Plymouth Retirement Board
Monday, November 15, 2010
8:30 a.m.
Retirement Board Conference Room
Chairman Thomas Kelley called the meeting to order at 8:30 a.m. in the conference room of the Plymouth Retirement Office. Present Board members were Thomas Kelley, Lynne Barrett, Richard Manfredi, David Malaguti and Shawn Duhamel. Also present were Debra Sullivan, Wendy Cherry, Anthony Tranghese from FIA and Atty. Michael Sacco. Marie Guidetti was in attendance to observe the meting.
Section I: Regular Business – Regular Meeting
Minutes:
Minutes of October 22, 2010: Regular Board Meeting
Minutes of October 22, 2010: Executive Session
Motion to approve meeting minutes made by Mr. Manfredi; seconded by Mr. Duhamel. Unanimously voted.
Warrants:
Warrant #9, dated September 30, 2010: $8,222,966.40 (Final w/Trial Balance)
Warrant #10, dated October 31, 2010: $1,222,396.76 (Partial)
Warrant #11, dated November 30, 2010: $ 510,469.96 (Partial)
Warrant #12, dated December 31, 2010: $ 3,545.76 (Partial)
Motion to approve warrants made by Mr. Malaguti; seconded by Mr. Manfredi. Unanimously voted.
Public Comment:
Marie Guidetti, retiree and President of PREA, thanked the Board for all their hard work and dedication on behalf of Town of Plymouth retirees.
Section II: Solicitation & Correspondence:
PERAC Memo's:
The Board received the following PERAC Memo's:
PERAC MEMO #37/2010: Investment Manager List
PERAC MEMO #38/2010: Tobacco Company List
Third Party Monitoring:
Scott & Scott 3rd Quarter 2010 Report
Conferences:
NCPERS 2011 Legislative Conference, January 30 – February 1, 2011
Mr. Duhamel told the Board that he was already attending this conference on behalf of the Massachusetts Retirees Association. No other Board members will be attending.
Investment Correspondence:
The Board received the following investment correspondence:
• FIA Capital Markets Flash Report – September 2010
• Intercontinental Real Estate Investment Fund IV – 3rd Qtr Unaudited Financial Statements
• State Street Global Advisors – Performance Analysis for October 31, 2010
Proposed Legislative Changes
The Board received Proposed recommendations from PERAC to the House of Representatives for consideration during the 2011 – 2012 legislative sessions.
Legal:
The Board has received the new Policy & Procedures manual created by Atty. Sacco. Atty. Sacco asked that they review it and discuss any changes or concerns at the next meeting.
Section III: Membership:
Section 91A Hearing:
Board to hold Section 91A hearing for Kenneth Rood, Group 4, Accidental Disability retiree. Mrs. Sullivan told the Board that Mr. Rood had contacted the Retirement Office and has provided copies of his 2009 W-2 and tax return. This information has been forwarded to Sandra King at PERAC for their Annual Statement. Ms. King has stated that she will look at the documents and get back to Mr. Rood if anything else is needed. Atty. Sacco recommended that the Board table any decisions, as forfeiting Mr. Rood's retirement allowance would mean he would not be re-paid once the process is completed. Mrs. Sullivan told the Board she will keep them updated on the status of this issue.
Motion made by Mr. Manfredi to table any 91A Hearing/decision on Kenneth Rood for one (1) month; seconded by Mr. Malaguti. Unanimously voted.
New Hires:
School:
9% Bonfilio, Paul F., Group 1, Computer Lab Aide
Perm. Full-time, $727.36 Bi-weekly
Start Date: 10/12/2010
9% Joyal, Lindsey, A., Group1, Computer Lab Aide
Perm. Full-time, $896.89 Bi-weekly
Start Date: 10/12/2010
Motion made by Mr. Malaguti to approve new hires; seconded by Mr. Manfredi. Unanimously voted.
Refunds:
2009 Uniform Allowance Refunds for Town Employees:
224 Member Refunds, Town Employees
Total distribution, including FWT: $11,396.49
(All details included in November 2010 Warrant)
Town:
Routhier, Timothy, Group 1, Harbor Master
8 years, 4 months service (8/27/01 – 9/11/09)
Total distribution, including FWT: $43,746.35
Net Check to Member: $31,499.57
Net Check to Town: $ 3,497.51 (for restitution)
Motion made by Mr. Malaguti to approve refunds; seconded by Ms. Barrett. Unanimously voted.
