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Home My Public Portal About2022-03-01_Pl Fire Meeting_MinutesCITY OF CRESTVI EW POLICE OFFICERS' El FIREFIGHTERS' EMPLOYEES PENSION TRUST FUND PENSION BOARD OF Ti;'USTEES QUARTERLY MEETING MINUTES 198 N. Wilson Street Crestview, FL 32536 TRUSTEES PRESENT: Tuesday, March 1, 2022, at 2:30pm Andrew Schneider, Chair Corey Winkler, Secretary Ellis Conner David Griggs Dan Krusenklaus FRUSTEES ABSENT: None OTHERS PRESENT: Tyler Grumbles, AndCo Consulting Stu Kaufman, Klausner, Kaufman, Jensen, & Levinson Drew Ballard, Foster & Foster Kim Kilgore, Foster & Foster Justin Hildebrand, Agincourt Capital Management Pat O'Hara, Agincourt Capital Management 1. CaII to Order — Andrew Schneider called the meeting to order at 2:30pm. 2. Roll Call -- As reflected above. 3. Welcome to new Trustee a. Dan Krusenklaus, Commission appointed trustee i. Dan Krusenklaus introduced himself to the board. 4. Public Comments — None. 5. Approval of Minutes a. November 30, 2021, quarterly meeting The minutes from the November 30. 2021, quarterly meeting were approved, upon motion by David Griggs and second by Ellis Conner: motion carried 5-0. 6. Reports (Attorney/Consultants) a. Agincourt Capital Management, Justin Hildebrand and Pat O'Hara, investment Manager i. Quarterly report as of December 31, 2021 1. Pat O'Hara introduced himself to the board. Pat gave an overview of the firm and team makeup, commenting they manage over $7.8 billion in investments. 2. Pat O'Hara reviewed their current clients commenting $500 million in assets were added last year. 3. Pat O'Hara reviewed the Treasury Yield Curve (TYC) which summarized the negative total returns across for all maturities especially the longer maturity bonds. 4. Pat O'Hara commented the lower end of quality bonds did the best last year and so far, this year higher quality bonds were doing the best. 5. Pat O'Hara commented the current portfolio value was $7,020,974 at the end of the quarter. 6. Pat O'Hara review the investment performance. The gross earnings for the quarter were -0.44% outperforming the benchmark of -0.51%. The trailing returns for the 1, 3, 5, 7 and 10-year periods were-1.28%, 4.12%, 3.24%, 2.91%, and 2.92°I0. Since inception (6/30/2007) returns were 4.14%, outperforming the policy benchmark of 3.63%. 7. Pat O'Hara commented the underperformance happened mainly during the first quarter of last year. 8. Justin Hildebrand reviewed the investment process on setting up their investment strategies. Justin reviewed the sector management, security selection and yield curve/duration management. Justin commented the portfolio characteristics yield advantage with high quality bonds, diversified and lower volatility. Justin further commented the strategy had a defensive duration for the portfolio. 9. Justin Hildebrand reviewed the macro factor analysis, corporate sector/rating, sector overweight/underweight and mortgage sector analysis. 10. Justin Hildebrand reviewed the investment strategy overview. 11. Dan Krusenklaus asked about the current loss to the fund. Pat O'Hara commented they were looking forward to higher yields. Pat further commented unfortunately this past year was tough and was now dealing with the war in Ukraine and interest rates going up. b. AndCo Consulting, Tyler Grumbles, investment Consultant i. Quarterly report as of December 31, 2021 1. Tyler Grumbles reviewed his role as the investment consultant for the Fund. Tyler commented they recommend on how and what to invest in and find investment managers for the Board to considered. Tyler stated they charge a flat fee, and they had no fee arrangements with the investment managers in the Fund's portfolio. 2. Tyler Grumbles reviewed the firm makeup and commented they had currently $123 billion in advisement with the bulk of their business with public pension plans. Tyler commented AndCo reinvested 100% of their profit back into the company. 3. Tyler Grumbles reviewed the market environment during the past quarter commenting only a few stocks did very well during the quarter and the rest of the market did ok. 4. Tyler Grumbles reviewed the Treasury Yield Curve showing short-term bonds went up and longer -term bonds stayed flat or went down. 5. The market value of assets was $28,187,082. The asset allocation by asset class for the fund was Domestic Equity at 42.60%, International Equity at 13.70%, Domestic Fixed at 24.90%, Non -Core Fixed at 4.70%, Infrastructure at 3.60%, Real Estate at 8.20%, and Cash at 2.30%. Tyler Grumbles commented how the Investment Policy Statement (IPS) keeps them in line for their long-term goal. 6. Tyler reviewed the financial reconciliation for the quarter with around a $1.2 million gain. 7. The gross earnings for the quarter were 4.63% underperforming the benchmark of 5.03%. The trailing returns for the 1, 3, 4, and 5-year periods were 14.46%, 15.68%, 10,41%, and 11.40%. Since inception (10/01/1994) returns were 8.24%, outperforming the policy benchmark of 8.30%. 