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HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 02_08/02/2010 1 SYNOPSIS OF PUBLIC SAFETY OFFICERS' PENSION BOARD QUARTERLY MEETING HELD 05/03/10 1. Approved minutes of 2/1/10 quarterly meeting and 4/12/10 special meeting as submitted. 2. Dan Johnson, Bogdahn Consulting, LLC, presented the quarterly report. 3. Mr. Johnson was asked to talk with the investment manager and obtain an explanation of why $367,000 was sitting in cash. 4. Secretary D'Ambra asked for comparison against a peer group of the same style (momentum managers). 5. Secretary D'Ambra asked that document changes be highlighted in the future. 6. Approved changing the index for equity to Russell 3000. 7. Adopted Barclay's Intermediate Aggregate as the new market index for domestic fixed income. 8. Adopted the addendums to the investment policy with net of investment related expenses clarification to the actuarial assumption paragraph, changing the indexes to reflect Russell 3000 for domestic equity and Barclay's Intermediate Aggregate for fixed income, and gave Chair Sabin authority to sign off on the changes discussed. 9. Consensus was to defer discussion regarding diversifying the domestic portfolio within framework as provided by Dan Johnson of Bogdahn Consulting to either the quarterly or special meeting. 10. Deferred commission recapture to the special meeting. 11. Attorney Jensen reported the initial review of the IRS Determination Letter had been completed, and she hoped the letter would be finalized and issued this summer. 12. Approved ratification of the following payments: Business Services Connection, Inc. Office Work for weeks ended 1/8/10 through 4/9/10 $ 1,739.40 Business Services Connection, Inc. Preparation of 2/1/10 quarterly meeting minutes 553.04 SYNOPSIS OF REGULAR QUARTERLY MEETING OF PUBLIC SAFETY OFFICERS PENSION BOARD HELD ON 5/3/10 2 Hanson, Perry & Jensen, P.A. Services through 2/15/10 3,397.17 13. Approved the following invoices for payment: Business Services Connection, Inc. Preparation of 04/12/10 Special Meeting Minutes 437.08 Perry & Jensen, LLC. Services through 4/15/10 1,728.93 Bogdahn Consulting, LLC Fee for Quarter ending 3/31/10 3,750.00 Rockwood Capital Advisors, LLC Fee for Quarter ending 3/31/09 6,925.85 14. Senior Accountant Monica Rahim presented the budget report. 15. Approved the Rockwood Capital Advisors quarterly report dated 3/31/10. 16. Attorney Jensen reported nothing had happened with any of the proposed legislation. 17. Board Member Young and Board Member Giblin were asked to contact Pension Coordinator McWilliams if they could not attend the FPTTA trustees' school in September at PGA National Resort in Palm Beach Gardens, so that another member could attend. END OF SYNOPSIS T TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES May 3, 2010 I. Call To Order and Roll Call A regular quarterly meeting of the Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees was held at the Tequesta Village Hall, 345 Tequesta Drive, Tequesta, Florida, on May 3, 2010. The meeting was called to order at 2:00 p.m. A roll call was taken by Recording Secretary Betty Laur. In attendance at the meeting were: Chair Ed Sabin, Secretary Frank D'Ambra, Board Member Ray Giblin, and Board Member Robert Young. Also in attendance were Attorney Bonni Jensen, Pension Coordinator Lori McWilliams, Recording Secretary Betty Laur, Senior Accountant Monica Rahim, and Dan Johnson with Bogdahn Consulting, LLC. Board Member David Cooper was absent from the meeting. 11. Approval of Agenda MOTION: Secretary D'Ambra made a motion to approve the agenda as submitted. Board Member Giblin seconded the motion, which carried by unanimous 4- 0 vote. III. Approval of Minutes 1. Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees Quarterly Meeting Minutes — February 1, 2010 MOTION: Board Member Giblin made a motion to accept the minutes of February 1, 2010 as submitted. Board Member Young seconded the motion, which carried by unanimous 4 -0 vote. 2. Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees Special Meeting Minutes — April 12, 2010 MOTION: Secretary D'Ambra made a motion to accept the minutes of April 12, 2010 as submitted. Board Member Giblin seconded the motion, which carried by unanimous 4 -0 vote. Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund May 3, 2010 2 IV. Presentations 3. Presentation By Monitor Dan Johnson, Bogdahn Consulting, LLC, reviewed the preliminary quarterly report and the attribution report. With improvement in the economy, the market had improved, resulting in a good quarter. Chair Sabin questioned why there was $367,000 being held in cash. Discussion ensued. Mr. Johnson was asked to talk with the investment manager and obtain an explanation so that the Board would know what was going on. Mr. Johnson explained that accounts had been opened at Salem Trust, and the actual transfer to international would take place that day or the next. Secretary D'Ambra questioned why the Russell 3000 had not been used as a benchmark and was advised the Board had not taken action on that at the last meeting. Secretary D'Ambra asked for comparison against a peer group of the same style. Mr. Johnson noted the State statute had changed, allowing police and fire to increase international components, and that had been done as well as adding the new dedicated international manager. Mr. Johnson had taken