At the regularly scheduled meeting of the Fire and Police Pension Fund held on the 7th day of February 2013, President Terry Knowles presided. The meeting was held at the Pension Office, 6009 John Douglass Drive, Chattanooga, TN 37421.
The meeting convened at 0917 hours with board members Terry Knowles, Chris Willmore, Jerome Halbert, Phillip McClain, and Ray Ryan. Attorney Bill Robinson was also present. Corliss Cooper and Shawn O’Kelley were excused.
Motion by Chris Willmore and seconded by Jerome Halbert to approve the minutes from the January 17, 2013 meeting. Motion carried unanimously.
Attorney Bill Robinson reported that he has looked over an amendment to the subscription agreement from the Energy and Minerals Group (EMG). Attorney Robinson recommended approving the amendment as it reduces the amount of debt that EMG can use to purchase assets. The amendment will be forwarded to Fund Trustee, Wells Fargo for final approval and execution.
Luke Provenzano of Wells Fargo conveyed that the reporting of non-publicly traded assets is up-to-date and he will continue to personally monitor through June 2013 to assure that the new accountant responsible for reporting the assets is properly doing so.
Motion by Phillip McClain and seconded by Ray Ryan to approve the following membership changes:
REMOVE FROM THE ROLLS:
Flossie Batts, surviving spouse of Retired Police Detective Sully Batts, Sr., effective 01/31/2013, died 01/22/2013 (2-412)
REFUND CONTRIBUTIONS:
Former Senior Firefighter Charles E. Parks, terminated 01/05/2013, participation date of 12/09/2004 (2-413)
Former Police Officer Harrison Santiago, terminated 01/04/2013, participation date of 01/21/2011(2-413)
The motion carried unanimously.
The Board discussed the application for job related disability benefits by Police Sergeant James Hogwood. Frank Hamilton reported that the Fund Staff has not yet received the independent medical exam (IME) report from Dr. McKoy’s office after repeated requests. The IME was conducted on 11/26/2012. Attorney Robinson will send a legal request for the IME report.
The Board also discussed the Cost-of-Living Adjustment (COLA) provided to retirees and beneficiaries. On January 25th, Mr. Ryan circulated a Wall Street Journal article on the Texas Teachers Retirement System, which ties the COLA to investment performance. Mr. Ryan stated that such a strategy “equilibrates” the pressure on employer contribution among active and retired members when market conditions do not allow the Fund’s investment return to reach the actuarially assumed rate of return. Attorney Robinson stated that the basic philosophy of the COLA was to prevent retirees from “falling behind” the cost-of-living with their benefits. The Board discussed the long-term average of the Consumer Price Index and found long-term inflation to be below 3%. President Knowles directed Frank Hamilton to ask Fund actuaries if they are familiar with plans that tie COLA to investment performance and get their input.
Bill Pickens and Mark Hicks of Gerber Taylor Associates presented the 4Q-2012 investment report to the Board. The Fund saw 1.9% growth for the quarter and 12.0% growth for the year. Gerber Taylor made a preliminary recommendation to reallocate $1.75MM from TCW and $1.75MM from PIMCO High-Yield to Evanston Capital. The reallocation would require modifying the Fund’s Investment Policy Statement (IPS). Mr. Ryan reported that he recently attended a PIMCO investment conference and suggested consideration for six PIMCO funds. Gerber Taylor will review the PIMCO funds and send its final recommendations on the IPS and allocation to the Board at the next meeting.
Motion by Ray Ryan and seconded by Corliss Cooper to pay the bills. Motion carried unanimously.
Motion by Phillip McClain and seconded by Jerome Halbert to adjourn at 1132 hours. Motion carried unanimously.
Note: City Court fees received for December 2012.
Note: Reinstated Police Officer Taylor Walker elected to receive no pension credit for prior service by not repaying his contributions upon his reinstatement.
Terry Knowles, President
Phillip McCain, Secretary
Visitors
Luke Provenzano, Bill Pickens, Mark Hicks
