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Agenda 08-09-11 BOYNTON BEACH POLICE OFFICERS’ PENSION FUND QUARTERLY BOARD MEETING Tuesday, August 9, 2011 @ 9:30 AM Renaissance Executive Suites – Conference Room #1 1500 Gateway Blvd., Suite # 220 Boynton Beach, FL 33426 AGENDA I.CALL TO ORDER – Lt. Gary Chapman, Chairman II. AGENDA APPROVAL III.APPROVAL OF MINUTES – Special Meeting March 1, 2011 Special Meeting June 14, 2011 IV.FINANCIAL REPORTS: A) Quarterly Investment Review – June 30, 2011 1.)Russell Investment Group – Glenn Harris, Client Executive- 1) Len Brennan- New president & CEO of Russell Investments- memo of July 13, 2011 2) Portfolio review - 2.) Burgess Chambers & Associates (BCA) – Frank Wan, Head of Research 1) Fund Performance review – 2) Form ADV Part 2 and Privacy Notice – letter of 5-31-2011 3) Gabriel, Roeder, Smith & Co – For your Review – 1) Revised October 2010 Actuarial Valuation Report – Dated 5-31-2011- Est Payroll/Annual Deposit 4) Financial Statements – - Oct, Nov, & Dec 2010 – For your review Jan, Feb & Mar 2011 and Apr, May & Jun 2011. V. CORRESPONDENCE: 1) – State Street letter of 6-6-2011The Berwyn Group death searches. VI.OLD BUSINESS: N/A VII. NEW BUSINESS: A. Invoices for review and approval: 1) Russell Investment Gp – Quarter End 6-30-2011 $101,819.00 2)Russell Payment Services – Quarter End 6-30--2011 - $985.38 3)Burgess Chambers & Assoc – Second Quarter 2011 - $5,000 4)Gabriel Roeder Smith & Co, - Service 5-31-2011 - $1,182. 5)Perry & Jensen, LLC – Service June/July 2011 - $1,250.40 1 C. Attorney Report – Bonni Jensen 1) Senate Bill 1128 – Memo of 6-3-2011 2) IRS Mileage Rate for 2011 – memo of 7-7-2011 VIII. PENSION ADMINISTRATOR’S REPORT 1.Benefits, terminations as of August 1, 2011 2.Alive & Well Outstanding Statements – second request mailed 8-3-2011 IX. COMMENTS: X. ADJOURNMENT: Next Regular Meeting Date – Tuesday, November 8, 2011 @ 9:30 a.m. – Renaissance Commons If you cannot attend, please call Barbara @ 561-739-7972 NOTICE PO’PB IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE OLICE FFICERS ENSION OARD WITH RESPECT TO ANY MATTER ,/,,/ CONSIDERED AT THIS MEETING HESHE WILL NEED A RECORD OF THE PROCEEDINGS AND FOR SUCH PURPOSE HESHE MAY NEED TO , ENSURE THAT A VERBATIM RECORD OF THE PROCEEDING IS MADE WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON .(..286.0105) WHICH THE APPEAL IS TO BE BASED FS THE CITY SHALL FURNISH APPROPRIATE AUXILIARY AIDS AND SERVICES WHERE NECESSARY TO AFFORD AN INDIVIDUAL WITH A ,, DISABILITY AN EQUAL OPPORTUNITY TO PARTICIPATE IN AND ENJOY THE BENEFITS OF A SERVICE PROGRAM OR ACTIVITY CONDUCTED .CC’,(561)742-6060- BY THE CITY PLEASE CONTACT ITY LERKS OFFICE AT LEAST TWENTYFOUR HOURS PRIOR TO THE PROGRAM OR . ACTIVITY IN ORDER FOR THE CITY TO REASONABLY ACCOMMODATE YOUR REQUEST TB(C).I HE OARD OMMITTEE MAY ONLY CONDUCT PUBLIC BUSINESS AFTER A QUORUM HAS BEEN ESTABLISHED F NO QUORUM IS CC ESTABLISHED WITHIN TWENTY MINUTES OF THE NOTICED START TIME OF THE MEETING THE ITY LERK OR DESIGNEE WILL SO NOTE .B THE FAILURE TO ESTABLISH A QUORUM AND THE MEETING SHALL BE CONCLUDED OARD MEMBERS MAY NOT PARTICIPATE FURTHER . EVEN WHEN PURPORTEDLY ACTING IN AN INFORMAL CAPACITY S:\CC\WP\JANET\POLICE PENSION FUND.doc 2 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement 1. PURPOSE OF INVESTMENT POLICY STATEMENT The Pension Board of Trustees maintains that an important determinant offuture investment returns is the expression and periodic review ofthe Fund's investment objectives. To that end, the Trustees have adopted this Statement of Investment Policy to apply to all of the assets of the fund. In fulfilling their fiduciary responsibility, the Trustees recognize that the retirement system is an essential vehicle for providing income benefits to retired participants or their beneficiaries. The Board also recognizes that the obligations of the Fund are long-term and that the investment policy should be made with a view toward performance and return over a number of years. The general investment objective then is to obtain a reasonable total rate of return - defined as interest and dividend income plus realized and unrealized capital gains and/or losses - that meets or exceeds the actuarial interest rate assumption net of fees to ensure the Fund is actuarially sound. This return is expected on a regular basis over rolling actuarial measurement periods. The Board, the Fund's investment manager(s), and investment monitor/consultant shall comply with the following fiduciary standard: A fiduciary shall discharge its duties with respect to the Plan solely in the interest of the participants and beneficiaries and a. for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the Plan; b. with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; c. by diversifying the investments of the Plan so as to minimize the risk oflarge losses, unless under the circumstances it is clearly prudent not to do so. Reasonable consistency of return and protection of assets against the inroads of inflation are paramount. However, the volatility of interest rates and securities markets make it necessary to judge results within the context of several years rather than over short periods of one- or two-years or less. 2. INVESTMENT PERFORMANCE OBJECTIVES The below listed performance measures will be used as objective criteria for evaluating effectiveness of the investment manager(s): 1 of 8 Pages 8/10/2009 BOYNTON BEACH POL/{E OFFICERS" PENS/O/V P'liNJ) Investment Policy .S'tatement A. Total Fund Performance t. The performance of the total Fund will be measured net of fees for rolling three- and five-year periods, These periods are considered suftlcient to accommodate the market cycles experienced with investments. The perforn1ance of the total Fund will be compared to both the Russell Custom Benchmark and the Consultant Benchmark. The Russell Custom Benchmark is comprised currently of: 35% Russell 1000 Index, 10% Russell 2000 Index, 15% AIM Composite (90% MSCI EAFE Net Index and 10% MSCI Emerging Markets Net Index), 35% Barclays Capital US Aggregate Bond Index and 5% NCREIF Index Open-End Diversified Core Equity-Equal Weigl1t. The Consultant Benchmark is comprised currently of: 34% Russell 1 000 Index, 11 % Russell Mid-Cap Index, 11 % MSCI EAFE Net Index, 4% MSCI Emerging Markets Net Index, 5% Wilshire REIT Index, 30% Barclays Capital US Aggregate Bond Index and 5% Barclays Capital US TIPS Index. 2. On a relative basis, it is expected that the investment manager's performance with regard to the total return of combined equity, fixed income, cash and altematives portfolio, will be in the top 40th percentile of an appropriate balanced universe over three- to fIve-year periods. 3. On an absolute basis, it is expected tllat tile total returll of tIle cOlnbined equity~ fixed income, cash and alternatives portfolio, will equal or exceed the actuarial earnings assumption rate (8.0%), For each actuarial valuation, the Board will determine the total expected alIDual rate of return for the current year, for each of the next several years, and for the long-tenn thereafter. B. U.S. Equity Performance t. The us. large- cap equity portion of the portfolio is expected to meet or exceed the return of the Russell 1000 large-cap equity index, and rank within the top 40th percentile of an appropriate core large cap equity universe over three- and five-year periods. 2. The small-cap equity portion of the portfolio is expected to meet or exceed the return of the Russell 2000 small-cap equity index, and rank within the top 40th percentile of an appropriate small-cap equity universe over three- and five-year periods. 2 of 8 Pages 8/10/2009 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement C. Fixed Income Performance Thefixed income portion of the portfolio is expected to meet or exceed the return of the Barclays Capital US Aggregate Bond Index, and rank within the top 40th percentile of an appropriate fixed income universe over three- and five-year periods. D. International EQuity Performance The international equity portion of the portfolio is expected to meet or exceed the return of the AIM Composite Index, and rank within the top 40th percentile of an appropriate international equity universe over three- and five-year periods. E. Private Real Estate Performance The Private Real Estate portion of the portfolio is expected to meet or exceed the return of the NCREIF Index Open-End Diversified Core Equity-Equal Weight, and rank within the top 40th percentile of an appropriate Private Real Estate universe over three- and five-year periods. F. Public Real Estate (REIT) Performance The Public Real Estate (REIT) portion of the portfolio is expected to meet or exceed the return ofthe FTSE EPRA-NAREIT Developed Real Estate Net Index, and rank within the top 40th percentile of an appropriate Public Real Estate universe over three- and five-year periods. G. Listed Infrastructure Performance The Listed Infrastructure portion of the portfolio is expected to meet or exceed the return ofthe DJ Global Index or S&P Global Infrastructure Index. H. Active Commodities Performance The Active Commodities ("Collateralized Commodities Futures") portion of the portfolio is expected to meet or exceed the return of the DJ UBS Commodities Index. 3. INVESTMENT STANDARDS AND GUIDELINES Liquidity: The Fund's investment manager(s) shall be kept informed of the liquidity requirements of the Fund. The investment portfolio shall be structured in such a manner as to provide sufficient liquidity to pay obligations as they come due. To the extent possible, an attempt will be made to match investment maturities with known cash needs and anticipated cash-flow requirements. 3 of 8 Pages 8/10/2009 BOYNTON BEACH POLICE OFFICER5J" PENS/ON FUiVD Investment Policy ..S'tatemenf C'ustodian: The Board has a retained and \'-iill continuc to retain a third party to be custodian oftlle Fund's assets. All securities shall be designated as an asset ()f the Fund, and no \vithdrawal securities-in wholc or part-shall be made from safekeeping except by an authorized member of the Board or the Board's designee. Security transactions bctween a broker dealer and a custodian involving the purchase or sale of securities by transfer of moncy or securities must be made on :1 "delivery vs. payment" basis, if applicable, to ensure that the custodian will have the money \ H security, as appropriate, in hand at the conclusion of the transaction. Bid requirement: The Board shall determine the approximate maturity date based on cash flow needs and market conditions, analyze and select one or more optimal types of investment, and competitively bid the security in question whcn feasible and appropriate. Except as otherwise required by law, the most economically advantageous bid must be selected. Risk and Diversification: The investments held by the Fund shall be diversified to the extent practical to control the risk ofloss resulting from over-concentration of assets in a specific maturity. issuer, issuer, instrument, dealer, or bank which financial instruments are bought and sold. A. Authorized Investments: 1. Commingled equity, fixed income, money market, and altemative (real estate, listed infrastructure, commodities) funds and institutional mutual funds whose investments are restricted to securities meeting the criteria outlined in Section 3 B. Limitations 1. Illiquid investments, as described 111 Chapter 215.47. Florida Statutes, are prohibited. 