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Home My WebLink AboutCOMM - Meeting Minutes - 259 - 2-18-2016 - RETIREMENT375 1 1 Sold 8y IMR. Limited Form 825 E001102204 Minute No. 259 Washington County Retirement Board Washington, PA February 18, 2016 The quarterly meeting of the Washington County Retirement Board was held at �ipproximately 10:45 a.m. on Thursday, February 18, 2016 in the Public Meeting Room I Iith the following members being present: Commissioners Harlan Shober and Diana ','aughan, Controller Michael Namie, and Treasurer Francis L. King. Also present: ecretary Paula Jansante, Solicitor Lynn DeHaven, Director of Finance Roger Metcalfe, l )irector of Administration Scott Fergus, Clerk of Courts Frank Scandale, Deputy Clerk c f Courts Tammy Mankey, concerned citizen Frank Byrd, Lee Martin, Ph.D., Barbara l Miller representing the Observer -Reporter, Chris Haines representing the Herald- "tandard, representing Peirce Park, and Mark Birmingham and Jack Gastler Y-presenting Acadian Asset Management. Commissioner Larry Maggi was absent. ,''.nnroval of Minutes Mrs. Vaughan entertained a motion to approve Minute No. 258-SP dated . muary'4, 2016. The motion was moved by Mr. Namie and seconded by Mr. Shober t iat the above mentioned minutes be approved as written. No discussion followed. l .oll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. ublic Comment None. Treasurer's Renort Mr. King stated that for November 2015, December 2015, and January 2016 the Ilank balance was reconciled to zero. It was moved. by Mr. King and seconded by Mr. l famie;that the report be approved: No discussion followed. Koli call vote taken:. Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. "t-'aughan — yes. Motion passed unanimously. i,'.etirement Allowance Renort Bank Balance as of November 1, 2015 Add: ACH Credit Less: Cancelled Checks Less: Other Debits Less: Funds Transferred Out $ 193,346.24 1,039,035.30 (204,995.88) (42 6,800.80) (543 266.89) 176 Bank Balance as of November 30, 2015 3 Less: Outstanding Checks Less: Retirement Check Run i Reconciled. Balance as of November 30, 2015 Bank Balance as of December 1, 2015 Add: Deposits to Checking Account Add: ACH Credit Less: Cancelled Checks Less: Other Debits Less: ACH Debits Bank Balance as of December 31, 2015 Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of December 31, 2015 Bank Balance as of January 1, 2016 Add: ACH Credit Add: Other Credits Less: Cancelled Checks Less: ACH Debits Bank Balance as of January 31, 2016 Add: Transfers to Bank Account Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of January 31, 2016 $ 57,317.97 (33,681.34) (23,636.63) $ 57,317.97 2,594.60 777,420.10 (80,963.27) (139,053.36) (543,118.69) $ 74,197.35 (50,079.67) (24,117.68) $ -0- $ 74,197.35 410,722.87 328,605.67 (171,848.55) (555,059.12) $ 86,618.22 591.64 (55,570.57) (31,639.29) $ -0- Requisitions Mr. Namie stated that requisitions for the months of December 2015 and January 2016 totaled $1,379,683.55. It was moved by Mr. Namie and seconded by Mr. King that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. 1 Ll 1 377 Sold By IMR Limited Form 825 E00102204 I; Distributions December 2015 Check Payee 1122 Eric Sensky 1123 Kory Sensky 1124 Robert Sensky 1125 James Matthews, Jr. 1126 Pamela Matthews 1127 Patricia L. Thomas 1128 John Burgan 1129 Stephanie Brown 1130 JP Morgan Funds as trustee of IRA of Amy Hurey 1131 Tracy Lahew 1132 Michelle Myler 1133 Joe Pakish 1134 Kenneth Zites 1135 Washington County Regular Payroll Escrow Account 1136 Washington County Regular Payroll Escrow Account Bagay PA SCDU 1137 Washington County Regular Payroll Escrow Account 1138 Washington County Regular Payroll Escrow Account 1139 Washington County Cash Disbursement Account Transfer PNC Bank Transfer Washington County Retirement Account Total December 2015 Distributions January 2016 Check Payee 1140 Barbie Castrucci 1141 Beatrice J. Zediker 1142 Lisa Skidmore 1143 Deanna Yee 1144 Norman Forgues 1145 Patrick Vaina 1146 Washington County Regular Payroll Escrow Account 1147 Washington County Regular Payroll Escrow Account 1148 Washington County Regular Payroll Escrow Account 1149 Washington County Cash Disbursement Account Transfer PNC Bank Transfer Washington County Retirement Account Total January 2016 Distributions Amount $ 101.41 101.41 101.41 52.05 52.05 52.05 25,570.97 3,962.98 6,552.83 3,495.84 1,045.83 266.34 24.50 200.00 951.00 9,735.99 2,577.64 22,736.00 39,409.87 523,364.84 S 640.355.01 Amount $ 3,209.63 39,283.54 737.08 3,220.27 159.81 ,260.24 951.00 12,884.52 100.00 87,552.18 57,136.42 533,833.85 S 739.328.54 3178 Old Business None. zs New Business Mrs. Vaughan entertained a motion for the approval of the 2016 Washington County Retirement Fund Budget. The motion to approve was made by Mr. Namie and ii seconded by Mr. King. No discussion followed. ;t Roll call vote taken: t Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion for the purchase of Employee Benefit Statements from the Hay Group at a cost of $1.85 per statement for a total approximate cost of $1,973.95. The cost per statement remains unchanged from 2015. The motion �E to approve was made by Mr. Namie and seconded by Mr. King. