Loading...
HomeMy WebLinkAboutCOMM - Meeting Minutes - 245 - 11-15-2012 - RETIREMENTmo would be rec ced since the County is a current client. The Board expressed interest in this service and requested th Mr. Martin forward any educational materials along with a proposal. Federated I estors Inc. — John Stanley and John Gentry Mr. 1. anley took a moment to give the Board an overview of Federated Investors, stating that the firm has remain( stable throughout the current market conditions and has continued to perform well for the County. He hen turned the presentation over to Mr. Gentry to discuss the County's fixed income account. Mr. Gentry began by stating that performance was strong in the lst quarter, lagged a little in the 2" a quarter, but i 3 positive for the year-to-date. Federated Investors strives to outperform using a more balanced strategy of ditration, sector, yield curve, and individual security selection. Since there is virtually no yield in Treasuries it the current market, Federated is underweight in Treasuries and overweight in mortgage backed securities an I agencies. Mr. entry asked the Board to consider adding some high yield and emerging market debt. In doing so, the Coun i y could benefit through increased yield and further diversification of asset holdings. Federated proposed acdessing these strategies through the use of their internal funds so that there would be no additional cost to the C purity. Mr. Martin suggested that there should be some constraints put on the use of these strategies an that the investment policy statement would have to be changed to allow their use. Mr. Martin suggested al wing Federated to invest up to 10% of their allocation in high yield and 10% in emerging market debt, with a combination of the two strategies to never exceed 15% at purchase. Mr. hober made a motion to approve the addition of high yield and emerging market debt by Federated In, 7estors with the constraints as recommended by Mr. Martin. The motion was seconded by Mr. King. No discussion followed. Roll call vott taken: Mr. amie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Irey Vaughan — yes; Mr. Maggi — yes. Moti n passed unanimously. The ing was adjourned at 12:20 p.m. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL: ),1�r41S4 :;1 ,2012 ATTEST: l i 2 4 Minute No. 245 Washington County Retirem, Washington, PA November The quarterly meeting of the Washington County Retirement Board was held at approxima a.m. on Thursday, November 15, 2012 in the Public Meeting Room with the following members b present: Commissioners Larry Maggi, Harlan Shober, and Diana Irey Vaughan; Controller Micha and Treasurer Francis L. King. Also present: Chief Clerk Mary Helicke; Secretary Joyce Thornbi of Finance Roger Metcalfe; Director of Administration Scott Fergus; Sheriff Samuel Romano. cor. citizen John Adams; Observer -Reporter representative Barbara Miller; WJPA representative Tony Lee Martin and Lisa Gentry representing Peirce Park; and John Thompson and David Volpe repre Emerald Advisors. Approval of Minutes Mr. Maggi entertained a motion to approve Minute No. 244 dated August 16, 2012. The n moved by Mr. Namie and seconded by Mr. Shober that the above mentioned minutes be approved No discussion followed. Roll call vote taken: it Board 5, 2012 ly 10:30 �g Mamie; Director prned a iPalma; ion was written. Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Irey Vaughan — yes; Mr. Maggi — Tes. Motion passed unanimously. s's ki y Public Comment Mr. Adams commented on what he considers to be the poor performance of the retirement 4 also expressed his displeasure that public money was being used to fund any deficit due to the invest taken by the Board. Treasurer's Report Mr. King stated that for August and September 2012, the bank balance was reconciled to moved by Mr. King and seconded by Mr. Namie that the report be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Irey Vaughan — yes; Mr. Maggi — Motion passed unanimously. Retirement Allowance Report Bank Balance as of August 1, 2012 $ 70,212.67 Add: Deposits to Checking Account 820,272.40 Less: Cancelled Checks (138,849.95] Less: ACH Debits (404,437.73 Less: Other Debits (295,830.90 Bank Balance as of August 31, 2012 $ 51,366.49 Add: Transfers into Checking Account 1,839.21 and risks It was 1 P Sold �9.s f' Less: Retirement Check Run 14 479.57 Reconciled Balance as of August, 312012 $ Q Bank Balance as of September 1, 2012 $ 51,366.49 Add: Deposits to Checking Account 706,018.65 Less: Cancelled Checks (81,365.00) Less: ACH Debits (425,277,00) Other Debits (138,801.58) Bank Balance as of September 30, 2012 $ 111,941.56 Transfers into Checking Account 44.94 Less: Outstanding Checks (100,502.87) Less: Retirement Check Run 11 483.63 Reconciled Balance as of September 30, 2012 $ Q Requisitions Mr. Namie stated that requisitions for the months of August, September, and October 2012 totaled $1,646,244.01, It was moved by Mr. Namie and seconded by Mrs. Irey Vaughan that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Irey Vaughan — yes; Mr Maggi — yes. Motion passed unanimously. August 2012 Check Payee Amount 593 Estate of Hazel Woods $ 21.97 594 Anne E. Richard 25773.75 595 Joshua Camson 4,859.78 596 Timothy Dames 478.22 597 Lori Harbert 16,076.91 598 Stephanie Hayes 3,099.81 599 Michele Lipchik 7,219.74 600 Brandi Wanto 625.02 601 Washington County Regular Payroll Escrow 6,119.36 Account 602 Washington County Cash Disbursement Account 62,011.91 Transfer PNC Bank 31,993.51 Transfer Washington County Retirement Account 389,161.52 Total August 2012 Distributions $ 524,44150 96 September 2012 Check Payee Amount 605 Ashley Brownlee $ 4,807.17 606 Mary Ellen Chipps 53,709.21 607 Lorena Craig 3,660.98 608 Angela Davis 15,406.84 609 Michelle L. Howard 2,099.10 610 Shawn Kressley 3,046.98 611 Ashlee J. McCartney 4,764.59 612 ING Direct as trustee of IRA of Erick Rigby 2,666,18 613 NSS Life as trustee of IRA of Lori Sheldon 8,347.57 614 Washington County Regular Payroll Escrow Account 5,998.73 615 Beth Whitney 2,062.5,3 616 Washington County Cash Disbursement Account 20,235.8-3 Transfer PNC Bank 46,898.