2. Foreign investments are limited to 20% of the total Pension Fund, at market. 3. All repurchase agreement transactions shall adhere to the requirements of the Master Repurchase Agreement. 4. Under Protecting Florida's Investment Act ("PFIA"), scrutinized companies published by the State Board of Administration are prohibited, unless an indirect investment is unable to divest, as provided for in Florida Statutes section 215.4 n ), The following investments are prohibited, unless authorized by the Board: a. Futures (exceptions are mutual and commingled funds) b. General obligations issued by a foreign govenm1ent c.. I-Iedge funds d.. Insurance annuities e. Internally managed assets f. Limited partnerships 4 of 8 Pages 8/10/2009 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement g. Margin Accounts h. Options (exceptions are mutual and commingled funds) 1. Private equity J Private mortgages k. Securities lending (unless authorized by the Board) 5. The fund may use options and futures contracts on selected u.s. and international equity indexes to "equitize" advisor and liquidity reserve cash. Cash balances are monitored daily to ensure "market like" returns, without leveraging the funds. The use of options and futures in total will be limited to five percent (5%) of the portfolio. Option and commodity purchases in aggregate shall be limited to a maximum of five percent (5%) of the portfolio. 4. COMMUNICATIONS A. The custodian shall apprise the Trustees of all transactions and shall forward all proxies to the investment manager( s) within ten calendar days. On a monthly basis, the custodian shall supply an accounting statement that will include a SunID1ary of all receipts and disbursements and the cost and the market value of all assets. On a quarterly basis, the investment manager(s) or investment monitor shall provide a written report affirming compliance with the security restrictions and a summary of common stock diversification and attendant schedules. The investment manager(s) shall deliver each quarter a report detailing the Fund's performance, adherence to the investment policy, forecas. ofthe market and economy, portfolio analysis and current assets ofthe Trust. Written reports and personal presentations shall be delivered to the Trustees within 60 days ofthe end of the quarter. The investmentmanager(s) will provide immediate written and/or telephone notice to the Trustees of any significant market related or non-market related event, specifically including, but not limited to, any deviation from the standards set forth in Section 3 above. B. The investment manager(s) will disclose any securities that are not in compliance with Section 3 in each quarterly report. C. The Trustees shall retain a monitoring service to evaluate and report on a quarterly basis the rate of return and relative performance of the fund. D. The Trustees will meet quarterly with the investment monitor to review the Performance Report. The Trustees will meet with the investment manager(s) and investment monitor to discuss performance results, economic outlook, investment strategy and tactics and other pertinent matters affecting the Fund on a quarterly basis. E. The equity investment manager shall report to the Trustees on an annual basis with respect to proxies, the issues, votes and dates, and if not voted, a written explanation. 5 of B Pages 8/10/2009 BOYNTONBE4CH POLICE OFF1CER,\" PENSION rl./NO Investment Policy Statement 5. CRITERIA FOR INVESTMENT MANAGER REVIEW The board wishes to adopt standards by which judgments of the ongoing performance of an investment manager may be made. With this in mind. the following are adopted: If, at any time, anyone of the following is breached, the investment manager(s) will be warned of the Board's serious concern for the Fund's continued safety and performance. A. Four consecutive quarters of the investment manager's performance below the 40th percentile in appropriate perfOlmance rankings. B. Standard deviation for the Fund in excess of 120% of the market. C. Loss by the investment ll1anager(s) of any senior investment personnel. D. Any change in basic investment philosophy by the investment manager(s). E. Failure to attain a majority vote of confidence by the Board of Trustees. F. Failure to observe the security quality restrictions in Section 3. 6. INTERNAL CONTROLS The Fund shall be governed by a set ofwTitten internal controls and operational procedures. which shall be periodically reviewed by the Fund's certified public accountant ( CPA). At the time of every financial audit, the CPA shall review the controls that should be designed to prevent loss of funds that might arise from fraud, error, or misrepresentation by third parties or imprudent actions by the Board or the employees of the City of Boynton Beach. 7. CONTINUING EDUCATION The Fund acknowledges the importance of continuing education for the Trustees. Ongoing education will be provided by the Fund's actuary, attorney, custodian, investment manager(s). investment monitor/consultant, and administrator. In addition, the Trustees are encouraged to attend educational conferences in connection with their duties and responsibilities as Trustees. Each Trustee is encouraged to attend a minimum of two conferences or seminars per year. Additional conferences or seminars are also encouraged. Each Trustee may attend up to six conferences in state and two conferences out-of-state, every year, without additional Board approval. 8. FLORIDA STATUTES 112, 185 AND APPLICABLE CITY OF BOYNTON BEACH ORDINANCES If at any time, this document found to be in conflict with Chapter 112.661 or Chapter 185. Florida Statutes, or the applicable City of Boynton Beach Ordinances, the Statutes and Ordinances 6 of 8 Pages 8/10/2009 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement shall prevail. 9. PROXY VOTING In general, proxies shall be voted in accordance with the Trustees proxy policy, which is: "The Board of Trustees of the CITY OF BOYNTON BEACH MUNICIPAL POLICE OFFICER'S PENSION TRUST FUND recognizes that proxy voting powers are an asset of the Fund and must be exercised for the exclusive benefit of the participants in the Fund". On a regular basis, no less frequently than annually, the investment manager(s) shall report a record of his or her proxy vote. 10. REVIEW AND AMENDMENTS It is the Trustees intention to review this document periodically and to amend this statement to reflect any changes in philosophy, objectives or guidelines. In this regard, the investment manager's interest in consistency in these matters is recognized and will be taken into account when changes are being considered. If at any time any investment manager feels that the specific objectives defined herein cannot be met, or the guidelines constrict performance, the Trustees should be notified in writing. By initial and continuing acceptance ofthis Investment Policy Statement, the investment manager(s) concurs with the provisions of this document. Once the Board has adopted the investment policy, the investment policy shall be promptly filed with the Department of Management Services, the plan sponsor, and the consulting actuary. The effective date of the Investment Policy Statement and any amendment thereto shall be the 31 st calendar day following the filing date with the plan sponsor. 11. ASSET ALLOCATION Deliberate management of the asset mix among classes of investments is both a necessary and desirable responsibility. In the allocation of assets, diversification of investments among asset classes that are not similarly affected by economic, political, or social developments is a highly desirable objective. The Fund's general policy shall be to diversify investments within both equity and fixed income securities so as to provide a balance that will enhance total return, while avoiding undue risk concentrations in any single asset class or investment category. The addition of real assets, such as real estate, commodities and infrastructure, to the equity/fixed income portfolio may materially improve the ability of the portfolio to dominate inflation over the long-term. As a collection, real assets diversify each other and to equities and fixed income. Real assets may offer the potential for attractive levels of return. In making asset allocation judgments, it is not expected that the Board will necessarily seek to "time" subtle changes in financial markets, or that frequent or minor adjustments would be needed. Instead, it is expected to develop and adopt expressed guidelines for broad allocations on a long-term basis, in light of current and projected investment environments. 7 of 8 Pages 8/10/2009 BOYNTON BEACH POLICE OFFICER.",' PENSION f'lliYD Investment Policy Statement To insure broad diversification III the long-term Illvcstment portfolios among the major categories of investments, asset allocation, as a percent of the total market value of the total1011g- tenn portfolio, will be set with the tollowing target percentage: Asset Class/Strategy US Equities Non-US Equities Strategic Allocation ('Yo) ~) Policy Range Allocation (%) 26- 66 :) 20 Fixed Income FhJM;;~~~~;;~----- -- I Alternatives: -_._------_..._---~.__. Total ~~ 30 40 () - ~ ---~--.---- I... \5 ) 20 lOO AL TERNA TIVES Private Real Estate i Public Real Estate (REITs)* Listed Infrastructure* Ii ~ Ii Conunodities (CCFs)* *Under consideration as of July 2009. o :) 12. PROCEDURE FOR REBALANCING ASSET ALLOCATION At the end of each month, Russell Investments will compare the Fund's asset values and their relative allocation percentages, to the rebalancing policy targets and ranges, Based on this comparison, Russell Investments will determine what trades are necessary in order to bring the investments as close to target as practical BOYNTON BEACH POLICE OFFICERS' PENSION N RUSSELL INVESTMENTS ~;~, 1 i By: ' ,,;T,;;;e, en Man~ tLlILt!