed in HB 1499 which
would affect the Plan’s funded ratio. She commente d that this bill was filed on
1/18/2012, but has not been approved. Ms. Jensen w ill update the Board as more
information becomes available.
Ms. Jensen reviewed the revised and final statement of policy regarding expenses
associated with public records, class actions, and domestic relations orders.
MOTION: Mr. Sidey made a motion to approve and acce pt the revised
statement of policy regarding expenses associated w ith public
records, class actions, and domestic relations orde rs as
presented.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 5-0.
ADMINISTRATOR REPORT
Resource Centers – Presented by Audrey Ross
Ms. Ross presented the board with the 2012 fiduciar y liability insurance renewal
quote. She commented that the premium this year ha s decreased by $484 from last
year.
MOTION: Mr. Seidensticker made a motion bind covera ge for the 2012
Fiduciary Liability Insurance Renewal.
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SECOND: Mr. Sidey seconded the motion.
CARRIED: The motion carried unanimously 5-0.
Ms. Ross stated that she has the Salem Trust author ized signors form with her today
that needed to be updated and executed since we hav e a new Trustee on the Board.
MINUTES
MOTION: Mr. Pierson made a motion to approve the mi nutes from the
October 20, 2011 regular meeting.
SECOND: Mr. Sidey seconded the motion.
CARRIED: The motion carried unanimously 5-0.
DISBURSEMENTS APPROVALS
MOTION: Mr. Pierson made a motion to approve the di sbursements.
SECOND: Mr. Sidey seconded the motion.
CARRIED: The motion carried unanimously 4-0.
BENEFIT APPROVALS
MOTION: Mr. Sidey made a motion to approve the appl ication to enter
the DROP for Robert Odell, the application to exit the DROP for
Martin Greenberg, and the application for distribut ion from
DROP account (due to retirement) for Martin Greenbe rg.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 5-0.
FINANCIAL STATEMENTS
The board reviewed and discussed the financial stat ements that were provided
through December 2011.
The board received and filed the financial statemen ts through June 2011.
OLD BUSINESS
Mr. Spencer stated that Mr. Smith has contact him a gain regarding his situation. Mr.
Smith was one of the members who opted out of the p ension plan years ago. He
now wants to “repay” back his contributions for the time that he was not in the
pension plan. Ms. Jensen explained that he cannot just pay back the amount that he
would have contributed into the Pension plan as if he never opted out the plan, but
rather he would have to buyback and purchase his pr evious time with the City to be
credited for it. Mr. Spencer directed Ms. Jensen t o send a letter to Mr. Smith
explaining this.
OTHER BUSINESS
The Trustees stated that they would like to get Mr. Barone a little gift to thank
him for his time and commitment that he serve on th e pension board for so many
years.
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MOTION: Mr. Sidey made a motion to authorize the ad ministrator to
purchase a $100 gift card to a restaurant of the Bo ard choice
for former Trustee Jules Barone.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 5-0.
PUBLIC COMMENTS
N/A
AJOURN
There being no further business, and the future mee tings are scheduled for the 3rd
Thursday of the first month proceeding the quarter. The next regular meeting was
scheduled for Thursday April 19, 2012 at 9AM; the T rustees officially adjourned the
meeting at 11:22AM.
Respectfully submitted,
_____________________________
DAVID PIERSON, Secretary