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BOARD MEMBERS PRESENT:
Jim Freeman, Chair
Dale Hoffner, Vice Chair
Cheryl Miller, Secretary
Ana Rodgers (Not Present)
Robert Schofield
Leland Taylor
Allen Tusing
STAFF AND OTHERS PRESENT:
Lindsey Garber, Board Attorney
TJ Loew, Graystone Consulting
Cassi Bailey, Assistant City Clerk/Pension Plan Administrator
Chair Freeman called the meeting to order at 8:32 am. and conducted a roll call.
1. AGENDA APPROVAL
MOTION: Mr. Hoffner moved, Mr. Schofield seconded, and the motion
carried 6-0 to approve the November 18, 2024 General Employees’ Pension Board Agenda.
2. PUBLIC COMMENT
No public comment.
3. APPROVAL OF MINUTES
MOTION: Mr. Schofield moved, Mr. Taylor seconded, and the motion
carried 6-0 to approve the August 26th, 2024 minutes.
4. APPROVAL OF EXPENSES
a.) City of Palmetto Reimbursement, invoices dated: 09/20/2024 & 09/12/2024
b.) First State Trust, invoices dated: 07/08/2024-received 09/16/2024
c.) Klausner, Kaufman, Jensen & Levinson, invoices dated: 09/30/2024 & 08/31/2024
d.) Florida Municipal Insurance Trust, invoice dated: 09/05/2024
MOTION: Mr. Tusing moved, Ms. Miller seconded, and the motion carried
6-0 to ratify the paid expenses as presented.
General Employees’ Pension Board of Trustees
November 18, 2024
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5. APPROVAL FOR ROBERT SCHOFIELD, ACCOUNTANT, TO HAVE ACCESS TO CUSTODIAN STATEMENTS
MOTION: Mr. Tusing moved, Mr. Hoffner seconded, and the motion carried
6-0 to approve custodian statement access to Robert Schofield.
6. INVESTMENT REVIEW
TJ Loew, with Graystone Consulting, presented the end of the quarter investment review.
We’re up approximately 19% over the last 12 months. Comparatively, we’re a little below the benchmark. Congress has continued to underperform. We’ve only had them for about a year.
Mr. Loew began by going through the performance report, which was included in the Agenda. The FED has cut interest rates 75 basis points over the last year. Large Cap has outperformed mid-cap and low-cap over the long term. International markets outperformed. Cash was up 1.37% for the quarter. 11.5% on bonds over the last 12 months. As rates come down, we’re getting the reversal of negative returns. Our interest rates are between 4-6%. There is still a lot of volatility in the market. Unemployment is creeping up. The FED is trying to reduce inflation. We’re still seeing strong GDP growth. The FED is unsure of what to do right now. Inflation is down to 2.5%. Earnings drive long term performance. On average, we’re paying 22 times earnings. The long term is 16.6 times earnings. Typically, this leads to volatility. Since the election, they think this will help long term with the market.
Mr. Taylor questioned the rising debt and asked if we still expect consumers to fall off. Consumer debt is still going up per Mr. Loew. He discussed the possibility of this creeping up into middle class. They’re not seeing this across the board yet.
The plan is up 5.63% for the quarter, and up 19.07% for the year.
Real Estate is near 0% returns.
Individual managers were discussed. We’re up 30% in the large-cap growth space (Sawgrass), but the benchmark was 42.19%. Historically, we’ve really focused on protection on the downside. We can look at other managers, if we want to find a manager that will do better on the upside.
Congress, mid-cap growth space, has underperformed by almost 10%. We have only had them for a year. Mr. Loew discussed Congress’ methodology.
The rest of the managers looked very good.
Mr. Freeman questioned UBS redemptions. He asked when the last time was we received a redemption payment and how much have we received. Mr. Loew answered year to date about $77,000, $26,000 in the 3rd quarter and another small one in October. The total they’ve received is about $136,000 over the last 3 years.
Congress is the one we need to talk about.