Retirements:
Town:
Hendry, Scott F, Group 4, Police Officer
20 years, 2 months service (1/1/92 – 11/8/10)
Superannuation retirement, opt c
Retirement date: November 8, 2010
Peers, Richard S, Group 1, Parks Dept. Laborer
20 years, 2 months service (9/27/90 – 11/29/10)
Superannuation retirement, opt b
Retirement date: November 29, 2010
Motion made by Mr. Malaguti to approve retirements; seconded by Mr. Manfredi. Unanimously voted.
Section IV: Investment Performance
Total Fund Investment Performance: 1st Quarter 2010:
Tony Tranghese was present to review the Investment Performance for 3rd Quarter 2010 with the Board. The total fund is valued at $105.6 million. The fund under-performed the blended benchmark with 8.7% vs. 9.4%. The blended benchmark is made up of the following: S&P 500 Index 35%, Barclays Aggregate 15%, NCREIF Property Index 10%, MSCI EAFE 15%, Credit Suisse High Yield 5%, Russell 2000 Index 10%, S&P 500 + 5% 5%, and 90-day T-Bill + 5% 5%. Mr. Tranghese told the Board that they market has done very well in the past 6 – 8 weeks, and that so far, November 2010 has been a great month for the portfolio.
Mr. Tranghese told the Board that Asset Allocation fund managers, BlackRock and Wellington, have now been fully funded with $5 million each.
As of September 30, 2010, fund asset allocations were as follows: money market 2.6%, Fixed Income 24.8%, Domestic Small-Mid & Large Cap Equity 38.5%, Foreign Equity 20.4%, Real Estate 6.0%, commodity 1%, and Alternative Investments 7.6%.
Wellington CIF Core Bond Series: (Fixed Income)
This fund was valued at $16.5 million and represented 15.62% of assets. The quarter's portfolio's return of 3.0% out-performed Barclays Aggregate Index of 2.5%, as with the 1-year return of 11.3% vs. 8.2%.
MacKay Shields High Yield: (Domestic Fixed Income)
Valued at $5.5 million and represented 5.25% of assets. The portfolio's return of 4.8% under-performed Credit Suisse High Yield Index return of 6.0%, and also under-performed the 1- year return with 14.7% vs. 17.8%.
State Street Global Advisory Flagship S&P 500 Index: (Domestic Equity)
Valued at $5.2 million and represented 4.96% of assets. The portfolio's return of 11.3% was in line with the S&P 500 Index's return of 11.3%, as was 1-year return also stayed in line with the benchmark with 10.3% vs. 10.2%.
State Street Global Advisors Collateral Assets
Valued at $920 thousand and represented 0% of assets.
Boston Advisors: (Domestic Equity)
Valued at $7.6 million and represented 7.27% of assets. During the 3rd quarter of 2010, the portfolio's return of 10.1% under-performed the S&P 500 Index's return of 11.3%, as did the 1-year return with 9.9% vs. 10.2%.
Wellington Management Legacy PPIF
Valued at $1.4 million and represented 1.36% of assets. At September 30, 2010, the portfolio out-performed the CPI + 9% with 7.0% vs. 2.9%. No results for the 1-year.
Wellington CIF Research Equity: (Domestic Equity)
This fund was valued at $3.2 million and represents 3.10% of assets. The portfolio's 3rd quarter return of 11.6% out-performed S&P 500 Index Fund of 11.3%, but under-performed the 1-year with 9.2% vs. 10.2%.
Eaton Vance Large Cap Value Fund: (Domestic Equity)
Valued at $5.3 million and represented 5.08% of assets. The portfolio's 3rd quarter return of 9.2% under-performed the Russell 1000 Value Index's return of 10.1%, and also under-performed the 1-year return with 5.9% vs. 8.9%.
Westfield Large Cap Growth Fund: (Domestic Equity)
Valued at $5.5 million and represented 5.29% of assets. The portfolio's return of 14.8% out-performed Russell 1000 Growth Index's return of 13.0%, but under-performed the 1-year return with 10.1% vs. 12.7%.
Boston Trust Small Cap Core Equity Fund: (Small-Mid Equity)
Valued at $11.2 million and represented 10.65% of total assets. Boston Trust's Small Cape Core Equity portfolio returned 7.7% in the 1st quarter of 2010 and under-performed the Russell 2000 Index of 11.8%, and also trailed in the 1-year return with 15.3% vs. 15.5%.