$7 Transfer Washington County Retirement Account 391,673.78 Total September 2012 Distributions 565,3UM October 2012 Check Payee Amount 617 Estate of Marcia J. Wilson $ 62.60 618 Linda S. McNeely 3,472.74 619 Erica E. Cargello 156.14 620 Susan A. Carthon 1,320.50 621 John R. Clemens III 8,512.74 622 Laura Luckock 37,826.90 623 Eileen Malon 7,592.80 624 Lauren Page 4,472.41 625 Katie Sharffer 1,228.77 626 Washington County Cash Disbursement Account 53,153.28 627 Washington County Regular Payroll Escrow Account 5,816.67 Transfer PNC Bank 40,819.82 Transfer Washington County Retirement Account 391,989.28 Total October 2012 Distributions 556,424,65 Old Business None. New Business Mr. Maggi noted for the record an agreement with Elizabeth Meeks to purchase service credit dated April 21, 1980 to July 9, 1984 in the amount of $2,594.60. Mr. Maggi entertained a motion for the approval of a request by Jane Zupancic to buy back unpaid __I?9Y Sold By IMR Limited Form 825 E417350 leave of absence time dated March 17, 2003 to March 27, 2003, February 17, 2005 to May 4, 2005, and February 17, 2007 to March 12, 2007 in the amount of $2,449.99. The motion was moved by Mr. King and seconded by Mr. Shober. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Irey Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Presentations Emerald Advisors — John Thompson/David Volpe/Scott Blumenthal Mr. Thompson began with a brief background of the County's financial relationship with Emerald for the past fourteen years. Emerald began as the County's small -cap manager for the first seven years and currently manages the County's mid -cap portfolio. As an active manager, Emerald has generated positive returns and added substantial value relative to the benchmarks, due in no small part to a bottom -up, research driven philosophy. As of the third quarter, performance at the one-year is solid as are the three and five-year. There have been no management changes in the last year at Emerald, but there have been some portfolio changes. David Volpe has moved from co -manager of the County's portfolio to the sole manager and will continue to be backed by a strong research and analysis team. Mr. Volpe stated that in addition to the changes that Mr. Thompson mentioned, Emerald recently created an employee stock ownership program as an added incentive to continue providing the best possible investment service. He also reiterated Emerald's strong performance in the last year and although he believes that there will be some choppiness in the market in the coming months, he expects an overall positive performance in 2013. Mr. Volpe mentioned that at the moment, cash balances are high in private companies. Mr. Shober asked him to explain, to which Mr. Volpe responded that corporate CEO's and treasurers do not want to get caught again with low cash balances as they did in 2008. He believes that once the national elections are over and the fiscal cliff is dealt with, cash will again begin to flow. Peirce Park — Lee Martin/Lisa Gentry Mr. Martin began with a discussion about the possibility of lowering the County's assumed rate of return, currently at 7.5%. While it would initially require a larger outlay by the County, it would be more realistic and be more in line with the returns expected in the current market. Mrs. Irey Vaughan requested that Mr. Martin provide the Board with some scenarios with various reductions in the assumed rate of return so that a decision could be made. Mr. Martin briefly covered the market environment stating that after a down second quarter, the markets turned positive in the third quarter. European markets began to rebound and the U.S. unemployment rate fell below 8% for the first time in several years. The U.S. and European markets were both up, 6.2% and 9.6% respectively, but the Japanese market was down 0.8%. Consumer confidence was up and there were strong performances in automotive and home prices. Although consumers are starting to feel more confident, there is still a long way to go. GDP remains down with the third quarter expectation coming in at 2% compared to the remains down with the third quarter expectation coming in at 2% compared to the historical average of 3.25% a year. Since 2005, there has been more money flowing into bonds than equities, telling us that the average investor is still very concerned about the market. In this type of market environment, the best way to manage your portfolio is to stay diversified and rebalance to your long term targets, both of which the County has done. Moving on to the performance review, the County's fund was up 5% for the quarter and 12% year-to-date, gaining just under $12 million. The fund is above the policy index for both the quarter and year-to-date and also well above the medians. For the third quarter, the active equity managers, Emerald, C.S. McKee, and Dodge & Cox, did very well, the recently added GTAA also did well as did C.S. McKee as an active fixed income manager. Negative returns came from asset allocation and real estate. The addition of MFS Global Allocation and Wellington smid cap value has also been to the County's advantage with both performing well. As discussed at the previous meeting, Mr. Martin educated the Board on Peirce Park's Consulting Plus Option wherein Peirce Park would review the County's portfolio weekly and make rebalancing recommendations when necessary. The Board could designate one member to authorize any rebalancing adjustments. Mrs. Irey Vaughan made a motion to approve the addition of the Consulting Plus Option and to authorize Mr. Namie as the person to act on the Board's behalf for any rebalancing changes. The motion was seconded by Mr. Shober. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Irey Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Due to an airline delay, Mr. Dave Reichert of the Hay Group was unable to attend the meeting. Mr. Namie assured the Board that he would speak with Mr. Reichert and forward all information to the Board. The meeting was adjourned at 11:45 p.m. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL: 2013 ATTEST:' 1