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July, 2006 |
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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 12:30 P.M., Wednesday, July 12, 2006 in the Pension Board Conference Room, 888 S. Andrews Avenue, Suite 202, Ft. Lauderdale, Florida 33316.
PRESENT: Dee Seibert, Chairman
Allan Curry, Vice Chairman
Ian Kemp, Trustee
Michael Dew, Trustee
Mark Burnam, Trustee
Tom Topor, Trustee
Steve Cypen, Board Attorney
Alison Bieler, Esq.
Lynn Wenguer, Administrator
Laurie DeZayas, Pension Aide
Renee Lipton, Recording Secretary
Betty Burrell, Ex-officio
ABSENT: Romney C. Rogers, Secretary
ALSO PRESENT: Fuzzy Larkin, President, Retirees’ Assoc.
Bill Paton, Vice President, Retirees’ Assoc.
Nancy Cone, Treasurer, Retirees’ Assoc.
Linda Solomon Duffey, Secretary, Retirees’ Assoc.
Jack Chew, Director, Retirees’ Assoc.
Mike Salzano, President, IAFF
Rick Schulze, Director, Retirees’ Assoc.
Dennis Hole, Retiree
Jack Lokeinsky, President, FOP
John Abrams, Police Dept.
Stephen McInerny, Acting Fire Chief
Richard Hickman, Firefighter
Richard Sicking, Esq.
Jason Pulos, Asset Consulting
ASSET VALUE as of July 11, 2006: $428,310,627.
Chairman Seibert called the meeting to order at 12:30 P.M.
MINUTES: Regular Meeting, June 14, 2006. Mr. Curry made a motion to approve the minutes as submitted. Mr. Dew seconded the motion. The motion was approved UNANIMOUSLY by the Board.
BENEFIT REVIEW: POLICE DEPARTMENT – New Retirees – Termination of DROP Retirement: Michael B. Roddy, Sergeant. Date of DROP retirement December 1, 2003 with 23.65 credited years of pension service and 26.21 total years of service. Termination date June 22, 2006. Monthly pension benefit $5,368.70. DROP account total $181,891.67.
Louis J. DiBonifazio. Sergeant. Date of DROP retirement December 1, 2003 with 21.33 credited years of pension service and 24.00 total years of service. Termination date August 2, 2006. Monthly pension benefit $4,650.53 (100% Joint & Survivor). DROP account total $165,032.30.
Vesting: Ryan Kennerson, Police Officer. Last day worked July 14, 2006. 11.23 years of service. Monthly pension benefit $2,034.14 to commence April 24, 2015.
Request for Lump Sum Refund – Thomas V. Ralph, Police Officer. Date of Separation June 27, 2006 with .13 years of creditable service. Lump sum payment due $147.11.
FIRE DEPARTMENT - New Retiree – Termination of DROP Retirement: John P. Millroy, Lieutenant. Date of DROP retirement October 1, 1002 with 25.49 credited years of pension service and 29.25 total years of service. Termination date July 10, 2006. Monthly pension benefit $5,262.79 (100% Joint & Survivor). DROP account total $275,369.63.
Motion was made by Mr. Kemp to approve the Benefit Review with Mr. Curry seconding the motion. The motion was approved UNANIMOUSLY by the Board.
BILLS: Systematic Financial Management submitted a bill for investment services from 04/01/2006 – 06/30/2006 in the amount of $61,906.08.
Stanley, Holcombe & Assoc. submitted a bill for actuarial consulting services in the amount of $20,488.
Asset Consulting Group submitted a bill for Investment Consulting Services for the period April 1, 2006 through June 30, 2006 in the amount of $10,625.
Koch Reiss submitted a bill for professional services rendered for the period ended 12/31/05 in the amount of $4,100.
A motion was made by Mr. Curry seconded by Mr. Kemp to approve payment of these bills as submitted. The motion was approved UNANIMOUSLY by the Board.
SMALL CAP VALUE MANAGER PRESENTATIONS: Jason Pulos, Asset Consulting reviewed the Portfolio Asset Allocation Study dated February 2006 that he had prepared for the Board and had been discussed at a prior meeting.
Mr. Burnam arrived at the meeting at 12:38 and Mr. Topor arrived at 12:42.
Mr. Pulos then discussed the reasons he believed the trustees should add Small Cap Value and Small Cap Growth Managers to this portfolio. He then introduced Thomas A. Cosmer and Samuel Nathans from Martingale Asset Management.
Small Cap Growth Presentation: Martingale Asset Management was founded in 1987 and is 100% employee owned with 14 employee-partners. They have $4.5 billion under management from 45 clients. Mr. Nathans discussed their investment process, which included systematic valuation, disciplined portfolio construction and low cost trading. He reviewed that stock selection approach as well as their targeted risk parameters for the construction of the portfolio. Minimizing the cost of trading and the fact that they did not use soft dollars was discussed. Their performance results from inception 01/01/03 was noted. The fee structure would be 90 basis points for a $20,000,000. portfolio.