Templeton Foreign Equity Series: (Foreign Equity)
Valued at $19.2 million and represented 18.24% of total assets. The portfolio's return of 15.2% under-performed the MSCI EAFE Net return of 16.6% during the 3rd quarter of 2010, and also under-performed the 1-year return with 2.7% vs. 7.6%.
Intercontinental Real Estate: (Real Estate)
Valued at $1.3 million and represented 1.29% of assets. The fund return of -0.1% under-performed the NCREIF Property Index of 3.9%, and also under-performed the 1-year return with -13.7% vs. 5.8%.
PRIT Core Real Estate Fund: (Real Estate)
Valued at $4.9 million and represents 4.71% of assets. This fund out-performed the NCREIF Property Index return with 6.7% vs. 6.6%, and significantly out-performed the 1-year with
5.9% vs. 2.0%.
PRIT Absolute Return: (Hedge Funds)
Valued at $5.4 million and represented 5.18% of assets. The portfolio's 3rd quarter 2010 return out-performed the benchmark 90-day T Bill + 5% return with 2.8% vs. 1.3%, and also the 1-year with 5.5% vs. 5.1%.
PRIT Vintage 2006: (Private Equity)
Valued at $1.3 million and represented 1.3% of assets. This portfolio under-performed the S&P 500 + 5% with 3.5% vs. 12.7%, but out-performed the 1-year with 17.6% vs. 15.7%
PRIT Vintage 2007: (Private Equity)
Valued at $783 thousand and represented .74% of assets. The portfolio's return of 6.3% under-performed the Index benchmark of 12.7%, but out-performed the 1-year with 21.7% vs. 15.7%.
PRIT Vintage 2008: (Private Equity)
Valued at $358 thousand and represented .34% of assets. The portfolio's return of 5.9% under-performed benchmark of 12.7%. and also the year-to-date return with 9.1% vs. 15.7%.
PRIT Vintage 2009: (Private Equity)
Valued at $34 thousand and represented .03% of assets. The portfolio's return of -25.8% under-performed benchmark of 12.7%. No 1-year results. This fund is in the preliminary stages of funding, and therefore is not expected to have positive performance.
PRIT Vintage Year 2010: (Private Equity)
Valued at $12 thousand and represented .01% of assets. The portfolio's return of -19.8% under-performed benchmark of 12.7%. No 1-year results. This fund is in the preliminary stages of funding, and therefore is not expected to have positive performance.
BlackRock Global Allocation Fund
Valued at $4.1 million represented 3.89% of assets. There are no performance results for this fund yet.
Wellington Trust Opportunistic Fund
Valued at $3.2 million and represented 3.04% of assets. There are no performance results for this fund yet.
Mr. Tranghese told the Board that there are no managers currently on watch list, but he would like to keep a close eye on Eaton Vance and MacKay Shields.
Discussion/Vote on PRIT Vintage Year 2011 Private Equity Fund:
Mr. Tranghese told the Board that they must decide whether or not they would like to participate in the PRIT Vintage Year 2011 Private Equity fund. If so, a vote needs to be made so that the fund can be established as of January 1, 2011. The Board has committed $2 million to each of the PRIT Vintage Year funds form year 2006 through 2010.
Motion made to commit $2 million to the PRIT Vintage Year 2011 Private Equity fund by Mr. Manfredi; seconded by Mr. Duhamel. Unanimously voted.
Annual Investment Manager Interviews:
Templeton Foreign Equity Series
Mark Binnion from Templeton was present for the annual investment performance update with the Board. He told the Board that there has been no change in the investment team or company philosophy. At September 30, 2010, the TIF Foreign Equity Series Fund has total net assets of $6.1 billion.
As of September 30, 2010, the fund under-performed the MSCI EAFE Index with 15.2% vs. 16.5%, and also the 1-year with 2.7% vs. 3.7%. Mr. Binnion told the Board that October 2010 performance has helped move the portfolio up by 3% – 4%.
Sectors performing positively for the fund this quarter were Financials, Industrials, & Information Technology. Negative performers within the fund were Materials, Health Care, Energy and Consumer Staples. Top performing country was 3rd quarter 2010 was Japan, whereas France was the worst for performance.
