HomeMy WebLinkAbout2020-05-28-RB-min Minutes of the May 28, 2020 Retirement Board meeting:
Present: Bob Cunha, Alan Fields, Fred Weiss,Joe Foley, Carolyn Kosnoff, and Jim Condon
Absent: None
The Lexington Retirement Board met remotely through Zoom telephone conferencing during the
ongoing Covid-19 pandemic. All Board members were present. The Clerk's Office Meeting posting
included the information for any interested party to join the conference call.
The Board accepted the 052920 Warrant and the May payroll. The April minutes were reviewed and
approved via email.
Bob Cunha reviewed the May agenda with the Board members and staff in attendance. There was no
new information to report regarding Joseph O'Leary and Ryan Bugler.
Due to the Covid-19 pandemic,we have been advised by PERAC to re-run the election for the open seat
on our Board. Due to a "shelter in place" order during our election period, PERAC stated candidates
were unable to enter Town Hall for nomination papers, seek required signatures, and file paperwork
within the proper time frame. Once restrictions on the public entering Town Hall are lifted,we will
begin the process again to post an election.
Bob Cunha made a motion to approve the military buyback request for Christopher Ducharme,which
was seconded by Joe Foley, and unanimously approved by Carolyn Kosnoff and Alan Fields.
Bob Cunha made a motion to approve the buyback request for Jane Aronson,which was seconded by
Fred Weiss, and unanimously approved by Joe Foley and Alan Fields.
The 2019 Annual Statement was reviewed by the Board Members via email. Bob Cunha made a motion
to approve the Annual Statement,which was seconded by Joe Foley, and unanimously approved by
Carolyn Kosnoff, Fred Weiss, and Alan Fields.
The Vanguard balance as of March 31, 2020 is$16,316,451.00. We received a 1St Quarter 2020
reimbursement from the Fidelity plan for$12,358.00.
Bladen Burns from FMI Large Cap Fund presented the Board an update. In short, FMI has had a tough
year and has been underperforming. He mentioned it appears the fund will continue to struggle going
forward during the tough economic times. The spread between FMI and market overall continues to
widen in the wrong direction. It was noted that FMI has had four straight quarters of little to no growth.
Bladen felt the fund was in position to do fair during the pandemic, but it took a major hit. He felt they
were in a good defensive stance to weather the market. After fielding some questions from Alan and
Fred,the review wrapped up at 9:30 am.
Ed Schollmeyer and Mike Hickey from Fidelity presented the Board an update. They talked about their
high quality holdings that have done well through the turbulent market of late. Many of the holdings
have been in place for years. Amazon makes up 8.5%of the portfolio for them. Mike spoke of two big
changes heading their way. Reducing financial holdings due to interest rates becoming so low. Banks
aren't making much money. Fidelity is interested in healthcare again. The potential for a vaccine to
prevent Covid-19 becoming a reality is very enticing. Also, elective surgeries should be returning to the
hospitals once the Covid-19 virus slows down. Mike and Ed assured the Board they are in a very good
position heading into 2nd Qtr. 2020.
Henry Jaung and Steve MacLellan from Meketa presented the update. Henry began speaking about the
TALF 2.0 investment strategy. He informed the Board that the exposure has dried up. Wellington and
Payden have already closed due to funding capacity. Meketa will continue a search of managers that
might seem suitable for this investment. BlackRock Global Renewable Fund III remains undecided as of
the meeting.
The portfolio balance as of April 20, 2020 was$168,555,831.00. Despite being down 8.5%for YTD, the
month of April was up 6.7%. The month added $11m to the portfolio. It was mentioned the May 2020
numbers were posting positive. The returns coming in are much higher than the March books posted.
The success can be attributed to the performances of Contrafund and KAR. Domestic equities
performed well in April. Henry moved on to the RFP that was issued in the 4t" Qtr. 2020 regarding US
equity index search. Five responses from investment managers were received by Meketa. Three were
ranked highly advantageous; LGIMA, RhumbLine and SSGA.The other two were advantageous; Mellon
and Piedmont. After a review, Bob Cunha made a motion to select RhumbLine,which was seconded by
Alan Fields, and unanimously approved by Fred Weiss, Carolyn Kosnoff, and Joe Foley. RhumbLine is
already in the Lexington portfolio with Meketa. They offer very low fees.
Bob Cunha made a motion to dissolve the FMI Large Cap Fund and transfer those funds to RhumbLine.
The motion was seconded by Fred Weiss, and unanimously approved by Carolyn Kosnoff,Joe Foley, and
Alan Fields.
Bob mentioned the actuarial study and the 2024 might have to be extended out or seek funding from
the Town.
Fossil Fuel exposure remains at 2.8%
Bob motioned to adjourn the meeting at 10:40 am,which was seconded by Joe Foley, and approved by
Alan Fields and Fred Weiss
The next Retirement Board meeting will be held on Thursday,June 25, 2020 at 8:30 am. The meeting
will be held via Zoom tele-conference.
Sean Duff from Monroe Capital is expected to present.
Robert Cunha, Chairman Alan Fields, Appointed Member
Carolyn Kosnoff, Ex Officio Member Joseph Foley, Elected Member
Frederick Weiss, Appointed Member