CIVILIAN AND POLICE PENSION BOARDS
The Civilian and Police Pension Boards met on February 19, 2004 at 9:00 a.m. Members present were Chairman Salters (Chairman - Civilian) (arrived at 9:25 a.m.), Chairman Mullaney (Chairman - Police), Mr. Truitt, Mrs. Braun, Mrs. Rigby, Mr. Lucas, Mr. DePrima (departed at 11:00 a.m.), Mrs. Mitchell, Ret. Lt. Knotts, and Chief Horvath. Ret. Capt. Gray was absent.
AGENDA ADDITIONS/DELETIONS
Mrs. Mitchell requested the addition of item #2 - Investment Performance Review and Recommendations.
Mr. Mullaney moved for approval of the agenda, as amended, seconded by Mr. Lucas and unanimously carried.
Mr. Michael Shone, President, Pierce Park Group, requested to address agenda item #2 - Investment Performance Review and Recommendations first. He indicated that by doing so, it would make item #1 easier to understand.
INVESTMENT PERFORMANCE REVIEW AND RECOMMENDATIONS
As a result of the Civilian and Police Pension Boards meeting of September 25, 2003, members approved the hiring of Pierce Park Group (a three (3) year contract in the amount of $35,000 per year) in order to receive an unbiased assessment of the City’s pension investments.
He provided members with an Investment Performance Analysis (as on file in the City Clerk’s Office) for the City of Dover’s Civilian and Police Pension Boards. In an effort to save time, he reviewed only the Civilian Investment Performance Analysis in detail. He indicated that although the two reports (Civilian and Police) are different, the observations are very consistent.
After a detailed review of the report, Mr. Shone indicated that there was not enough diversity in a portfolio of this size and questioned if there were too many constraints with the current investment policy. He believes that Merrill Lynch, within their firm, has the ability to bring diversified asset classes into the City’s portfolios. Mr. Shone believes members should consider International and Small Cap Stocks. He indicated that Merrill Lynch, for the past quarter, met the benchmark, however; for the year, they significantly lagged in meeting the benchmark. Mr. Shone indicated that Merrill Lynch did meet the benchmark on fixed income bonds.
It was the consensus of the board members that it may be time to consider multiple fund managers for the Civilian and Police pension funds.
Mr. Mullaney moved to authorize the Pierce Park Group, in conjunction with the Finance Director/Treasurer and the chairmen of the Civilian and Police Pension Boards, to conduct an RFP (Request For Proposal) for pension managers and custodians for the Civilian and Police Pension Funds. The motion was seconded by Chief Horvath and unanimously carried.
REVIEW OF DRAFT INVESTMENT POLICIES
Mr. Shone stated that currently, the policies have an asset allocation split of 65/35, meaning 65% is invested in Large Cap stocks and 35% is invested in Government/Credit Bonds. He briefly reviewed the Draft Civilian Pension Investment Policy (Attachment #1) and the Draft Police Pension Investment Policy (Attachment #2). He then distributed a City of Dover Asset Allocation Study (Attachment #3). After explaining the five (5) different asset mixes, it was the consensus of members to have him incorporate Mix 5 into the investment policies. Mix 5 consists of the following breakdown: 40% Large Cap, 10% Small Cap, 14% International, 0% Government/Credit Bonds, and 35% Intermediate Government/Credit Bonds.
Mr. Shone indicated that there are sections in the Investment Policies that involve “relevant law” and requested that the policies be forwarded to the City Solicitor for his review and input. He also quoted the minimums and maximums for variable percentages of asset class allocations as follows: Domestic Equity - +/- 5%, International Equity - +/- 3%, and Fixed Income - +/- 5%.
Mr. Mullaney moved to authorize Pierce Park Group to incorporate Mix 5 from the Asset Allocation Study into the City of Dover’s Civilian and Police Investment Policies. The motion was seconded by Mrs. Rigby and unanimously carried.
Mr. Truitt moved for adjournment, seconded by Mr. Mullaney and unanimously carried.
Meeting Adjourned at 11:05 A.M.
Respectfully submitted,
Reuben Salters Timothy Mullaney
Chairman - Civilian Pension Board Chairman - Police Pension Board
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S:ClerksOfficeAgendas&MinutesMisc-MinutesPENSION2004