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2011-05-09 Police Fund MeetingCITY OF OKEECHOBEE POLICE PENSION BOARD MEETING POLICE MINUTES 05/09/2011 Police Officers Members Denny Davis-Present Bettye Taylor-Present Russ Cale- Present Bill Bartlett-present �. Pension Meeting held at 55 SE 3rd Ave. Okeechobee Florida. Meeting called to order at 5:00 PM by Jamie Mullins forjoint boards. narici Kellg oi t3owen ancJ 11aae1 t�rei�nted: (3yno�iii) We are diversified in a good way. Started fiscal year 5,377,751.43 as of 4/30/2011 Police is at 6,225,827.58. Plan is doing good right now. Will be more aggressive going forward. Tim liarh oE Bagdahn Repart: {3ynopris) Bowen Hanes had done good job. Strong positive performance of equity benchmarks during the quarter. The Internationals were up 3.4%. S&P up just shy of 6% . Small and midcap stock up by 2.6%. � Bonds AAA were minimal returns. Investment grade were returning about 1.5 %. Energy is one of the big drivers of the economy. Good strong movement in market. Police $5751,481 at end of December then closed out at $6,094,654 March 31, 2011. Good strong growth of all three plans for quarter. Fees are less then %z% per year for money manager which is less than the real world. Getting good low fees and very strong investment performance up just over 700,000 for Police. Police is up 5.69 percent for quarter. Index was only up 3.67% so plan is over index by 2.02. Longer term we are trying to get to 7%. This year and last year we have made it but the last five years have not. We are in the top percentile of pension plans. Reviewed Investment Policy check list. No way we would hit the 7% due to economy in past years. We are in compliance with plan. Tim Nash reviewed the request for their pay increase. Said this is the three year completion of original fees. They have requested an increase from 12,500.00 to $15,500.00. This fee will be guaranteed for the next 3 years. Cincly #'t�rrou� tieialionJhi� idl�nc�c�er 3ul�m TrurE which is the Custodian advised she is in the Tampa Office and available to be at any meetings we need her to be. latJ fl9Gt3ee OE Ditior�olomeo. f11ci3ee. tlorEley & t3erner. l�.A (iynop�i�) Presented Statements of Plan Assets. Shows an increase from $5,420,638 from $4,841,560. Advised Bowen Hanes has done a nice job with investments. Showed a decrease in state money. Theora Braccialarghe of Gabriel, Roeder, Smith and Company. Discussed the smoothing method that was used to keep plan solvent by spreading losses from � the past. She said this also effects the gains that are happening now. Plan is 100 funded. ScoFi Chriitian�en o� ChrirEic�nlen & nehner, P. �I. (Synoprir} Police need to fill vacant slot as soon as possible. Make sure all trustees fill out Form 1 as soon as possible. Wanted to know if the letters for the Records Custodian were complete. The boards advised him they were. He asked for copies to be forwarded to him. Said we needed to do the letter to the State reference the expected rate of return based on advice of consultant. Said letter was in Pension package and it listed as letter 1. He reviewed current legislation in which is waiting on Governor's signature. The changes that will affect Police are that no accrued leave or sick pay can be included in pension and only 300 hours of overtime. This will go in to effect on July 1, 2011. Plans 175/185 members can vote to increase contributions. Waiting on clarification from Patricia Shoemaker on the language of this bill. Discussion was made on the language in current Individual Boards split for meeting. Called to order by Dennis Davis. No minutes or treasury report at this time. Motion was place to approve Bogdahn's request for fee raise by Russ Cale. Motion seconded by Bill Bartlett. All approved. Motion passed. Motion was placed to approve Actuarial Report by Bill Bartlett. Russ Cale seconded motion. All approved. Motion passed. � Motion was placed to approve Auditors Report for 2010/2009 by Bill Bartlett. Russ Call seconded motion. All approved. Motion passed.\ Motion made to approve based on advice of its investment professionals and actuary, determined that the total expected annual rate of investment return for our fund for the next year, next several years and the long-term thereafter, shall be 7%, net of investment related expenses by Bettye Taylor. Motion seconded by Bill Bartlett. All approved. Motion passed. Motion made to adjourn by Bettye Taylor. Seconded by Russ Cale. All approved. Meeting adjourned at 6:45 PM. Bettye Taylor-Secretary Presented by Scott Christiansen Attorney: � Discussed the Records Management Custodian. This person is responsible for records retention. They recommend we follow the Schedule GS1-S1 for records retention schedule. This is a whole list of documents that have an indication of how long the records have to be retained. Said letters have to be done appointing this custodian then sent to Division of Library and Information Services