MINUTES
REGULAR JOINT MEETING OF THE
BOARD OF TRUSTEES OF THE CITY EMPLOYEES RETIREMENT FUND & THE BOARD OF TRUSTEES OF THE POLICE & FIREMEN PENSION FUND
MAY 2, 2011
A REGULAR JOINT MEETING of the Board of Trustees of the Police & Firemen Pension Fund and the Board of Trustees of the City Employees Retirement Fund was held on Monday, May 2, 2011, in the City Hall Auditorium.
Those in attendance included Mayor Ryan J. Bingham, Treasurer Arthur Mattiello, members of the Board of Trustees of the City Employees Retirement Fund Gregg Cogswell, Paul Samele, Elinor Carbone, Gerald Zordan, Marie Soliani, Nancy Michna, Delisse Locher, Gail Gillette, and Raymond Drew, members of the Board of Trustees of the Police & Firemen Pension Fund James Potter, Fire Fighter Edward Delisle, and Lt. Kevin Hayes. Councilor Waldron arrived at 6:40 p.m.
Members David Prahm, Mark Kugler, David Kissko, Angelo Alduini, Police Lieutenant Michael Emanuel, Officer Shopey, Christopher Cook, Angelo LaMonica, Douglas Benedetto, Richard Zaharek, Darlene Battle and Drake Waldron were absent.
Anthony Tranghese of Fiduciary Investment Advisors, LLC was also present.
Mayor Bingham called the meeting to order at 6:35 p.m.
Presentation: First Quarter Results
Mr. Tranghese reviewed the Executive Summary saying there were strong returns across the board.
Mr. Mattiello asked for an explanation of the ‘watch’ status. Mr. Tranghese said they evaluate managers on a regular basis with one of three statuses: maintain, watch or terminate. A manager can go on ‘watch’ for underperformance for an extended period of time, or changes in the team if key people leave, and doesn’t remain on ‘watch’ for more than a year. In Eaton Vance’s case, he said, it’s because of a period of underperformance.
Mr. Mattiello asked why Artisan would go on ‘watch’ when they’ve outperformed their benchmark. Mr. Tranghese said they had a period of underperformance but have taken a great step forward. At the end of the quarter, both plans showed strong gains with the City Employees’ Retirement Fund plan valued at over $28.4 million dollars, and the Police and Firemen’s Pension Fund plan valued at over $40 million dollars.
Mr. Tranghese said FIA is changing the way they look at fixed income portion of the plans and adding a new component to the portfolio dubbed ‘inflation hedge bucket’ geared toward taking advantage of upcoming inflation and protecting the portfolio as most of assets in the portfolio would not be poised to perform very well in a high inflationary environment.
Recommendations:
Mr. Tranghese recommended the Boards of Trustees implement the changes outlined in the “Supplemental Materials” handout which include the following transactions to be implemented through a dollar-cost-averaging process in equal segments over two months:
Sell: |
Buy: |
Vanguard Total Bond - $3 million |
Eaton Vance Floating Rate - $1.4 million |
Vanguard 500 Index - $1.1 million |
Templeton Global Bond - $1.4 million |
Bank of America Money Market - $200,000 |
Vanguard Inflation Protected Securities - $500,000 |
|
PIMCO Commodity Real Return - $500,000 |
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Van Eck Global Hard Assets - $500,000 |
Additionally, the target asset allocation outlined on page 5 of the “Supplemental Materials” package should also be adopted.
REALLOCATION OF FUNDS – CITY EMPLOYEES
On a motion by Councilor Soliani, seconded by Councilor Carbone, the Board of Trustees of the City Employees Retirement Fund voted unanimously to move forward with the above recommendation.
REALLOCATION OF FUNDS – POLICE & FIREMEN
There was no quorum for the Board of Trustees of the Police and Firemen’s Pension Fund to vote.
ADJOURNMENT
On a motion by Councilor Carbone, seconded by Councilor Cogswell, the Boards voted unanimously to adjourn at 7:14 p.m.
ATTEST: Joseph L. Quartiero, CMC
City Clerk
Respectfully Submitted,
Carol L. Anderson, CCTC
Asst. City Clerk
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