12-15-2014 CITY OF EDGEWATER FIREFIGHTERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday December 15, 2014 at 5:OOPM
TRUSTEES PRESENT: Dominick Fede
Justin Nickels
Scott Hopkins
TRUSTEES ABSENT: Gary Butt
OTHERS PRESENT: Ferrell Jenne, Plan Administrator
Jack Evatt, Investment Consultant
Ken Harrison, Board Attorney
David Kelly, Investment Manager
Mark Rhein, Salem Trust Company
Brian Bizzell, Salem Trust Company
John McKinney, Finance Director
1. Call to Order Dominick Fede called the meeting to order at 5:10PM
2. Roll Call As reflected above.
3. No Public Comment
4. Approval of Minutes
The minutes from the September 15, 2014 quarterly meeting were approved upon motion
by Justin Nickels and second by Scott Hopkins, motion carried 3-0.
5. New Business
a. Discussion of early implementation of GASB 68.
i. John McKinney stated that GASB 68 replaced GASB 27. Mr. McKinney
then recommended early implementation of GASB 68 and stated that the
general and police board voted for early implementation.
ii. John McKinney stated that all costs are reimbursed by the City dollar for
dollar by City contributions.
The Board approved early implementation of GASB 68 upon motion by Justin Nickels and
second by Scott Hopkins, motion carried 3-0.
b. Discussion of the Summary Plan Description (SPD).
i. Ferrell Jenne stated that the last SPD was done in June 2008 by Foster
& Foster.
The Board approved Foster & Foster to do the SPD for a fee not to exceed $1,000 upon
motion by Justin Nickels and second by Scott Hopkins, motion carried 3-0.
c. Discussion of Barbara Scott's resignation.
i. Ferrell Jenne commented that Barbara Scott resigned as of December 1,
2014 and City Council would like a recommendation.
d. Discussion of the Investment Policy Statement(IPS).
i. Ken Harrison stated that red strikethroughs indicated deletions and blue
underlines indicated additions.
1.Board directed Ken to delete "real estate performance" and
"alternative and other asset performance" sections on page 3.
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2.Jack Evatt recommended tight ranges on page 2 under target
allocations. Mr. Evatt commented that the target allocations are
the biggest driver for returns.
3.David Kelly commented that he would like more flexibility and a
bit more money in stocks. Mr. Kelly then stated that he would like
to change the limitations in equities from 70% to 75% and fixed
income from 30%to 25% on page 5 under "limitations."
4.Jack Evatt stated that this will only open up the Plan to risk and
the goal is not to get the highest return, but the meet the
expected rate of return. Mr. Evatt then commented that having
returns in the highest/lowest percentile vs. 50% percentile is
problematic.
5.David Kelly stated that he doesn't feel like he has flexibility with
70% allocation and commented that they have been over 70%.
6.Ken Harrison commented that "authorized investments" on page
4 is very broad language.
7.David Kelly stated that his Firm leans towards a more
conservative approach.
The Board approved David Kelly's recommendation to change the limitations on equities
and fixed income upon motion by Scott Hopkins and second by Justin Nickels, motion
carried 3-0.
Note: John McKinney arrived at 5:20pm.
The Board approved the Chairman to execute the revised IPS upon motion by Justin
Nickels and second by Scott Hopkins, motion carried 3-0.
8.Jack Evatt directed the Board to page 2 of the IPS. Ken Harrison
stated since there are ranges of 0%, the Board can keep the
asset classes shown on page 2. Jack Evatt disagrees and
commented that he thinks equity and fixed income should only
be shown on the target allocation table.
The Board approved the allocations to global equity with a target of 65% and a range of
55%-75% and domestic fixed income classes with a target of 35%and a range of 25%-45%
upon motion by Justin Nickels and second by Scott Hopkins, motion carried 3-0.
The Board approved the IPS with changes upon motion by Scott Hopkins and second by
Justin Nickels, motion carried 3-0.
