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HomeMy WebLinkAbout2012-02-29-RB-minMinutes of the February 29, 2012 Retirement Meeting Present: Robert Cunha, Rob Addelson, Joe Foley, Alan Fields, Michael McNabb, Marguerite Oliva, Karen Machant Bob Cunha called the meeting to order at 8:00 AM. The Board accepted and signed the 2/29/12 Warrant and February payroll. The January minutes were reviewed and signed. New Members: (5) Robert Green, Sean McCallister, Firefighters; Laura Woods, SSI; Sally Tesoro, Special Class Aide; Melisa Tintocalis, Economic Development Director Retirements: Maryann Loveday, Tutor, 2 /1 /12 Retirements: Marcia Cavatorta, School Secretary, 3/30/12 Deceased: (4) Virginia Sullivan, School Lunch, Opt. B depleted, 2/5/12; Coleman Connolly, DPW Laborer, Opt. C pop -up, 2/13112; Allen McSherry, Lieutenant, Opt. B depleted, 2/16/12; Mary Trant, School Nurse, Opt, A, 2/7/12 Gary Miller and Bob Lyttle from Fidelity presented the annual review. In the fourth quarter of 2011 U.S. small cap led a rally, Europe and emerging markets led international markets although emerging markets struggled for the year. As of 2/24/12, Contrafund was up 10.64 %. Bob Lyttle presented an overview. The fund seeks long -term growth, normally investing primarily in common stocks, in either growth or value stocks or both. Will Danoff is always looking for the "best in breed" which is defined as companies having a leading presence in industry with the potential for high earnings growth, possessing sustainable operating advantages and led by proven management teams. As of 12/31/11, some of Contrafund's top holdings were Apple, Google, Berkshire Hathaway and McDonalds. LouAnn Eisenhut attended the meeting and presented an overview of the managers who had responded to the RFP for a Domestic Equity High Quality Manager search. Meketa received 36 responses. Of the 36, eight were deemed not eligible. One submitted an incomplete RFP and seven do not offer a mutual fund or commingled fund. The three finalists were Fiduciary Management, Inc. of Milwaukee, Neuberger Berman, and Wellington Management Co. The evaluation performed by Meketa was based on organization, the investment team, their philosophy, the investment process and performance and the management fees. The report shows that for the 1, 5 and 10 year returns, all far exceeded the benchmark of Russell 1000. Meketa also included calendar year returns for 2001 2010. The top sector weightings for Fiduciary Management were consumer staples, industrials, and financials. Neuberger Berman's were technology, industrials and consumer staples and Wellington's were financial, energy and health care. Management fees were .97% for Fiduciary (Mutual Fund), .75% for Neuberger Berman (Mutual Fund) and .60% for Wellington (Commingled Fund). The Wellington Quality Value presentation was made by Matthew Baker, Scott Brink, and Ellen Chae. Outlined were the philosophy, the investment process, the portfolio construction listing the top ten holdings, and investment returns. The next presenters were MG Subhas and Mike Brember from Neubeger Berman Guardian Fund. The investment team for this fund has been together since 2001. They discussed the global equity research team and presented their philosophy including the investment process overview. Reviewed were the portfolio construction and characteristics and risk management. Mr Subhas noted that the ten top holdings make up 41.81% of the portfolio. The third presenter was Michael Stanley from Fiduciary Management, Inc. Mr. Stanley discussed the investment philosophy and research process. Included in the report was a list of organizations invested with Fiduciary Management. The Board discussed the three finalists and Alan noted that he was impressed with Fiduciary Management's list of investors. Fiduciary beat the S &P 9 times out of 10. Alan mentioned he would like to possibly add Wellington, also. LouArm mentioned that spitting the $5 mm allocation between the two managers would not make much difference to the portfolio and suggested increasing the allocation if Wellington were to be added. The Board decided to postpone investing with Wellington for the present time. Meketa will present a report showing the impact of adding Wellington along with Fiduciary. Alan made a motion to invest $5 mm with Fiduciary Management. Mike seconded and the vote was'unanimous. $2.5 mm will be withdrawn from both Contrafund and Hartford. LouAnn presented the January interim report showing the portfolio increased from $102.4 mm to $108.3 mm, an increase of 5.1 %. PRIT increased 3.4% for January. All managers outperformed the benchmarks in January. Hartford at 9.7% and Acadian at 7.5% had the best January performances. The expected cash shortage for March was discussed. A chart for 2010 and 2011 indicates that the shortage has been approximately $2 mm each year. At the end of the meeting, a decision was made to withdraw the needed funds from Contrafand. The Board reviewed the Medical Panel findings for the Accidental Disability application for Charles Sortino. All three doctors were in agreement that Mr. Sortino could no longer perform the essential duties of his position and his injuries would be permanent. A motion was made by roe, seconded by Alan and voted unanimously to grant the ADR. A discussion of the FY' 13 COLA of 3% on $12,000 followed. A motion was made by Joe, seconded by Bob and agreed upon unanimously to grant the FY' 13 COLA. Mike Sacco will be attending the 3115 meeting to discuss Laura Creedon, State Retirement 3(8) ( c ) invoice for Charlie Shannon and the Financial Reporting requirements for Board members. More information needs to be provided by Denise Casey regarding her comments that GIC requirements state that to be eligible for health coverage, the member must be employed 18.75/hrs /wk and be a member of the retirement system. Rob would life to see if there is any documentation from GIC to that point. The Board was reminded that the State Ethics training is still needed by some board members. The salary review was postponed until the April 26th meeting. The next meeting will be held March 15, 2012, 8:00 AM in the Selectmen's Meeting Room at Town Hall. Finalists for the Infrastructure Manager search will attend. Meketa will forward information on the finalists prior to the meeting. A motion was made, seconded and approved unanimously to adjourn the meeting at 11:30 AM. Robert W. Cunha, Chairman Michael McNabb, Appointed Member Robert Addelson, Ex Officio Member Joseph Foley, Elected Member Alan Fields, Appointed Member