HomeMy WebLinkAboutMinutes Police Pension 112812City of Palm Beach Gardens Police Officers'
Pension Fund
Minutes of the Meeting Held
November 28, 2012
The regular meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers' Pension Fund was called to order at 9:01 AM by 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
Brad Seidensticker, Trustee
Greg Mull, Trustee
Marc Glass, Trustee
OTHERS PRESENT
Audrey Ross (Resource Centers)
Bonni Jensen (Law Offices of Perry & Jensen)
Donna Kramer (PBG Clerk's Office)
Steve Stack (ICC Capital Management)
John McCann (Thistle Asset Consulting)
Steve Palmquist (GRS)
Pete Strong (GRS)
ACTUARY REPORT
GRS — Presented by Steve Palmquist & Pete Strong
Mr. Palmquist explained that he was here today to personally address the board
regarding a letter that they recently received regarding his upcoming retirement;
January 1, 2013. Mr. Spencer wanted to first thank Mr. Palmquist for all the great
services that he has provided to the board over the many years. He noted that Mr.
Palmquist has been involved with the building of this Plan since the beginning and he
has been a true asset.
Mr. Palmquist introduced Mr. Strong to the board and stated that Mr. Strong will be
taking over for him. Mr. Strong welcomed himself and commented that he has been
working closely with Mr. Palmquist for the last 5 years in preparation of his upcoming
retirement. Mr. Palmquist explained that his team of Actuaries behind the scenes
will still remain in place, and there will always still be 2 senior Actuaries and 1 senior
Analysis working on every project. The board wished Mr. Palmquist luck in his
retirement.
INVESTMENT MANAGER REPORT
ICC Capital Management — Presented by Steve Stack
Mr. Stack wanted to address the inquire of ICC with Munder. He explained that ICC
has signed a letter of intent with the company Munder out of Michigan. In return
Munder has sent a care package to ICC and they are currently working on gathering
all the information needed. Mr. Stack stated that after that process has been
completed, then ICC will either enter into a final agreement with Munder or they
won't. He noted that he does not have an exact timeline to the transition at the
moment if it does happen, although the probability of the transition happening is
about 75% at this time. Mr. Stack explained that Munder will retain ICC's employees
and that they also offer a lot more opportunity to ICC investment wise. He
reassured that board that if the transition did go through, that there would be no
changes to this Plan's portfolio, portfolio team, fees, etc. Mr. Stack noted that he
will update the board as more information becomes available.
Mr. Stack updated the board on another firm /client related item. He stated that ICC
has had their second largest client leave them last quarter due to changes the client
made to their plan. He noted that ICC is trying to get back with them because they
were a client of theirs since 1995. This plan will not be impacted because the client
that left was in a separate portfolio.
Mr. Stack reviewed the September 30, 2012 fixed income report and commend that
they ended the quarter with $16,118,391 in assets. The total fund outperformed the
index net of fees for the quarter at 1.70% versus 1.59 %, but for the fiscal year the
fund was behind net of fees at 4.93% versus the index at 5.16 %.
On the equity side the fund was behind for the quarter and fiscal year at 4.91%
versus 6.11% and 24.64% versus 29.19 %, respectively. Mr. Stack explained that
their underperformance was mainly to do with one stock, Apple. Apple had the
biggest holding in the market during the quarter at 9 %, and ICC only had a 1%
holding in them. He stated that they missed out then, but since the quarter Apple
has sold off and ICC has benefited from that with a gain of 300 basis points. Lastly
he commented that they are currently trying to find a way to reserve the capital
because of the issues overseas.
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting - Presented by John McCann
Mr. McCann reviewed the Plans investment style as of the end of the fiscal year.
Overall he commented that the portfolio is nicely diversified between large and mid
cap companies and well as International.
Mr. McCann noted that the plan had a great fiscal year ending September 30, 2012
with a total net return of 18.63% versus the index at 19.60 %. The plans assumed
rate of return of 7.75% was beat for this fiscal year, and we will also be dropping off
a very bad year from 2008 at the end of this fiscal year which will be very beneficial
to the fund. Mr. McCann reviewed each manager's performance during the quarter
and the fiscal year. He noted that Apple was held in 3 different funds within the
equity portfolio and RhumbLine's 3 accounts were all in line with the index for the
quarter and fiscal year. Mr. McCann commented that American Realty had another
capital call on 10/1/2012, which is not reflected in this report. With the recent
funding American Realty is now up to $1M and Mr. McCann stated that he would like
the board to consider allocating more to them from the ICC's fixed income account.