6. Old Business —None.
7. Reports
a. Salem Trust Company, Brian Bizzell and Mark Rhein.
i. Brian Bizzell briefly reviewed the company structure and their fiduciary
and custodial accomplishments.
ii. Mr. Bizzell described the services they provide to the Board and the
proposed fee schedule.
iii. Mr. Bizzell stated that the current fee schedule is from 2010 and the fee
guarantee expired in 2013. The current fee is$5,000 and Salem is
proposing a $500 increase to meet their new minimum of$5,500 per
account. The new fee proposal will be guaranteed for 3 years but if
there's a significant change in the Plan, they would need to come back
with an amended fee schedule.
iv. Mark Rhein stated that they would include thresholds that outline what
would constitute a fee increase.
The Board approved the fee increase proposed by Salem Trust, effective April 1, 2015,
upon motion by Justin Nickels and second by Scott Hopkins, motion carried 3-0.
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b. The Bogdahn Group, Jack Evatt
i. Quarterly report as of September 30, 2014.
1. Net earnings for the quarter were -0.41% outperforming the
policy benchmark of-0.71% by 0.30% points.
2. Since inception, the fund is at 5.25%, underperforming the policy
benchmark of 6.49% by 1.24% points.
3. Fiscal year to date the plan is at 13.94% (net) beating the policy
benchmark of 10.97% by 2.97%.
4. Jack Evatt commented that the lack of international exposure
helped the portfolio.
5. Jack Evatt reviews the compliance checklist with the Board and
the Board has no questions regarding this.
c. Bowen, Hanes & Company, David Kelly
i. Quarterly report as of September 30, 2014 and as of November 30,
2014.
1. David Kelly briefly reviewed the portfolio changes.
2. As of September 30, 2014, fiscal year to date, the total portfolio
is at 14.7% and the ending market value as of November 30,
2014 was$10,222,595.81.
d. Sugarman &Susskind, Ken Harrison.
L IRS determination letter.
1. Ken Harrison stated that the determination letter verifies that the
Plan is a qualified plan. The application is sent to the IRS, IRS
will most likely recommend changes to the Plan (based on the
past experience).
2. IRS determination letters happen every 5 years and the current
cycle's determination letters are good until January 1, 2018.
3. IRS fee last year was$1,500, this year the filing fee is$2,500.
4. Ken Harrison stated the fee for his Firm to do the IRS
determination letter is $8,500. Mr. Harrison also stated that the
Plan is subject to fines next cycle if the letter is not done.
5. Board takes no action.
ii. Board discussed the DROP application, DROP distribution form, and
DROP procedures.
1. Ferrell Jenne commented that the county information is not
included in the notarized section and requested that the month
line is longer. Ms. Jenne also commented that there is not
enough room for a notary stamp.
The Board approved the DROP forms with discussed changes upon motion by Scott
Hopkins and second by Justin Nickels, motion carried 3-0.
8. Disbursements
Disbursements were approved as stated on the agenda upon motion made by Justin
Nickels and second by Scott Hopkins, motion carried 3-0.
9. Staff Reports, Discussion, and Action
a. Board discussed 2015 FPPTA membership fees.
i. Ferrell Jenne informed the Board that the renewal fee is$600.
The Board approved renewing the 2015 FPPTA membership fee for $600 upon motion by
Scott Hopkins and second by Justin Nickels, motion carried 3-0.
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b. Board discussed Salem Trust ACH authorization form.
i. Ferrell Jenne explained that Salem is not asking the Board to change the
way they approve payments, but to allow Salem to pay vendors via ACH
instead of a check.
Board approved executina the ACH authorization form upon motion made by Justin
Nickels and second by Scott Hopkins, motion carried 3-0.
c. David Kelly informed the Board about GlobeTax and believes it would be
advantageous to the Plan.
i. Board directed Ferrell Jenne to get in touch with Salem Trust to find out
how to participate.
10. Adjournment The meeting adjourned at 8:OOPM
11. Next Meeting March 16, 2015 at 5:OOPM
espectfull ub fitted by: Approved by:
erred,Jenne, an dministrator ,""Dominick Fede, Chairman
Date Approved By the Pension Board: _ C 1-� ,�a 0 1
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