At the regularly scheduled meeting of the Fire and Police Pension Fund Board of Directors held on the 1st day of October 2015, President Craig Joel presided. The meeting was held at the Pension Office, 6009 John Douglass Drive, Chattanooga, TN 37421.
The meeting convened at 0915 hours with board members Craig Joel, Mark Coffman, Kelly Simmons, Phillip McClain, Tommy Meeks, Charlie Thomason, and Less Lee. Attorney Bill Robinson was also present.
Motion by Less Lee and seconded by Kelly Simmons to approve the minutes of September 17, 2015 meeting. Motion carried unanimously.
Motion by Phillip McClain and seconded by Less Lee to approve the following membership items:
REMOVE FROM THE ROLLS:
Retired Police Detective Charles Kenneth Gamble, effective 09/30/2015, died 09/22/2015 (2-411and 2-418)
Margaret Lee, surviving spouse at of Retired Police Sergeant Charles A. Lee, effective 09/30/2015, died 09/27/2015 (2-411 and 2-418)
Jannie Rich, surviving spouse of Retired Police Officer Randall Rich, effective 09/30/3015, died 09-27-2015 (2-411)
ADD TO THE ROLLS:
Margaret Gamble, surviving spouse and 50% J&S of Charles Kenneth Gamble, effective 10/01/2015 (2-411 and 2-418)
Police Officer Charles E. Topping, Jr with 27 years of service adjusted to 25-year rate and a 27-month DROP, effective 10/01/2015. Pension participation date of 06/03/1988 (2-411, 2-422)
PAY DEATH BENEFITS:
Margaret Gamble, designated beneficiary of Charles Kenneth Gamble (2-411 and 2-418)
Motion carried unanimously.
The Board discussed the Annual Directors meeting and the recommendations from Gerber Taylor Associates regarding reallocation of assets and the Fund’s Investment Policy Statement.
Motion by Phillip McClain and seconded by Tommy Meeks to add specific language that allows the Board to purchase Mutual Funds and Exchange Traded Funds in the Fixed Income and Equities allocations. Motion carried unanimously.
Motion by Tommy Meeks and seconded by Kelly Simmons to convert the Victory Capital actively managed separate account to the in-kind Victory Institutional Diversified Equity mutual fund (VIDSX). Motion carried unanimously.
Motion by Phillip McClain and seconded by Charlie Thomason make the following allocation changes:
Add $3M to Eagle Global (MLP)
Sell $3M of MetWest Fixed income (10/2015)
Redeem $3M from Evanston Capital—reduce over-weighting (01/2016)
Re-purchase $3M of MetWest from Evanston redemption
Purchase $12M I-Shares Russell Mid-Cap (IWR)
Sell $6M of Victory Capital
Sell $6M of Advisory Research
Add $3M to Cash for Quarterly Benefit Payments
$1M from Vanguard
$1M from First Eagle
$1M from MetWest
Motion carried unanimously.
The Board recessed the meeting at 1000 hours for Board of the Firemens and Policemens Insurance and Pension Fund Real Estate Holdings, Inc. to meet.
During the recess, the Board met with Chris Poppe and Terry Schwartz of US Bank who appeared before the Board to discuss their proposal for Trust/Custody services. After the conclusion of the US Bank presentation, the meeting reconvened at 1123 hours and the Board discussed the proposals of US Bank and Wells Fargo Bank (presented at the annual meeting). Motion by Tommy Meeks and seconded by Mark Coffman to retain Wells Fargo for Trust/Custody services. Motion carried unanimously.
Frank Hamilton recommended that the Board approve changing the monthly benefit payment date from the 25th of each month to the 15th of each month. Based on comments and questions each year, the 15th of the month provides greater margin for members preparing for Christmas, Thanksgiving, and Memorial Day. The earlier payment should also alleviate some complaints of postal delays of paper checks for the few participants who choose to receive a paper check rather than a direct deposit. The Board discussed the recommendation. In the event that the 15th falls on a weekend or holiday, benefit payments would continue to be sent on the last business day preceding the 15th. Motion by Phillip McClain and seconded by Kelly Simmons to change the benefit payment date to the 15th of each month, effective with the November 2015 payment. Motion carried unanimously.
The Board continued discussion from the last meeting regarding the Fund Office Administrative Budget for FY2016. The Board and Staff discussed the budget and details. Staff pointed out that unlike a budget at for-profit businesses whose budgets factor into profitability, the Fund Administrative Budget is the Administrator’s best estimate of necessary expenditures throughout the year and the Board has the authority to amend the budget as needed. Board members expressed their desire to further explore details of the proposed Budget at a later date. Motion by Less Lee and seconded by Phillip McClain to approve the budget pending recommendations of the Personnel Committee for the Staff. Motion carried unanimously.
Bill Robinson reported to the Board that he and a local financial expert had recently conducted a training class for the public. The Board briefly discussed whether or not to add a second retirement class in the second half of the year and invite an outside financial expert to conduct the investment portion of the class. The Board members discussed their fiduciary responsibility to seek out and obtain training for themselves, and possibly using an outside expert to conduct in-house training for the Board also. Board members also discussed their concern with Less Lee regarding his failure to obtain required training, in accordance with the Fund’s Education Policy, during his tenure on the Board.
The Board discussed Advisory Committee on Board Structure. To provide adequate notice in the newsletter, the Board decided to extend the deadline for members to submit their names requesting to be on the committee until 1600 hours on October 30, 2015. The Board will name committee members at the regular meeting on November 5, 2015.
Motion by Phillip McClain and seconded by Kelly Simmons to adjourn at 1152 hours. Motion carried unanimously.