~+- Date: Date: BURGESS CHAMBERS & ASSOCIATES, INC. ~~4~~~ A . ere Ad ISor Date: 8 of 8 Pages 8/10/2009 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement 1. PURPOSE OF INVESTMENT POLICY STATEMENT The Pension Board of Trustees maintains that an important determinant of future investment returns is the expression and periodic review of the Fund's investment objectives. To that end, the Trustees have adopted this Statement of Investment Policy to apply to all of the assets of the fund. In fulfilling their fiduciary responsibility, the Trustees recognize that the retirement system is an essential vehicle for providing income benefits to retired participants or their beneficiaries. The Board also recognizes that the obligations of the Fund are long-term and that the investment policy should be made with a view toward performance and return over a number of years. The general investment objective then is to obtain a reasonable total rate of return - defined as interest and dividend income plus realized and unrealized capital gains and/or losses- that meets or exceeds the actuarial interest rate assumption net of fees to ensure the Fund is actuarially sound. This return is expected on a regular basis over rolling actuarial measurement periods. The Board, the Fund's investment manager(s), and investment monitor/consultant shall comply with the following fiduciary standard: A fiduciary shall discharge its duties with respect to the Plan solely in the interest of the participants and beneficiaries and a. for the exclusive purpose of providing benefits to partIcIpants and their beneficiaries and defraying reasonable expenses of administering the Plan; b. with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like alms; c. by diversifying the investments of the Plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. Reasonable consistency of return and protection of assets against the inroads of inflation are paramount. However, the volatility of interest rates and securities markets make it necessary to judge results within the context of several years rather than over short periods of one- or two- years or less. 2. INVESTMENT PERFORMANCE OBJECTIVES The below listed performance measures will be used as objective criteria for evaluating 1 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICER5;' PEN,S'ION FUND Investment Policr Statement effectiveness of the investment manager( s A. Total Fund Performance I. The performance of the total Fund will be measured net of fees for rolling three- and five-year periods. These periods are considered sufficient to accommodate the market cycles experienced with investments. The performance of the total Fund will be compared to both the Russell Custom Benchmark and the Consultant Benchmark. The Russell Custom Benchmark is comprised currently of: 35% Russell 1000 Index, 10% Russell 2000 Index. 150Ic) AIM Composite (90% MSCI EAFE Net Index and 10% MSCI Emerging Markets Net Index), 35% Barclays Capital US Aggregate Bond Index and 5% NCREIF Index Open-End Diversified Core Equity-Equal Weight. The Consultant Benchmark is comprised currently of: 34% Russell 1000 Index. 11 % Russell Mid-Cap Index.. 11 % MSCI EAFE Net Index, 4% MSCI Emerging Markets Net Index. 5% Wilshire REIT Index, 30% Barclays Capital US Aggregate Bond Index and 5% Barclays Capital US TIPS Index. 2. On a relative basis, it is expected that the investment manager's performance with regard to the total return of combined equity, fixed income, cash and alternatives portfolio. will be in the top 40th percentile of an appropriate balanced universe over three- to five-year periods. 3. On an absolute basis. it is expected that the total return of the combined equity, fixed income, cash and altematives portfolio. will equal or exceed the actuarial earnings assumption rate (8.0%). For each actuarial valuation. the Board will determine the total expected annual rate of return fcn the current year, for each of the next several years. and for the long-term thereafter. B. u.s. Eauity Performance I. The U.S. large- cap equity portion of the portfolio is expected to meet or exceed the return of the Russell 1000 large-cap equity index, and rank within the top 40th percentile of an appropriate core large cap equity universe over three- and five-year periods. 2. The small-cap equity portion of the portfolio is expected to meet or exceed the return of the Russell 2000 small-cap equity index. and rank within the top 40th percentile of an appropriate small-cap equity universe over three- and five-year periods. 2 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement C. Fixed Income Performance The fixed income portion of the portfolio is expected to meet or exceed the return of the Barclays Capital US Aggregate Bond Index, and rank within the top 40th percentile of an appropriate fixed income universe over three- and five-year periods. D. International Eauity Performance The international equity portion of the portfolio is expected to meet or exceed the return of the AIM Composite Index, and rank within the top 40th percentile of an appropriate international equity universe over three- and five-year periods. E. Private Real Estate Performance The Private Real Estate portion of the portfolio is expected to meet or exceed the return of the NCREIF Index Open-End Diversified Core Equity-Equal Weight, and rank within the top 40th percentile of an appropriate Private Real Estate universe over three- and five-year periods. F. Public Real Estate (REIT) Performance The Public Real Estate (REIT) portion of the portfolio is expected to meet or exceed the return of the FTSE EPRA-NAREIT Developed Real Estate Net Index, and rank within the top 40th percentile of an appropriate Public Real Estate universe over three- and five-year periods. G. Listed Infrastructure Performance The Listed Infrastructure portion of the portfolio is expected to meet or exceed the return of the DJ Global Index or S&P Global Infrastructure Index. H. Active Commodities Performance The Active Commodities ("Collateralized Commodities Futures") portion of the portfolio is expected to meet or exceed the return of the DJ UBS Commodities Index. 3. INVESTMENT STANDARDS AND GUIDELINES Liquidity: The Fund's investment manager(s) shall be kept informed of the liquidity requirements of the Fund. The investment portfolio shall be structured in such a manner as to provide sufficient liquidity to pay obligations as they come due. To the extent possible, an 3 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICER,S" PENSION FUND Investment Polh:v Statement attempt will be made to match investmenlmalunl.lcs \\lth known cash needs and anticipated cash-flow requirements Custodian: The Board has a retained and will continue to retain a third party to be custodian of the Fund's assets. All securities shall be designated as an asset of the Fund, and no withdrawal of securities-in whole or part-shall be made from safekeeping except by an authorized member 0 I the Board or the Board's designee. Security transactions between a broker dealer and II custodian involving the purchase or sale of securities by transfer of money or securities must be made on a "delivery vs. payment" basis, if applicable. to ensure that the custodian will have the money or security, as appropriate, in hand at the conclusion of the transaction, Bid requirement: The Board shall determine the approximate maturity date based on cash flo\\ needs and market conditions, analyze and select one or more optimal types of investment and competitively bid the security in question w'hen feasible and appropriate. Except as otherwise required by law. the most economically advantageous bid must be selected. Risk and Divers(fication: The investments held by the Fund shall be diversified to the extent practical to control the risk of loss resulting from over-concentration of assets in a specific maturity, issuer. issuer, instrument, dealer, or bank which financial instruments are bought and sold. A. Authorized Investments: 1. Commingled equity, fixed income, money market, and alternative (real estate. listed infrastructure, commodities) funds and institutional mutual funds whose investments are restricted to securities meeting the criteria outlined in Section 3. B. Limitations 4 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement 1. Illiquid investments, as described in Chapter 215.47, Florida Statutes, are prohibited. 2. Foreign investments are limited to W%--25% of the total Pension Fund, at market. 3. All repurchase agreement transactions shall adhere to the requirements of the Master Repurchase Agreement. 4. Under Protecting Florida's Investment Act ("PFIA"), scrutinized companies published by the State Board of Administration are prohibited, unless an indirect investment is unable to divest, as provided for in Florida Statutes section 215.473. 5. The following investments are prohibited, unless authorized by the Board: a. Futures (exceptions are mutual and commingled funds) b. General obligations issued by a foreign government c.. Hedge funds d.. Insurance annuities e. Internally managed assets f. Limited partnerships g. Margin Accounts h. Options (exceptions are mutual and commingled funds) 1. Private equity j. Private mortgages k. Securities lending (unless authorized by the Board) 5. The fund may use options and futures contracts on selected U.S. and international equity indexes to "equitize" advisor and liquidity reserve cash. Cash balances are monitored daily to ensure "market like" returns, without leveraging the funds. The use of options and futures in total will be limited to five percent (5%) ofthe portfolio. Option and commodity purchases in aggregate shall be limited to a maximum of five percent (5%) of the portfolio. 4. COMMUNICATIONS A. The custodian shall apprise the Trustees of all transactions and shall forward all proxies to the investment manager(s) within ten calendar days. On a monthly basis, the custodian shall supply an accounting statement that will include a summary of all receipts and disbursements and the cost and the market value of all assets. On a quarterly basis, the investment manager(s) or investment monitor shall provide a written report affirming compliance with the security restrictions and a summary of common stock diversification and attendant schedules. The investment manager(s) shall deliver each quarter a report detailing the Fund's performance, adherence to the investment policy, forecast of the market and economy, portfolio analysis and current assets of the Trust. Written reports and personal presentations shall be delivered to the Trustees within 60 days of the end of the quarter. The investment manager(s) will provide immediate written and/or 5 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICER,\" PENSION F(lNO Inve\'tment Policr Statemem telephone notice to the I rustees ot any slgmticant rnarkel related or non-markc! related event. specifically including. hUl Illll limited 10. allY deviation from standards set forth in SectIOn .~ aon\ <..' B. fhe investment manager(s) \,,-'IlI disclose any securities that are 110t in compliance with Section 3 in each quarterlv report C. 