12-16-2013 CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday December 16, 2013 at 1:30PM
TRUSTEES PRESENT: David Arcieri
Larry Brinson
Lawrence Leaf
John Tarr
TRUSTEES ASSENT: James Morey
OTHERS PRESENT: Lee Dehner, Board Attorney
Ferrell Jenne, Plan Administrator
Donna Looney, Personnel Director
Jack Evatt, Investment Consultant
John McKinney, Finance Director
1. Call to Order David Arcieri called the meeting to order at 1:35PM.
2. Roll Call As reflected above.
1 No Public Comment
4. Approval of Minutes
The minutes from the September 16 2013 auarterly meeting were approved upon motion
by John Tarr and second by Lawrence Leaf, motion carried 4.0.
5. New Business
a. New Trustee Larry Brinson was introduced to the Board. Lee Dehner asks if his
financial disclosure was filed and Mr. Brinson confirmed this has been done.
Board approves all 2014 meeting dates submitted by Christiansen & Dehner upon motion
made by John Tarr and second by Lawrence Leaf,motion carried 4-0.
6. Reports
a. The Bogdahn Group, Jack Evatt
i. Jack Evatt advises the Board know that their Firm is growing and they
just purchased a firm in Chicago to expand their presence in the Chicago
area.
ii. Quarterly report as of September 30, 2013
1. Net earnings for the quarter were 3.90%, underperforming the
policy benchmark of 4.61% by 0.71% points.
2. Fiscal year to date returns were 11.78%, beating the policy
benchmark of 11.22% by 0.56% points.
3. Since inception, the fund is at 4.28%, underperforming the policy
benchmark of 4.43% by 0.15% points.
4. Jack Evatt advises the Board that Investment Performance
Review information for the third quarter is preliminary data due to
the errors contained in the data provided by Salem Trust that
were not corrected by the time the report was produced. This is
also noted on the front cover of the report.
iii. SMiD-Cap Equity Manager Evaluation
1. The portfolio does not currently have any exposure to smaller
companies. Jack Evatt states that smaller companies have a
tendency to be more volatile but also grow much faster. Jack
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Evatt states that it is a good idea to invest in smaller companies
in a good economic environment.
2. Jack Evatt presents the following four candidates to invest in:
Eaton Vance AC SMID, FMI Focus Fund, Lazard US SMID, and
Vanguard Extended Market. The first threes' objectives are to
beat the benchmark and the last manager's objective is to match
the benchmark.
3. Jack recommends Eaton Vance AC SMID or Vanguard
Extended Market. He prefers Vanguard due to the fact they are
less expensive and their numbers are very good with a defensive
strategy.
4. Jack Evatt states that 45% of the portfolio is domestic equities
with Dana Investment. Mr. Evatt recommends taking 15% from
Dana Investments and put it in Vanguard Extended Market to
diversify the Fund's portfolio. This will result in 213 of the
domestic equity portfolio in big companies and 113 in smaller
companies.
Board approves moving 15% from Dana Investments to Vanguard Extended Market upon
motion made by John Tarr and second by Lawrence Leaf, motion carried 4-0.
b. Christiansen & Dehner, Lee Dehner
i. Lee Dehner advises the Board that he believes more Bills will be
considered in Tallahassee (S6 246 and SB 534). Mr. Dehner will update
the Board at the next quarterly meeting after the legislative sessions
begin.
c. Foster& Foster, Doug Lozen
i. Revised October 1, 2612 actuarial valuation report
1. Revised to include assumptions approved in the experience
study dated September 13, 2013,
2. Three assumptions were adopted due to the experience that was
found in the study: salary scale, normal retirement rates, and
turnover rates, The funding method was also changed from
Frozen Entry Age Actuarial Cost Method to the Entry Age
Normal Actuarial Cost Method.
a. The City/State contribution rates were lowered from
70.7% of payroll to 63.7%of payroll by only changing the
cost method.
b. The City/State contribution rates were lowered from
63.7% of payroll to 59.5%of payroll by changing the cost
method and assumptions stated above,
c. The balance due from the City is 48.6% of payroll and
before any changes were made, the balance due from
the City was 59.7% of payroll (deduction in funding is
11.1%of payroll).
d. Doug Lozen advised that the funded ratio did decrease
as a result, from 82.7% to 55.0%.
Board approved the revised October 1 2012 valuation report as presented by Doug Lozen
upon motion made by John Tarr and second by Lawrence Leaf motion carried 4-0.
Board approved the investment return rate of 7.5016 upon motion made by John Tarr and
second by Lawrence Leaf, motion carried 4-0.
NO TE: John Tarr left at 2:15PM for a court hearing.
7. Disbursements
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Disbursements were approved as stated on the agenda upon motion made by Lawrence
Leaf and second by Larry Brinson, motion carried 3-0.
8. Staff Reports, Discussion,and-Action
a. Ferrell Jenne, Plan Administrator
i. Board elects to keep 1 signature for the Salem Trust authorization form.
9. Adjournment The meeting adjourned at 2:20PM
10. Next Meeting Monday, March 17, 2014 at 1:30PM
7ectfully,s bmitted by: Approved by:
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Fer ell Jenn , Pj n Administrator Da Arderi, Chairman
Date Approved By the Pension Board:
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