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12-10-2012 General Employees' Pension Board of Trustees Minutes-Regular Meeting December 10,2012 Page 1 of 3 CITY OF EDGEWATER GENERAL EMPLOYEES' PENSION BOARD Regular Meeting MINUTES Monday,December 10,2012 CALL TO ORDER/ROLL CALL/DETERMINATION OF A QUORUM The Edgewater General Employees' Pension Board held its quarterly (regular) meeting on Monday, December 10, 2012 in the City Hall Conference Room at the City of Edgewater, Florida. Members Present: John McKinney Brenda Dewees Tim Sopko Tyna Hilton Bobby Laramore Members Absent: Gigi Bennington John Brackin Plan Attorney: H. Lee Dehner Board Administrator: Sheila Hutcheson Consultant: Jack Evatt, The Bogdahn Group City Staff: Julie Christine, Personnel Department Donna Looney, Personnel Director Vice-Chairman Dewees called the meeting to order at 11:02 a.m.; there was a quorum with four members present at the beginning of the meeting. Member Laramore arrived at 11:12 a.m. APPROVAL OF MINUTES -Quarterly Meeting- September 17, 2012 Member Hilton made a motion to approve the minutes of the September 17, 2012 quarterly meeting; Member Sopko seconded the motion, which passed unanimously. NEW BUSINESS/OLD BUSINESS-None. REPORTS(ATTORNEY/CONSULTANTS) Jack Evatt,The Bogdahn Group,Performance Consultant Quarterly Report- September 30,2012 Jack Evatt opened by discussing the report he distributed to the Board, and noted that it had been a strong quarter and a good year. He reported that the fund had $12,650,938 on September 30, 2012, compared to $12,313,136 on June 30, 2012. The return for the quarter was 5.01%, and 18.27% for the fiscal year, both of which out-performed the index. As of November 30, 2012, the fiscal year to date performance was 0.33%and 0.98%for the month of November. General Employees' Pension Board of Trustees Minutes-Regular Meeting December 10,2012 Page 2 of 3 Review of Investment Policy Statement(IPS) With the upcoming separation from Principal, Mr. Evatt recommended a review of the IPS, especially with reference to ICC. Recently, ICC has been trying to sell their firm, and The Bogdahn Group does not recommend funding this manager at this time. He next discussed West End, which would have a large portion of the assets. The Board and Mr. Evatt concurred that the best course of action is to re-interview investment managers. He distributed handouts on various Vanguard funds, which would be a good index fund to receive the assets from Principal (as a "place-holder"). To an extent, the final decisions on the investments will be governed by the Plan ordinance that is adopted after the separation from Principal. Member McKinney made a motion to transfer funds from Principal to the Vanguard Total Stock Market Index Fund (domestic only - 45% of the portfolio); Member Hilton seconded the motion, which passed unanimously. Mr. Evatt then discussed the international investment piece and recommended that the funds be transferred to the Vanguard Total International Stock Index Fund, until an international manager is hired. Member McKinney made a motion to transfer funds from Principal to the Vanguard Total International Stock Index Fund(international only- 15% of the portfolio); Member Sopko seconded the motion, which passed unanimously. Mr. Evatt next discussed that the fixed income portion of the portfolio could be transferred to the Vanguard Bond Fund, as a"place-holder." This would be just for a few months until an active manager is selected. Member Hilton made a motion to transfer funds from Principal to the Vanguard Total Bond Market Index Fund (fixed income only - 40% of portfolio); Member Laramore seconded the motion, which passed unanimously. Mr. Evatt said that the percentages above would be finalized based on the actual amount of the assets at the time of the transfer. There may need to be a special meeting before the March quarterly meeting to discuss the IPS/investment managers. The Boards may want to meet jointly as was done in 2009. H. Lee Dehner,Plan Attorney Mr. Dehner opened his report with an overview of the recent negotiations with Principal and the need to have the joint special meetings on January 7 and January 15, 2013. He discussed the schedule and transition logistics. The Administrator also noted some of the issues that will occur with the transfer of assets and retiree data from Principal to Salem Trust. The organizational session of the legislation is underway; the actual legislative session will be in the next few months with changes likely to occur that will affect all employee groups' pension plans. Sheila Hutcheson,Plan Administrator Ms. Hutcheson opened her report with a notice of resignation as of the end of December to transition records and information to the City staff. In her discussion with the City Manager, Mr. Barlow said the timing is good with respect to the transition from Principal, so that he can evaluate the staffing needs once General Employees' Pension Board of Trustees Minutes-Regular Meeting December 10,2012 Page 3 of 3 the plans are separated from Principal. Ms. Hutcheson recommended an associate of hers, Karan Rounsavall, for consideration as the Plan's Administrator. Ms. Rounsavall would be available in March. Ms. Hutcheson expressed her gratitude to the Board and that she had enjoyed working with the Board/City Staff. The Board thanked Ms. Hutcheson for her service. • FPPTA membership will be renewed for 2013 - $600.00 The Board approved the meeting dates for 2013,as follows: • Quarterly meeting dates for 2013 (Mondays at 11:00 a.m.): March 18, 2013 June 17, 2013 September 16, 2013 December 16, 2013 • Spouse Beneficiary Forms—these are complete for active members and Plan retirees (still working for the City) with certain period or survivor options. It is recommended that the notices be sent to other retirees along with the notification of the Plan change when the contract with Principal is terminated. • Salem Trust Authorized Signer Forms -the Administrator has the form from Salem Trust for the signatures of all Trustees RAFTIFICATION OF PROCESSED DISBURSEMENTS/RETURN OF CONTRIBUTIONS, DISBURSEMENTS,and DEPOSITS DISBURSEMENTS 1. Sheila Hutcheson, plan administration fees - $4,500.00 ($1500/month); mileage & postage expense-$15.60 2. Christiansen & Dehner,professional legal fees, $957.64,$135.20 3. The Bogdahn Group, performance consultant fees, 3rd quarter, 2012 -$3,625.00 4. Foster& Foster, actuarial services-$2,500.00,$638.00 5. Scott Chamberlin, commencement of normal retirement as of September 1, 2012- lifetime option with member contribution refund 6. James Martin, commencement of normal retirement as of September 1,2012 - joint/100% survivor option with member contribution refund 7. Pension fiduciary insurance premium for FY12/13 policy- $3,269.41* DEPOSITS-none Member Hilton made a motion to approve the processed disbursements/return of contributions and deposits;Member McKinney seconded the motion, which passed unanimously. *The Attorney confirmed that the City pays the waiver of recourse premium separate from the policy premium paid from the Plan's assets. TRUSTEES',STAFF,EMPLOYEES',and PUBLIC REPORTS,DISCUSSION,and ACTION ADJOURNMENT-There was no further business and the meeting was adjourned at 11:53 a.m. Respectfully Submitted: Approved: Donna Looney, Personnel Director( Gigi-BenningternTGlairman- bC