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mrs. Vaughan entertained a motion to discuss a cost of living adjustment for retirees. No motion was made. Presentations Peirce Park — Lee Martin, Ph.D. Mr. Martin began his presentation with a brief market overview stating that while there was a small rally in the markets for the 4th quarter, the economy only grew an annualized 0.7%. The two largest detractors from growth were decreases in consumer spending and manufacturing. Moving on to the 4th quarter review, the retirement fund made $4.6 million, with'' performance just slightly behind benchmark. Looking at the individual managers, C.S. McKee was behind benchmark again for the quarter and for the year, Twin Capital was down for the quarter and the year but outperforming so far in 2016, Vanguard matched the index, Emerald was ahead for the year but lagged in the quarter, Wellington was up for the quarter and the year, American Funds was also up for the quarter and the year, and Dodge & Cox was behind for the quarter but on benchmark for the year. Real z estate was up strongly for the year, both REITs and private. Fixed income was up almost 40 basis points, primarily due to C.S. McKee's performance on the fixed income=r side. 1 n 1 379 Sold By IMR Limited Form 825 HC102204 1.,cadian Asset Management — Jack Gastler/Mark Birminaham Mr. Gastler began with a brief background summary stating that Acadian is a Z2 billion organization with close to $12 billion of that in managed volatility assets. j .cadian's managed volatility assets are designed to protect in a down market but provide market -like returns to obtain superior results. Mr. Birmingham discussed Acadian's strategy, noting that their goal is to build a portfolio of low risk stocks with three broad expectations: achieving the same return as t to market, outperformance when the market is down, and lower volatility. This I, ortfolio would be made up of low risk stocks that are diversifying of each other. If f iere is a rise in the market, this portfolio should capture most, but not all, of the upside. /hen the market falls, this portfolio should be flat. Acadian follows a rules -based l rocess to build portfolios and does not deviate from these rules. Portfolios are built t sing models of risk, trading costs, and returns. Constraints are put on the portfolio so t iat no stock is more than 1 % of the portfolio and that the portfolio contains no more t ian 20% of an industry group. Controls are also put on the portfolio so that it is not too s nall cap or too large cap. Finally, interest rate controls are put in place. Our c Kpectations are that our portfolios outperform the market by 100 to 150 basis points I�er year with 2/3 of the risk. Acadian's actual track record has been an outperformance c F about 300 basis points a year at 2/3 of the risk. Yeirce Park — Lee Martin, Ph.D. The Board requested Mr. Martin's opinion regarding investing in Acadian Asset P lanagement's Global Managed Volatility Equity product. Mr. Martin responded that r`.- would recommend hiring Acadian and suggested an 8% - 10% allocation to Acadian. Mrs. Vaughan made a motion to hire Acadian Asset Management and allow 1'eirce Park to allocate, with the current asset allocation, between 8% - 10%. The r totion was seconded by Mr. King. No discussion followed. F oll call vote taken: I Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes. Motion passed unanimously. Mr. Martin also discussed with the Board what an asset/liability study is and N, hat it could do for the County. The County's assumed rate of return and standard assumptions would become the baseline for the study, all liabilities would be modeled i i, and then different scenarios could be applied to see the various outcomes. Peirce Fark's fee for County clients is $25,000 for the study and if requested, approximately S 5,500 for annual updates. Mrs. Vaughan entertained a motion to have Peirce Park prepare an asset/liability s udy at a cost of $25,000. The motion was moved by Mr. Shober and seconded by Mr 1` amie. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs.. Vaughan — yes. Motion passed unanimously. The meeting was adjourned at 12:07 p.m. The meeting was reopened at 12:08 p.m. to allow Mr. Martin to discuss OPEB. Peirce Park — Lee Martin, Ph.D. Mr. Martin noted that the County had a passive approach on OPEB until May 2015. Since switching to an active approach, return has been up 60 basis points finishing the year with a gain of 0.1 %. If OPEB was still benchmarked, there would have been a loss of 0.5% for the year. Since inception, OPEB has gained close to $1.5 million, a return of 7.2%. Outperformance has come from both the equity and fixed income sides. The meeting was re -adjourned at 12:12 p.m. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL: 'AMY // , 2016 ATTEST:' ' 1 1 1