HomeMy WebLinkAbout07312015 PRB MinutesDraft 7/31/2015 Minutes
Sebastian Police Pension Board Minutes
July 31, 2015 10:00 a.m.
Sebastian City Council Chambers
TYPE OF MEETING: Special
ATTENDEES: Board Members:
Steve Marcinik, Chair
Robert Zomok, Secretary
Bruce Hoffman
Ken Killgore
Richard Snell
EXCUSED:
CONSULTANTS:
Scott Owens
Lee Dehner
Cindy Watson - Guest
SUBJECT
CALL TO ORDER
10:00 a.m. There being a quorum present, Steve Marcinik, called the
meeting to order.
Agenda Modifications: Additions to Unfinished Business
The Agenda was modified to permit the approval of seminar attendance
by Bruce Hoffman. The seminar delivered information on Florida
Statute 112 Section 112.664.
Bob Zomok moved to approve reimbursement to Bruce Hoffman. Ken
Killgore seconded the motion and it passed unanimously.
Draft 7/31/2015 Minutes
SUBJECT
UNFINISHED BUSINESS
APPROVAL OF MINUTES
10:05 a.m. Ken Killtn
-gore motioned the minutes of the June 23, 2015
Special Board Meeting be approved. Motioned seconded by Bruce
Hoffman and passed unanimously.
Consideration of "wrapping" consulting, custodial, and account
management services into one "bundled" contract.
Three concepts for consideration were discussed in detail —
Transparency, Conflict of Interest, and .Fiduciary Responsibility.
The most important fact, understood by all on the Board, is the
critical need to diversify Asset Allocation. With this fact as a
given, the discussion proceeded.
Scott Owens stated that the issue of Transparency would be
addressed via the detailed reports the Board would receive vis-a-
vis the performance of each asset manager. Part of the MSG fee is
the research done to develop the suggested list of best -in -class
asset managers.
On the issue of Conflict of interest, Scott Owens pointed out that
all transactions are outside the firm of Merrill Lynch Graystone
(MSG). That firm collects only their fees for administering the
"WRAP" program. All fees of asset managers are paid by the
Plan and no fees from fund managers are recovered in any way by
MSG
Fiduciary Responsibility would be assessed by Lee Dehner. His
firm has several clients who have converted to the "WRAP"
structure to diversify their asset allocation.
The WRAP program has the potential to reduce asset manager
fees and custodial fees. The fee from MSG would increase.
The Board selects the asset manager for each part of asset
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allocation. MSG would provide the Board with suggested
managers; however, the Board retains the final approval in the
selection process.
Scott will provide the Board and Lee Delmer a copy of the
Investor Services Agreement. Lee will review the acceptability of
the WRAP program by clients of his firm. Scot is to send Bob
Zomok contact information so that Bob can check with three (3)
current Plans that have adopted and are using the WRAP
program.
Action to continue evaluation of firms for custodial services and/or
formally discontinue RFP process
The Board agreed to table this process and to defer to the
consideration of the WRAP program. If the Board opts for the
WRAP, the Fund Custodian is a part of that agreement.
As and aside, Lee Dehner has been in touch with Salem Trust,
(current custodian) and that firm will keep Lee apprised of the
results of the next audit that firm will undergo. The reason the
Board requested the initiation of the RFP process to replace Salem
Trust was the "qualified" audit results they had recently received.
Research of actual expenses to use as basis for developing and annual
operating budget per Senate Bill 172.
Bruce Hoffman has produced a budget for the annual expenses of
the Plan as required by Florida Statute 112, Section 112.664
(formerly Senate Bill 172).
Public Comment: None
J