12-12-2016CITY OF EDGEWATER
POLICE OFFICERS' PENSION BOARD
QUATERLY MEETING MINUTES
City Hall Council Chambers
Monday, December 12, 2016 at 1:30PM
TRUSTEES PRESENT: David Arcieri
Lawrence Leaf
Larry Brinson
Alexander Penalta
Timothy Webb
TRUSTEES ABSENT: None
OTHERS PRESENT: Ken Harrison , Sugarman Susskind
Ferrell Jenne , Foster & Foster
Jack Evatt , The Bogdahn Group
1. Call to Order Alexander Penalta called the meeting to order at 1 :30pm.
2. Roll Call -As reflected above .
3. Public Comment -None.
4. Approval of Minutes
The minutes from the September 19, 2016, quarterly meeting were approved upon motion
by David Arcieri and second by Larry Brinson, motion carried 5-0.
5. New Business
a. Actual expenses budget as of September 30, 2016.
i. Ferrell Jenne reviewed the expenditure amounts and reminded the board
this was done to stay compliant with SB172.
The board approved the actual expenses as of September 30, 2016 as presented, upon
motion by Larry Brinson and second by David Arcieri, motion carried 5-0.
b. Renewal of 2017 FPPT A board membership.
i. Fe r rell Jenne informed the board that the 2017 FPPTA membership had
been renewed and asked the trustees to contact her if they were
interested in attending any of the upcoming conferences.
c. Proposed 2017 meeting dates .
i. Ferrell Jenne reviewed the proposed 2017 dates with the board; March
20th , June 19th, September 1 ath, and December 11th .
The board approved the proposed 2017 meeting dates upon motion by Lawrence Leaf and
second by Timothy Webb, motion carried 5-0.
d. Salem Trust staffing change memo .
i. Ferrell Jenne reviewed the Salem Trust memo with the board informing
them that Brad Rinsem had stepped down as President and Mark Rhein
would be replacing him.
e. Discussion of updating the Summary Plan Description (SPD).
i. Ferrell Jenne commented the SPD was last updated in 2003 and needed
to be done every two years. Now that the plan had been restated, Foster
& Foster could update the SPD for a fee not to exceed $500.
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The board approved having Foster & Foster update the Summary Plan Description (SPD)
for a fee not to exceed $500, upon motion by Lawrence Leaf and second by Larry Brinson,
motion carried 5-0.
6. Old Business -None.
7. Reports
a. The Bogdahn Group, Jack Evatt , Investment Consultant.
i. Jack Evatt informed the board that his firm was rebranding and would
soon have a new name and logo. Jack confirmed that there has been no
change in the ownership.
ii. Quarterly update as of September 30, 2016.
1. Jack Evatt gave a brief overview of the market environment
during the quarter.
2. Market value of the fund as of September 30, 2016, was
$8 ,551,031 .
3. Jack Evatt reminded the board that Dana had been removed
from the portfolio after the end of the third quarter and Vanguard
Index 500 was added.
4. Gross returns for the quarter were 2.97%, underperforming the
policy benchmark of 3.20%. Fiscal YTD returns were 7.79%,
underperforming the benchmark of 10.43%. Trailing returns for
the 3 and 5 year periods were 6.32% and 9.68%. Since inception
(10/1/2000) gross returns were 4 .67%, slightly underperforming
the policy benchmark of 4.82%.
5. Jack Evatt briefly reviewed the financial reconciliation fiscal YTD.
6. Jack Evatt felt that Vanguard Index was a permanent piece of
the portfolio and he brought complimentary managers for the
board's review.
7. Jack Evatt reviewed the compliance checklist and commented
that it included Dana .
The board approved the September 30, 2016 Bogdahn quarterly report as presented, upon
motion by David Arcieri and second by Lawrence Leaf, motion carried 5-0.
iii. Discussion of Large Cap Value Equity managers.
1. Jack Evatt reviewed the definition of the value stock & growth
space .
