MINUTES OF THE
BOARD OF TRUSTEES MEETING OF THE
COLUMBUS GEORGIA EMPLOYEES' PENSION PLAN
March 5, 2008
A meeting of the Board of Trustees for the Columbus Georgia Employees? Pension
Plan was held March 5, 2008 at 2:00 P.M. in the Mayor?s Conference Room.
PRESIDING: Morton Harris, Trustee & Mayor Wetherington, Chairman
PRESENT: Isaiah Hugley, City Manager; Pamela J. Hodge, Finance
Director, Morton Harris Trustee; Omagene Holland, Trustee; Mary
Strozier-Weaver, Trustee; Col. R. George Plummer, Trustee; Alan Rothschild,
Jr., Trustee; Major Lemuel Miller, Trustee; Reather Hollowell, Trustee; Richard
Swift and Henry Swift, (Smith Barney); Tom Barron, Human Resources Director;
Savonne Robinson (Columbus Water Works)
ABSENT: Joe Smith, Trustee
GUESTS: Mr. James (Jim) Donofrio and Mr. Ben Law (Buck Consultants)
Mr. Morton Harris, Trustee called the meeting to order. Ms. Julia Rasch,
Recording Secretary, recorded the attendance.
MINUTES OF THE PREVIOUS MEETING:
The minutes from the February 6, 2007 meeting was presented for approval. A
motion was made and seconded to accept the minutes as submitted. The vote was
unanimous.
INVESTMENT UPDATE: Interim Report (Mr. Richard Swift)
This interim report covers the period from November 30, 2007 to February 29,
2008. The first chart shows the Ten Year Treasury Bonds and shows what?s going
on in the bond market. For this three-month period, the yield dropped from
3.97% to 3.53% indicating a better bond market.
The next chart is the S&P 500. At the end of November the stock market was at
1481.14 and finished at 1330.63 at the end of February 2008. Mr. Swift stated
that it?s been a pretty dreadful marketplace since the first of the year and
that in large part makes up the returns that will be seen in the rest or the
report.
First are the fixed income managers, Synovus, Tattersal and Madison, and
looking at the figures in the right hand column are the returns, Tattersal is
under performing. In the last quarterly report that was presented to the
board, looking at Tattersal, there were some bonds that appeared in their
portfolio that were un-priced securities. When the quarterly report is
presented to the board, those securities are priced through the Tech Center in
Atlanta, so the figures in the quarterly report are priced but in the interim
report those securities are listed at cost and so it can be an inaccurate
number. So it looks like they are under performing and they very well may be
but there is a discrepancy with the un-priced securities with Tattersal. But
even with that under performance or those returns, the combined fixed income
was up 2.15% vs. the index of 2.68%, so slightly below the index for that
period of time.
The growth managers, Rittenhouse, Trusco and this is the period when the funds
were transitioned from Santa Barbara to the Russell Growth and so those assets
are combined in this category. The returns for the managers were down ?8.32%,
-8.56%, -7.12%, a very, very tough period, really for all equity accounts, but
the combined growth was down ?7.90% vs. the index being down ?10.23%. A down
(negative) number is absolutely hard to accept but relative to the market, the
managers are capturing much less of that down move which helps.
The value managers, TCW, Cambiar, Spears and the Russell Value account, is a
similar story, the combined was down ?5.47% vs. ?9.58% for the index. Again,
relative to the market place, a good performance, although on an absolute
basis, the numbers are down.
The core managers, Knott, Madison and S&P 500 Account, similar numbers, down ?
5.90%, -7.03%, -5.76, and the total was down ?6.38% vs. the index being down ?
10.16%.
Next is the international manager, Lazard, and the EAFE Account, again a tough
market place, internationally, down ?4.10% but compared to the EAFE being down ?
13.96%.
Small Cap funds down ?2.41% vs. the Russell 2000 down at ?10.62%, mid cap funds
down -2.48% vs. down -.9.29% for the Russell Mid Cap. Looking at the indexes,
this has been a dreadful, stressful period. Even though this has been a really
tough period, the managers have held up really well compared to the market
place.