'The Trustees shall retain a monitoring service to evaluate and report on a quarterly basis the rate of return and relative performance of the fund D. The Trustees will meet quarterly with the investment monitor to review the Performance Report. The Trustees will meet with the investment manager(s) and investment monitor to discuss performance results, economic outlook. investment strategy and tactics and other pertinent matters affecting the Fund on a quarterly basis. E. The equity investment manager shall report to the Trustees on an annual basis with respect to proxies. the issues. votes and dates. and if not voted. a written explanation. 5. CRITERIA FOR INVESTMENT MANAGER REVIEW The board wishes to adopt standards by which judgments of the ongoing performance 01 an investment manager may be made. With this in mind, the following are adopted: If, at any time, anyone of the following is breached. the investment manager(s) will be warned of the Board's serious concern for the Fund's continued safety and performance. A. Four consecutive quarters of the investment manager's performance below the 40th percentile in appropriate performance rankings. B. Standard deviation for the Fund in excess of 120% of the market. C. Loss by the investment manager(s) of any senior investment personnel. D. Any change in basic investment philosophy by the investment manager(s). E. Failure to attain a majority vote of confidence by the Board of Trustees. F. Failure to observe the security quality restrictions in Section 3. 6. INTERNAL CONTROLS The Fund shall be governed by a set of written internal controls and operational procedures, which shall be periodically reviewed by the Fund's certified public accountant (CP A). At the time of every financial audit, the CPA shall review the controls that should be designed to prevent loss of funds that might arise from fraud, error, or misrepresentation by third parties or imprudent actions by the Board or the employees of the City of Boynton Beach. 6 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement 7. CONTINUING EDUCATION The Fund acknowledges the importance of continuing education for the Trustees. Ongoing education will be provided by the Fund's actuary, attorney, custodian, investment manager(s), investment monitor/consultant, and administrator. In addition, the Trustees are encouraged to attend educational conferences in connection with their duties and responsibilities as Trustees. Each Trustee is encouraged to attend a minimum of two conferences or seminars per year. Additional conferences or seminars are also encouraged. Each Trustee may attend up to six conferences in state and two conferences out-of-state, every year, without additional Board approval. 8. FLORIDA STATUTES 112, 185 AND APPLICABLE CITY OF BOYNTON BEACH ORDINANCES If at any time, this document found to be in conflict with Chapter 112.661 or Chapter 185, Florida Statutes, or the applicable City of Boynton Beach Ordinances, the Statutes and Ordinances shall prevail. 9. PROXY VOTING In general, proxies shall be voted in accordance with the Trustees proxy policy, which is: "The Board of Trustees of the CITY OF BOYNTON BEACH MUNICIP AL POLICE OFFICER'S PENSION TRUST FUND recognizes that proxy voting powers are an asset of the Fund and must be exercised for the exclusive benefit of the participants in the Fund". On a regular basis, no less frequently than annually, the investment manager(s) shall report a record of his or her proxy vote. 10. REVIEW AND AMENDMENTS It is the Trustees intention to review this document periodically and to amend this statement to reflect any changes in philosophy, objectives or guidelines. In this regard, the investment manager's interest in consistency in these matters is recognized and will be taken into account when changes are being considered. If at any time any investment manager feels that the specific objectives defined herein cannot be met, or the guidelines constrict performance, the Trustees should be notified in writing. By initial and continuing acceptance of this Investment Policy Statement, the investment manager(s) concurs with the provisions of this document. Once the Board has adopted the investment policy, the investment policy shall be promptly filed with the Department of Management Services, the plan sponsor, and the consulting actuary. The effective date of the Investment Policy Statement and any amendment thereto shall be the 31 st calendar day following the filing date with the plan sponsor. 11. ASSET ALLOCATION 7 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFfleER.\" PEN.\'ION FUNO /nve..tment Po/icl' Sttltemenl Deliberate management 01 the asset III I \ alnon!,' classcs 01 investments s hoth a neCeSSai\ and desirable responsibility In the allocation '.ll assets. diversification of lTlvestments amOIlL: asset classes that are not similarly aflected by eCOnOtlllC politicaL or SOCIal developments ,,, .1 highly desirable objective The Funds general pollcy shall be to diversify Investments wlthul both equity and fixed income securities so as to proVIde a balance that will enhance total return. while avoiding undue risk concentrations in any single asset class or investment category The addition of rea) assets, such as real estate, commodities and intfastructure, to the equity/fixed income portfolio may materially improve the ability of the portf()lio to dominate inflation over the long-term,. As a collection, real assets diversify each other and to equities and fixed income, Real assets may offer the potential t~Jf al1ractiVt, levels of return In making asset allocation judgments. it is !].Q! expected that the Board will necessarIly seek to "time" subtle changes in financial markets.. or that frequent or minor adjustments would be needed, Instead, it is expected to develop and adopt expressed guidelines t()r broad allocations on a long-term basis, in light of current and projected investment environments. To insure broad diversification lTl the long-term 1l1vestment portfolios among the maJor categories of investments, asset allocation. as a percent of the total market value of the total long- term portfolio, will be set with the following target percentage 35 Policy Range Allocation (%) 26 66 I~ 5 - W 25 Asset Class/Strategy US Equities Non-US Equities Strategic Allocation (%) Fixed Income -~ ~ 30 40 Cash/Money Markel (I () <; Alternatives: 1<; :2 20 Total 100 Private Real Estate ~ ') ~ Public Real Estate (RElTs)* o <; Listed Infrastructure* I) ~ Commodities (CCFs)* *Under consideration as of July 2009. "' o 5 8 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement 12. PROCEDURE FOR REBALANCING ASSET ALLOCATION At the end of each month, Russell Investments will compare the Fund's asset values and their relative allocation percentages, to the rebalancing policy targets and ranges. Based on this comparison, Russell Investments will determine what trades are necessary in order to bring the investments as close to target as practical. BOYNTON BEACH POLICE OFFICERS' PENSION FUND RUSSELL INVESTMENTS By: As: Chairman, Board of Trustees By: As: Investment Manager Date: Date: BURGESS CHAMBERS & ASSOCIATES, INC. By: As: Registered Advisor Date: 9 of 8 Pages 8/8/2011 . BC /\ . \~ May 31, 2011 ~r . O/-,~.YV- ~~~d-' . t f~f~ Barbara LaDue, Pension Administrator Boynton Beach Police Officers Retirement Fund 1500 Gateway Blvd, Suite 220 Boynton Beach, FI 33426 Re: BCA, Inc Form ADV Part 2 and BCA Privacy Notice Dear Barbara: Recent changes in securities laws require investment advisors to provide clients with the latest version of the firm's Form ADV Part 2 disclosure brochure, which has been prepared in accordance with applicable Federal regulations. As you will see, the disclosure brochure is written as a narrative. I have also enclosed a copy of our current privacy notice, which is required to be provided to clients, annually. Please sign and return the attached copy signifying receipt of the Form ADV, Part 2 and privacy notice. On behalf of the entire staff at BCA, we appreciate the relationship and confidence that you have placed with us. As always, we welcome your comment/suggestions at any time. Sincerely, Burgess B. Chambers President Signed: ~I!~ , , ~'-/3--/( Dated: . Institutional Investment Advisor 601 North New York Avenue, Suite 200 Winter Park, FL 32789 (407) 644-011 J (407) 644-0694 fax, (800) 229-0694 . Barbara Ladue From: Sent: To: Cc: Subject: Harris, Glenn [GSHarris@RUSSELL.COM] Wednesday, July 13, 20119:18 AM Gary Chapman Burgess Chambers; Barbara LaDue; Bonni S. Jensen Russell new CEO Gary, As a follow-up to my phone message, I am writing to let you know that Russell Investments announced the appointment of Len Brennan as president and chief executive officer of the company, effective immediately. He succeeds Andrew Doman, who has been appointed chairman of the board. Ed Zore who has been chairman of Russell's board since 2008 will continue as a director of the company and will become chair of the board's investment committee. This is exciting news within Russell as we welcome back a long-serving executive while continuing to benefit from Andrew Doman's industry knowledge and experience. We felt that it was important to notify you of this change as soon as possible. As you may know, Len Brennan has spent most of his career at Russell, dating back to 1985. He recently re-joined the firm as chief executive of our EMEA business, a position he will continue to hold in addition to his global responsibilities as president and CEO. He will also be a director on Russell's board and will split his time primarily between our Seattle and London offices. Over two decades with Russell, he held a number of senior management positions, including most recently that of managing director of Individual Investor Services. In this role, he had oversight for Russell's global operations, including the firm's global third-party funds distribution business and individual investor services in the U.S., EMEA, Asia, Canada and Australia. Previously, he managed our institutional and retail business as office head in Toronto and London. Notably, while he was office head in these locations, we launched our first multi-manager investment funds outside the U.S. In 2005, Len joined Rainier Investment Management, Inc., where he served as president and CEO for six years. He is a strong believer in Russell's people and in our long-held value of striving to exceed the expectations of our clients. He possesses a unique mix of visionary leadership and ties to Russell's rich legacy. I will be in touch shortly to answer any questions you may have, and you can expect to hear much more about our new president and CEO in the near future. In the meantime, if you have questions, as always, please give me a call. Thanks, Glenn Glenn Harris Client Executive I Client Service I Americas Institutional Russel/Investments I Desk: 212-702-7915 I Qsharris@russell.com I www.russell.com Securities products and services offered through Russel/ Financial Services, Inc., member FINRA, 1301 Second Avenue, Seattle, WA 98101, part of Russell Investments. The information contained in this message is for the use of the intended recipient(s) named above. If you received this e-mail in error, please notify us immediately at (800) 787- 7354. Russell Investment Group is a Washington, USA Corporation which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company. GRS Gabriel Roeder Smith & Company Consultants & Actuaries One East Broward Blvd. Suite 505 Ft. Lauderdale, FL 33301-1827 954.527.1616 phone 954.525.0083 fax www.gabrielroeder.com May 31, 2011 d/~ I) ^ ,'t' ot~(X ~Vp~ Ms. Barbara La Due Pension Administrator Renaissance Executive Suites 1500 Gateway Blvd. Suite 220 Boynton Beach, Florida 33426 Dear Barbara: Enclosed are 15 copies of our revised October 1, 2010 Actuarial Valuation Report pertaining to the Police Officers' Retirement System. The Report was revised due to the request by the Finance Director to use his estimated payroll for the 2011-12 fiscal year and to determine the required contribution as of the beginning of the fiscal year. Please take the following actions: 1. Distribute a copy of the Report to Board members and other interested parties. ~' J~#\ ( /W1t;J.r.,! 