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August, 2005 |
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POLICE & FIREFIGHTERS' PENSION BOARD REGULAR MEETING
Pursuant to authority of Ordinance C-00-34, Article II, this regular meeting of the Police & Firefighters' Pension Board convened at 12:35 P.M., Wednesday, August 10, 2005 in the Pension Board Conference Room, 888 S. Andrews Avenue, Suite 202, Ft. Lauderdale, Florida 33316.
PRESENT: Dennis Hole, Vice Chairman
Allen Curry, Trustee
Mark Burnam, Trustee
Tom Topor, Trustee
Steve Cypen, Board Attorney
Lynn Wenguer, Administrator
Bernard W. Wray, Ex-officio
Laurie DeZayas, Pension Aide
Renee Lipton, Recording Secretary
ABSENT: Rick Perez, Chairman
Romney Rogers, Trustee
Dee Seibert, Trustee
ALSO PRESENT: Jason Pulos, Asset Consulting Group
Greg Curran, Standish Mellon Asset Mgmt.
Charles F. Lovejoy, Batterymarch Financial Mgmt.
Timothy E. Stanton, Batterymarch Financial Mgmt.
Ryan R. Fitzpatrick, The Boston Co.
John Truschel, The Boston Co.
Joe Robinson, President, Retirees’ Assoc.
Leslie Larkin, Vice President, Retirees’ Assoc.
Linda Soloman-Duffey, Secretary, Retirees’ Assoc.
Nancy Cone, Treasurer, Retires’ Assoc.
Bill Paton, Executive Board, Retirees’ Assoc.
Ross Dovey, Retiree
Harry Wood, Retiree
Varion Harris, Fire Dept.
ASSET VALUE as of August 10, 2005: $415,546,545.
Vice Chairman Hole called the meeting to order at 12:43 P.M. and advised that there was no quorum present. He also introduced Mr. Burnam as the newly appointed trustee.
MINUTES: Regular Meeting, July 6, 2005. It was noted that there were no errors or omissions.
QUARTERLY PORTFOLIO REVIEW: Asset Consulting Group. Mr. Pulos stated that he would be replacing Mr. Kirkland as our contact person since Mr. Kirkland would be leaving the firm shortly.
He then presented the quarterly report; noting that the S&P was up 14% for the trailing one year. Small and mid-cap stocks outperformed large cap stocks. Value stocks outperformed growth. International equities were generally down with the exception of MSCI Emerging Markets, which returned 4.24%. He then reviewed the total fund dollar reconciliation. For the quarter the beginning market value was $408,671,000. Net additions were -$7,240,000. Return on investments was $11,412,000. Income received was $1,470,000. Gain/Loss was $9,942,000. The ending market value was $412,843,000.
The total fund return for the quarter was 2.8% (rank 14) with the median public fund returning 2.2%. Quarterly returns for the total fund Equities returned 3%, International returned –1.0%, Fixed Income returned 3%.
The Vice-Chairman noted that Allen Curry arrived at 12:53 P.M. Therefore, there was now a quorum present. Mr. Pulos was asked to delay his report in order for the Board to address the items that needed to be voted on. Mr. Topor made a motion to approve the minutes as submitted with Mr. Curry seconding the motion. The motion was approved UNANIMOUSLY by the Board.
BENEFIT REVIEW - POLICE DEPARTMENT – NEW RETIREES (Termination of DROP Retirement): Philip E. Arth, Detective. Date of DROP retirement December 1, 2001 with 21.l6 credited pension service and 24.81 total years of service. Termination date August 31, 2005. Pension benefit $3,425.76 (100% Joint & Survivor). DROP account total $177,796.94.
Michael J. Daniels, Police Officer. Date of DROP retirement October 1, 2000 with 21.95 credited pension service and 25.93 total years of service. Termination date September 20, 2005. Pension benefit $3,428.97. DROP account total $248,543.60.
Alfred J. Ortenzo, Assistant Chief. Date of DROP retirement September 30, 2000 with 25.48 credited pension service and 30.30 total years of service. Termination date July 21, 2005. Pension benefit $7,868.70. DROP account total $542,648.32.
VESTING: George Bowlin, Police Officer. Last day worked July 24, 2005. Benefits to commence July 10, 2015 with 10.04 years of service. Pension benefit $1,805.62. (Agenda corrected from Fire Department to Police Department).
A motion was made by Allen Curry to waive the reading of the Benefit Review and to approve. Tom Topor seconded the motion. The motion was approved UNANIMOUSLY by the Board.
BILLS: Tom Topor then made a motion to waive the reading of the Bills and approve payment. Mr. Burnam seconded the motion. The motion was approved UNANIMOUSLY by the Board.
Essex Investment Management $64,359.40
Systematic Financial Management $58,686.13
Agincourt Capital Management $37,716.33
InTech $32,990.28
RhumbLine $14,552.58
The Bank of New York $19,197.21
Cypen & Cypen $252.08
Cypen & Cypen $100.00
Mr. Pulos continued his review of the portfolio. He noted that the equity managers have performed above the medium. InTech and Systematic have added value. The bond managers are in line. The two international funds are under-performing.