He reminded the board that we are taking the yield from American Realty every
quarter and using it for benefit payments instead of reinvesting them. Mr. McCann
reviewed the plans asset allocation and commented that he would recommend
moving $1.5M from the ICC fixed income account to the American Realty account.
This would now move the American Realty allocation up to 5% ($2.5M) of the
portfolio. He noted that if the board did decide to do this, then they would also need
to amend their investment policy guidelines to increase the allocation target to
American Realty. The board had a lengthy discussion on the transfer that was being
recommended.
MOTION: Mr. Pierson made a motion to authorize the transfer of $1.5M
from the ICC fixed income account to the American Realty
account per the Investment Consultants recommendation.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
MOTION: Mr. Seidensticker made a motion to amend the investment
policy guidelines to increase the allocation target to American
Realty to 5 %, and to also approve the Chair to execute the
revised investment policy guidelines in between meetings.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
Mr. McCann discussed with the board some other investment ideas and
opportunities. He recommended adding more into real estate, repositioning the
International and RhumbLine accounts. The board had a lengthy discussion on the
different ideas and asked Mr. McCann to put together an asset allocation and bring it
back to the next meeting. The Trustees also discussed gold, commodities, and
ETF's. Mr. McCann stated that if the board was looking into something of that
nature, then they would need to purchase either ADR's or ETF's because not a lot of
companies trade domestically with gold or commodities. He noted that he will also
bring back some more information regarding this as well.
ATTORNEY REPORT
Law Offices of Perry & Jensen - Presented by Bonni Jensen
Ms. Jensen explained that the Plan received a letter from the Division of Retirement
regarding the recent Ordinance changes that were passed, which lowers the plans
benefits. This letter is known as the "Naples Letter ". Ms. Jensen reviewed the letter
with the board and explained the Division of Retirement's new interpretation of the
Chapter 185 monies (in which they are now changing their interpretation after many
years). The Division now wants the Trustees to determine if their 185 monies meet
the minimum requirements that were in place as of 1999. Ms. Jensen explained that
in order for this to be determined, GRS would need to do the actuarial analysis.
MOTION: Mr. Seidensticker made a motion to authorize and approve GRS
to prepare a calculations /analysis in accordance to the letter
the Plan received from the Division of Retirement regarding the
minimum Chapter 185 benefits since 1999.
SECOND: Mr. Glass seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
Ms. Jensen reviewed some of the benefit changes that were recently passed and the
effect it will have on some members. For example, now the DROP eligibility is
according to years of service and not age like before. Therefore if a member is not
hired by the City before they are 29 years of age, then they will never be eligible to
enter the DROP because they will be pass that 30 year max of service that is allowed
under the DROP provision. The new retirement eligibility states that members must
be age 59 to retire and most people in the work force now will have over 30 years of
employment by age 59. The DROP clause stated that members are not eligible to
enter the DROP past their 30th year of employment. Mr. Mull stated that the revised
contract started effective September 13, 2012 and is only in place for 1 year;
therefore they can address this issue during the next contract in 2013. Lastly Ms.
Jensen also stated that once GRS completes the analysis and if the minimum
benefits are met then the plan will stay as is. But if the analysis reflects that there is
additional money left over after the minimum benefits from 1999 have been met,
then that money can be used to buy down the age 59 requirement back to age 52
with 25 years of service (back to what the normal retirement eligibility has always
been prior to the recent changes). We will find out more after the analysis is
complete.
Ms. Jensen commented that she was contacted by the plan's securities monitor;
Kessler, Topaz, Meltzer & Check (KTMC). KTMC stated that they will file all class
action filings for free on behalf of the board. Ms. Jensen noted that Salem Trust also
currently offers this service for free as well. Although in September Salem Trust sent
out a letter to all their Plan's stating that they were going to start charging for their
class action monitoring services. Salem Trust ended up retracting back their original
letter fairly quickly because it is already in their contract that they would provide this
service as no additional cost. Since then Salem Trust has stated that they may
approach their clients in the near future to revise their contracts to either remove the
class action servicing part all together, or they will start charging for the service.
The Board discussed what Salem Trust provides as well as KTMC, and asked Ms.
Jensen to invite KTMC to their next meeting as they would like to hear from them
regarding their class action filing process. Ms. Jensen noted that she will invite KTMC
to the January 31, 2013 meeting.
Ms. Jensen presented that board with the revised PRC fee addendum to be executed.
She commented that the board previously approved a monthly fee retainer increase
from $2,275 to $2,575 per month effective September 1, 2012.