2. Send a copy of the Actuarial Report to: -/ Bureau of Local Retirement Systems Division of Retirement P.O. Box 9000 Tallahassee, Florida 32315-9000 Office of Municipal Police Officers' & Firefighters' Retirement Fund P.O. Box 3010 Tallahassee, Florida 32315-3010 f ~( ,. J", II rmlV" I.J' ?{ '1 We welcome your questions and comments. Sincerely yours, I e!7~ Senior Consultant and Actuary Enclosures 7/19~1/ 1t f~'O R~~~ CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 06/30/2011 ,:!- - f67'-l ~J 127,316.30 266,766.11 56,067,171.11 56,461,253.52 ------------------ ------------------ 50,379,544.67 6,081,708.85 56,461,253.52 56,461,253.52 ------------------ ------------------ CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 06/01/2011 To 06/30/2011 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS CONTRIBUTIONS - EMPLOYER R/O MONEY TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES (~/8S~) DROP LOANS DROP WITHDRAWALS REFUNDS TERM EMPLOYEES INVESTMENT FEES ACTUARIAL FEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES SUNTRUST/BANK CHGS PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS PENSION PROGRAM MAINT (ES) MISCELLANEOUS TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount 4,278.72 (782,841.11) 103,844.35 705.28 105,408.08 407,548.38 .00 (161,056.30) 332,838. 69 ~ .00 28,696.52'-" .00 .../' 5,000.00 .00 -../ 1,284.71 825.001..-' .00 15.00 .......-- 1,546.35v 1,754.56 v 1,563.56'-' 472.50 v 839.25 374,836.14 (535,892.44) YTD Amount 33,988.48 3,639,938.42 2,259,917.34 813.74 792,346.42 2,581,139.74 75,423.28 9,383,567.42 2,592,924.32 50,000.00 299,780.81 28,642.18 209,633.62 27,800.00 5,994.35 5,618.79 15,750.00 75.00 11,011.11 15,607.89 24,096.57 2,018.50 12,905.43 3,301,858.57 6,081,708.85 J{, . II CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 05/31/2011 I~ -t 31~ ~ 5,217.77 266,766.11 56,725,162.08 56,997,145.96 ------------------ ------------------ 50,379,544.67 6,617,601.29 56,997,145.96 56,997,145.96 ------------------ ------------------ CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 05/01/2011 To 05/31/2011 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS CONTRIBUTIONS - EMPLOYER R/O MONEY TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES DROP LOANS DROP WITHDRAWALS REFUNDS TERM EMPLOYEES INVESTMENT FEES ACTUARIAL FEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES SUNTRUST/BANK CHGS PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS PENSION PROGRAM MAINT (ES) MISCELLANEOUS TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount 4,278.72 (368,962.34) 23,360.52 2.16 116, 254.02 271,698.92 .00 46,632.00 281,825.02 V .00 17,196.52 v .00 105,180.75V' 15,280.001/ 1,037.86 II 825.00../ 2,750.001.1" 15.00 V 2,670.15./ 1,754.561/ 3,487.30 V .00 .00 432,022.16 (385,390.16) YTD Amount 29,709.76 4,422,779.53 2,156,072.99 108.46 686,938.34 2,173,591.36 75,423.28 9,544,623.72 2,260,085.63 50,000.00 271,084.29 28,642.18 204,633.62 27,800.00 4,709.64 4,793.79 15,750.00 60.00 9,464.76 13,853.33 22,533.01 1,546.00 12,066.18 2,927,022.43 6,617,601. 29 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 04/30/2011 I~ ;~ .-- 8,218.39-t,ff 266,766.11 57,107,551. 62 57,382,536.12 ------------------ ------------------ 50,379,544.67 7,002,991.45 57,382,536.12 57,382,536.12 ------------------ ------------------ 7.,!t . / I '"\ 1, ..,;. PI- ~ CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 04/01/2011 To 04/30/2011 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS CONTRIBUTIONS - EMPLOYER R/O MONEY ~ TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES DROP LOANS DROP WITHDRAWALS REFUNDS TERM EMPLOYEES INVESTMENT FEES ACTUARIAL FEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES SUNTRUST/BANK CHGS PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS PENSION PROGRAM MAINT (ES) n . MISCELLANEOUS 1I~~ TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount 4,278.72 93,651.49 1,506,098.09 .00 104,774.14 407,548.38 17,216.07 2,133,566.89 281,825.02V .00 22,412.59 v' .00 .00 .00 79.92 V .00 .00 .00 .00 .4' 1, 754.56~: 2,037.65 .00 ./ 10,864.43 318,974.17 1,814,592.72 YTD Amount 25,431.04 4,791,741.87 2,132,712.47 106.30 570,684.32 1,901,892.44 75,423.28 9,497,991.72 1,978,260.61 50,000.00 253,887.77 28,642.18 99,452.87 12,520.00 3,671.78 3,968.79 13,000.00 45.00 6,794.61 12,098.77 19,045.71 1,546.00 12,066.18 2,495,000.27 7,002,991.45 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 03/31/2011 1ft.. ~ <i pI 22,954.95+ 266,766.11 /' 55,278,222.34 , 55,567,943.40 Ir rz. ------------------ ------------------ 50,379,544.67 5,188,398.73 55,567,943.40 55,567,943.40 ------------------ ------------------ 1-/-/! It CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 03/01/2011 To 03/31/2011 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS CONTRIBUTIONS - EMPLOYER R/O MONEY TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES DROP LOANS DROP WITHDRAWALS REFUNDS TERM EMPLOYEES INVESTMENT FEES ACTUARIAL FEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES SUNTRUST/BANK CHGS PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS PENSION PROGRAM MAINT (ES) MISCELLANEOUS TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount J / 4,278.72 ,/ 70,505.62 113,969.05 .; .00 1./ 109,623.50 . 407,548.38 V 9,622.70v 715,547.97 278,283.72&t- .00/ 65,196.52 26,496.86V .00 .00 1,137.68 V 825.00\"/ .00 15. OO~ 987.90 v .00 3,966.97v _. n-IJ-. 46.00V ~- 701.75 377,657.40 337,890.57 YTD Amount 21,152.32 4,698,090.38 626,614.38 106.30 465,910.18 1,494,344.06 58,207.21 7,364,424.83 1,696,435.59 50,000.00 231,475.18 28,642.18 99,452.87 12,520.00 3,591.86 3,968.79 13,000.00 45.00 6,794.61 10,344.21 17,008.06 1,546.00 1,201.75 2,176,026.10 5,188,398.73 :'.. l'C' (,' ,,"';;' , et CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 02/28/2011 ,a- t.{- (100,364.75) -r,f';. 266,766.11 1'('" 55,063,651.47 v"f.' '. ------------------ ------------------ 55,230,052.83 50,379,544.67 4,850,508.16 55,230,052.83 55,230,052.83 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 02/01/2011 To 02/28/2011 Current Amount YTD Amount ADDITIONS TO RESERVE DROP LOAN REPAYS 3,374.72 16,873.60 UNREALIZED G/L RUSSELL 1,217,669.81 4,627,584.76 RUSSELL REALIZED G/L 94,960.45 512,645.33 MISCELLANEOUS INCOME I~ 48.00 106.30 CONTRIBUTIONS - MEMBERS '?~~ 34,424.61 356,286.68 CONTRIBUTIO~NS - EMPLOYER\~~ 135,849.46 1,086,795.68 R/O MONEY ~~~' 15,239.71 48,584.51 ----------------- ----------------- TOTAL ADDITIONS 1,501,566.76 6,648,876.86 383 1'~ - J ;i- .J.Jt) DEDUCTIONS FROM RESERVE ~.J9~ (J ~ t(i,1.t41f\ ~ PAYMENT TO RETIREES ~ p~ g~H 274,071. 88/ 1,418,151. 87 DROP LOANS .00 50,000.00 DROP WITHDRAWALS 130,196.52\/ 166,278.66 REFUNDS TERM EMPLOYEES .00 2,145.32 INVESTMENT FEES 94,452.87V 99,452.87 ACTUARIAL FEES 10,884.00 v 12,520.00 OFFICE EXPENSES .00 2,454.18 COMPUTER/SUPPLY/SOFTWARE/MAINT .00 3,143.79 AUDIT FEES 8,000.00"; 13,000.00 SUNTRUST/BANK CHGS .00 30.00 PROFESSIONAL SERVICES 3,763.26 / 5,806.71 PENSION ADMINISTRATOR 3, 509 .12~ 10,344.21 BUSINESS MEETINGS 569.88v 13,041.09 PENSION PROGRAM MAINT (ES) .00 1,500.00 MISCELLANEOUS .00 500.00 NET CHANGE IN FUND RESERVE 525,447.53 976,119.23 1,798,368.70 4,850,508.16 TOTAL DEDUCTIONS CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 01/31/2011 I ?-. 1-/-" .Jr ;.fl 20,814.38 266,766.11 53,966,353.11 54,253,933.60 ------------------ ------------------ 50,379,544.67 3,874,388.93 54,253,933.60 54,253,933.60 ------------------ ------------------ IJ, _c9Cf'- ~! fi.t- CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 01/01/2011 To 01/31/2011 Current Amount ADDITIONS TO RESERVE DROP LOAN REPAYS 3,374.72 UNREALIZED G/L RUSSELL 448,413.63 RUSSELL REALIZED G/L 247,904.18 MISCELLANEOUS INCOME .00 CONTRIBUTIONS - MEMBERS 82,053.08 CONTRIBUTIO~S - EMPLOYER~ ~ ~ 271,698.92 R/O MONEY VD.At4v\i\-"-t.. ~. ,~~. 6,000.00 ----------------- TOTAL ADDITIONS 1,059,444.53 DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES ~ DROP LOANS ~ ~~ DROP WITHDRAWALS REFUNDS TERM EMPLOYEES INVESTMENT FEES ACTUARIAL FEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES SUNTRUST/BANK CHGS PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS PENSION PROGRAM MAINT (ES) MISCELLANEOUS 278,229.85 50,000.00 5,196.52 .00 .00 .00 ./ 1,141.10V 223.70V .00 .00 .00/ 1,822.06 1,060.00V' .00 .00 TOTAL DEDUCTIONS 337,673.23 721,771.30 NET CHANGE IN FUND RESERVE YTD Amount 13,498.88 3,409,914.95 417,684.88 58.30 321,862.07 950,946.22 33,344.80 5,147,310.10 1,144,079.99 50,000.00 36,082.14 2,145.32 5,000.00 1,636.00 2,454.18 3,143.79 5,000.00 30.00 2,043.45 6,835.09 12,471.21 1,500.00 500.00 1,272,921.17 3,874,388.93 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 12/31/2010 ,a /]./ - .,.;'6r 25,061.24 266,766.11 53,240,334.95 53,532,162.30 ------------------ ------------------ 50,379,544.67 3,152,617.63 53,532,162.30 53,532,162.30 ------------------ ------------------ (p~;J7-/1 ..,t7 81-- CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 12/01/2010 To 12/31/2010 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS CONTRIBUTIONS -. EMPL.~YER R/O MONEY t~" V~C \~ TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES DROP WITHDRAWALS REFUNDS TERM EMPLOYEES INVESTMENT FEES ACTUARIAL FEES OFFICE EXPENSES -- COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES SUNTRUST/BANK CHGS PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS PENSION PROGRAM MAINT (ES) II MISCELLANEOUS "'--v'JM~f;;t:{::... TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount 3,374.72 2,169,382.08 61,087.09 .00 84,849.77 271,698.92 27,344.80 2,617,737.38 310,626.31 6,492.58 .00 5,000.00v' 1,636.00~ 1,275.90 1,514.64V 2,500.00 V 30.00 .,. 1,413.70 v 1,671. 