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HomeMy WebLinkAbout05-03-2017 Minutes CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND BOARD OF TRUSTEES QUARTERLY MEETING MINUTES City Hall, Commission Chambers Wednesday, May 3, 2017, at 10:00AM TRUSTEES PRESENT: Jean Grafton Patricia Gleason Robert Godek Robert Briggs Gequita Cowan TRUSTEES ABSENT: None OTHERS PRESENT: Ferrell Jenne, Foster&Foster Lee Dehner, Christiansen &Dehner Tim Nash,AndCo Consulting Eugene Williford, City of Ocoee 1. Call to Order—Robert Godek called the meeting to order at 10:02AM. 2. Roll Call—As reflected above. 3. Public Comments—None. 4. Approval of Minutes The minutes from the January 23, 2017, quarterly meeting were approved upon motion by Gequita Cowan and second by Robert Briggs, motion carried 5-0. 5. Consent Agenda a. Warrants#29,#30,#31, and#32 for ratification. b. Warrant#33 for payment approval. The consent agenda was approved as presented upon motion by Robert Briggs and second by Gequita Cowan, motion carried 5-0. 6. New Business a. Quarterly Fund Activity report. i. Ferrell Jenne reviewed the Fund Activity report. The fund activity report was approved as presented upon motion by Gequita Cowan and second by Robert Briggs, motion carried 5-0. b. Summary Plan Description (SPD). i. Lee Dehner reminded the board that the SPD needed to be updated every two years and then sent out to the active membership upon approval. ii. Lee Dehner reviewed the changes and commented that they were minimal. iii. Lee Dehner commented that he would change the Chairman's information on page#1 and also update the Board of Trustees in Exhibit A. iv. Lee Dehner reminded the board that the actuary would provide the Exhibit B. 1 The board approved the Summary Plan Description with the discussed changes, upon motion by Jean Grafton and second by Patricia Gleason,motion carried 5-0. c. Update on custodian change. i. Lee Dehner commented that Salem Trust is reviewing the contract and would be sending back the executed contracts shortly. ii. Tim Nash commented that the termination letter to Fifth Third Bank would not go out until there was a fully executed contract in place with Salem Trust. 7. Old Business—None 8. Reports a. Christiansen &Dehner, Lee Dehner, Attorney. i. Legislative update. 1. Lee Dehner commented that SB 306, which dealt with trustees 1 abstaining from a vote when a personal gain/loss could occur, was still pending. 2. Lee Dehner commented that SB 6326, which attempts to put collars on the investment return assumption,was still pending. 3. Lee Dehner commented that SB 80 dealt with public record requests that were filed for improper reasons, was still pending. 4. Lee Dehner reminded the board to file their Form 1 Financial Disclosure form by July 1, 2017 to avoid fees. b. AndCo Consulting, Tim Nash, Investment Manager i. Quarterly report as of March 31, 2017. 1. Tim Nash gave a brief overview of the market environment during the quarter. 2. Market value as of March 31, 201, was$35,106,612. 3. Net returns for the quarter were 4.93%, outperforming the policy benchmark of 4.25% and placing the fund in the 151h percentile on a gross basis. Trailing returns for the 1, 3, and 5 year periods were 10.55%, 6.02%, and 7.83% on a net basis. Since inception (4/1/2004), net returns were 6.40%, underperforming the policy benchmark of 6.67%. 4. Tim Nash commented that no rebalancing was needed as all assets were in line with the Investment Policy Statement. 5. Tim Nash reviewed the financial reconciliation quarter and fiscal year to date. 6. Tim Nash reviewed the Dodge & Cox returns and commented that they were in the first percentile fiscal year to date and the one-year trailing period. 7. Tim Nash reviewed Brown Advisory and commented that they were in the 98th percentile fiscal year to date and one-year trailing, grossly underperforming the benchmark. Tim briefly reviewed the stocks held by Brown Advisory and the detractors that contributed to their underperformance. Tim recommended making a change on the large cap growth manager. 8. Tim Nash reviewed the compliance checklist. c. Review of large cap growth manager analysis. 1. Tim Nash commented that he was presenting five different manager options to replace Brown Advisory. 2. Tim Nash informed the board that approximately$6.3 million was currently allocated to Brown Advisory. 3. Tim Nash reviewed the location, fees, number of holdings, and fund size of each manager. Tim commented that more concentrated managers have a history of higher volatility. 4. Tim Nash reviewed the current and historical holdings and style analysis of each manager. 2 5. Tim Nash reviewed the trailing performance for each manager and commented Alger and MFS were consistently ranking in the top. 6. Tim Nash reviewed the risk-reward for each manager. 7. Tim Nash commented that Alger and MFS were his top recommendations. 8. Jean Grafton asked about splitting the allocation between the two recommendations. Tim Nash commented that he recommended focusing on just one due to minimums. 9. Gequita Cowan commented that she liked MFS because she felt it was safer than Alger. Patricia Gleason and Robert Briggs commented they liked MFS as well. 10. Tim Nash commented MFS was a very stable company with low fees. Tim commented there may be an opportunity down the road to add another large cap growth manager to the portfolio. The board voted to terminate Brown Advisory and move the entire allocation to MFS Growth upon motion by Gequita Cowan and second by Patricia Gleason, motion carried 5- 0. 9. Staff Reports, Discussion,and Action a. Educational opportunities. i. Ferrell Jenne commented that the Division of Retirement Conference would be held May 31 — June 2, 2017 in Tallahassee, Florida. Ferrell briefly reviewed the registration fees associated with attending the conference. ii. Ferrell Jenne commented that the FPPTA 33rd Annual Conference would be held June 25—28, 2017 in Orlando, Florida. iii. Ferrell Jenne commented that the FPPTA Fall Trustee School would be held October 8— 11, 2017 in Tampa, Florida. b. Confirmation of receipt of benefits verification. i. Ferrell Jenne reviewed the death audit procedures Salem Trust uses to ensure the Fund is not paying benefits to members who are deceased or no longer eligible. ii. Ferrell Jenne commented that Foster& Foster could send a mailing to all current retirees requiring them to complete and notarize a PF-11 Form verifying they were still alive and eligible to receive benefits. Ferrell reviewed the costs associated with the mailing. The board approved the mailing of PF-11, Confirmation of Receipt of Benefit form to all retirees, upon motion by Jean Grafton and second by Gequita Cowan, motion carried 5-0. c. Update on SB 534 posting. i. Ferrell Jenne commented that the SB 534 posting requirements were sent to the City on April 27, 2017, and that she received confirmation on May 1, 2017 that they were posted. 10. Trustee Reports, Discussion, and Action/City Liaison a. Robert Godek asked about class actions and associated custodial fees. Tim Nash reviewed what would warrant an additional fee. 11. Adjournment—The meeting adjourned at 11:26am. 12. Next Meeting—August 2, 2017 at 10:00AM. 3 '-spectfully s, bmitted by: Appro ed by: / _A... A_LEK. ' i i 47" 'Ii..- am: : z- ell Jenne Name: Robert Godek Title: Plan Administrator Title: Chairman Date Approved By the Pension Board: AOG U'T d , d-.Q '1 1I 4