Ms. Jensen noted that she is assisting former Trustee Wayne Sidey with his appeal
because when he left the board he never received his Form 1 Disclosure due to the
fact that he moved out of the State. Therefore he missed the deadline to file and he
was hit with a fee in which they are in the process of appealing.
ADMINISTRATOR REPORT
Resource Centers — Presented by Audrey Ross
Ms. Ross started that recently an active member passed away and she needs the
boards help in determining who will be the beneficiary of his death benefit. This
member did not have a beneficiary form on file and he was partially vested in the
Plan with 8 years and 9 months of service. It was also noted that the member was
not married at the time of his death, although he did have a dependant child. The
Board disused the situation and Ms. Jensen reviewed the Plan's language with the
board and noted that in this case since the member did not have a beneficiary form
on file, the board can make the discretion as to where the payment can go. Ms.
Jensen noted that her recommendation would be to pay the members estate since
there is no surviving spouse, and also his child cannot receive a benefit at this time
or at any other time in the future either. She explained that the child would not be
able to start collecting the benefit until the members early or normal retirement date
is reached, and in this case the child will already be over the age of 18 by that time
and would no longer be entitled to the benefit. The Trustees' has a lengthy
discussion on the different options.
MOTION: Mr. Seidensticker made a motion to pay out the non -duty death
benefit to the Estate of Mr. Thomas Juric.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
Ms. Ross noted that she will send the necessary information over to GRS so they can
calculate his lump sum benefit that will be paid to his Estate.
Ms. Ross presented the board with the 2013 meeting dates.
MINUTES
MOTION: Mr. Seidensticker made a motion to approve the minutes from
the August 9, 2012 regular meeting.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
DISBURSEMENTS APPROVALS
MOTION: Mr. Pierson made a motion to approve the disbursements.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
BENEFIT APPROVALS
MOTION: Mr. Mull made a motion to approve the applications to enter the
DROP for Andrew Spragg, Christopher Barca, Gary Carmack,
Jack Schnur, Jeffrey Main, Ralph Kranchick, and Robert
Christoffers.
SECOND: Mr. Glass seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
MOTION: Mr. Seidensticker made a motion to approve the application for
distribution of DROP account (2/15/2013) for Jay Spencer.
SECOND: Mr. Glass seconded the motion.
CARRIED: The motion carried unanimously 4 -0.
*Jay Spencer sustained from the vote* *Form 8B on file*
OTHER BUSINESS
Ms. Ross presented the board with the September 30, 2012 Audit Engagement Letter
from Cherry, Bekaert & Holland. She noted that CBH is increasing their fee this year
from $14,500 to $14,850 after 4 years.
MOTION: Mr. Seidensticker made a motion to approve September 30,
2012 Audit Engagement Letter, including the fee increase to
$14,580.
SECOND: Mr. Pierson seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
Ms. Ross presented the board with the 2013 Fiduciary Liability Insurance Renewal.
She commented that the renewal fee this year is $5,572, which is $322.30 lower
than last year.
MOTION: Mr. Seidensticker made a motion to bind coverage for the 2013
Fiduciary Liability Insurance.
SECOND: Mr. Mull seconded the motion.
CARRIED: The motion carried unanimously 5 -0.
Ms. Ross presented the board with the September 30, 2012 Salem Trust class action
report. She noted that there were no class actions filed or there were settlements
received in on behalf of the plan during the quarter.
PUBLIC COMMENTS
N/A
AJOURN
There being no further business, and the future meetings are scheduled for the 3rd
Thursday of the first month proceeding the quarter. The next regular meeting was
scheduled for Thursday January 31, 2013 at 9AM; the Trustees officially adjourned
the meeting at 11:22AM.
Re ec fully sub it d,
A
DAVID PIERSON, Secretary
FORM 813 MEMORANDUM OF VOTING CONFLICT FOR
COUNTY, MUNICIPAL, AND OTHER LOCAL PUBLIC OFFICERS
L "� "' ^ " "� -FIRST NAME- IDDLE NAME
NAME OF BO D COMMISSION UTI�ORITY, 0 COMMITTF ,
MAILING k\- -,,E,- 'Cs en
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THE BOARD, COUNCIL, COMMISSION, AUTHORITY OR COMMITTEE ON
WHICH I SERVE IS A UNIT OF:
CITY ❑COUNTY ]OTHER LOCAL AGENCY
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NAME OF POLITICAL SUBDIVISION:
DATE ON HICH V TE OCCURRED
MY POSITION IS:
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ELECTIVE ❑ APPOINTIVE
WHO MUST FILE FORM 813
This form is for use by any person serving at the county, city, or other local level of government on an appointed or elected board, council,
commission, authority, or committee. It applies equally to members of advisory and non - advisory bodies who are presented with a voting
conflict of interest under Section 112.3143, Florida Statutes.
