HomeMy WebLinkAbout2014-10-22-RB-minMinutes of the October 22, 2014 Retirement Board Meeting
Present: Robert Cunha, Alan Fields, Joe Foley, Rob Addelson, Marguerite Oliva and Karen Marchant
Bob Cunha called the meeting to order at 8:00 AM.
NEW MEMBERS: (4) Kirk Varjian, SSI; Maureen Rynn, Visitor Center Manager; Susan Lusk,
Administrative Assistant, Carl Tritto, Custodian
RETIREMENTS: None
DECEASED: Robert Leslie, Policeman, 10/5/14; Terese Kealy, Survivor of William, 10/10/14; Guy
Busa, Policeman, 10/13/14
Bladen Burns presented the Fiduciary Management annual review. As of 9/30/14, FMI has
$20.9 Billion in assets. The portfolio value for Lexington as of 9/30 was $8,925,477. The
annualized performance since inception in May 2012 is 18.35 %, net of fees. The year to date is
6.47% which is lagging the S &P Index benchmark by almost 2 basis points. The performance of
the FMI Large Cap Fund was helped by holdings with Microsoft Corp and Berkshire Hathaway
and hindered with Danone ADR and Willis Group. FMI has 10% held in cash as a defensive
move. If he had the choice, Mx. Burns stated he would hold 20 — 30% in cash. He feels the
holdings will do OK. Performance has done well 80-95% on the upside.
Alan mentioned an alternative to FMI would be an index fund but feels that the FMI Investment
is currently acceptable. Steve MacLellan from Meketa feels there will be a better idea of the
performance in the next quarter or two while the market is unpredictable. Steve went on to
present the 9/30/14 interim report. He focused first on the 3`d quarter World Markets
benchmarks. Most declined significantly due in part to the tension in Europe. US equity
markets have done better than foreign markets although the fixed income markets are weak.
GDP growth through the second quarter is positive and the U.S. unemployment has been
reported as 5.9 %. The portfolio as of 9/30/14 was $1 36.5 down from $1 40.2. The performance
decreased 2.1% which is not outside the norm. PRIM is moving out of core bond and moving to
20+ year treasuries.
The Wellington Opportunistic investment is the largest holding in the portfolio at 14 %. There
was a discussion on the possibility of curtailing the amount held. Steve will see about having
Meketa check in on Wellington's rationale. Steve also mentioned that Matthews has performed
exceptionally well.
Ignacio Galaz and Yinyin Wu presented the PIMCO annual review. The first item discussed was
the new CIO structure due to the resignation of Bill Gross, who has accepted a positon with
Janus. Dan Ivascyn was promoted from Deputy CIO to Group CIO and others that had been
Deputy CIO's are now CIO's. The succession plan had been implemented last year after
Mohammad left. The outflows that began after Bill Gross' departure have lessened and most are
now taking a "wait and see" approach to see how the new management team does. Lexington
Retirement's All Asset investment is currently $9.3 million with a year to date return after fees
of 3.8 %. Realizing the PIMCO could be affected by the change in management, Meketa
recommends issuing an RFP for the real return mandate to test the market in case the Board
wishes to move to a replacement. Mentioned were GMO and Neuberger Berman. Alan would
like to see a comparison of these two plus Wellington Opportunistic before issuing the RFP.
Beacon distributed $616,569 on 10/10, the second quarter appropriation is being drawn at the
end of the month, $600,000 was withdrawn from PIMCO and transferred to PRIT and the
balance of Vanguard on 9/30/14 was $5,601,183.
Rob is going to set up a conference call with Dan Sherman, Scott McIntire from Melanson Heath
and Maggie to discuss the new GASB requirements.
Mark Culleton has appealed the Board's Accidental Disability application denial to DALA.
Mike Sacco will handle the matter.
Joe Foley's nomination papers were received on October 8t. No other requests have been
received.
The Board granted a 2.5% increase to Maggie, retro to July 1, 2014.
A motion was made, seconded and approved unanimously to adjourn the meeting at 10:20.
The next meeting will be held November 25, 2014, 8:00 AM at Cary Memorial Library.
Robert Cunha, Chairman Man Fields, Appointed Member
Robert Addelson, Ex Officio Member Joseph Foley, Elected Member
Vacant
Appointed Member