CIVILIAN AND POLICE PENSION BOARDS
The Civilian and Police Pension Boards met on September 25, 2003 at 9:00 a.m. Members present were Chairman Salters (Civilian), Chairman Mullaney (Police), Mrs. Braun, Mr. DePrima, Ret. Capt. Gray, Chief Horvath, Mr. Lucas (departed 10:00 a.m.), Mrs. Mitchell, Mrs. Rigby, and Mr. Truitt.
AGENDA ADDITIONS/DELETIONS
Mr. Truitt moved for approval of the agenda, seconded by Mr. Lucas and unanimously carried.
PRESENTATION - INVESTMENT CONSULTANT
In order to receive an unbiased assessment of the City’s investments, during the Civilian and Police Pension Boards meeting of January 29, 2003, members authorized the Finance Director to prepare a Request For Proposals (RFP) for independent consultant services. Mrs. Mitchell explained that a “wrap fee” is paid to Merrill Lynch, which includes fees (amount unknown) for Mr. Townsend to be the City’s Asset Manager.
As a result of the RFP’s, two investment firms were available for presentations.
PRESENTATION - INVESTMENT CONSULTANT - PEIRCE PARK GROUP
Mr. Michael Shone, President, and Mr. Kenneth L. Holmes, Director, Peirce Park Group, provided members with a detailed verbal and written presentation (as on file in the City Clerk’s Office).
Items delineated under “Scope of Services” include the following:
- Assistance in the review of the Plan’s Investment Policy;
- Ongoing asset allocation recommendations;
- Identification and recommendation of asset managers with appropriate justification for selection;
- Regular evaluation of selected asset managers using accepted performance measurement standards;
- Regular and ongoing consultation and advisory services;
- Advise the City concerning Federal, State or other regulatory compliance issues;
- Keep the City abreast of asset management trends and options; and
- Maintain an active role in assuring that the Plan’s assets are managed efficiently and in compliance with the investment policy.
In addition, they will also provide the following:
- A rewrite of the Investment Policy
- An asset allocation study in order to make asset allocation recommendations;
- Review existing investment managers for appropriateness based upon a rewritten investment policy;
- A customized quarterly performance report similar in form to that presented with their RPF;
- Review the costs, including negotiation with managers, custodian, and other potential cost savings;
- Review and comment on custodian as to capabilities and cost; and
- Custodian searches, if ever needed.
- All other pension investment related issues.
All the services fall under their annual fee with a three (3) year contract in the amount of $35,000 per year. The fee contemplates an asset optimization study. The only extra charge would be if the Pension Boards request an asset-liability study instead of an asset optimization study. The one-time additional charge for an asset-liability study would be $15,000.
Responding to Mr. DePrima, Mr. Shone stated that there would be no additional charges for providing an educational seminar to Pension Board members.
PRESENTATION - INVESTMENT CONSULTANT - SEGAL ADVISORS
Mr. George C. Kiriakos, Vice President, and Carol Sung, Consultant/Senior Relationship Manager, provided members with a detailed verbal and written presentation (as on file in the City Clerk’s Office).
Below are the three (3) phases that will be conducted:
Planning
- Initial Review
- Investment Policy Guidelines and Objectives
- Develop Asset Allocation/Number of Funds
Implementation
- Investment Structure
- Investment Management/Fund Changes
- Investment Manager Guidelines
Monitoring
- Measure and Evaluate Performance
- Maintain and Monitor Investment Policy Statement/Guidelines
- Ongoing Consulting
Responding to Mr. DePrima, Mr. Kiriakos stated that all clients were invited to a five (5) day Annual Educational Conference, however, registration fees, hotel, and travel expenses are not included. The 2004 Annual Educational Conference is scheduled to be held in Puerto Rico.
Responding to Mr. Mullaney, Mr. Kiriakos stated, that if the Pension members would like for them to conduct a one (1) day seminar, travel expenses were not included in the proposal.
All the above services fall under their annual fee with a three (3) year contract in the amount of $32,000 per year, stipulating that travel expenses would be an additional cost.
Prior to departing, Mr. DePrima stated that he supported the idea of hiring a Financial Advisor, and of the two (2) presentations given, he preferred the Peirce Park Group.
Mr. Mullaney moved to hire an independent investment consultant to assess the Civilian and Police Pension Funds. The motion was seconded by Mr. Gray and unanimously carried.
Mr. Gray moved to hire Peirce Park Group, for a three (3) year contract in the amount of $35,000 per year, to assess the Civilian and Police Pension funds. The motion was seconded by Chief Horvath and unanimously carried.
Mr. Truitt moved for adjournment, seconded by Mr. Mullaney and unanimously carried.
Meeting Adjourned at 11:14 A.M.
Respectfully submitted,
Reuben Salters Timothy Mullaney
Chairman - Civilian Pension Board Chairman - Police Pension Board
RS/TM/lcg
S:ClerksOfficeAgendas&MinutesMisc-MinutesPENSION2003