Fire Department – Disability - Richard Hickman. Mr. Cypen read the minutes of the June meeting and the revised report received from Dr. Lupu. The board discussed the medical reports as well as the fact that there was no light duty position available for Mr. Hickman in the Fire Department.
In light of the above, Mr. Kemp made a motion to grant Richard Hickman disability status. Mr. Dew seconded the motion. The motion was approved UNANIMOUSLY by the Board.
INPUT FROM ACTIVE & RETIRED POLICE OFFICERS & FIREFIGHTERS: None.
ADMINISTRATOR’S REPORT – Stanley, Holcombe & Assoc. letter dated June 22 2006 re Academic Incentive Pay: Mr. Kemp asked about factoring in the cost of living adjustment. Ms. Wenguer responded that this was not issue because COLA’s were not based on salary, but on total years of service and, therefore, not related to the amount.
XM Satellite Litigation Update: After review of the letter from Schiffrin & Barroway, LLP and a discussion of the three firms who declined pursuing this matter, the trustees decided no further action would be taken.
Administrator’s Performance Review & Staff Pension: The Administrator discussed her concern of her inability to buy back over 10 years of prior service. There is a provision in the ordinance for this buy-back, but no mechanism to do this. The trustees discussed this issue as well as the possibility of providing a pension for the 10 years only and other possible remedies. The trustees decided to review this at another meeting.
The Administrator’s annual salary increase was discussed. After discussion, Mr. Kemp made a motion to approve a 4% increase of base salary retroactive to February ????, 2006. Mr. Topor seconded this motion. The motion was approved UNANIMOUSLY by the Board.
The Administrator was asked to prepare a list of comparative salaries paid to administrators by the larger pension plans in the State of Florida. This item to be placed on the December agenda for her review prior to her February hire date.
Mr. Cypen and Mr. Topor left the meeting at 3:30 P.M.
SMALL CAP GROWTH MANAGER PRESENTATIONS (continuation): Northpointe Capital represented by Carl P. Wilk and Kenneth C. Hudson reviewed their portfolio management approach. They utilize quantitative screens and fundamental research to identify companies with a proven, consistent track record and sustainable competitive advantage. The trustees reviewed their returns as well as the Russell 2000 Growth Index and the Russell 2000 Index. They also discussed their process for risk control. The fee schedule was reviewed. The cost would be 81 basis points on a $20,000,000. portfolio.
SMALL CAP VALUE PRESENTATIONS: Lee Munder Capital Group represented by Don Triveline and R. Todd Vingers reviewed their organization, which was founded in the year 2000. They are employee-owned by senior professionals with 60 employees and $4.3 billion in assets under management. Their investment strategy is to purchase leading businesses that are temporarily out of favor and selling at a discount to fair value which they believe have the potential to generate excess returns. They focus on stocks offering high probability of modest out performance rather than a low probability of high out performance. They reviewed their investment process starting with the security valuation, security analysis and portfolio construction including their buy/sell decisions. The trustees reviewed their risk-adjusted returns. The fee on a $20,000,000. portfolio would be between 75 and 80 basis points.
New York Life Investment Management represented by Kathy A. O’Connor and Paul R. Ames reviewed their philosophy. They look for attractively priced companies that offer superior investment opportunities. Their objective is to exceed the Russell 2000 Value Index by 3-5% annually, after fees, with a tracking error of 4-6%. Ms. O’Connor discussed their stock selection, portfolio construction, risk control and their trading strategy with a focus on trading costs. The trustees reviewed their investment results since inception February 1, 1987. The fee on a $20,000,000. portfolio would be 75 basis points.
Mr. Pulos then reviewed the four presentations consisting of two small cap growth managers and two small cap value managers. He discussed the Policy Manual and the need to have the language in place to rebalance the portfolio. He agreed to draft this language necessary to add targets and ranges that will aid in future rebalancing.
After discussion, Mr. Curry made a motion to hire Northpointe Capital using one-half of RhumbLine’s Mid Cap portfolio to fund this new portfolio. Mr. Burnam seconded the motion. The motion was approved UNANIMOUSLY by the Board.
Mr. Curry then made a motion to hire Lee Munder Investments using the other half of RhumbLine’s Mid Cap portfolio for funding Mr. Burnam seconded the motion. The motion was approved UNANIMOUSLY by the Board.
FOR YOUR INFORMATION: No action.
There being no further business to be brought before the Board, Mr. Burnam made a motion to adjourn at 4:15 P.M. The motion was UNANIMOUSLY approved.
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Meeting Minutes