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12-10-2012 Police Pension Board of Trustees Minutes-Quarterly Meeting December 10,2012 Page 1 of 4 CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES Monday,December 10,2012 CALL TO ORDER/ROLL CALL/DETERMINATION OF A QUORUM The Edgewater Police Officers' Pension Board held its quarterly meeting on Monday, December 10, 2012 in the City Hall Conference Room at the City of Edgewater,Florida. The Board welcomed new Trustee Jim Morey,who was recently appointed by the City Council. Members Present: Jim Morey David Arcieri John Tarr Ferd Heeb Lawrence Leaf Members Absent: none Plan Attorney: H.Lee Dehner Plan Administrator: Sheila Hutcheson Consultant: Jack Evatt,The Bogdahn Group City Staff: Tracey Barlow,City Manager Donna Looney,Personnel Director Chairman Arcieri called the meeting to order at 1:29 p.m. There was a quorum with all members present. APPROVAL OF MINUTES-Quarterly Meeting-September 17,2012 Member Tarr made a motion to approve the minutes of the September 17, 2012 quarterly meeting; Member Arcieri seconded the motion, which passed unanimously. NEW BUSINESS Administrative Budget Report The Administrator had provided in the agenda package the report of expenses through those included on this agenda. This report is for information only and requires no action. OLD BUSINESS-None REPORTS(ATTORNEY/CONSULTANTS) The Bogdahn Group,Performance Consultant-Quarterly report- September 30,2012 Jack Evatt opened by discussing the performance as outlined in the reports he distributed. The return for the quarter was 5.14% and 18.02% for the fiscal year, both of which out-performed the index. The fund's assets were $8,216,654 on September 30, 2012, compared to $7,782,335 on June 30, 2012. As Police Pension Board of Trustees Minutes-Quarterly Meeting December 10,2012 Page 2 of 4 of November 30, 2012, the fiscal year to date performance was 0.33% and 0.99 % for the month of November. 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. This portion of the portfolio could go directly to Dana or to an interim investment. He also noted that no decision had been made for an international manager, so he recommends that this portion of the portfolio (15%) be sent to Vanguard Total International Stock Index Fund. Mr. Evatt recommends active management for the bonds and confirmed that Integrity is a good fixed income manager. At Member Heeb's request, Mr. Evatt summarized the investment allocation/manager decisions made by the Board in December 2009. 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 Heeb made a motion to transfer funds from Principal to the Dana Fund(domestic only- 45% of the portfolio);Member Tarr 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 Heeb made a motion to transfer funds from Principal to the Vanguard Total International Stock Index Fund (international only - 15% of the portfolio); Member Morey seconded the motion, which passed unanimously. Mr. Evatt next discussed that the fixed income portion of the portfolio could be transferred to the Integrity,the manager the Board had hired in 2009. Member Heeb made a motion to transfer funds from Principal to Integrity fixed income only- 40%of portfolio);Member Morey 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 international manager. The Boards may want to meet jointly as they had done in 2009. H.Lee Dehner,Plan Attorney The Attorney confirmed that Trustee Morey has filed his Financial Disclosure Form and the Administrator said that former Trustee McCauley confirmed he had filed his form at the end of his term. The organizational session of the legislation is underway; the actual legislation session will be in the next few months with changes likely to occur for all employee groups' pension plans. Mr. Dehner also discussed the minimum benefits issues brought about by the City of Naples opinion from the Division of Retirement,as was reviewed at the last meeting. Mr. Dehner provided an overview of the recent negotiations with Principal and the need to have the joint special meetings with the City Council 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. Police Pension Board of Trustees Minutes-Quarterly Meeting December 10,2012 Page 3 of 4 Next, the Attorney reported that he had prepared the Rules Manual as authorized by the Board at its September 17 meeting and gave it to the Administrator to review and distribute to the Trustees. Sheila Hutcheson,Plan Administrator Ms. Hutcheson opened her report with a notice of her 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 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 1:30 p.m.): March 18,2013 June 17,2013 September 16,2013 December 16, 2013 • Spouse Beneficiary Forms -these are complete for active members and DROP participants. 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. RATIFICATION of PROCESSED DISBURSEMENTS/RETURN OF CONTRIBUTIONS and DEPOSITS DISBURSEMENTS 1. Christiansen&Dehner,professional legal fees- $1,194.24,$135.20 2. Sheila Hutcheson, plan administration fees - $4,500.00 ($1500/month); mileage expense- $11.10 3. The Bogdahn Group,performance consultant fees, 3`d quarter,2012-$3,625.00 4. JoAnne Winston, commencement of normal retirement as of October 1, 2012 (lifetime with member contribution refund) 5. Pension fiduciary insurance premium for FY12/13 policy - $2,266.23* 6. Marci Kaye,refund of member contribution (terminated,vested member)- $18,903.14(with entitlement to future early or normal retirement at a correspondingly reduced amount) 7. Foster&Foster, actuarial services-$716.00 • DEPOSITS-none Member Heeb made a motion to approve the processed disbursements/return of contributions and deposits;Member Tarr 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. Police Pension Board of Trustees Minutes-Quarterly Meeting December 10,2012 Page 4 of 4 STAFF REPORTS,DISCUSSION,and ACTION/TRUSTEES' REPORTS,DISCUSSION and ACTION; REQUESTS FROM THE PUBLIC/EMPLOYEES PRESENT Member Morey asked for an explanation of the funding of the Plan, among the City, State monies, and member contributions. The Attorney provided information in this regard from the last valuation. The Chairman asked about the Florida Supreme Court's review of the FRS issues,and Mr. Dehner said this does not affect local law plans. Member Tarr asked about training requirements and the consultants advised as to FPPTA and other training that is available. ADJOURNMENT There was no further business, and the Chairman adjourned the meeting at 2:44 p.m. Respectfully Submitted: Approved: 7/ onna Looney, Personnel Direct,r Dav° Teri,Chairman