Your responsibilities under the law when faced with voting on a measure in which you have a conflict of interest will vary greatly depending
on whether you hold an elective or appointive position. For this reason, please pay close attention to the instructions on this form before
completing the reverse side and filing the form.
INSTRUCTIONS FOR COMPLIANCE WITH SECTION 112.3143, FLORIDA STATUTES
A person holding elective or appointive county, municipal, or other local public office MUST ABSTAIN from voting on a measure which
inures to his or her special private gain or loss. Each elected or appointed local officer also is prohibited from knowingly voting on a mea-
sure which inures to the special gain or loss of a principal (other than a government agency) by whom he or she is retained (including the
parent organization or subsidiary of a corporate principal by which he or she is retained); to the special private gain or loss of a relative; or
to the special private gain or loss of a business associate. Commissioners of community redevelopment agencies under Sec. 163.356 or
163.357, F.S., and officers of independent special tax districts elected on a one -acre, one -vote basis are not prohibited from voting in that
capacity.
For purposes of this law, a "relative" includes only the officer's father, mother, son, daughter, husband, wife, brother, sister, father -in -law,
mother -in -law, son -in -law, and daughter -in -law. A "business associate" means any person or entity engaged in or carrying on a business
enterprise with the officer as a partner, joint venturer, coowner of property, or corporate shareholder (where the shares of the corporation
are not listed on any national or regional stock exchange).
ELECTED OFFICERS:
In addition to abstaining from voting in the situations described above, you must disclose the conflict:
PRIOR TO THE VOTE BEING TAKEN by publicly stating to the assembly the nature of your interest in the measure on which you
are abstaining from voting; and
WITHIN 15 DAYS AFTER THE VOTE OCCURS by completing and filing this form with the person responsible for recording the min-
utes of the meeting, who should incorporate the form in the minutes.
APPOINTED OFFICERS:
Although you must abstain from voting in the situations described above, you otherwise may participate in these matters. However, you
must disclose the nature of the conflict before making any attempt to influence the decision, whether orally or in writing and whether made
by you or at your direction.
IF YOU INTEND TO MAKE ANY ATTEMPT TO INFLUENCE THE DECISION PRIOR TO THE MEETING AT WHICH THE VOTE WILL BE
TAKEN:
• You must complete and file this form (before making any attempt to influence the decision) with the person responsible for recording the
minutes of the meeting, who will incorporate the form in the minutes. (Continued on other side)
i
APPOINTED OFFICERS (continued)
• A copy of the form must be provided immediately to the other members of the agency.
• The form must be read publicly at the next meeting after the form is filed.
IF YOU MAKE NO ATTEMPT TO INFLUENCE THE DECISION EXCEPT BY DISCUSSION AT THE MEETING:
• You must disclose orally the nature of your conflict in the measure before participating.
• You must complete the form and file it within 15 days after the vote occurs with the person responsible for recording the minutes of the
meeting, who must incorporate the form in the minutes. A copy of the form must be provided immediately to the other members of the
agency, and the form must be read publicly at the next meeting after the form is filed.
DISCLOSURE OF LOCAL OFFICER'S INTEREST
I, Ja I_�_�
, hereby disclose that on �( K) Q M �ck � 20 r:
(a) A measure came or will come before my agency which (check one)
inured to my special private gain or loss;
inured to the special gain or loss of my business associate,
inured to the special gain or loss of my relative,
inured to the special gain or loss of
whom I am retained; or
inured to the special gain or loss of
is the parent organization or subsidiary of a principal which has retained me.
(b) The measure before my agency and the nature of my conflicting interest in the measure is as follows-
\J cl) On 1q t n e J �- .ice (C C��
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Date Filed Sign
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NOTICE: UNDER PROVISIONS OF FLORIDA STATUTES §112.317, A FAILURE TO MAKE ANY REQUIRED DISCLOSURE
CONSTITUTES GROUNDS FOR AND MAY BE PUNISHED BY ONE OR MORE OF THE FOLLOWING: IMPEACHMENT,
REMOVAL OR SUSPENSION FROM OFFICE OR EMPLOYMENT, DEMOTION, REDUCTION IN SALARY, REPRIMAND, OR A
CIVIL PENALTY NOT TO EXCEED $10,000.
CE FORM 8B - EFF. 1/2000 PAGE 2