01 V 688.72:/ 1,500.00../" 500.00 334,848.86 2,282,888.52 YTD Amount 10,124.16 2,961,501.32 169,780.70 58.30 239,808.99 679,247.30 27,344.80 4,087,865.57 865,850.14 30,885.62 2,145.32 5,000.00 1,636.00 1,313.08 2,920.09 5,000.00 30.00 2,043.45 5,013.03 11,411.21 1,500.00 500.00 935,247.94 3,152,617.63 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 11/30/2010 ,9. ;f.,JPI/ ..- 2,791.21 266,766.11 50,979,716.46 51,249,273.78 ------------------ ------------------ 50,379,544.67 869,729.11 51,249,273.78 51,249,273.78 ------------------ ------------------ t "':27 .r/ .; ""t bl-. CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 11/01/2010 To 11/30/2010 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS CONTRIBUTIONS - EMPLOYER TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES DROP WITHDRAWALS REFUNDS TERM EMPLOYEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT AUDIT FEES PROFESSIONAL SERVICES PENSION ADMINISTRATOR BUSINESS MEETINGS TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount 3,374.72 (452,047.36) 67,030.59 .00 101,831.24 407,548.38 127,737.57 278,229.85/ 7,l96.52t/ .00 .00 . 115.08 ./ 2,500.00 v' 629.75 1,671.01' 5,907.081. 296,249.29 (168,511.72) YTD Amount 6,749.44 792,119.24 108,693.61 58.30 154,959.22 407,548.38 1,470,128.19 555,223.83 24,393.04 2,145.32 37.18 1,405.45 2,500.00 629.75 3,342.02 10,722.49 600,399.08 869,729.11 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ASSETS CHECKING - SUNTRUST RECEIVABLE-SOLD SECURITIES RUSSELL TRUST INVEST TOTAL ASSETS LIABILITIES AND FUND RESERVES ACCOUNTS PAYABLE TOTAL LIABILITIES POLICE PENSION RESERVE NET CHANGE IN FUND RESERVE RESERVE BALANCE TOT. LIABILITY & FUND RESERVES BALANCE SHEET Year-To-Date As Of 10/31/2010 73,565.05 266,766.11 51,252,055.26 174,600.92 174,600.92 50,379,544.67 1,038,240.83 51,417,785.50 ( _,,,t-" ,I';./T. r} / ~.,. . tJ> >! ."...;i I~ t~ f\./ 't ~.- '~ or 19>.7. 11 51,592,386.42 ------------------ ------------------ 51,592,386.42 ------------------ ------------------ . . ,.~, <" . f' CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 10/01/2010 To 10/31/2010 ADDITIONS TO RESERVE DROP LOAN REPAYS UNREALIZED G/L RUSSELL RUSSELL REALIZED G/L MISCELLANEOUS INCOME CONTRIBUTIONS - MEMBERS TOTAL ADDITIONS DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES DROP WITHDRAWALS REFUNDS TERM EMPLOYEES OFFICE EXPENSES COMPUTER/SUPPLY/SOFTWARE/MAINT PENSION ADMINISTRATOR BUSINESS MEETINGS TOTAL DEDUCTIONS NET CHANGE IN FUND RESERVE Current Amount 3,374.72 1,244,166.60 41,663.02 58.30 53,127.98 1,342,390.62 276,993.98 17,196.52 2,145.32 37.18 1,290.37 1,671.01 4,815.41 304,149.79 1,038,240.83 YTD Amount 3,374.72 1,244,166.60 41,663.02 58.30 53,127.98 1,342,390.62 276,993.98 17,196.52 2,145.32 37.18 1,290.37 1,671.01 4,815.41 304,149.79 1,038,240.83 II STATE STREET. Retiree Services P. O. Box 5149 Boston, MA 02206-5149 June 6.2011 Ms. Barbara LaDue City of Boynton Beach Boynton Police & Fire Pension Funds 1500 Gateway Boulevard, #220 Boynton Beach, FL 33435 Dear Ms. LaDue: Twice a year the Russell Retiree & Benefit Payment Services Team utilizes the services of The Berwyn Group to conduct death searches on behalf of our clients. The Berwyn Group is an organization that provides mortality identification in addition to address location and death certificate obtainer services. The results of their audits are enclosed for your review. Please be advised that as part of Retiree Services ongoing initiatives to protect participants' data, the Death Audit does not report the participants' full name and social security number in the same report. Depending on the report, we have suppressed either part of the participant's name or part of the social security number, as is appropriate for each individual report. This modification is consistent with Retiree Services standard reports. The only report that contains a full name and social security number is the Invalid Social Security Numbers report, as the social security number is invalid. If you have any questions regarding the Death Audit modification, please contact me at your convemence. The Ben,,:yn Group's reports are designed to provide detailed information. categorized to assist you in your review and research of audit findings. Please pay particular attention to the following detail, which will enable you to review the data in the most efficient manner: RepOrTS ({re so,.,ed ({nd hound In lhefirstlO ch({me/en o/r(lllr Retiree S(,/'l'icl:'s ({ccountID Consl:'qlll:'ntlr, rim I1J({Y h(I\'e reCl:in'd one or l1Julliple reports. IVilhin e({ch reporl, resulls ({re ullegori:::ed inlo lhefollowingfour ({re({s. . "Exact Matches" where Retiree Services supplied social security number, last name, first name and date of birth all match a record in The Berwyn Group's database exactly, . "Highly Probable Matches" where Retiree Services supplied social security number, valid or invalid last name and first name (but not date of birth) all match a record in The Berwyn Group's database exactly, . "Other Matches" where Retiree Services supplied social security number only or social security number and one other field match a record in The Berwyn Group's database exactly, and · "Invalid Social Security Numbers" where Retiree Services supplied social security numbers are not valid. Within e({ch 0/ these/our areas, results ({re sorted bv Retiree Services account ID. . "No Matches Found for the Entire Company" where Retiree Services supplied social security number valid or invalid, last name, first name and there were no matches. Your report will indicate the number of records searched with zero matches. LIMITED ACCESS Page 2 .Tune 6, 201 ] The Berwyn Group has provided Report Interpretation and Action Guidelines to help identify those areas where death verification and benefit recovery may be most effective. FUl1hermore, The Berwyn Group will assist you with any questions, inquiries or further research you may wish to pursue regarding your death audit findings. Please feel free to contact our account representative at The Berwyn Group, Frank Chen, at any time to discuss or review your report results. Frank can be reached at 216-765-8818. As in the past, once you have determined the payment eligibility of the participants in the report(s) provided, please advise us as to what action you wish us to take We will terminate payments and/or correct invalid data upon your direction. We hope you find The Berwyn Group's reporting and service helpfuL As always, we welcome any feedback you wish to share. Please feel free to contact me at 617-985-1499 or via email at nysingletary(W,statestreet.com should you have any questions or concerns regarding this report. Finally, please acknowledge receipt of your audit by signing and returning the statement below. A return envelope has been enclosed for your convenience. Sincerely, ~~~. ~l9-=f-~ Natalia Y. Singletary V ice President Unit Manager. Russell & Benefit Payment Services _____hmmm_____h_mn_m_nnn_n_CUT ALONG DOTTED LINE_nn_m_nnnm__m____nm_mnm____ THE UNDERSIGNED HAS RECEIVED THEIR DEATH AUDIT REPORT(S) City of Boynton Beach fc,t..-\~~ ~~N$LD rV ~/J P It/ /'~ k . , --_._--~-~- SIgnature ~1~iZ8f+~;1 LII- D l{~ Print Name t-/Y-I/ Date LIMITED ACCESS DeathCheck Mortality Identification Services The Berwyn Group Web: berwyngroup.com BOYNTON Personal Sensitive Data 05/03/2011 The following analysis has verified 96 records from your data and matched 0 individuals against The Berwyn Group's National Master Death file. Positive matches generally indicate that individuals being verified are deceased. However, some positive matches are "false-positives". Source files can and do have data errors, and acquisition of individual death certificates is required for reliable verification. The Berwyn Group makes no guarantees or warrantees that the source files contain the entire universe of deceased individuals. Many deaths remain unreported. Consequently, the absence of a match is not an unequivocal indicator of validation. The Berwyn Group is dedicated to acquiring and maintaining the most up-to- date, and credible data sources for our analytical and research work. Our commitment to this goal ensures that our customers receive the highest quality work product and the highest degree of customer satisfaction. Personal Sensitive Data Invoice Invoice for: City of Boynton Beach Police Retire Fund MS.Barbara S. LaDue Pension Administrator ladueb@bbpdpension.com 1500 Gateway Blvd #220 Boynton Beach, FL 33426 Mail to: City of Boynton Beach Police Retire Fund MS.Barbara S. LaDue Pension Administrator ladueb@bbpdpension.com 1500 Gateway Blvd #220 Boynton Beach, FL 33426 11.1111.11..1'11111.1.11'1..1.11 Invoice Number 16334 Russell Client ID C04616001 Billing Period Ending 06/30/2011 Invoice Date 08/03/2011 Payment Terms Net 30 Days Total Amount Due $ 101,819.00 Please return upper portion with your check or direct debit request - - - - - - The following is a summary of your account(s). For more information, please review the enclosed detail. I I Direct Debit pe; I Description of Service Fee Amount Standing Instructions or Amount Due Payments Received Russell Investments Investment Management Fees $101,819.00 $0.00 $101,819.00 Current Period Fees $101,819.00 $ 0.00 $ 101,819.00 Balance Forward 99,463.00 (99,463.00) 0.00 Total Amount Due $ 101,819.00 Invoice Number Invoice Date Russell Client 10 Payment Terms Billing Period Ending 16334 08/03/2011 C04616001 Net 30 Days 06/30/2011 Current Period Over 30 Days Over 60 Days Over 90 Days Total Amount Due $ 101 819.00 $ 0.00 $ 0.00 $ 0.00 $ 101,819.00 Invoice for: City of Boynton Beach Police Retire Fund MS.Barbara S. LaDue Pension Administrator ladueb@bbpdpension.com 1500 Gateway Blvd #220 Boynton Beach, FL 33426 (See reverse side for additional information) Invoice Invoice Number: Billing Period Ending: 16334 06/30/2011 Rq....I.n~._~DIafAt... Investment Management Fees City of Boynton Beach Police Retirement Fund Boynton Beach Police Officers Retirement Trust Funds Investment Account Account Number: QU7W Fund Name Average Rate% Market Value Russell Concentrated Equity Fund 4,302,817 0.19750 Russell All International 6,444,787 0.19750 Markets Fund Russell Equity I Fund 9,500,720 0.19750 Russell Large Cap Structured 589,942 0.19750 Equity Fund Russell Multi-Manager Bond Fund 20,653,891 0.19750 Russell Real Estate Equity Fund 2,276,634 0.19750 Russell Global Real Estate Securities 1,753,237 0.19750 Fund Russell Short-Term Investment Fund 16,767 0.19750 Russell Small Cap Fund 4,567,832 0.19750 Russell World Equity Fund 5,770,528 0.19750 Subtotal 55,877,155 Russell Real Estate Equity Fund - Internal Fee Paid Fee Amount 8,498.00 12,728.00 18,764.00 1,165.00 40,791.00 4,496.00 3,463.00 33.00 9,021.00 11,397.00 $ 110,356.00 Account Total (8,537.00) $ 101,819.00 $ 101,819.00 Total Investment Management Fees Page 2 BURGESS CHAMBERS & ASSOCIATES, INC. INVESTMENT ADVISORS SEC. REGISTERED Post Office Box 3316 Winter Park, FL 32790 Invoice Date Invoice # 8/2/2011 11-197 Bill To Boynton Beach Police Officers' Pension Barbara La Due, Administrator 1500 Gateway Blvd. Suite 220 Boynton Beach, Florida 33426 Description Amount Third Quarter 2011 Investment and Perfonnance Monitoring and Advisory Fee per Contract 5,000.00 ~ ,. . /. " v v 0;; , ,."V",,.,, ,.,ay' Il. Total $5.000.00 Phone # Fax# (407) 644-011 ] (407) 644-0694 russell Investment Group 1774098 1098 Solutions Center ~icago, IL 60677-4000 1S MANAGER 4525 - - INVOICE NO. 1106074706-9997 DATE 2011/07/22 PAGE 1 OF 1 TOTAL CHARGES CURRENT PERIOD USD 985.38 Police Officer Retirement Trust City of Boynton Beach Boynton Police & Fire Pension Fnds, 1500 Gateway Pension Administrator Boynton Beach, FL 33426 9BYM-Police Officer Retirement Trust FOR 3 MONTH PERIOD 4/01/11 to 6/30/11 DB Blvd,suite #220Account 10: BOYNTON POLICE Pay Type 3 ATTENTION Barbara L. Ladue ?LEASE DETACH THIS PORTION AND RETURN WITH YOUR PAYMENT ES BENEFIT PAYMENT CHECK FEES ACH Benefit Payments 365 AT 1.25 456.25 Benefit Payments 18 AT 1.25 22.50 LUmp Sum Payments 4 AT 10,00 40.00 BENEFIT PAYMENT: OTHER FEES Annual TEFRA Form 191 AT 0,50 95.50 State Tax Filing 3 AT 25.00 75.00 ** SUBTOTAL FEES ** 689.25 OUT OF POCKET CHARGES POSTAGE 13- 2010 Tax Form 1099R Postage 6.76 103- 2010 Tax Form 1099R Postage 53.56 60.32 Advice of Deposit 189.80 Benefit Payment 9.36 Lump Sum 2.08 UPS DELIVERY UPS Charges 04/27/2011 6.26 UPS Charges 03/29/2011 10.72 UPS Charges OS/26/2011 6.41 UPS Charges 04/27/2011 4.69 UPS CHARGES 06/27/2011 6.49 34,57 * * SUBTOTAL OUT OF POCKET ** 296.13 CURRENT CHARGES USD INV.