MINUTES
REGULAR JOINT MEETING OF THE BOARD OF TRUSTEES OF THE POLICE AND FIREMEN’S PENSION FUND
AND THE BOARD OF TRUSTEES OF THE CITY EMPLOYEES’ RETIREMENT FUND
November 10, 2014
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, November 10, 2014 in the City Hall Auditorium.
Those in attendance included Mayor Elinor Carbone, members of the Board of Trustees of the City Employees Retirement Fund Gregg Cogswell, Paul Cavagnero, Anne Ruwet, Paul Samele, Drake Waldron, and Nancy Michna, and Members of the Police & Firemen’s Pension Fund Angelo LaMonica, Richard Zaharek, Douglas Benedetto, Robert Conforti, Glenn McLeod and Officer Oscar Segui. City Treasurer Arthur Mattiello, Joe DiPalma of Wells Fargo Bank and Anthony Tranghese of FIA were also present.
Members Christopher Anderson, Sheryl Lewis, Raymond Drew, Michael Soliani, John Schnyer, Robert Lizotte, Mark Zordan, Craig Audia, Mark Kugler, Darlene Battle, Edward Delisle, and Stephen Krzanowski were absent.
Mayor Carbone called the meeting to order at 6:40 p.m. beginning with the Pledge of Allegiance.
WELLS FARGO BANK
Mr. Mattiello introduced Mr. Joe DiPalma of Wells Fargo Bank, custodian of our pension funds. Mr. DiPalma reported that the transition from Bank of America to Wells Fargo went very smoothly and everything is up and running.
FIA PRESENTATION
Mr. Tranghese reviewed the third quarter index results saying the S & P 500 was up 1.1%, continuing the positive momentum that the large cap stocks in the U.S. have enjoyed this year. He said the small caps in the Russell 2000 Index were negative by a meaningful amount. Rates continued to drop during the third quarter, the U.S. Aggregate Bond Index was up .2% and long bonds have done incredibly well this year, up over 13% in the first nine months of this year. Mr. Tranghese said the markets began in a challenging way in October, but have rallied to new highs since then. The portfolios participated quite well in that, he said.
Asset Allocation
Mr. Tranghese said that at the end of the quarter, the City Employee plan was at about 34.8 million and the Police & Firemen plan at about 52.7 million dollars. He said the portfolio is very well diversified both by asset class and by entity, with a number of different managers in the portfolio.
Fixed Income
Mr. Tranghese explained the replacement of Pimco Total Return which had been on watch status. He said the founder, Bill Gross, left abruptly. FIA expected significant outflows as a result of his departure, and felt the Boards’ prompt action to move to MetWest served the plans well. He said the Pimco Total Return fund has lost almost 50 billion dollars in assets since Mr. Gross left.
Returns
Mr. Tranghese reported quarterly returns down by about 1.5%. He said that year-to-date they are up 2.9% and the blended benchmark up by 4.8%. He said there has been under-performance this year, trickling through to the longer term results, but on a three-year basis the plans are up about 13.5%, pretty close to the actuarial expected return levels.
Underlying Managers
Mr. Tranghese said there was a mix of underperformance and outperformance in the shorter periods but over longer time frames, all active managers in the portfolio are expected to add value above the benchmarks. He said that for the most part the managers in the portfolio have performed reasonably well, but one laggard is the Boston Trust Small Cap Fund which underperformed by about 4.5% over the last 12 months and at that same magnitude over the last three years. FIA will have an on-site due diligence meeting with them in December and will report their findings at the next Board of Trustees meeting. He said most managers have performed pretty well in the shorter and longer time frames.
Mr. Tranghese concluded that the well-diversified strategic portfolio allocations make sense over the long run for the overall objectives of the portfolio. He explained the three manager statuses in the report – maintain, watch and terminate.
TABLED: Police & Firemen’s Pension Fund
On a motion by Commissioner Benedetto, seconded by Commissioner Conforti, the Board voted unanimously to table until the next meeting the acceptance of minutes and the acceptance of the pension computation for Joseph McElroy, Captain for the Torrington Fire Department, effective September 28, 2014, after completing 26.04 years of service.
TABLED: City Employees’ Retirement Fund
On a motion by Councilor Cogswell, seconded by Councilor Samele, the Council voted unanimously to table acceptance of the minutes of the regular meeting held October 6, 2014.
ADJOURNMENT
On a motion by Commissioner Benedetto, seconded by Commissioner Zaharek, the meeting was adjourned at 6:56 p.m.
ATTEST: Joseph L. Quartiero, CMC
City Clerk
Carol L. Anderson, CMC
Asst. City Clerk
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