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HomeMy WebLinkAbout2013-07-24-RB-minMinutes of the July 24, 2013 Retirement .Board Meeting Present: Robert Cunha, Joe Foley, Alan Fields, Rob Addelson, Mike McNabb, Marguerite Oliva, Karen Marchant Bob Cunha called the meeting to order at 8:00 AM. The Board accepted and signed the 073113 Warrant and July payroll. The June minutes were reviewed and approved. New Members:: (6) Melissa Jones, Management Intern, Marisa Cappadona, Catherine Agresto, SSI; Linda Rainville, Dept. Assistant; Sean Wilson, Custodian; Christopher Gaffron, AN Technician; Retirements: Bernadette Kearney, School Aide, 6/28/13; Rosemary Maconochie, Administrative Assistant, 9/12/13 Deaths: (5) Margaret Hartery, School Library Aide, 7/29/13. Opt. B depleted; Dorothy Gauthier, Clerk, 7/30/13, Opt. A; David Savage, Firefighter, ADR Opt. B, 7/6/13; Dorothy Silva, School Lunch, Opt. A, 7/2/13; John MacKenzie, DPW, Opt. A, 7/10/13 Henry Jaung from Meketa presented a 6/30/13 update. The market value of the System decreased from $123.7 on 5/31/13 to $118.9 on 6/30/13. The Global Tactical Asset holdings and Fixed Income were the worst performers for May and June. When questioned about the investment report, Henry noted that the mutual funds lag in reporting. Contrafund and Hartford are 1/4 behind in reporting but Henry feels there will not be a drastic shift when 2nd quarter reports for both are received. Also noted was that PRIT reports gross of fees whereas LRS reports net. In discussing some of the reasons the portfolio was down it was mentioned that there was too much international exposure in the portfolio and fixed income did not do well. June was a bad month with loses across the board. PIMCO Global Multi -Asset had the greatest loss at 7.2 %. The Board asked Henry to contact PIMCO to discuss the loss. PIMCO representatives will be asked to attend the August meeting. Most of the year's gains were lost in June but the market is starting to rebound. The Board discussed the decision to move some GTA funds to the PRIT Hedge Fund sleeve. The GTA is 26% of the portfolio. The question was raised if it would be possible to get flexibility without investing in the PRIT Hedge Fund. After reviewing a three -year cash flow report that Maggie sent to Mike, he asked that the report be sent to the Board and Meketa for review and comment. Meketa included two fee comparison reports for legal, custody and consulting fees. Lexington vs. Greenwich Associates which is the average cost for public funds with assets less than $500m and Lexington vs. Mass. Public Peers which includes 22 different towns with market values between $78 and $128 million. Rob presented the Board with a Funded Pension Ratio report comparing nine other systems similar to Lexington. Rob asked that the systems listed be asked to provide information on their legal, custody and consulting fees. SSgA reps. Emeka Linton and Read Burns presented the SSgA review. They reported the 6/30/13 market value for Lexington was $2,578,031. The Passive Bond Market Index NL Fund since the inception in June 2009 has almost mirrored Barclays US Aggregate Bond Index. SSgA has $326.1 billion total global indexed bonds under management and $164.1 billion US fixed income index assets as of 3131113. Read Burns mentioned SSgA has ETF floating rate products where duration risk is removed. SSgA's investment philosophy, index investment process and risk management were discussed. Mike suggested transferring the SSgA investment to Loomis Sayles and Alan stated he would like to wait until after the representatives from PRIT attend the Sept. meeting to consider where the 2% invested with SSga could be placed. Bob mentioned using it as a funding source when there is a shortage. After discussing the involuntary ADR application received, Bob made a motion to request PERAC set up a medical panel. The motion was seconded by Rob and approved unanimously. The Vanguard balance as of 6130113 was $3,069,273. The Town invested an additional $775,000 in July. A motion was made by Bob, seconded by Joe and approved unanimously to have Monroe and all investment companies use "Lexington Retirement System" on all documents. The Board was given a copy of PERAC memo 918 regarding mandatory Board training. The Board requested that educational credit balances be checked before next meeting. The PERAC auditors will be coming in September for a three -year audit. The Administrator's review was to be discussed. A motion was made, seconded and approved unanimously to adjourn the meeting at 10:30. The next meeting will be held August 21, 2013, 8:00 AM at Cary Memorial Library in the large meeting room. On July 29", the Lexington Retirement System provided the Selectman with an update on the performance of the Retirement System. Chairman. Bob Cunha introduced Alan Fields and Mike McNabb representatives of the Trustees to make the presentation. The attached three charts highlight the in�or points that the trustees wanted to share. Chart l .....the funding ratio of the plan (78.3%) represented the second highest ratio level for all towns in the Commonwealth. Chart 2..... the performance results of the plan durin g the past ten years and over shorter intervals was in line with a 60140 global benchmark (equity/debt) but trailed the aetuarial target over five and ten year time frames reflecting the sub par results of financial market returns. Chart 3... -the Trustees offered a comparative chart which highlighted the difference in asset allocation between the Lexington plan and the Commonwealth's PRIT asset allocation. The chart also provided a cash flow analysis which explained that the difference in equity exposure and illiquid real estate and private equity investments reflected the unique liquidity eds of the Lexington plan. MEM NAT` M 75 -7 'A 75.Bg OEM= 729% CAM. .. ......... .. .. ......... .. ... . .... .. .. .. , -ROM-1191 4 vl. W WE ATLANTIC TRUST June 2Q13 YTD 1 Year 3 Year SYamr 10 Year Inception Date Since inception N CA) (11.1 N Vt.) (11.) (1/6) MAIM- UMMIN CPI (infl.ti.n) 0.2 0.3 13 U 23 1 3 2.4 2.5 60% MSCI W.r]dt4O% Brclap Universal -2.5 -1.2 2.7 9.8 9.1 4.1 & B 4 8 ' Acburial Target 0.6 1.9 3.9 7.75 7.75 7.75 7.8 7.75 wnj'40 RID 'R-.---Wi!,' M.7 ip MSCI ACwl -2.9 -0.5 6.4 17.1 12.6 2.B B4O 4.3 S&P Soo -1,3 2'9 1&8 20.6 18.5 7.0 73 3.6 Barclays Universal -1A -2.4 -2.3 0.2 4.1 S'S 4,8 5.7 ATLANTIC TRUST Why are we different? Lexington CIF Analysis 2008 2009 2010 2011 LO 12 Receipts 5 6,776,479.22 $ 6,746,552.26 S 6,967,236.04 $ 7,574,601.9 8,824,427.81 CisBUmns $ 672060.56 $ 8,393,145,68 $ 9,120,230,39 $ 9,488,948.90 $ 9,557,324.31 ❑iff —nne $ (1,895,581.34( $ (1,648,093.43( $(2,158,993.65( $(1,974,347.21( $ {735,896.60} ATLANTIC TWUST The resentation was well received by the Selectmen. Robert W. Cunha, Chairman Michael McNabb, Appointed Member Robert Addelson, Ex Officio Member Joseph Foley, Elected Member Alan Fields, Appointed Member