Loading...
HomeMy WebLinkAbout06142011 PRBa Ea Sebastian Police Pension Board Minutes June 14, 2011, 10:00 a.m. Sebastian City Council Chambers TYPE OF MEETING: NOTE TAKER: Regularly Scheduled Harry Tanner ATTENDEES: Board Members: Denis Hovasse, Chairman Harry Tanner, Recording Secretary Debra Krueger Robert Zomok EXCUSED: Dan Acosta CONSULTANTS H. Lee Dehner, Attorney Peter Goodridge, Wells Fargo Advisor Grant McMurry, ICC Capital Mgmt. SUBJECT CALL TO ORDER TIME: 10:00 a.m. A quorum being present the meeting was called to order by Chairman, Denis Hovasse. SUBJECT APPROVAL OF MINUTES TIME: 10:00 a.m. Denis Hovasse made a motion to approve the minutes of the March 15, 2011, meeting, seconded by Robert Zomok, unanimously approved by the Board. OLD BUSINESS SUBJECT WELLS FARGO INVESTMENT CONTRACT UPDATE 11:10 a.m. Peter Goodridge and Lee Dehner report they are continuing work on the contract with Wells Fargo. A discussion was held to identify what is the problem that is holding things up? It was asked of Lee to explain the standards of liability that were talked about at the last meeting and to tell the Board exactly what issues are holding up the talks? Lee stated the following issues; Keeping records confidential. This can not be done as we conduct business that is regulated by State law that says we must keep records for the public to review. A Contract termination fee. Fiduciary Rights Standards. Questions of Areas of Responsibility. Wells Fargo does not want responsibility for wrongs committed by the Portfolio Manager. Peter states he relies on the report on records provided by the Custodian, Salem Trust. Governing law to be Florida Law, and the Venue to be Indian River County. Mandatory Arbitration. Lee recommends to the Board that we do not agree to arbitration to settle disputes. If we can't reach agreement the matter will be decided in court. Mediation and Arbitration will not be part of the agreement but will be options. The matter adjourned to the next meeting for a report from Lee. SUBJECT PROXY STATEMENT 10:15 a.m. Debra Krueger provided the Investment Proxy Statement provided by Grant McMurry. Robert Zomok took the document to review and return to the Board. Grant says that at this time his organization uses an outside service to oversee the proxy process. It is done by ISS and if ICC thinks there is a conflict of interest we step in. The report is available in January. Debra will put the issue of the Proxy report on the December agenda to ensure it is provided at the March meeting in 2012. Grant states the blue book provided the Board by ICC covers the proxy votes cast by ISS. Robert Zomok Bob asked if we could get the information on the upcoming voting issues covered by the Proxy statements so we, as a Board, have the opportunity to consider the issues before ISS casts votes. Grant will determine how this might be accomplished and will report back to the Board. Lee brought up the fact that Class Action suits go to the Custodian, Salem Trust, to respond to, and, report on. NEW BUSINESS SUBJECT FINANCIAL DISCLOSURE STATEMENTS 10:35 a.m. Debra reminded the Board of the need to file the Disclosure statement by the July 1St, deadline. In response to Debra's remarks, Robert Zomok said he wanted to make sure he followed the proper procedures for disclosure reporting when he last left the Board and was going to check his records. SUBJECT REVIEW OF INVESTMENT PORTFOLIO 11:35 a.m. Peter Goodridge provided a performance evaluation of the Police Pension Fund portfolio for the 1St quarter of 2011 which had an investment return of 3.64 %. This shows the Fund outperformed the indexes it is compared to. As of March 31, 2011, the Fund was fully compliant with the current /new Investment Policy. Peter reported on research he told the Board in March he would do to compare our Fund against a universe of other Police /Fire pension funds returns on investment. Peter reports the data for comparison does not exist. Harry Tanner asked for a clarification of the new Investment Policy's wording concerning investing in Foreign Stock. Peter Goodridge, and Lee said State Law defines investing in "Foreign Stocks" as including investing in "Foreign Stock Markets." Grant stated he has done nothing to implement change in investment strategy since the new policy and is waiting at this time for a signed copy of the Policy. He will report back to the Board before he makes and changes from the current 50% Equities investment. And, will discuss with the Board before starting investing in Foreign Stock Markets. Peter suggested we may want to choose another manager to handle the foreign investment strategies. It was determined through discussion that ICC will do this with no additional fees, and if we hired a separate manager for this investment Peter says the cost would be the same, just being paid to a different manager. Debra said if we were going to do that we might as well put out a RFP for the entire service and see what the bidding is on it. Grants Company would naturally, if they wanted, be included in the RFP. The discussion turned to the Benchmarks used to compare our fund and how accurate are they over the long run and how do they rate against Actuary data. It was determined that the December 2011 meeting will have on the agenda time for a separate look into Actuary information and the question does, the Board need a presentation and question and answer session with our Actuary? Robert Zomok asked about the Benchmark used to compare fund performance. Lee stated that for Organizations formed under the Chapter Plan, (Sebastian PD is a Chapter Plan,) the performance Benchmark is set by State law. Robert Zomok asked Grant to recommend what we should do in Foreign Markets and what our Asset Allocation should be under the new Investment Policy. Peter stated, Asset Allocation is the most important aspect of good investment strategy. SUBJECT FUND REVIEW 11:50 a.m. Grant McMurry reports our funds return on investment over the last two years is 13.2 %. He sees the future as being in Equity investment. Bonds are not paying any money and therefore the money is going into the equity market regardless of fundamentals. People are investing in equities and he thinks the Bond Market has a dim outlook for providing any real return on investment. Therefore the Equities market is the place to invest. The Capital Market is going to come out of the Equities market. Debra questioned; How does this strategy provide for our established view towards, conservative, less risk, investments? Grant states he is not looking at the kind of risk that presented itself in the past. He believes management is the key to equity growth and his firm is ready to and monitoring the management issues in investments. Peter asked why the funds investment in Financials was weighed on the heavy side. Grant stated Financials are a big part of the picture, they have money, and they are making money, therefore they are a worthwhile, less risk, good investment. SUBJECT LEGAL /LEGISLATION 11:45 A.M. Lee Drehner again stressed the importance of the campaign to stop unfavorable legislation from being passed and signed. The feds have made no changes in the $3000 deductible; the legislation is in the House Ways and Means committee. Senate Bill 1128 will affect pensions if passed and signed, should be understood by the membership. Denis asked, if the Governor signs the bill will accrued time used towards retirement calculations be lost? Lee said there will be time to retire after the bill is signed and if done within the window no monies will be lost. SUBJECT ACTION ITEMS ITEM Well Fargo Contract Agenda for Dec. meeting to include an actuary report? Process for ISS providing proxy vote before voting. Report on Fund Asset Allocation RESPONSIBLE PERSON SUBJECT ADJURNMENT Goodridge/Dehner Debra Krueger Grant McMurry Grant McMurry 11:55 a.m. Having no further business for discussion, Chairman, Denis Hovasse adjourned the meeting. The next meeting is Tuesday, 9/20/11.