BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION

Transcription

1 BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION Our mission is to administer the retirement benefits for the members and beneficiaries in a prudent, accurate, timely and cost-effective manner, while administering fund assets in a manner that achieves investment and funding objectives within prudent levels of risk December 3, :30 AM REGULAR MEETING AGENDA MINUTES Trustees Present: Marion Austin Laura P. Basua Judith Case McNairy Dr. Rod Coburn, III Vicki Crow Paul Dictos Robert Dowell Eulalio Gomez Steven Jolly Staff and Services Providers Present: Jeffrey MacLean, Wurts & Associates Doyle Queally, GSO Capital Partners LP David Posnick, GSO Capital Partners LP Ryan Savell, CarVal Investors LLC Pete Vorbrich, CarVal Investors LLC Dean Stuckenschmidt, County Counsel Donald Kendig, Retirement Administrator Becky Van Wyk, Assistant Retirement Administrator Conor Hinds, Supervising Accountant Kelly Prinz, Retirement Benefits Manager Elizabeth Avalos, Administrative Services Assistant Members of the Public that Addressed the Board: None. 1. Call to Order Chair Coburn called the meeting to order at 8:33 AM. 2. Pledge of Allegiance Recited. 3. Public Presentations Chair Coburn congratulated Trustees Basua and Gomez on their re-election to the Board of Retirement and welcomed Paul Dictos as the new Trustee, elected by the General Membership on November 20, 2014.

2 Consent Agenda/Opportunity for Public Comment Chair Coburn pulled Consent Items 4 and 12 for discussion/comment. *5. Retirements 2 Name Department Yrs of Svs Bertha Abundis Department of Social Services Enedelia Bedrosian California Superior Court, Deferred Timothy A. Bolin Department of Social Services Thomas A. Brito Department of Social Services C. Eric Broughton Sheriff, Deferred Michael Contreras Valley Medical Center, Deferred 6.94 Peggy L. Dockman Community Health 9.20 Evelia Elizondo Child Support Services Sharon Fry Assessor-Recorder Jovana A. Gigliotti Community Health Sandra L. Gravano District Attorney, Deferred 1.06 Valerie L. Gregg Department of Social Services Paula Groves-Coleman County Clerk/Registrar of Voters Barbara Hollinger Valley Medical Center, Deferred 8.63 Glen L. Hurst Department of Social Services Pat Klemm Department of Social Services Victor L. McGill Sheriff Tracy Perry Sheriff Diane Ramirez County Counsel, Deferred Efren Sanchez California Superior Court Imelda Sustaita California Superior Court Jeffrey A. Todd-Stenberg Community Health, Deferred Sergio Toscano Sheriff Bruce A. Welch Community Health, Deferred 9.66 Kathleen Wood Valley Medical Center, Deferred Trustee Gomez joined the Board at 8:46 AM. *6. Public Records Requests and/or Retirement Related Correspondence from Ron Madsen, FCERA Member; Paul Dictos, Assessor/Recorder; Mary Aguilar Terminez, Thomas Reuters; and Nick Dawson, Proxy Insight *7. Official Canvass of the Fresno County Board of Retirement Safety Member, General Member, and Consolidated Special (General Member) Elections *8. Reports from Trustees Basua, Coburn, Crow, Dowell and Jolly, as well as Donald Kendig, Retirement Administrator, on their attendance at the SACRS Fall Conference on November 11-14, 2014 *9. Ratify the Board s decision to approve request from Trustee Steven Jolly to attend the PIMCO Educational Seminar in Newport Beach, CA on November 18-20, 2014