# 1106074706-9997 9BYM-Police Officer Retirement Trust 2011/07/22 2010 Compensation Disclosure Report DDA Interest Estimate 2010 Barbara L. Ladue City of Boynton Beach Boynton Police & Fire Pension Fnds, 1500 Gateway Blvd,Suite Pension Administrator Boynton Beach, FL 33426 Dear Customer, Following is the annual estimated 2010 benefit payment float income for your plan(s). lfyou have any questions, please don't hesitate to contact your State Street Retiree Services client service manager. Sincerely, State Street Retiree Services Client Invoice Payment Type Interest Earned 9BYM City of Boynton Beach PENSION $6.95 LUMP SUM $7.57 Tota/20iO Estimated DDA interest $14.52 * This report discloses variable compensation paid directly or indirectly to State Street Bank and Trust Company (or its affiliates) in connection with recordkeeping, benefit payment or other services provided to your plan(s). The amounts indicated may be based upon average balances, allocated shares and/or a reasonable estimate of the revenue generated by your plan(s), To the extent State Street Affiliates perform services for your plan(s), such affiliates may share revenue received with State Street Bank and Trust Company or may credit State Street for such revenue against amounts due from State Street to such affiliate. GRS Gabriel Roeder Smith & Company Consultants & Actuaries One East Broward Blvd. Suite 505 Fe Lauderdale, Florida 33301-1804 (954) 527-1616 /t1 ~ · jt/~ / ! Invoice nak 111\ nin' # 6/10/2011 115371 Bill (II: Pie "....l' ({"lIlit 10: BOARD OF TRUSTEES, BOYNTON BEACH MUNICIPAL POLICE OFFICERS RETIREMENT FUND Ms. Barbara La Due City of Boynton Beach Renaissance Executive Suites 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 Dept. # 78009 Gabriel Roeder Smith & Company PO Box 78000 Detroit, Michigan 48278-0009 or ACH Payment to: Gabriel Roeder Smith & Company JPMorgan Chase, ABA #: 072000326 Account #: 0486723 I>l'....nipl ion Pro.il'd ti \1111111111 For services rendered through 5/31/2011 Revised 10/1/2010 Actuarial Valuation Report to incorporate 100550-052 $1,182 estimated payroll provided by City's Finance Director and to determine the required City contribution if full payment is made at the beginning of the next fiscal year Invoice Total $1,182 Paid to Date Client No. 100550 Amount Due $1,182 PLEASE INDICATE THE INVOICE NUMBER ON YOUR REMITTANCE. THANK YOU. THE LAw OFFICES OF PERRY &]ENSEN, LLC ANN H. PERRY aperry@perryjensenlaw.com BONNISPATARAJENSEN bsjensen@perryjensenlaw.com July 20, 2011 Via Email Boynton Beach Police Pension Fund Sgt Gary Chapman, Chairman 100 East Boynton Beach Boulevard Boynton Beach, FL 33425 Re: Leaal Services Provided Invoice #70522 Dear Gary: Enclosed please find the Firm's invoice for services rendered for the period that ended 7/15/2011. Thank you for your payment of $1,546.35. Your current balance due is $1,250.40. If you have any questions, please do not hesitate to contact me. Sincerely yours, ( _/(6~ Bonni S. Jensen BSJlIg Enclosure Copy to: Barbara LaDue Via Email Only 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401-2922 PH: 561.686.6550 .:. Fx: 561.686.2802 ~I) ("I",:,":....-;Ir-Io:&; THE LAW OFFICES OF PERRY & JENSEN, LLC 400 Executive Center Drive Suite 207 West Palm Beach, FL 33401-2922 Invoice submitted to: Boynton Beach Police Pension A TIN: Gary Chapman, Chairman - via email 100 E. Boynton Beach Blvd. Boynton Beach, FL 33425 Copy to: Barbara LaDue - Via Email July 19, 2011 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOllOWS: Client 1 File No.: 0188 Invoice #70522 Professional Services Hrs/Rate Amount Auditor - DJC Auditor - DJC 6/16/2011 BSJ Draft Auditor Agreement E-mail to Jeanine Bittinger & Richard Cristini re: Proposal Auditor - DJC 1.00 200.00/hr 200.00 Auditor - DJC 6/20/2011 BSJ Review and respond to email from Gary Chapman re: Status of 0.25 50.00 Agreement 200.00fhr Auditor - DJC Auditor - DJC 6/22/2011 lG Revise Auditing Service Agreement 0.50 37.50 Prepare Exhibit A - Fee Schedule 75.00/hr Auditor - DJC Auditor - DJC BSJ Review Auditor Agreement and Fee Exhibit 0.50 100.00 Review proposal re: whether mid year review is included 200.00/hr Auditor - DJC Boynton Beach Police Pension Auditor - DJC 6/22/2011 LG E-Mail to Richard Cristini, Jeanine Bittinger, Gary Chapman and Barbara LaDue re: Auditing Service Agreement and Exhibit A - Fee Schedule Auditor - DJC Auditor - DJC 7/15/2011 LG E-Mail to Jeanine Bittinger re: Auditor Agreement Auditor - DJC SUBTOTAL: Definition of Salary Definition of Salary 6/26/2011 BSJ Review email from Kurt Bressner re: SB 1128 Definition of Salary Definition of Salary 6/30/2011 BSJ Review Pension Plan for Definition of Salary/Compensation E-mail to Gary Chapman & Toby Athol re: Expiration of current collective bargaining agreement Review Responses from Toby Athol Definition of Salary SUBTOTAL: Miscellaneous Matters Miscellaneous Matters 6/24/2011 LG E-Mail to Board of Trustees & Administrators re: SB1128 Miscellaneous Matters Miscellaneous Matters 7/7/2011 BSJ Correspondence with Board of Trustees & the Administrator re: Internat Revenue Service Mileage Rate Increase Memorandum Miscellaneous Matters SUBTOTAL: Hrs/Rate 0.10 75.00/hr 0.10 75.00/hr 2.45 0.10 200.00/hr 0.50 200.00/hr 0.60 0.10 75.00/hr 0.20 200.00/hr 0.30 Page 2 Amount 7.50 7.50 402.50] 20.00 100.00 120.00] 7.50 40.00 47.50] Boynton Beach Police Pension Plan Document Plan Document 5/6/2011 BSJ Telephone call with Gary Lippman Telephone call with Gary Chapman Plan Document Plan Document 6/19/2011 BSJ Review and respond to email from Tim Howard re: SB 1128 Research Status of Bill Research Division of Retirement Implementation Memorandum for Tim Howard Plan Document Plan Document 6/29/2011 LG Update Plan Document from American Legal website Plan Document SUBTOTAL: For professional services rendered Additional Charges: Bill File 7/15/2011 Copy Charges SUBTOTAL: Total additional charges For professional services rendered Total amount of this bill Previous balance Accounts receivable transactions 6/30/2011 Payment - Thank You!. Check No. 053190 Total payments and adjustments Hrs/Rate 0.75 200.00/hr 0.50 200.00/hr 0.20 75.00/hr 1.45 4.80 4.80 Page 3 Amount 150.00 100.00 15.00 265.00] $835.00 5.40 5.40] $5.40 $840.40 $840.40 $1,956.35 ($1,546.35) ($1,546.35) Page 4 Boynton Beach police Pension Amount $1,250.40 Balance due THE LAW OFFICES OF PERRY & JENSEN, LLC ANN H. PERRY aperry@perryjensenlaw.com BONNI SPATARA JENSEN bsjensen@perryjensenlaw.com June 21, 2011 Via Email Boynton Beach Police Pension Fund Sgt Gary Chapman, Chairman 100 East Boynton Beach Boulevard Boynton Beach, FL 33425 Re: Leqal Services Provided Invoice #70465 Dear Gary: Enclosed please find the Firm's invoice for services rendered for the period that ended 6/15/2011. Your current balance due is ~,II'.Je. flP r& If you have any questions, please do not hesitate to contact me. Sincerely yours, &ru- ) ~ / c1;(j BonniS.Jensen Signed in Ms. Jensen's absence to expedite delivery BSJlIg Enclosure Copy to: Barbara LaDue Via Email Only 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401-2922 PH: 561.686.6550 .:. Fx: 561.686.2802 ~" (,ufll'1j:tL.."fr.la-> THE LAW OFFICES OF PERRY & JENSEN, LLC 400 Executive Center Drive Suite 207 West Palm Beach, Fl 33401-2922 Invoice submitted to: Boynton Beach Police Pension ATTN: Gary Chapman, Chairman - via email 100 E. Boynton Beach Blvd. Boynton Beach, Fl 33425 Copy to: Barbara LaDue - Via Email June 20, 2011 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOllOWS: Client! File No.: 0188 Invoice #70465 Professional Services Hrs/Rate Auditor Auditor 6/14/2011 BSJ Telephone call with Gary Chapman Auditor 0.10 200.00/hr SUBTOTAL: 0.10 Commission on Ethics Commission on Ethics 5/31/2011 BSJ Review Palm Beach County Ethics Ordinance Commission on Ethics 0.25 200.00/hr Commission on Ethics 6/3/2011 BSJ Research Code of Ethics & Inspector General Research Ordinances Commission on Ethics 0.50 200.00/hr Commission on Ethics 6/8/2011 BSJ Telephone call with Alan Johnson Draft Memorandum re: Ethics Code Commission on Ethics and Inspector General 0.50 200.00/hr Amount 20.00 20.00] 50.00 100.00 100.00 Boynton Beach Police Pension Commission on Ethics SUBTOTAL: Minutes of Trustee Meetinas Minutes of Trustee Meetings 5/31/2011 BSJ Review and respond to email from Catherine Cherry re: Clarification of Meeting Discussion Research Pension Plan Documents Minutes of Trustee Meetings SUBTOTAL: Miscellaneous Matters Miscellaneous Matters 6/3/2011 BSJ Review Information Sheetfrom Trish Shoemaker re: SB1128 Miscellaneous Matters SUBTOTAL: Plan Document Plan Document 5/27/2011 BSJ Telephone call with Fla Attorneys re: SB 1128 E-mail to Trish Shoemaker Plan Document SUBTOTAL: For professional services rendered For professional services rendered Previous balance Page 2 Hrs/Rate Amount 1.25 250.00] 0.35 200.00/hr 70.00 0.35 70.00) 0.10 200.00/hr 20.00 0.10 20.00] 0.25 50.00 200.00/hr 0.25 50.00] 2.05 $410.00 2.05 $410.00 ~ fa' r52-/ -I ( $1,546.35 Balance due ~,QSg.:3fr" 5qIO~. c.l< .,>Y jj;t ,.... . THE LAW OFFICES OF PERRY & JENSEN, LLC ANN H. PERRY aperry@perryjensenlaw.com BONN I SPATARA JENSEN bsjensen@perryjensenlaw.com MEMORANDUM TO: Board of Trustees FROM: Bonni S. Jensen Fund Legal Counsel DATE: July 7,2011 SUBJECT: IRS Mileage Rate for 2011 This is to inform you that the Internal Revenue Service ("IRS") released its updated Standard