8. Tyler Grumbles reviewed each of the investment managers performance and commented the need to watch their longer period performance. Investment Policy Statement update 1. Tyler Grumbles commented the only change made to the current IPS was the assumed rate of return would not be shown as an actual percentage to eliminate the updates needed every time the rate changed. The Board voted to approve the Investment Policy Statement as presented. upon motion by Corey Winkler and second by David Griggs; motion carved 5-0. 2. Stu Kaufman stated the IPS would need to be filed with the State. Kim Kilgore commented she would take care of this. c. Foster & Foster, Drew Ballard, Board Actuary i. Actuarial services fee letter 1. Drew Ballard reviewed his role as the actuary and commented his job was to calculate the cost to fund the benefits of the Plan. Drew looked at the core services provided, current charges and fees needing to be increased. Drew reviewed the only time the Actuary used the hourly rate fee was for an item other than the regular services they provided. Drew further commented all service items including the hourly rates listed would be adjusted annually based on the Consumer Price Index for All Urban Customers (CPI-U) rate. Drew stated the proposed changes would be effective October 1, 2022, and first adjustment for CPI-U would be effective on October 1, 2023. The Board voted to approve the increase in actuarial fees as presented, upon motion by Corey Winkler and second by David Griggs; motion carried 5-0. 2. Stu Kaufman commented he would produce the fee addendum for the Chair to sign. d. Klausner, Kaufman, Jensen, & Levinson, Stu Kaufman, Board Attorney i. Legal/Legislation updates 1. Stu Kaufman commented he represented public plans and reviewed his role as the attorney for the plan. ii. Special Tax Notice update 1. Stu Kaufman reviewed the Special Tax Notice given to members who received a lump sum disbursement from the Fund. Stu commented the required minimum distribution age was raised by the Fed to age 72. Stu also reviewed the exceptions to the 10% additional income tax on early distributions of retirement funds. Stu commented a public safety officer would need to be at least Age 50 at the time of separation from employment to receive an exception to the 10% additional income tax on lump sum disbursements. iii. Legislative update 1. Stu Kaufman commented the legislation session would end on March 11th and no bills had passed affecting pension plans. 2. Stu Kaufman reviewed pending legislation that would make COVID an ILOD disability presumption. Stu commented the bill did not make it out of committee, so it did not pass. 3. Stu Kaufman commented the Florida Retirement System changed the DROP period for Special Risk from 5 to 8 years and the State was expected to approve. 4. Stu Kaufman briefly reviewed a bill related to PTSD and Workers' Compensation with PTSD claims. Stu commented PTSD claims would have to be filed within 60 days from the time diagnosed. 5. Stu Kaufman commented a disability application had been received by his office for Frank Van Schmidt. Stu reviewed the disability process and when the board would determine if the disability was permanent and if the member was totally disabled to do his job as a police officer. Stu commented once all medical records and documents were received, he would bring them to the board to review. 6. Stu Kaufman reviewed the Sunshine Law and fiduciary duties of the trustees of the Fund. 7. New Business a. Andrew Schneider commented some municipalities had opted out of the Social Security plan and could that be an option for the City of Crestview. Stu Kaufman commented once you opt into the Social Security plan you could not opt out. 8. Old Business — None. 9. Consent Agenda a. Payment ratification — Warrants #17 and #18 b. Invoices for approval — None c. Fund activity report for November 24, 2021, through February 22, 2022 The Board voted to approve the Consent Agenda as presented. upon motion by Ellis Conner and, second by Corey Winkler: motion carried 5-0. 10. Staff Reports. Discussion and Action a. Foster & Foster, Kim Kilgore, Plan Administrator i. Kim Kilgore reviewed the upcoming educational opportunities available to the Board. Kim commented the FPPTA Annual Conference would be held June 26- 29, 2022, in Orlando, Florida. 11. Trustee Reports. Discussion and Action — None. 12. Adiournment - The meeting adjourned at 3:56pm. 13. Next Meeting — June 7, 2022, at 2:30pm. Re ctfully subitted by: 4.4_5�- Kilgori `Ian : ministrator ndrew Scyi'neider, Chair Date Approved by the Pension Board: 4