steps to increase risk exposure. It had been a very good quarter, and Rockwood had beaten the index by approximately two basis points. V. Unfinished Business 4. Review of updated Investment Policy Dan Johnson, Bogdahn Consulting, reviewed the updated investment policy. The manager had recommended changing the fixed income benchmark to the intermediate aggregate, and Mr. Johnson had added additional constraints to control mortgages in items d and e on page 4. Discussion ensued regarding Rockwood and that they would be measured against a fixed income benchmark, which would also include cash. Mr. Johnson reviewed the CMO mortgage constraints; explained how investments in these pools of mortgages worked, and how the investment manager was able to determine whether the CMO was leveraged. The only thing being changed was the index, from Barclay's Government Credit to Barclay's Intermediate Aggregate. Secretary D'Ambra asked for changes to be highlighted in the future. On page 2, international allocation target was changed to 50- 10 -40, but allowable range brought that down from zero to 15, based on the Village ordinance allowing only 15% investment. Chair Sabin noted the General Employees' pension had a range of 0 to 25 %, and Mr. Johnson explained a recent change also allowed that investment range for Public Safety plans, but the Village ordinance limited it to 15 %. Secretary D'Ambra advised the actuarial rate had been lowered to 7- 1/2%; Chair Sabin clarified that the Board had accepted the actuarial report that used 8% but recommended to the Village that they consider putting in an Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund May 3, 2010 3 additional contribution of $80,000 to $90,000 annually, in effect, treating it as if it were 7 -1/2 %. Mr. Palmquist was using 8% because the Board had not wanted to pay for another actuarial report. Secretary D'Ambra noted the target then should be 9 -1/2% and he was not so comfortable with the 60/40 allocation. Mr. Johnson felt 8% or 9 -1/2% was a reasonable expectation for the next seven years, and commented the rate used by him and Mr. Palmquist must be the same. The motion recommending the Village contribute more to effectively make the rate 7- 1/2% was found in the minutes previously approved. Mr. Johnson advised he would bring some asset allocation information to the next meeting. The fact that the actuarial assumption was net would be added to the investment policy. Mr. Johnson discussed the two investment policy addendums, one for the stock account, and one for fixed income. MOTION: Secretary D'Ambra made a motion to change the index for equity to Russell 3000. Board Member Young seconded the motion, which carried by unanimous 4 -0 vote. For the fixed income addendum, the index needed to be changed to Barclay's Intermediate Aggregate. Mr. Johnson explained section d, which contained a 15% limitation on non - government mortgage backed securities, and item e, which had no limitation, but merely indicated that if one bought mortgage backed securities that were not backed by the government there would be a 15% limitation. Secretary D'Ambra suggested adding if a security had multiple ratings, the lowest rating would determine whether or not it was investment grade. During discussion, Mr. Johnson advised this could take away from the manager's ability. MOTION: Board Member Young made a motion to adopt Barclay's Intermediate Aggregate as the new market index for domestic fixed income. Board Member Giblin seconded the motion, which carried by unanimous 4 -0 vote. MOTION: Secretary D'Ambra made a motion to adopt the addendums to the investment policy with net of investment related expenses clarification to the actuarial assumption paragraph, changing the indexes to reflect Russell 3000 for domestic equity and Barclay's Intermediate Aggregate for fixed income, and to give Chair Sabin the ability to sign off on the changes discussed. Board Member Young seconded the motion, which carried by unanimous 4 -0 vote. Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund May 3, 2010 4 5. Discussion regarding diversifying domestic portfolio within framework provided by Dan Johnson of Bogdahn Consulting Consensus of the Board was to defer this item to the quarterly or special meeting. Dan Johnson briefly commented on highlights of the information provided for this item, and explained there were no right or wrong ways to invest, just different concepts. There were sole managers, growth and value managers, and satellite /opportunistic and core managers —all different ways to develop an asset class. There could be overlap but the managers might have different approaches. Chair Sabin commented the next time the Board met at either the quarterly or special meeting, some time would be allowed to go through this item. Mr. Johnson commented Rockwood was trading heavily through one different brokerage firm. There was something called commission recapture, which was a way to get a rebate. He had been talking to someone at the BNY desk of Bank of New York. The way this would work would be Rockwood could be told to continue to trade at the best price and best execution, and if that happened to be through the BNY desk, you could get 70% of that money back —they would send a check at the end of the year. No money would go through Bogdahn. He had given Attorney Jensen a contract that day to review, so this could be deferred to the next meeting. Chair Sabin reported the Board had talked about this when they first started with Rockwood, before Mr. Johnson had come on board, and it had sounded like you had to steer a fair amount of business to them. Mr. Johnson responded there was commission recapture and there was directed brokerage, and it must be clear they were not being forced to direct anything. A letter of instruction would accompany the contract. Attorney Jensen advised she had a client with four recapture agreements, and if the manager was going to trade with these firms anyway, you might as well get the commission recapture. Discussion ensued. Mr. Johnson indicated the manager was going to get the best execution they could. This item was deferred to the special meeting. 