Intercontinental Real Estate
Devin Sullivan and Paul Nasser were present to discuss the annual performance with the Board. Intercontinental Real Estate has three office locations which employ 79 professionals.
Mr. Nasser told the Board that their total commitment of $3 million into IREFI Fund IV has been totally drawn, and as of September 30, 2010, the total value of assets is only $1.3 million, which is down 48%. Mr. Nasser reviewed the six properties in the fund with the Board.
Waterplace, Providence RI
Mr. Nasser told the Board that Waterplace in Providence, Rhode Island is a 2-building complex with 193 units, that was built as luxury condominiums. To date, these buildings are 97.8% occupied, but primarily rented as apartments. Mr. Nasser told the Board that only 8 of the units have been sold as condos, and he does not expect that this project will ever break even. He said that a large part of the problem with this project is Rhode Island's economy, which is currently struggling with an unemployment rate of 11.9%.
Ten Faxon, Quincy MA
Mr. Nasser told the Board that despite the problems with Waterplace in Providence, 10 Faxon in Quincy MA has been a great project for the portfolio. Almost completely filled with 97.5% occupancy, this 200-unit luxury apartment building will be sold within 1 -3 years.
371-401 D Street, Boston MA
371-401 D Street in Boston MA is a 5.6 acre vacant parcel of land in the Seaport/South Boston Waterfront area. Mr. Nasser told the Board that there is no debt on this property, which will mostly likely be sold or build as a parking facility and/or hotel for the nearby convention center.
Lot E Project, New Haven CT
Mr. Nasser classified this project as a great deal. Intercontinental Real Estate developed this project for Yale New Haven Hospital, Inc., which consists of a 6-story parking garage, retail/office space of 53,000 sq ft, and a residential area consisting of 24 units. This project was built-to-suit YNHH, who will be leasing this project for a 25-year term. At the end of this lease, YNHH will purchase this construction.
Watermark, Portland ME
Mr. Nasser told the Board that there is no debt on this property. Phase I, a 720 space parking garage, has been completed. Phase II was planned as 122 condominium units and retail space. Mr. Nasser said that this property may be sold off as multiple sites.
Howard Legion, New Haven CT
This site is located in downtown New Haven CT, across the street from Yale-New Haven Medical Center. This project was sold to Yale-New Haven Hospital as part of their expansion project for parking.
Section V: Actuarial Valuation:
Larry Stone was present at the meeting to discuss his latest Funding Schedule with the Board. The schedule presented was based on an 8% interest rate, with a 29 year projection to 2040, a 3.64% amortization increase and using the $12k COLA base. After some discussion, the Board said they would like Mr. Stone to prepare a schedule showing 6.08% for FY2012, and then 8% for 2013 & 2014.
Motion made by Mrs. Barrett to have Mr. Stone prepare a final funding schedule that will show a 6.08% increase from FY 2011 to FY 2012, and 8% increases for years FY 2013 & FY 2014, and extended out to year 2040, using asset smoothing. The increase in the COLA base will not show in this schedule and will need to be addressed in the next funding schedule. Motion seconded by Mr. Manfredi. Unanimously voted.
Section VI: New Business:
Ch 188, Sec 19 of the Acts of 2010 – Adoption of COLA Base Increase
To see if the Town of Plymouth Retirement Board will vote to accept the provisions of Ch 188, Sec 19 of the Acts of 2010, to amend MGL Ch 32, Sec 103, to increase the maximum base of cost of living adjustments.
Motion made by Mr. Manfredi to accept the provisions of Ch 188, Sec 19 of the Acts of 2010, to increase the maximum base of cost of living adjustments from $12,000 to $14,000; seconded by Mr. Duhamel. Unanimously voted.
This adoption of Ch 199, Sec 19 of the Acts of 2010 will be placed before Town Meeting at their Spring 2011 meeting.
Next Meeting: Thursday, December 20, 2010, 8:30 a.m.
Section VII: Adjournment:
Motion to adjourn meeting at 11:15 am. made by Ms. Barrett; seconded by Mr. Manfredi. Unanimously voted.
The Town of Plymouth Retirement Board unanimously voted to approve these minutes at their meeting on Thursday, December 23, 2010. Original, signed minutes are available at the Retirement Office, 10 Cordage Park Circle, Suite 240, Plymouth, MA.
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