2. Jack Evatt commented that the portfolio needed some level of
market outperformance in order to meet the assumed rate of
return.
3. Jack Evatt reviewed the manager and fund comparison for the
large cap value equity evaluation .
4. Jack Evatt commented that the lower the total holdings were for
the company , the increased likelihood for volatility.
5 . Jack Evatt briefly reviewed the fees and investment strategy for
each manager.
6. Jack Evatt reviewed the net-of-fees returns and rolling active
returns for each manager to illustrate how far away from the
benchmark the managers could get.
7. Jack Evatt reviewed the risk/return analysis for each manager.
8. Jack Evatt stated he liked Becker Value Equity , Ridgeworth
Large Cap Value, and Great Lakes Value.
9. Jack Evatt recommended moving $650,000 to Becker Value
Equity Fund.
iv. Discussion of Large Cap Growth Equity.
1. Jack Evatt reviewed each manager , their associated fees, and
strategic evaluation.
2. Jack Evatt reviewed the trailing returns for each manager.
3. Jack Evatt reviewed the risk/return analysis for each manager.
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4. Jack Evatt recommended investing with MFS Growth and
commented they had lower fees. Jack stated his second
recommendation was Fred Alger Capital Appreciation .
The board aooroved Jack Evatt's recommendation of diversifying the portfolio upon
motion by David Arcieri and second by Larry Brinson, motion carried 5-0.
The board approved moving $1.3MM from Vanguard 500 Index and investing $650,000 with
Large Cap Growth manager MFS, and investing $650,000 with Large Cap Value Equity
manager Becker, upon motion by David Arcieri and second by Larry Brinson, motion
carried 5-0.
v. Jack Evatt stated these changes would not affect the Investment Policy
Statement (IPS), and that no rebalancing was needed at this time.
b. Sugarman & Susskind, Ken Harrison, Attorney .
i. Legal update.
1. Ken Harrison stated his office was still waiting on the final IRS
Determination Letter.
2. Ken commented that he hadn't seen any pre-filed pension reform
bills for the spring legislative session .
8 . Consent Agenda
a. David Arcieri inquired about the Independent Medical Exam (IME) cost being
$4,000. Ken Harrison stated it was more expensive than usual due to the
psychiatric evaluation.
The board approved the consent agenda as presented upon motion made by David Arcieri
and second by Lawrence Leaf, motion carried 5-0.
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11.
12.
Staff Reports, Discussion, and Action
a. Ferrell Jenne informed the board that Ordinance 2016-0-34 was adopted by
Council on November 14, 2016, and sent to the State on December 5, 2016.
Trustee Reports. Discussion, and Action
a. David Arcieri asked what the possibility was for Share Plan monies to be used
to pay for post-retirement medical insurance. Ken Harrison commented that a
VEBA could be set-up and there were various funding sources . Ken advised
that Chapter 185 rules would have to be followed and he could send some
examples to David Arcieri.
b. David Arcieri commented that City Council would like to provide health
insurance to all members receiving an In-Line-of-Duty Disability benefit. David
stated that he would like to see a health subsidy benefit for all members. Ken
Harrison commented he would put a letter together describing the different
options and send it to the board prior to the next meeting .
c. Alex Penalta asked what was in place to keep a disability recipient from
recovering from an injury and still collect a disability benefit. Ken Harrison
stated that the board had the right to re-evaluate any disability recipient. Ferrell
Jenne reminded the board that a disability affidavit is also sent out to anyone
receiving a disability benefit.
d. Ferrell Jenne commented that the finance director asked her to pass along to
the board that the General Board went out for a fee analysis for all service
providers. The board decided not to have a fee analysis done at this time .
Adjournment The meeting adjourned at 3:00pm.
Next Meeting Friday , February 17, 2017 , 1 :30PM . &nub;: Approved ~
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Ferrell Jenne , Plan Administrator Alexander Penalta, Chairman
Date Approved By the Pension Board: rn A '(,CK g., 0' ~ 0 l /
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