Mr. Pulos then introduced Greg Curran from Standish Mellon.
STANDISH MELLON PORTFOLIO REVIEW: Mr. Gregory Curran reviewed the Indexed Investment Management Group. The total market value of this portfolio is $79,121,506. There are 28 participants in this fund and the market value of the entire fund is $973,644,491. The effective duration of this fund is 4.15 years as opposed to the Lehman Brothers Aggregate Index at 4.16 years. The average maturity is 6.66 years with the Lehman Bros. Index at 6.68 years.
The performance of this fund for the quarter was 2.98% (Lehman 3.01%), year-to-date 2.49% (Lehman 2.51%), one year 6.76% (Lehman 6.80%), since inception 6.38% (Lehman 6.43%). Mr. Curran then reviewed the economic outlook for the next three to nine months. He reviewed the key economic variables and discussed the intermediate duration strategy. He explained TIPS (U.S. Treasury Inflation Protection Securities) that adjusts for inflation since the demand has picked up as inflation concerns increase.
Vice Chairman Hole thanked Mr. Curran for his report and noted that the trustees accepted the report. Mr. Curry left at 1:15 P.M.
INTERNATIONAL MANAGER PRESENTATIONS: Batterymarch Financial Management, Inc. Mr. Charles F. Lovejoy and Mr. Timothy E. Stanton reviewed the risk-controlled, core approach that is designed to produce positive excess returns regardless of market environment. They expect success in both up and down markets with consistent risk-adjusted returns.
This is a Boston-based equity specialist managing US, International, Emerging Markets and Global portfolios. They have a specialized team approach, with a strong commitment to research and information technology. Their investment disciplines combine the best of both fundamental and quantitative strategies. They discussed their investment philosophy and stressed cost-efficient trading. They control risk by buying the best stocks and adhere to a sell discipline.
This fund, as of June 30, 2005, has returned 18.8% for one year with MSCI EAFE returning 14.1%. For three years this fund returned 15.5% with EAFE returning 12.5% and for five years the return was 2.3% with EAFE at –0.2%.
The fee schedule was discussed as it was not negotiable. From $10 to $20 million the fee would be 0.45% of assets plus 0.85% on the first $10 million.
Chairman Hole thanked Mr. Lovejoy and Mr. Stanton for this presentation.
INPUT FROM ACTIVE & RETIRED POLICE OFFICERS & FIREFIGHTERS:
Firefighters’ Share Plan – Mr. Hole advised that several revisions had been made and the Plan would be given to their attorney for review prior to being voted on. Mr. Hole noted that he hoped to have a final draft ready at the end of the day.
INTERNATIONAL MANAGER PRESENTATIONS (continuation): The Boston Company represented by Ryan R. Fitzpatrick and John Truschel presented the International Core Equity Management product. They discussed their company as well as their investment philosophy and process. Their performance as of June 30, 2005 was 0.3% (-1.0 MSCI EAFE) for the second quarter. 2.0% (-1.2% MSCI EAFE) year-to-date, 19.9% (13.7% MSCI EAFE) for one year and 17.9% (12.1% MSCI EAFE) for three years. The portfolio return has been in the first percentile for the past five years. They discussed their philosophy with security selection being major to their strategy. They also do not invest in emerging markets.
The fee schedule was discussed. Their charge was 75 basis points on the first $20 million and 70 basis points on the next $20 million, 60 basis points on the next $60 million and 40 basis points thereafter.
Vice Chairman Hole thanked Mr. Fitzpatrick and Mr. Truschel for the presentation.
Joe Robinson asked whether the trustees have had an answer from the city attorney’s office reference other compensation that might be counted in computing compensation such as the car allowance for managers. He was advised that due to the staff changes, there was no new information on this.
ADMINISTRATOR’S REPORT - Letter from Dennis Hole: The administrator advised the Board that Mr. Hole has submitted a letter of resignation effective October 1, 2005. His term of office ends December 31, 2005.
Firefighter Trustee: An election will be held in October to fill this position as of January, 2006 due to the time it would take to hold an election for the three months remaining.
Me Too II Lawsuit: Mr. Cypen said there was nothing new to report on this.
Academic Incentive Pay: Waiting for approval from the Finance Department. Mr. Wray stated he would look into this.
Custodial Request for Proposal: No new information.
Managers’ Proxy Guidelines: Mr. Burnam was asked if he would be able to compare our managers’ guidelines to the NCPERS Model Guidelines. He agreed to do this and asked the staff to provide him with the guidelines.
Prior G.E. Service: The union and City management have to resolve this issue and give us a solution as to the transferring of funds from one Plan to another.
Consultant’s Survey: No new information.
FOR YOUR INFORMATION: No action.
There being no further business to be brought before the Board, Mr. Topor made a motion to
adjourn at 2:33 P.M. with Mr. Curry seconding the motion. The motion was UNANIMOUSLY approved.
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Meeting Minutes