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BOARD MEMBERS PRESENT:
Jim Freeman, Chair
Micah Mathews, Secretary
Mike Fuller
Robert Rotondo
Benjamin Schlabach (Not Present)
STAFF AND OTHERS PRESENT:
Scott Christiansen, Board Attorney
John Thinnes, & Co Consulting
Cassi Bailey, Assistant City Clerk/Plan Administrator
Chair Freeman called the meeting to order at 11:00 am. and conducted a roll call.
1. AGENDA APPROVAL
MOTION: Mr. Fuller moved, Mr. Mathews seconded, and the motion carried
4-0 to approve the November 27th, 2023 Police Officers’ Pension Board Agenda.
2. PUBLIC COMMENT
No public comment.
3. CERTIFICATION OF ELECTION FOR ELECTED TRUSTEE SEAT FOR TERM ENDING JANUARY 2026
Benjamin Schlabach ran unopposed for the elected Police Pension Trustee seat ending January 2026.
MOTION: Mr. Fuller moved, Mr. Mathews seconded, and the motion carried
4-0 to certify the election results as presented.
4. RE-APPOINTMENT OF MICHAEL FULLER TO THE POLICE OFFICERS’ PENSION BOARD
MOTION: Mr. Freeman moved, Mr. Rotondo seconded, and the motion
carried 3-0 to re-appoint Michael Fuller to the Police Officers’ Pension Board with a term ending January 2026.
Police Officers’ Pension Board of Trustees
November 27, 2023
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5. APPROVAL OF MINUTES
MOTION: Mr. Mathews moved, Mr. Rotondo seconded, and the motion
carried 4-0 to approve the August 28th, 2023 minutes.
6. APPROVAL OF EXPENSES
a.) Christiansen & Dehner, P.A invoices dated 10/31/23, 09/30/23, 08/31/23
b.) Salem Trust invoices dated 10/12/23, 07/13/23
c.) City of Palmetto Reimbursement invoice dated 10/12/23
d.) Sawgrass Asset Management invoice dated 10/06/23
e.) AndCo invoice dated 09/29/23
f.) Florida Municipal Insurance Trust invoice dated 09/06/23
MOTION: Mr. Mathews moved, Mr. Fuller seconded, and the motion carried
4-0 to ratify the paid expenses as presented.
7. INVESTMENT REVIEW
John Thinnes, &Co Consulting, presented the end of the quarter investment review, which was included in the Agenda.
He went through the packet and started out by noting that we were down about 3.5% for the quarter. He stated that everything was down except for cash. Equities had a strong fiscal year. The S&P 500 was up over 21%, international was up 20%, and bonds were basically flat for this fiscal year. The large tech names/ big companies accounted for the big returns. TRowe Price performed the best, who is our large cap growth manager. He highlighted the pie charts on Page 14-15. The current fiscal year return is at about 3.75%. We are off to a good start. Cash was a little higher in the report. We had some of our money come back from our Principal redemption. As of this morning, we’re at just over 10%.
We are very well diversified in terms of our size, and within the ranges of our IPS. There is no need to rebalance at this time. The overall fund performance was down about 3.5% for the quarter, with an overall return of 9.29% for the fiscal year. Mr. Thinnes highlighted individual managers and their performance. We have requested to fully redeem Principal. He noted that a lot of real estate is doing well, but not the office buildings.
The compliance pages of the packet were discussed, starting on page 59. For our portfolio, we just dropped off two really good years, and our last two years have hurt us. We have not had exposure to tech companies. He noted that we’re not trying to chase returns. Our 9% return this last year will help, and he believed going forward we have a diversified portfolio.
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November 27, 2023
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Mr. Fuller questioned page 34 and asked to be reminded of what the difference between total fund and total fund policy was. Mr. Thinnes responded that the total fund is us, and the total fund policy is from our investment policy. Mr. Fuller asked what he thinks the main difference is to why we rate so well for the 15 year, but not the 5 year, 3 year, and 1 year. Mr. Thinnes responded that the biggest companies have done the best over the last couple years. Mr. Thinnes continued to discuss how our plan has weathered over the long term.
