HomeMy WebLinkAbout2009-08-27-RB-minMINUTES OF THE AUGUST 27, 2009 RETIREMENT MEETING
Present: Robert Cunha, Joseph Foley, Michael McNabb, Rob Addelson, Alan Fields,
Marguerite Oliva
Bob Cunha called the meeting to order at 8:00.
The Board accepted and signed the 083109 warrant and the August payroll.
New Members: (1) Samuel Russo, Custodian
Request for Retirement: (5) Elizabeth Gable, School Library Aide, 6130109; Barbara Bair,
Instructional Asst., 8121109; James Brooks, Patrolman, 9/30109; Elaine McBride, Aide,
811109; Stephen O'Loughlin, Fire Lt., 8117109
Deceased Retirees: Alice Benoit, Opt. A, School Lunch, 8116109
LouAnn Eisenhut from Meketa Investments presented the June quarterly review. Stocks
rallied both domestically and abroad in the second quarter, posting the strongest quarterly
returns since 2003. The market value for Lexington at the end of June was $85.2M. At
the end of July the value increased to $89.8M.
LouAnn gave an investment manager overview for Loomis Credit Asset Fund prior to
representatives from Loomis making their presentation. Loomis' target allocation is 30-
100% Investment Grade Corporate, 0 -50% High Yield Corporate /Bank Loans and 0 -15%
Securitized Assets. The three sector leaders who act as portfolio managers for the Credit
Asset Fund are Mattthew Eagan (high yield), Kevin Kearns (investment grade), and
Richard Raczkowski ( investment grade). They are supported by 23 research analysts.
Loomis representatives Roger Ackerman, Matt Eagan and Will Averill made the
presentation to the Board. Loomis Sayles has been in existence since 1926, serving
institutional investors for more than 80 years. As of Tune 30, 2009, Loomis Sayles has
$113 Billion fixed income assets under management.
The Loomis Credit Asset Fund was funded in March 2009. The gross returns for 3/16-
6130/09 were 13.00% and 20% year -to -date.
Reports are on file in the retirement office.
The Board discussed that we are always chasing the 8% assumption. Mike mentioned the
"Credit Cycle Theory" from the Loomis report. The cycle starts with a downturn where
equity and credit are negative followed by credit repair where credit outperforms equity.
Next step is recovery where equity and credit are positive and finally expansion where
equity outperforms credit.
The cycle will be elongated and the current environment will probably last longer for
recovery. Alan questioned from where the funding should come for investment with
Loomis. Right now there is 6% in the bond market. To liquidate the SSgA Passive Bond
Market, the Board will have to take a hit. The Board also mentioned taking the money
from Earnest Partners. The final thinking was to take $1.5M from cash since there is
daily liquidity from Fidelity and Hartford if funds are needed to cover costs and $3.5M
from SSgA. Final decision will be made next meeting.
The Board mentioned looking at managers for Global Tactical Asset Allocation (GTAA).
LouAnn mentioned that Meketa could do a quick RFP and review responses before next
meeting.
LouAnn mentioned that the Lexington portfolio for Lexington was up 5.7% for July and
13.7% year -to -date while PRIT was up 5.1% for July and 7.9% year -to -date.
Alan Campbell did not show for his requested overearnings hearing. He will be notified
that his pension will be suspended. Sam Palmer paid back his overearnings and James
Weston requested that $750 be deducted from his pension each month for 7 months due
to a hardship. A request will be sent to PERAC.
PERAC notifications were received that reevaluations are being scheduled for Sam
Palmer, Don Barter, Joe Haynes, and Kevin Garvey
The Board requested that Wellington and PIMCO attend the next meeting for quarterly
reviews.
The June and July minutes were reviewed and signed by the Board.
Administrative review put on hold again.
A motion was made, seconded and approved unanimously to adjourn the meeting at
10:00 AM. The next meeting will be held September 23, 2009 at the new Lexington
DPW facility.
Robert W. Cunha, Chairman
Robert Addelson, Ex Officio Member
Michael McNabb, Appointed Member
Joseph Foley, Elected Member
Alan Fields, Appointed Member