in Tallahassee. Said he would email the letter to Bettye Taylor. Bettye Taylor will set it up for all boards then forward to each of the funds to be signed and forwarded. Bettye Taylor advised that Lane Gamiotea was appointed a couple of years ago as City Clerk to handle this retention of records. He advised while boards are together to vote to keep the City Clerk as the Records Retention Manager and if there is a change we can send in the new forms. Scott Christiansen asked that a copy of the resolution be forwarded to him when it was completed. Bill Bartlett made motion to approve Lane Gamiotea, City Clerk as Records Manager. Russ Cale seconded this motion. Motion passed. Christiansen then discussed legislature that had been presented and then removed from the table reference pension plans in the state of Florida. This legislature presented by Representative Costello was as follows: no government plan in the state could offer retirement date earlier then 55 years of age, limiting the multiplier to 1.6 %, Drop Plans would end December 2012, and the sponsor of the pension plan could not be required to contribute more than '15% to the plan, that employees could agree to increase their contributions to keep their current level of benefits. This was withdrawn after discussions with the PBA and nothing else has been filed yet. Said employees who reside in the City can be nominated to the Pension Board by the City to fill the empty slot. Said there is case law that says once you hit normal retirement age they can not affect your � pension. Bettye Taylor asked about how the money is funded into the drop. According to Bill Douglas and Scott Christiansen, the employee's contributions to the plan stop and are now back in your check. The drop is funded by your pension check going into the drop plan until you leave. Bettye Taylor asked if they can go into the drop even if they have not reached 25 years of service. Drop can be entered at 10 years of service and 55 or 25 years of service. Tim Nash of Bogden Group Presented: Fiscal year is starting out good. 3`d quarter in a row the numbers is good. Bowen Haynes they are buying International which was up 7 for the quarter the S& P up over 10%. The Lehman Index was down 1.3 and Bowen did better. They were not down near as much. The AAA bonds were down 2.5%, they were not doing well. Junk bonds were up and doing well. Banks are lending money just not making it easy for people to borrow. Showed a chart of the market from the 1920's and showed the ups and downs that comprise the market. Police went from 5.4 million up to $5,751,481. All plans are in line with investment policy. Fund made 6.52 which are just under the 7% of the actuarial assumption. It is forecasted that we will have a double digit year. The plan ranks in the top 22% of the pensions plans across the country comprising of 352 plans. Bogden feels that Bowen Haynes is doing a good job with the investments. � On the compliance checklist the total equity allocation was less than 60% of the total assets at cost. The plan is actually at 60.88% so it was checked no. � Our plan is in compliance with not doing business with companies on the Scrutinized Company list. Reviewed the Investment Policy Statement. Listed asset classes as follows: Asset Class Target Range Benchmark Index Domestic Equity 45% 40%-70% Russell 3000 International Equity 15% 5%-20% MSCI-ACWxUS Broad Market Fixed Income 40% 20%-55% Barclays Aggregate Reviewed the Investment Guidelines for the plan that are listed in the Investment Policy. Also reviewed the limitations and the absolute restrictions list. Reviewed the items that if3 of these items were breached they would be warned, if 5 were breached they would recommend an Investment Manager evaluation for the mandate be done. There was discussion about the range allowed on Internationals. Scott Christiansen said he had a note that the range would be %0 to 20%. Tim Nash said they felt like 5% was a good number. He also noted the date on the bottom of the policy was incorrect. Bill Bartlett made a motion to accept the Investment Policy with the date correction noted at the bottom. Motion was seconded by Bettye Taylor. All in favor motion passed. Boards split up individually at 6:00 PM. Chairman Denny Davis called the board to order. Bill Bartlett made a motion to approve the minutes from Special meeting held on 8/10/2010. 2"d by Bettye Taylor all approved. Motion approved by all. Russ Cale made motion to approve minutes for November 8, 2010 meeting. 2"d by Bill Bartlett and motion approved by all. Bill Bartlett made motion to approve Schedule GSi-SL for records retention. 2"d by Russ Cale. Motion approved by all. Bill Bartlett voted to approve expenditures of $5198.58 2"d by Russ Cale motion approved by all. Russ Cale made motion to adjourn 2"d by Bill Bartlett. Russ Cale made motion to adjourn Meeting at 6:15 PM, 2"d by Bill Bartlett. All in favor. / �/ � S�ecretary �Bettye Taylor