The combine fixed was 2.15% vs. 2.68% for the LB Gov Credit. The combined
equity was down ?6.13% vs. the S&P 500 down ?10.16%. The total city account
was down ?2.18% vs. the indexes down ?5.03%.
Mr. Swift stated that this is a tough report, it?s been a tough period, but
soon we?ll be moving out of this period and we?ll not be reporting on January
which is really a tough month coming right out of the gate.
Mr. Harris stated, ?thank goodness the bond market did well and it offset
almost all of the losses in the stock market?.
Mr. Swift commented and ?that?s why we have 40% in bonds.
Mr. Swift said he had two announcements to make and then he would bring in the
actuaries.
He stated that Santa Barbara has been fired and they will be replaced with
another large cap growth manager. The search has been done; the data has been
put together on a spreadsheet for the sub-committee to review. The Mayor has
appointed a sub-committee and a meeting is necessary to let them know who the
candidates are and arrange a meeting to look at the data. The sub-committee
consists of Col. George Plummer, Pam Hodge, Joe Smith and Morton Harris.
Lastly, the Mayor will get a memo from Trusco outlining everything about the
change within Trusco, and a copy will be mailed to each of the board members.
This is Trusco basically changing their name. The style is the same, there?s
no change, Joe Ransom, will continue to be the portfolio manager. The account
representative, George Smith has introduced our new account representative and
his name is Marc Schneidau. That transition is in place but they are moving to
a platform where they have a subsidiary of Trusco Capital, it?s going to be
called Ridge Worth Capital Management and Ridge Worth is going to manage a lot
of different boutiques, money management arms, so instead of having the Trusco
large Cap Growth, Trusco Large Cap Value, Trusco Municipal Bonds, all of them
are going to have their own name and their own logo and our portfolio will fall
under the arm called Silvant Capital Management with Joe Ransom as our money
manager.
PRESENTATION(S): Buck Consultants (Actuaries)
Key Results
Contribution requirements for fiscal 2009 total $18.5 million as
compared to $17.9 million for 2008
-The increase is attributable to the 3% as hoc COLA granted to retirees and
beneficiaries last year
The plans are 79.5% funded (financial statement basis), an improvement
from last year?s funded status of 78%
The fund earned 11.4% for the year ended June 30, 2007
In total, experience tracked the actuarial assumptions rather closely
during the year
Covered Population
This section covers the population for General and Public Safety
Employees as of July 1, 2007
Active Members
Pensioners and Beneficiaries
Terminated Vested and Disabled Members
Plan Assets
As of July 1, 2007 plan assets totaled $215.7 million
Allocation:
56% stocks
37% fixed income
06% Cash and Short Term Investments
01% Receivables
Actuarial Value of Assets
Contribution and funded status are based on a smoothed ?actuarial? value of
plan assets
The difference between actual return and assumed return is recognized over a
three-year period
This is designed to reduce the impact of random fluctuations in the capital
markets on the contribution and funded status
For fiscal 2007, the return on market value of assets was 11.4% compared to
6.5% on actuarial value
Funded Status
This basically a comparison between 2006 and 2007 for General Government and
Pubic Safety Employees:
Projected Benefit Funded Ratio
Accrued Benefit Funded Ratio
Financial Statement Funded Ration
Contribution Requirements
Please see actuarial report for figures
Actuarial Assumptions
The actuarial assumption will be remain at 7.0%
Contribution Forecasts
This consisted four charts depicting different scenarios with an asset
return of 7%
OLD BUSINESS:
Mr. Swift informed the Mayor that the old business had been addressed earlier
before he was able to join the meeting in progress.
NEW BUSINESS:
Mr. Barron addressed the board and stated that the City Council had passed an
Ordinance authorizing the creation of a Retiree Health Plan trust fund as a
component of the pension plan.
The meeting was adjourned and the next meeting is scheduled for April 2, 2008
at 2:00 p.m. in the Mayor?s Conference Room. Globalt (Synovus) will be the
guest speaker.
_______Julia A. Rasch ____
Julia A. Rasch
Recording Secretary
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