3 3 *10. Travel Request from Trustee Eulalio Gomez to attend the PIMCO Educational Seminar in Newport Beach, CA on January 17-18, 2015 *11. Travel Request from Trustee Marion Austin to attend the Institutional Investor Forum on Risk & Liquidity in San Francisco, CA on January 27-28, 2015 * PEPRA Compensation Limit *14. FCERA Cash Flow position as of October 2014 *15. Recommended Board of Retirement Regular Meeting Schedule for Calendar Year 2015 *16. Public Fund Universe Analysis Report for the period ending June 30, 2014 prepared by R.V. Kuhns & Associates A motion was made by Trustee Crow, seconded by Trustee Basua, to approve the Consent Agenda with the exceptions of Items 4 and 12 which were pulled for separate discussion/comment. VOTE: Unanimous (Absent Gomez) *4. November 5, 2014 Retirement Board Regular Meeting Minutes Chair Coburn noted several corrections to the November 5, 2014 Regular Meetings Minutes as follows: The minutes reflect that Harvey Leiderman, Reed Smith, was present via tele-conference when he was actually present. The minutes contain a typo in the last paragraph on page four at should be as. And lastly, the minutes did not reflect that, in addition to Trustee Case recusing herself from the Non-Vested Health Benefit vote (Item 21), she had also left the room and did not participate in the discussion. A motion was made by Trustee Dowell, seconded by Trustee Basua, to approve Consent Item 4 with noted changes. VOTE: Unanimous (Absent Gomez) *12. Travel Request from Donald Kendig, Retirement Administrator, or interested Trustee to attend the 16 th Annual Alternative Investing Summit in Laguna Niguel, CA on December 8-9, 2014 Donald Kendig, Retirement Administrator, informed the Board that he would be unable to attend the summit as requested. Trustee Dowell requested that the Board consider that he attend the summit. Mr. Kendig noted that, after a review of the Board of Retirement Education Policy, he could not find clear direction for the travel/education requirements of the Retirement Administrator or other staff. Therefore, Mr. Kendig proposed that he (Administrator) follow similar requirements to the Trustees for the approval and reporting of conference and seminar attendance. In addition, he requested that he be given the authority to approve Staff training within the adopted budget framework. Chair Coburn gave direction to return to the Board with proposed policy amendments for consideration. Staff agreed.

4 4 A motion was made by Trustee Gomez, seconded by Trustee Austin, to approve the travel request as revised for the attendance of Trustee Dowell. VOTE: Unanimous 17. Discussion and appropriate action on Private Credit Portfolio and Investment Recommendations and Selection of Investment Manager The Board heard presentations from representatives of GSO Capital Partners and CarVal Investors with each reviewing their respective organizational structures, investment strategies and processes, and fee structures. Detailed discussions ensued regarding the various investment strategies, approaches, and fee structures of each of the firms. In addition, the Board heard from its investment consultant Jeffrey MacLean of Wurts & Associates. A motion was made by Trustee Jolly, seconded by Trustee Austin, to authorize Donald Kendig, Retirement Administrator, and Wurts & Associates to work with legal counsel to begin contract negotiations with both GSO Capital Partners and CarVal Investors allocating $30 million to each mandate. VOTE: Unanimous (Abstain Dictos) 18. Discussion and appropriate action on Wellington Fee Update Jeffrey MacLean, Wurts & Associates (Wurts), opened discussions by stating that, due to the asset allocation that was adopted in December 2013, the Plan s aggregate domestic equity exposure was reduced from approximately 30% to 20% of Plan assets in April This resulted in an approximately $80 million withdrawal from the Wellington-managed account. Since the current fee schedule of 32 basis points on the first $250 million was negotiated based on minimum account size of $150 million, the fee schedule was revisited. Wurts negotiated a new fee schedule which takes into account the lower asset size. The new fee schedule is 45 basis points on the first $50 million and 40 basis points thereafter, resulting in a weighted average fee schedule of approximately 42 basis points. This reflects a review of Wellington s most favored nations clause and FCERA is receiving an equitable fee. A motion was made by Trustee Jolly, seconded by Trustee Gomez, to approve the Wellington fee schedule as presented. VOTE: Unanimous 19. Presentation of the September 30, 2013 Quarterly Research Report Jeffrey MacLean, Wurts & Associates gave an overview of the current economic environment and its impact on the investment markets. In addition, Mr. MacLean commented on and gave a brief summary on the global economic and capital markets. The Board engaged in a general discussion regarding the current market environment and the market assumptions going forward. NO ACTION TAKEN RECEIVED AND FILED