6. Update regarding IRS Determination Letter Attorney Bonni Jensen reported the IRS had done initial review of the application and the file had been forwarded for final evaluation by the quality assurance staff. Once that process was completed, they would expedite the issuance of the determination letter. Attorney Jensen commented on the process and indicated she hoped the determination letter would be completed this summer. VI. Standing Reports (Information Items) 7. New applicants for participation in Pension Plan Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund May 3, 2010 5 None 8. Request for withdrawal of contributions (employees terminating employment with Village of Tequesta) - Ratification of withdrawals made since the last meeting on 2 signature basis: None 9. Terminated Employees who have not taken their contributions None 10. Revenue and Expenditure Report Senior Accountant Rahim indicated the information provided was routine. There were no questions or comments from the Board. VII. Payments To Be Ratified (Payments Made Since Last Meeting) MOTION: Board Member Giblin moved to ratify the following payments. Board Member Young seconded the motion, which carried by unanimous 4 -0 vote. 11. Business Services Connection, Inc. Office Work for weeks ended 1/8/10 through 4/9/10 $ 1,739.40 Business Services Connection, Inc. Preparation of 2/1/10 quarterly meeting minutes 553.04 Hanson, Perry & Jensen, P.A. Services through 2/15/10 3,397.17 VIII. Payments To Be Reviewed And Approved MOTION: Board Member Young moved to approve the following payments. Board Member Giblin seconded the motion, which carried by unanimous 4 -0 vote. 12. Business Services Connection, Inc. Preparation of 04/12/10 Special Meeting Minutes 437.08 Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund May 3, 2010 6 Perry & Jensen, LLC. Services through 4/15/10 1,728.93 Bogdahn Consulting, LLC Fee for Quarter ending 3/31/10 3,750.00 Rockwood Capital Advisors, LLC Fee for Quarter ending 3/31/09 6,925.85 It was noted that since Rockwood was going from 60% to 50% in their account, that should reflect a lower fee, unless the asset value increased. IX. Budget Report 13. Quarterly Budget Report Expenditures Senior Accountant Monica Rahim advised the Board was operating within the budget, and a new budget would be presented for the Board's approval at the August meeting. Investment Services had been broken down to separate duties, Investment Services (Rockwood), Custodian (Salem Trust), and Investment Advisor (Bogdahn Consulting); but the amount had not been changed. Chair Sabin asked if the expenses as a percentage were in line with other plans this size; Mr. Johnson indicated that based on size this plan was probably doing better, but because of size it was probably worse. As the plan grew, the percentage would be lowered. X. New Business 14 . Approval of Investment Manager's Report (Rockwood Capital Advisors, LLC) MOTION: Secretary D'Ambra moved to approve the quarterly report ended March 31, 2010, from Rockwood Capital Advisors. Board Member Giblin seconded the motion, which carried by unanimous 4 -0 vote. 15. Form I Attorney Bonni Jensen commented it was time to complete the Form 1 and get it to the Supervisor of Elections office, and you needed to have proof they had received it. 16. State Legal Updates Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund May 3, 2010 7 Attorney Bonni Jensen reported nothing had happened with any of the proposed legislation. 1902 had been pulled off the table for a study, and the lesson from this legislative session was that something would happen at the next session. 17. FPTTA Annual Conference June 27 -30, Naples Florida — Trustees School September 26 -29 at PGA National Resort, Palm Beach Gardens, Florida Pension Coordinator McWilliams advised the next conference would be in Naples June 27 -30 and the next trustees' school would be September 26 -29 at PGA National Resort in Palm Beach Gardens. Attorney Jensen advised there was also a State conference May 24 -26. Chair Sabin asked Board Member Young and Board Member Giblin to consider attending the trustees' school, since neither had attended one, and if neither could attend to let Pension Coordinator McWilliams know so that someone else could attend. Chair Sabin expressed his opinion that one member of the Board should attend each year. XI. Any Other Matters There were no other matters to come before the Board XII. Communications From Citizens There were no communications from citizens. XIII. Adjournment There being no further business, the meeting was adjourned at 3:49 p.m. Respectfully submitted, Betty Laur Recording Secretary