Loading...
HomeMy WebLinkAboutMinutes Fire Pension 071612PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD July 16, 2012 A meeting of the Board of Trustees was called to order at 9:04.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chair Audrey Ross, Administrator Tom Murphy, Secretary Bob Sugarman, Attorney Donna Wisneski Troy Brown, Investment Consultant Ed Morejon Richard Hitchens, AXA Equitable Mark Joyce Ray Eissa, AXA Equitable Ms. Wisneski stated that at the last meeting the Board created a “committee” to review the Actuarial and Audit RFP responses. She explained that she was part of that committee and that she never attended a meeting to review the responses. Mr. Rhodes commented that due to the few number of responses that they received, he did not think it was necessary to hold a meeting as the board can review all the responses together today at the meeting. He apologized that he did not notify Ms. Wisneski of this in advance. MINUTES The Board reviewed the minutes of the regular meeting held on May 21, 2012. A motion was made by Ed Morejon to approve the minutes of the May 21, 2012 regular meeting. The motion was seconded by Tom Murphy and carried 5-0. INVESTMENT MANAGER PRESENTATION: AXA EQUITABLE (RICHARD HITCHENS & RAY EISSA) Mr. Hitchens introduced himself and Mr. Eissa to the Board. He explained that he was here today to review a self directed DROP account product that AXA Equitable has to offer. AXA Equitable is the second largest insurance company world wide and they came out with this self directed DROP product in October 2010. This product allows the ability to invest in indexes such as the S&P 500, the Russell 2000, etc. Mr. Hitchens explained that as an investor, you would choose one or more indexes to invest in. This product helps protect on the downside tremendously and also captures the upside. Mr. Hitchens reviewed the investing process and commented that they would also work closely with the Plan’s Consultant. This fund has daily liquidity and is a fee basis account. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY BROWN) Mr. Brown commented that he does not recommend the product that was presented by AXA Equitable. He stated that the board can do something similar to this affect if they are interested, but it would also have an insurance wrapper with it. Mr. Brown reviewed the preliminary June 30, 2012 report. He stated that securities lead the quarter, as information technology was the worst performing sector and was down -7.1%. For the quarter ending June 30, 2012 the total fund net of fees was down -2.89%, but for the fiscal year to date they are still up 12.54% net of fees. Mr. Brown explained 2 that international equity did not perform well during the quarter as well as real estate. He briefly reviewed each Managers performance during the quarter and commented that they will be taking a look at ICC’s long term performance later on. Lastly, he reviewed the Plan’s asset allocation and stated that Dana’s equity account is underweighted compared to the Plan’s policy. Therefore Mr. Brown made a recommendation to transfer $800K from the cash account to the Dana Equity account, so that the will be back in line with their current investment policy. A motion was made by Ed Morejon to approve and authorize the transfer of $800K from the Plan’s receipt and disbursement account to the Dana Investment Advisors Large Cap Core fund as recommended by the Plan’s Investment Consultant to be back inline with the Plan’s asset allocation. The motion was seconded by Donna Wisneski and carried 5-0. Mr. Brown handed out a report that reflected ICC Capital’s long term performance. He explained that they have been in this strategy with ICC for a very long time and that the strategy is high aggression. During the last quarter their biggest holding and number one holding was down -22%, which really hurt them. Mr. Brown stated that the Bogdahn Group is still recommending this strategy with ICC until they meet again later this month. Also he explained that if you make a change now then the board will be locking in the loss they occurred instead of letting them try to make it up. Mr. Brown also discussed with the board about managing their cash and reallocations in between the meetings. He explained that sometimes in between meetings we will need to raise funds for benefit payments or reallocate assets to be inline with the Plans Investment Policy Guidelines, and it is hard to do this without the proper authorization. Therefore Mr. Brown is asking the boards permission for him to be able to contact the Chair in between meetings if necessary to reallocate assets. Then at the next pension board meeting we will put the transaction on the agenda for ratification by the board. A motion was made by Donna Wisneski to approve and authorize the Bogdahn Group to have direct investment of available cash in accordance with the Plan’s Investment Policy Guidelines with the goal towards keeping the allocations in accordance with the Plan’s Investment Policy Guidelines . The motion was seconded by Tom Murphy and carried 5-0. Lastly Mr. Brown asked that when preparing the 2013 meeting dates, to schedule the quarterly meeting dates later in the month so that he will have a full report available. ATTORNEY REPORT: SUGERMAN & SUSSKIND (BOB SUGARMAN) Mr. Sugarman explained that he attended the City Council meeting last Thursday where the proposed Ordinance was on the agenda for the first reading. He stated that the Council did pass the Ordinance on the first reading, although there are still some outstanding questions/issues that need to be resolved before they can pass the second reading. In addition they will also need the Actuarial Impact Statement from GRS. Mr. Sugarman and the Trustees’ reviewed the proposed changes and stated that they will need to hold a special meeting once the Ordinance is passed to explain the benefit changes to the members in a more detailed way. Also it was noted that the City has the other drafted changes to the Plan, but they did not include them in the first reading of the Ordinance. 3 Mr. Sugarman reviewed the memo from the Division of Retirement which now allows City’s/Boards to choose whether they want to contribute based off the percentage of payroll or on a fixed dollar amount. He explained the history behind the changes in the first place and stated that now the Division of Retirement doesn’t really care how contributions are made and will now leave that up to the City. The board directed Ms. Ross to check with the Plan’s Actuary for a recommendation and to also send this memo to the City asking for their opinion as well. Mr. Sugarman updated the board on House Bill 401 which became effective July 1, 2012. This bill states that when a member gets divorced they are considered pre-deceased for pension purposes on a joint and survivor annuity unless there is a court order. He stated that the main thing members need to do is update their beneficiary forms. Mr. Sugarman stated that their plan of action is to have the Administrator look up all the retirees and the ones with the joint and survivor annuities will need to be sent a letter asking them to update their beneficiary forms. He noted that he will have more information pertaining to this at the next meeting. Mr. Sugarman reviewed the election policy procedure for the Board Officers’. A motion was made by Tom Murphy to approve and adopt the Board Officers’ Election Procedure as prepared by the Plans Attorney. The motion was seconded by Mark Joyce and carried 5-0. Lastly Mr. Sugarman reviewed the May and June 2012 securities litigation reports from SFMS. He noted that there were no new security filings or settlements. ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. A motion was made by Ed Morejon to approve the disbursements that were presented by the Administrator with exception to the GRS invoice #1180756 in the amount of $14,670. The motion was seconded by Tom Murphy and carried 5-0. OTHER BUSINESS The Trustees’ reviewed the Auditor and Actuary RFP responses. Ms. Ross noted that 4 Auditors responded to the RFP and 1 Actuary besides the current. The board reviewed and discussed the Auditor responses and asked Ms. Ross to invite Cherry, Bekeart & Holland (CBH) and Goldstein Schector & Koch (GSK) to the next meeting for an interview. The board also concluded that they would like to here from Foster & Foster, the only other Actuary that responded. Mr. Rhodes stated that we can also send the invite out to GRS to see if they would like to attend the next meeting, although they know what services they provide as that is their current Actuary. There being no further business, the meeting adjourned at 11:44AM. Respectfully submitted, Tom Murphy, Secretary