5 20. Presentation of the September 30, 2014 Investment Performance Review 5 Jeffrey MacLean, Wurts & Associates, reviewed the Plan s various asset classes and the individual managers within the asset classes noting any significant over or under performance over the three and five year periods. Mr. MacLean noted that the Plan s market value as of September 30, 2014 is approximately $3.96 billion. The Board engaged in detailed discussions regarding the current market environment and overall performance of the fund. NO ACTION TKEN RECEIVED AND FILED 21. Presentation of the September 30, 2014 Guideline Compliance Report Jeffrey MacLean, Wurts & Associates, stated that Western Asset Management Company and Loomis Sayles received a grace period during the month of September, as they were in the process of transitioning their respective portfolios to their newly approved mandates. Other than the stated grace period, there were no material breaches of any consequence by any of the managers audited by Wurts. NO ACTION TAKEN RECEIVED AND FILED Trustee Crow departed at 11:30 AM. 22. Most recent investment returns, performance summaries and general investment information from investment managers Donald Kendig, Retirement Administrator, opened discussions by sharing that was substantially more pubic reporting than observed at other plans, and that additional reporting creates additional responsibility under prudent person rule. Mr. Kendig added that both Staff and Wurts receive and review these reports and would bring to the Board s attention anything pertinent. Mr. Kendig recommended that the Board pull the most recent investment return reports item from future agendas, finding that the quarterly reporting by Wurts & Associates, and the staff s receipt and distribution to the Board off agenda satisfies the Board of Retirement Charter. Detailed discussion ensued regarding various avenues that the Board receives investment return updates, investment management alerts, as well as how manager values that are reported are verified. A motion was made by Trustee Case, seconded by Trustee Gomez, to accept the recent investment returns, performance summaries and general investment information from investment managers as presented and approve the recommendation to pull the investment item from future agendas as recommended. VOTE: Unanimous

6 23. Closed Session: 6 A. Conference with Legal Counsel Significant exposure to litigation pursuant to G.C (d)(1) (one case) B. Conference with Legal Counsel Existing Litigation pursuant to G.C (d)(1): ROBERT KENT, as successor in interest to GLEN GREEN, deceased v. BOARD OF RETIREMENT OF Fresno County Employees Retirement Association C. Disability Retirement Applications Personnel Exception pursuant to G.C : 1. Connie Reyes 24. Report from Closed Session 23.A. No reportable action. It was noted that Trustee Case McNairy recused herself from the discussion and removed herself from the Boardroom. 23.B. No reportable action. 23.C. Connie Reyes A motion was made by Trustee Jolly, seconded by Trustee Dictos, to reconsider the Board s prior decision of September 13, VOTE: Unanimous (Absent Crow) A motion was made by Trustee Gomez, seconded by Trustee Dictos, to Grant the Applicant service connected disability benefits based on the Findings of Fact and Decision. VOTE: Unanimous (Absent Crow) Trustee Dowell departed at 12:25 PM. 25. Report from FCERA Administration In addition to the written report submitted to the Board, Administration reported on the following: 1. A discussion/presentation on Active Commodities will be presented at the January 7, 2015 Regular meeting. 2. Administrative changes to the agenda and minutes will appear on the December 17, 2014 Regular meeting agenda and the December 3, 2014 Regular meeting minutes. 3. Updates on Trustee pictures and biographies. 26. Report from County Counsel Dean Stuckenschmidt, Deputy County Counsel, had nothing to report.

7 7 27. Board/Committee Member Announcements or Reports Chair Coburn reminded the Board of the upcoming Retired Employees of Fresno County (REFCO) Christmas Luncheon on Thursday, December 11, 2014 and encouraged their attendance. Trustee Dictos thanked Becky Van Wyk for her service as Interim Retirement Administrator. In addition, Chair Coburn expressed his pleasure with the presentation of the agenda and reminded the Trustees of the upcoming change to the Chair and Vice Chair seats and requested that each consider serving. Trustee Jolly commented on his recent attendance at the PIMCO Educational Investment Seminar and thanked the Board members for supporting his attendance. Trustee Jolly reiterated that our investment is not managed by Bill Gross and everything appeared to be inorder. There being no further business, the meeting adjourned at 12:35 PM. Donald C. Kendig, CPA Secretary to the Board