03-17-2014 CITY OF EDGEWATER FIREFIGHTERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday March 17, 2614 at 6:66PM
TRUSTEES PRESENT: Dominick Fede
Justin Nickels
Scott Hopkins
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Gar Butt
Barbara Scott
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TRUSTEES ABSENT: None
OTHERS PRESENT: Doug Lozen, Board Actuary
Ferrell Jenne, Plan Administrator
,lack Evatt, Investment Consultant
David Kelly, Money Manager
Brian Bizzell, Board Custodian
Mark Rhein, Board Custodian, CFO
1. Call to Order Dominick Fede called the meeting to order at 6:15PM
2. Roll Call As reflected above,
3. No Public Comment
4. Approval of Minutes
The minutes from the December 16, 2013 quarterly meeting were approved upon motion
by-Justin Nickels and second by Gary Butt, motion carried 5-0.
5. New Business
a. Board Elections
i. Board Chairman and Secretary terms expire 4!7114 and Trustee Barbara
Scott's term expires 5119114.
ii. Trustee Barbara Scott would like to resign from the Board as a Trustee,
but commits to staying on the Board until the Plan Document has been
finalized.
iii. Board directs Plan Administrator to work with Shontella Jackson for the
election process regarding the Chairman and Secretary elected
positions.
b. Salem Trust
i. Mark Rhein gave an overview of what role they play as the Board's
custodian and also explained that they have fixed all problems they
encountered when moving to the new software system. Mr. Rhein also
stated that a 10% discount was extended to the Board on the last two
quarterly invoices.
ii. Plan administrator presented a request from the finance director to
reimburse the City $379.00 for extra hours put in by City employees due
to the Salem Trust software transition. The total cost was $1,137 ($379
per pension Board).
1. The Board questions if they should be included in this since they
never had any association with The Principal Group. Plan
Administrator to follow-up with the finance director.
6. Reports
a. The Bogdahn Group, Jack Evatt
i. Quarterly report as of December 31, 2013
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1. Net earnings for the quarter were 7.93%, beating the policy
benchmark of 5.66% by 2.27% points.
2. Since inception, the fund is at 5.12%, underperforming the policy
benchmark of 6.48% by 1.36% points.
3. Jack Evatt expresses concern on fixed income investments and
the ratings, according to the IPS they should be at A rating or
better standard (this is a purchase rating). Mr. Evatt states that
he believes all bonds that do not meet this standard have been
sold.
a. David Kelly states that they were working under a
previous IPS that allowed them to buy BBB or better
te"oT d-s--orinvestm-erst--rate-d_bonds.--Thy tasr coupl
..........................................................................................................................................................of years all purchases have been rated A or better: All
purchase dates along with the ratings were sent to the
Auditor and abided by the current IPS.
4. Trustee Barbara Scott asks if the Fund is below the minimum for
fixed income based on cost or market.
a. Jack Evatt states that there is a requirement for both and
the ordinance has cost language which sets a minimum
and maximum standard at cost. The IPS has ranges at
market. Jack Evatt states the Fund is below the range at
market.
b. Trustee Justin Nickels states that the Board would like
some direction on changing the language in the
ordinance from cost to market.
i. Jack Evatt states to use market value language
because cost language is old and harder to
measure.
ii. Jack Evatt states that investment rated bond
language should not be included because it can
help with diversifying the portfolio and opening
up the parameters.
iii. Jack Evatt states that once the Ordinance
language is changed, the language in the IPS
will be updated to match the Ordinance.
iv. David Kelly states that the IPS can be as open
or restrictive as the Board wishes.
v. ,lack Evatt tells the Board that he is happy to
answer any questions the City Council has as a
result of changes to the investment language in
the Ordinance.
Board votes to strike sections A.- D. under Section 10.02 of the draft Plan Document upon
motion made by Barbara Scott and second by Scott Hopkins, motion carried 5-0.
Note: Trustee Barbara Scoff leaves the Board meeting at 7:10 PM
b. Bowen, Hanes&Company, David Kelly
i. Portfolio summary update as of March 7, 2014.
1. Total fixed income as of March 7, 2014 is 2.1M which is a few
thousand short of the target of 30%of cost.
2. Common stocks is at 4.9M which is 69.69% of cost, which
means it is at the maximum it can reach (and still abide by the
IPS).
a. David Kelly states that he hopes he can have at least
75% market value of stocks moving forward. Mr. Kelly
states that he believes stocks will outperform bonds.
b. David Kelly states that he thinks the investment grading
language should stay in the IPS.
c. Jack Evatt states that the portfolio goal is not to earn as
much as possible but to meet the investment return
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9. Adjournment The meeting adjourned at 8:OOPM
10, Next Meetinq June 16,2014 at 6:OOPM
%,Mb\ltted by: Approved by:
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F rre Jenne, Ian dministrator Dominick Fede, hairman
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Date Approved By the Pension Board: Nf.
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