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HomeMy WebLinkAboutMinutes Police Pension 013108City of Palm Beach Gardens Police Officers' Pension Fund Minutes of the Meeting Held January 31St, 2008 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 9:06 AM by Wayne Sidey in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT OTHERS PRESENT John McCann (Thistle Asset Consulting) Brad Seidensticker Steve Stack (ICC Capital Management) Jules Barone Bonni Jensen (Hanson, Perry, & Jensen, P.A.) Wayne Sidey Donna Cannon (Palm Beach Gardens Clerk's Office) Scott Baur (The Pension Resource Center, LLC) Audrey Ross (The Pension Resource Center, LLC) MINUTES MOTION: Mr. Seidensticker made a motion to approve the minutes from December 6th, 2007 meeting. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 3 -0. INVESTMENT MANAGER REPORT ICC Capital — Presented by Steve Stack Mr. Stack stated that the fund is down on the equity side, and at this time there is no leadership in any of the sectors of the market. He commented that gas and oil prices are still high and subprime has had a big impact on these companies. Mr. Stack reported that for the current month the equities are down 8 -10% and he explained the mess that is going on in the market. Mr. Seidensticker asked if the plan had any bonds that were involved in the subprimes. Mr. Stack commented that the portfolio on the fixed income side is very conservative and, a lot of the retail sectors are the ones that are linked to the subprimes. Mr. Stack reported that they have 39% rating in corporate and 22% in mortgage backed pools, and all of them are rated at least an A to AA. Mr. Barone asked Mr. Stack to explain what exactly their company invests in. Mr. Stack replied that they invest in a mixture of everything. The fixed income portfolio is split 50/50 between RhumbLine and ICC and their fee is 50 basis points which are on the lower side. ICC currently has $11M in fixed income and about 3% in equity. ICC Capital has active managers that are always buying and selling in their portfolio. INVESTMENT CONSULTANT REPORT Thistle Asset Consultant — Presented by John McCann Mr. McCann reviewed the chart that was handed out. The chart compared the international stocks that performed the best and worst in 2004 through 2007. Mr. McCann stated that the large cap value was up 2% in 2007, and this was the first time in 8 years that large cap had outperformed the small cap. He commented that January has been a very bad month and that the fixed income side has not down well. Mr. McCann reviewed the investment policy guidelines and stated that the board might want to table this matter until all the Trustees are present. Mr. McCann commented that the international fund numbers were not available yet because they only report them on a quarterly basis. Mr. Seidensticker reviewed and discussed some of the language in the mutual fund section of the investment policy and stated that it should be more specific. The board discussed what language should be added in. Mr. McCann stated that he will make the necessary changes and bring it back to the next meeting to be reviewed. For the quarter ending September 30, 2007 the equities were down, but the fixed income was slightly up. Mr. McCann reviewed the compliance report and stated that some requirements were not met. The total assets of the plan were split up with 3% in cash, 38% in fixed income and 59% in equities. He also reviewed the sectors of the portfolio and stated that ICC Capital has 51% of the portfolio in fixed and large cap growth with 41% in RhumbLine and 8% in international equity. Mr. McCann reviewed the breakdown of the cash in each sector and stated that all the cash is held in the fixed income side. Mr. McCann rebalanced the cash flow and took some cash from ICC Capital to pay out benefits. He commented that he rebalances the portfolio every quarter depending on the market. The total fund is behind the market for the current quarter at -1.64% versus -.90 %, and the one year is also behind at 5.61% versus 6.60 %. Mr. McCann also reported that the current equities are behind at -4.33% versus -3.07% for the current quarter and 5.42% versus 6.04% for the one year. The fixed income did a little better for the current quarter but is still trailing behind slightly at 3.09% versus 3.10 %. For the one year period the fixed income is right on target at 7.25% versus 7.25 %, and for a three year period it beat the index at 4.96% versus 4.44 %. Ms. Jensen asked Mr. McCann if he would recommend any changes to the portfolio as this time. Mr. McCann replied that he does not recommend any changes at this time. Mr. McCann reviewed and compared the performance of the other managers and commented that the board could look into having other active monitors instead of having an index return. The cost might be more, but the fund might get a better return. He stated that he will bring this idea up again at the next meeting when all the Trustees are present. Lastly, Mr. McCann reported that the Mainstay ICAP international fund manager had passed away. He stated that the fund did well for the 1, 3 and 5 year average, but the board will want to keep a close eye on the fund since the manager that passed away was the main leader. Mr. Seidensticker commented that the MainStay fund is the fund with the highest fee and the lowest return so he recommends that the board should close the MainStay fund and split the balance between the three remaining international funds. MOTION: Mr. Seidensticker made a motion to close out the Mainstay ICAP international fund, and to split the balance of the account into the three remaining International Funds. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 3 -0. ATTORNEY REPORT Hanson, Perry & Jensen, P.A. - Presented by Bonni Jensen Ms. Jensen stated that she spoke to Allan Owens in regards to the amendment and that it will be going in front of the city council by February 20, 2008. The amendment to the constitutions that was recently passed will not have a direct impact on the pension fund. Ms. Jensen commented that everything is still on they table in regards to the job cut backs. She also reported that Steve Palmquist is working on the 2007 Actuarial Valuation and should have it completed by the next meeting. The 2007 Actuarial Valuation will also determine the employee's payroll contributions which they will discuss further at the next meeting. DISBURSEMENTS APPROVALS MOTION: Mr. Seidensticker made a motion to approve the disbursements. SECOND: Mr. Barone seconded the motion. CARRIED: The motion carried unanimously 3 -0 FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through December 31, 2007. The board received and filed the financial statements through December 31, 2007. ADMINISTRATOR REPORT The Pension Resource Center, LLC - Presented by Scott Baur and Audrey Ross Mr. Baur commented on Richard Bloods situation. Mr. Blood recently exited the DROP, and Mr. Baur explained to the board the problems and frustration that he had. Mr. Baur stated that he has come up with a question and answer worksheet that will help the members understand the process, so that this type of situation will not occur again. Mr. Baur reported that the members in the DROP plan have waited a long time to get their calculations, due to the misinformation from the city. The city has now provided the Pension Resource Center with the correct information, so from now on the calculations will be processed in a timely manner. UR There being no further business, and the future meetings are scheduled for the last Thursday of the first month of the quarter. The next meeting is scheduled for April 24, 2008 at 10AM; the Trustees officially adjourned the meeting at 10:36AM Respectfully submitted, DAVID PIERSON, Secretary