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HomeMy WebLinkAbout12022015 PRB MinutesDraft 12/01/2015 Minutes Sebastian Police Pension Board Minutes December 1, 2015 10:00 a.m. Sebastian City Council Chambers TYPE OF MEETING: Regular ATTENDEES: Board Members: Robert Zomok, Secretary Bruce Hoffman Ken Killgore Richard Snell EXCUSED Steve Marcinik, Chair CONSULTANTS: None SUBJECT CALL TO ORDER 10:00 a.m. In the excused absence of Steve Marcinik, Chairman, Richard Snell moved to have Bob Zomok, Secretary, chair this meeting. The motion was unanimously approved. There being a quorum present, Bob Zomok, called the meeting to order. SUBJECT UNFINISHED BUSINESS APPROVAL OF MINUTES 10:05 a.m. Ken Killgore motioned the minutes of the September 15, 2015 Board Meeting be approved. Motioned seconded by Bruce Hoffman and passed unanimously. 1 Draft 12/01/2015 Minutes Consideration of "wrapping" consulting, custodial, and account management services into one "bundled" contract. HISTORY 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 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 Dehner 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. Draft 12/01/2015 Minutes 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. CURRENT DISCUSSION: Recognition of an additional proposal from First State Trust Company The Board recognized receipt of the RFP submitted by First State Trust Company. Approval to execute Investment Management Agreement with Highland Capital Management, LLC Bob Zomok moved to approve and submit the Investment Agreement. Bruce Hoffman seconded the motion and it passed unanimously. Requirement to Distribute the Summary Plan Description was met on October 27, 2015. Bruce Hoffman asked if signatures were required from those receiving copies of the SPD. The Board will ask Lee Dehner at the next meeting. Public Comment: None 3 Draft 12/01/2015 Minutes SUBJECT NEW BUSINESS Approval of Payments: Reimburse the City of Sebastian for payments made to Richard Snell and Bruce Hoffman to attend the 45th Annual Pension Trustee Conference. Bob Zomok motioned to approve the above listed payments. Ken Killgore seconded the motion and it passed unanimously. Other Matters: The following items were discussed: The Board would like to have a list showing the membership terms for each Board member Bruce Hoffman moved to elect new Board Officers at the January 12, 2016 meeting. This is called for under the Board's "Operating Rules and Procedures. Bob Zomok seconded the motion and it passed unanimously. As an adjunct to the election item, the Board determined the need to review and cause to have updated the Operating Rules and Procedures dated July 8, 2003. In that the Board has just approved the Agreement with Highland Capital Management, the Board asked Ken Killgore to contact Grant McMurry and have him bring a representative from Highland Management to provide a review of the services offered by Highland. The Board affirmed that Steve Marcinik's absence is an excused absence. The proposed meeting dates for calendar year 2016 are: January 12, March 15, June 14, September 20, and December 13. Draft 12/01/2015 Minutes Next regularly scheduled meeting is January 12, 2016 at 10:00 a.m. in the Sebastian City Council Chambers. Agenda items include: Review list of membership terms Election of Officers Discussion of Operating Rules and Procedures Review of Fiduciary and Travel Insurance policies Review of incorporating the "Share Plan" into the Ordinance Review of the Investment Services Agreement. SUBJECT ADJOURNMENT 11:40 AM Having no further business for discussion, Secretary Zomok adjourned the meeting. Respectfully submitted, Bob Zomok, Secretary