Mr. Freeman noted that one bad year can skew the numbers. Mr. Thinnes further opined. Mr. Fuller questioned domestic equity and asked about looking at private equity funds that are available to maybe get some additional alpha through that. He asked if there are private equity funds that we might have exposure to. Mr. Thinnes responded that he can look into it. They would need to commit a million dollars to that. It would take a while to see the benefits from it. Mr. Thinnes will bring information back at the February meeting to show private equity and private debt funds and see if it makes sense in our portfolio.
8. FY 2023 BUDGET TO ACTUAL PLAN EXPENSES (Informational Only)
9. 2023 SUMMARY PLAN DESCRIPTION (ATTORNEY CHRISTIANSEN)
Attorney Christiansen went over the Summary Plan Description which they’re required to update every 2 years. He went through the document highlighting any changes that were made, including increasing the Maximum Benefit, which is listed on page 9 to reflect the updated $275,000 annual maximum benefit.
MOTION: Mr. Fuller moved, Mr. Mathews seconded, and the motion carried
4-0 to approve the revised December 1, 2023 Summary Plan Description to include the updated amount of $275,000 for Maximum Benefit Annually.
10. ADDENDUM TO AGREEMENT BETWEEN PALMETTO POLICE OFFICERS’ RETUREMENT PLAN AND SALEM TRUST (ATTORNEY CHRISTIANSEN)
Attorney Christiansen explained that Salem Trust is now Argent Financial doing business as Salem Trust. He made the changes to our contracts. He also took the opportunity to review the contract and created an addendum.
MOTION: Mr. Fuller moved, Mr. Rotondo seconded, and the motion carried
4-0 to approve and authorize the Chairman and Secretary to execute the addendum to the agreement between the Palmetto Police Officers’ Retirement Plan and Salem Trust.
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November 27, 2023
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11. 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
· None
f. DECEASED ACTIVE EMPLOYEE PAYOUT
· None
12. NEW MEMBER ACKNOWLEDGEMENT (Informational Only)
· None
13. SEPARATED MEMBER ACKNOWLEDGEMENT (Informational Only)
· Madison Peters (11/21/2023)
14. ATTORNEY CHRISTIANSEN’S REPORT
Attorney Christiansen reported that Pension letter#2 needed to be sent to the Commission listing our assets at the end of the fiscal year.
The State recently passed an ESG legislation, prohibiting the use of environmental, social, and governance factors and only allowing the consideration of pecuniary factors when making investment decisions. He noted that we’ve never considered ESG factors. However, now that it is the law, we have to submit a comprehensive report by December 15th attesting to this. As a result, he got on a zoom call with other pension Attorneys where
they came up with a one-page document for everyone to submit to the state, along with attaching the revised Investment Policy Statement. Ms. Bailey and Mr. Freeman will look into the State portal to submit the appropriate document.
Mr. Fuller asked how many plans have cost of living increases in their benefits. Attorney Christiansen answered maybe 50% of the plans he represents. There are different types. He noted that we just did an ad-hoc COLA last year and are required to look at it at least every 5 years. Mr. Fuller opined that from an outsider looking in, it would be ideal to have something more stable for retirees, possibly an annual COLA. Attorney Christiansen mentioned that the Police are unionized and that would have to be negotiated through them and approved by the City Commission. Mr. Fuller asked what the cost would be to do a cost study. Attorney Christiansen thinks it’s in contract with Foster and Foster, so we can ask Doug at the February meeting.
Police Officers’ Pension Board of Trustees
November 27, 2023
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15. PLAN ADMINISTRATOR’S REPORT
Ms. Bailey noted the desire of the Police Pension Board to change the November 2024 meeting date from November 25th to November 18th due to the Thanksgiving holiday.
MOTION: Mr. Fuller moved, Mr. Mathews seconded, and the motion carried
4-0 to change the meeting date from 11/25/24 to 11/18/24.
Chair Freeman adjourned the meeting at 11:55 am.
Minutes approved: FEBRUARY 26, 2024
MICAH MATHEWS
MICAH MATHEWS
Secretary