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Home My WebLink About03182014 PRB MinutesSebastian Police Pension Board Minutes March 18, 2014, 10:00 a.m. Sebastian City Council Chambers TYPE OF MEETING: Regular ATTENDEES: Board Members: Steve Marcinik, Chair Robert Zomok, Secretary Debra Krueger Bruce Hoffman Richard Snell EXCUSED: CONSULTANTS: Grant McMurry, ICC Capital Mgmt. (Portfolio Manager) H. Lee Dehner, Attorney, Scott Owens (Morgan/Stanley) SUBJECT CALL TO ORDER 10:00 a.m. There being a quorum present, Steve Marcinik, called the meeting to order. SUBJECT APPROVAL OF MINUTES 10:05 a.m. Bruce Hoffman motioned the minutes of the Special Meeting on January 14 , 2014 Board Meeting be approved. Motioned seconded by Debra Krueger and passed unanimously without change. Public Comment None Presentation Al Boettjer (CFPBA Staff Representative) requested an agenda item to Minutes 3/18/2014 2 discuss the issue. Mr. Boettjer did not appear. Lee Dehner noted the case stands as last discussed - we are waiting on a position statement concerning "permanent and total disability" as a police officer. SUBJECT OLD BUSINESS Proposed Ordinance Lee Dehner has completed the draft reflecting the changes discussed at the Special Meeting in January2014, e.g., the "optional provisions" are removed. Bruce Hoffman raised a question about the effective date of changes and funding. Lee Dehner pointed out the Board uses a "projection methodology" determining funding. Therefore, the date on the Actuarial Impact Statement is 2015. Updated SPD The Summary Plan Description (SPD) will be updated reflecting the current provisions. A future revision may be necessary due to IRS regulations or unforeseen, required changes. Approval of 5th Board Member by City Council Debra Krueger noted that Sebastian City Council had approved her as the 5th Board Member. Approval of Invoices Christiansen & Dehner $4,129,16 Foster & Foster 1949.00 Bruce Hoffman moved to direct payment of both invoices. Bob Zomok seconded the motion and it passed unanimously. Asset Allocation Strategy The Board will revisit our Asset Allocation Strategy after the Ordinance is approved since the Ordinance broadens the Board's authority to increase asset classes. Investment Policy Statement Review This item is also being tabled pending Sebastian City Council approval of the revised Ordinance. Minutes 3/18/2014 SUBJECT NEW BUSINESS Review of Investment Portfolio As of December 2013, investments are now being made into international markets. The Fund has about 9.1% of assets invested in international markets. We can go to 15% per previous Board approval. Report on Sale of one (1) downgraded bond (AFLAC) Grant McMurry is continuing to hold this asst pending a more favorable time to sell it. Fund Review Scott Owens and Grant McMurry pointed out anomalies in the market. Even though unemployment is down, corporate profits are up, and the economy is continuing to recover, the recovery is slow. Also, they posited the FED position is another "wait and see" potion of the market. The FED did say it would revisit interest rates when unemployment reached 6.5%. The rate currently stands at 6.7%. Sebastian Police Officers' Pension Fund Investment Review — ICC Capital Management Fourth Quarter 2013 Executive Summary The stock market continued its solid performance through the last quarter of the calendar year of 2013. Probably more a result of previous experienced price momentum than of any recognizable attractive economic news. The fact that the Federal Reserve announced their intention to continue pulling back on the purchase of Treasury issues to hold down interest rates and the announcement of Janet Yellen as the next Fed Chairperson seemed to have little effect on the stock market. And, the bond market had previously factored these issues into the market previously thus seemed to take the announcements in stride. ICC stocks were up just over 10% for the quarter and up 33.1% for the calendar year. For the quarter this return closely matched the S&P return of 10.5%, and for the year exceeding the S&P's 32.3% return. Your bonds were down 0.11% for the quarter and down 2.13% for the Minutes 3/18/2014 4 year. During the month of December an allocation to international stocks was added to the asset mix. Following the December special meeting of the Board, we invested about 8% of the portfolio into our international ADR product. This took place around the end of December thus the performance for this short period is negligible. It will be reported in detail starting with the quarter ending March 31St. Note for Bob: We talked at the meeting about allowing us to move between our growth and value portfolios as part of our Large Capitalization allocation. The board gave its approval and we will begin to make such moves as we identify opportunities. Legal/Legislative Update Lee Dehner noted that SB 246 (Ring Bill)/HB 509 are currently moving through various committees at the State level. The Bills place funded overages (beyond 80% funded ratio) to be under State control rather than local control of those funds. SB 534 imposes filing and disclosure requirements that will increase pension administrative costs. The next State Sponsored Board Seminar is scheduled for May 12-13- 14, 2014 in Tallahassee. Bruce Hoffman and Richard Snell indicated interest in attending. Lee reminded the Board that the filing of Form 1 with the County is due prior to July 1, 2014. SUBJECT ACTION ITEMS ITEM RESPONSIBLE PERSON Email SPD Lee Dehner/Debra Krueger Email Investment Policy Draft Scott Owens To Bruce Hoffman and Richard Snell Minutes 3/18/2014 Executive Summary of Fund Status Grant McMurryBob Zomok SUBJECT ADJOURNMENT 11:30 AM Having no further business for discussion, Chairman Steve Marcinik adjourned the meeting. Next regularly scheduled meeting is June 17, 2014, at 10:00 a.m. in the Sebastian City Council Chambers. Debra Krueger will be unable to attend. Respectfully submitted, Bob Zomok, Secretary Minutes 3/18/2014