General Employees’ Pension Board of Trustees
November 18, 2024
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Mr. Loew explained that they don’t invest in the higher end of the mid-cap market. He further explained their methodology. They have lumpy returns. They perform better in the down markets. He discussed the pros/cons of making a change. Ms. Miller believed they should remain in Congress and give them time. Mr. Tusing spoke on their hard work to keep the portfolio stable. He believed they don’t want to be aggressive with pension monies. They don’t want to be as volatile. They are doing their job protecting the portfolio on the downside. Mr. Hoffner agreed to stay where we are. Mr. Loew will bring back an update next quarter.
Mr. Freeman questioned Sawgrass, which is a similar story. It is up 15%, the benchmark is up 16% for 15 years. Large Cap growth space was questioned. Why aren’t we in a passive investment here? Sawgrass is more consistent, but they have given up a large % in returns. In most cases they have gone to an active and passive approach. He suggested doing a 50/50 split with active and passive. Mr. Freeman was in favor of this.
Ms. Miller asked what the percentage of Vanguard was. Mr. Loew continued to explain the difference between the returns of Sawgrass and the benchmark/Vanguard.
MOTION: Mr. Hoffner moved to reallocate 50% of Sawgrass to Vanguard
as discussed, Mr. Freeman seconded.
Mr. Schofield asked if there were fees associated with this. It was answered, no.
Mr. Tusing asked what would happen if the FED raised rates. It would create volatility. He doesn’t see that happening at this time. The overall portfolio is still defensive.
The motion carried 6-0.
Doug Lozen will be here at the next meeting. He should be happy with the returns.
MOTION: Mr. Taylor moved, Mr. Tusing seconded, and the motion carried
6-0 to approve the investment consultant and manager fees as presented.
7. BENEFITS DISBURSEMENT APPROVAL
a. DROP PARTICIPANT
· None
b. SEPARATED NON-VESTED EMPLOYEE
· None
c. SEPARATED VESTED EMPLOYEE
· None
d. RETIRED EMPLOYEES
· None
e. DECEASED RETIREES
· Barbara Dishon (04/28/2024), No Annuitant
· Odies Blue (10/22/2024), No Annuitant
f. DECEASED ACTIVE EMPLOYEE PAYOUT
· None
(Informational Only)
General Employees’ Pension Board of Trustees
November 18, 2024
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8. NEW MEMBER ACKNOWLEDGEMENT (Informational Only)
· Rowena Young-Gopie (09/11/2024)
· Mildred Norris (11/06/2024)
· Juana Lugo (11/06/2024)
9. SEPARATED MEMBER ACKNOWLEDGEMENT (Informational Only)
· Emin Mathew (08/30/2024)
10. ATTORNEY GARBER’S REPORT
· Board Memo to Klausner, Kaufman, Jensen & Levinson, KKJL, Clients
· 2024 KKJL Company Not an Entity of a Foreign Country of Concern
· 2024 KKJL Human Trafficking Affidavit
Ms. Garber explained the memo from her office. The memo was regarding two new Florida laws that went into effect. This memo was included in the Agenda.
MOTION: Mr. Freeman moved, Mr. Tusing seconded, and the motion
carried 6-0 to update the Summary Plan Description.
11. PLAN ADMINISTRATOR’S REPORT
· Class Action Process
· Cheryl and Cassi received their CPPT
Ms. Miller and Mr. Schofield will participate in a re-election, as their term ends December 31, 2024.
Mr. Hoffner does not want to continue as a Board member after his term ends on December 31, 2024. Ms. Bailey will check with Ms. Rodgers to see if she is interested in another term.
Mr. Loew explained that their office monitors class actions. They fill them out and submit them on behalf of the plan.
Mr. Freeman passed out copies of a document from Foster & Foster. Out of 208 plans, we were 178th out of 208. The 5-year average, we were 204 out of 208. He recognizes we want to be defensive, but we are pretty far down the list. It’s important to protect the assets of the plan, but it is also important to keep this in mind when making decisions to get the best returns possible.
Mr. Tusing noted that we’re down, but we’re only down by 2-3%.
Chair Freeman adjourned the meeting at 9:46 am.
Minutes approved: FEBRUARY 24, 2025
CHERYL MILLER
CHERYL MILLER
Secretary