Mileage Rate for the final six months of 2011. The new rate is 55.5-cents per mile as of July 1 J 2011 through December 31, 2011. As you know, from previous years, the mileage rate can fluctuate within the same year. We will do our best to keep you and the administrator informed. You can find the current rate online at: http://www.irs.gov/newsroom/article/0..id=240903.00.html If you have any questions, please do not hesitate to contact us. BSJlks Copy: Administrator H:\AII MiscellaneouslALL BOARDS\2011\2011-IRS Mileage Rate UPDATE.wpd 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401-2922 PH: 561.686.6550 .:. Fx: 561.686.2802 ~" (l.!P;,..'G'1':~Iu:. ~j) II{S,~}o\j IRS Increases Mileage Rate to 55.5 Cents per Mile IR-2011.o9, June 23, 2011 WASHINGTON - The Internel Revenue Service today aMOunced an increase in the optional standard mileage rates for the flnelslx months of 2011. Taxpayars may use \he optional standard rates to calculate the deductible costs 01 operaling en automobile for business end other purposes. The rate wllllncra8seto 55.5 cants 8 mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This Is an Increase of 4.5 cents from tha 51 cent rale In effect for the first six months 012011, as set forth In Revenue Procedure 2010-51. In recognition of recent gasoline price increases, the IRS made lhis special adjustmanl for the finel months of 2011. The IRS normelly updates the mileage retes once a year in the fall for the next calendar year. "This year's Increased ges prices are having a major Impact on individual Americans. The IRS Is adjusting lhe stenderd mlleege rates to bailer reflect the recent increese In gas prices," said tRS Commissioner Doug Shulman. 'We are taking this step so the reimbursement rate will ba lelr to taxpayers." Vvtllle gesollne Is e slgnirlcant lactor in the mileage flgure, olhar Items enter Into the catculation of mileage rales, such as depreciation end Insurance and other fixed and variable costs. The optional business standard mileage rate Is used to compute the deductible costs of operating an automobile for business usa In lieu 01 tracking actual costs. This rate Is also used as a benchmark by lhe federel government and many businesses to reimburse their employees for mileage. The new six-month rate for computing deduclible medical or moving expenses will also Increase by 4.5 cents to 23.5 cents a mile, up from 19 cents for \he first six months of 2011. The rate lor providing services lor charitable organizations Is set by statute, not the IRS, and remains et14 cents a mile. The new rates are contained In Announcement 2011-<10 on the optional standard mileage rates. Taxpayers always have the option of calculaling lhe actual costs of using their vehicle rather than using the standard mileage rates. Mileage Rate Changes PurDOse lRates 1/1 throuah 6/30/11 Rates 7/1 throuah 12/31/11 Business 51 55.5 MedicallMovlna 19 23.5 Charllable 14 14 Follow the IRS on New Media Subscribe to IRS Newswire Page Last Reviewed or Updated: June 23, 201 1 http://www.irs.gov/newsroom/articIe/0..id=240903 ,00 .html 7/7/2011 THE LAw OFFICES OF PERRY &JENSEN, LLC ANN H. PERRY aperry@perryjensenlaw.com BONNISPATARAJENSEN bsjensen@perryjensenlaw.com MEMORANDUM To: Board of Trustees From: BonniS.Jensen Subject: Senate Bill 1128 Date: June 3, 2011 This week, Patricia Shoemaker with the Municipal Police Officers and Firefighters Pension Trust Funds' Office sent the attached information sheet regarding SB 1128. As of this morning, SB 1128 has not yet been presented to the Governor. Even though the bill is not law, the Pension Trust Funds Office wanted to try to address the many questions about S8 1128 and its impact on the local plans. Trish indicated that once the bill becomes law, the information will be updated to show the Chapter number and a section-by-section analysis. A copy of information sheet is also posted on the Pension Trust Funds Office website at: www.myflorida.com/frs/mpf. Please contact me if you have any questions. 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401-2922 PH: 561.686.6550 .:. Fx: 561.686.2802 ~~ Senate Bill 1128 made several changes to all Florida's local government defined benefit retirement plans with amendments to chapter 112, as well as the Municipal Police Officers' and Firefighters' Retirement Trust Fund plans operating under chapters 175 and 185. Though this bill has not vet become law, we know you have many questions and want to present information to help you understand these changes. Listed below are the key changes made in this legislation: Overtime. accrued vacation and sick leave payments for pension purposes Change applies to: all local plans - Chapter 112 . For service earned on or after the "effective date" (July 1, 2011, for non~collectively bargained service; or the date of entry into the first collective bargaining agreement (CBA) entered into on or after July 1, 2011, for collectively bargained service), a defined benefit plan may include up to 300 hours per year of overtime compensation, as specified in the plan or CBA, but may not include any payments for accrued unused sick or annual leave in the retirement calculation. Payments for overtime greater than 300 hours per year or accrued unused annual or sick leave accrued with service earned before the "effective date" may still be included in compensation for pension purposes, as provided in the plan document or CBA, even if the payment is not actually made until on or after the "effective date". Plan sponsor contributions relatinJ~ to normal cost Change applies to: all local plans - Chapter 112 . Effective July 1, 2011, a local government sponsor of a defined benefit plan may not reduce contributions required to fund the normal cost of the plan. If the Actuarially Required Contribution is less than the normal cost, employer contributions must at least equal the normal cost. This change in funding will require actuarial review and must be funded in accordance with chapter 60T-1.004(4), F.A.C. The minimum funding requirement must begin no later than the first day of the next fiscal year for the plan. Overtime. accrued vacation and sick leave payments for pension purposes (175/185 specific) Change applies to: local Police Officer and Firefighter pension plans - Chapters 175 & 185 . There are no changes to the definition of "compensation" or "salary" for service earned prior to the "effective date". . Police Plans continue to require 300 hours of overtime in the retirement calculation as a minimum benefit. Fire Plans may include up to 300 hours. . For service earned on or after the "effective date", a Chapter 175 or 185 plan may include up to 300 hours per year of overtime compensation, as specified in the plan or CSA, but may not include any payments for accrued unused sick or annual leave in the retirement calculation. Payments for overtime greater than 300 hours per year or accrued unused annual or sick leave accrued with service earned before the "effective date" may still be included in compensation for pension purposes, as provided in the plan document or CSA, even if the payment is not actually made until on or after the /I effective date". Board of Trustees - makeup of the board of trustees Change applies to: local Police Officer and Firefighter pension plans - Chapters 175 & 185 . This amendment onlv applies to those local law plans in effect on June 30, 1986 having a higher than 40% employee representation on the board. For these boards that were grandfathered in under the amendments in 1986, the City may now change the designated municipal representative on the board. Such municipal representatives must continue to be residents of the municipality. This change may not reduce the membership percentage of firefighters, police officers, or the municipal representatives on the board. Emplovee Contribution increases Change applies to: local Police Officer and Firefighter pension plans - Chapters 175 & 185 . As of the "effective date", employee contributions may be increased by consent of the members' collective bargaining unit, or if none, by majority consent of the police officers and firefighters. Increases in employee contributions are no longer contingent upon providing greater benefits. Collectivelv Bar~ained Benefits & Non-collectivelv Bar~ained Benefits - Effective Date Change applies to: all local plans - Chapter 112, 175 & 185 . Where the members are represented by a collective bargaining agent (whether the CSA includes pension benefits or not) these provisions are effective on the date of entry into the first CSA entered into on or after July 1, 2011. . For Chapters 175 & 185 plans, if some of the police and firefighters are represented by a collective bargaining agent, then the effective date is the date of entry into the first CSA entered into on or after July 1, 2011 for m! police and firefighters regardless of whether they are members ofthe collective bargaining unit or not. . In cities/districts where the members are not represented by a collective bargaining agent, the effective date shall be July 1, 2011. If you have questions regarding these changes, please call the Municipal Police Officers' and Firefighters' Retirement Fund Office at (850) 922-0667 or toll free (877) 738-6737. May 31, 2011 CITY OF BOYNTON BEACH POLICE OFFICERS' PENSION SYSTEM POLICE OFFICERS' PENSION DATA PAGE 1 REPORTING PERIOD 10/01/2010 TO 08/01/2011 soci a 1 Names Date of Date of Benef. Total Security Bi rth Retire/ Disability Bi rth Pens. Monthly Received Number Last, First, I. Disab. Code Name of Beneficiary Date Opt. Pensi <n This Yr EiIREMENT ALVARENGA,FEDRICKO 06/01/87 CECILE & STEPHEN,CHILDR 10Y 5,647.22 28,691. 72 CITY OF BOYNTON BEACH POLICE OFFICERS' PENSION SYSTEM POLICE OFFICERS' PENSION DATA PAGE 2 REPORTING PERIOD 10/01/2010 TO 08/01/2011 Social Names Date of Date of Benef. Tota 1 security Bi rth Retire/ Disability Bi rth Pens. Monthly Received Number Last, First, I. Disab. Code Name of Beneficiary Date Opt. pension This Yr KIRRMAN,MICHAEL 09/01/94 LISA MARIE KIRRMAN, WIF 10Y 4,408.93 49,509.77 CITY OF BOYNTON BEACH POLICE OFFICERS' PE~SION SYSTEM POLICE OFFICERS' PENSION DAlA PAGE 3 REPORTING PERIOD 10/01/2010 TO 08/01/2011 social Names Date of Date of Benef. Total security Bi rth Retire/ Disability Bi rth Pens. Monthly Received Number Last, Fi rst, I. Disab. Code Name of Beneficiary Date Opt. pension This Yr ----.--,'.--- 05/01/07 LA 1,467.23 16,934.55 Disability 300,172 .1: Soci a 1 security Number BENEFICIARY Names Last, Fi rst, I. PARKER, LINDA JACOBSON,CINDY REMCHUK,RUTH CITY OF BOYNTON BEACH POLICE OFFICERS' PENSION SYSTEM POLICE OFFICERS' PENSION DATA Date of Date of Bi rth Reti ref Disab. Disability Code REPORTING PERIOD 10/01/2010 TO 08/01/:011 PAGE Name of Beneficiary NUMBER OF RETIRED EMPLOYEES ON THIS REPORT: 97 Benef. Birth Pens. Date Opt. :Sl SA1 SA2 Death Mon1hly Plnsi on Total Received This Yr 783.10 1,986.93 2,222.55 9,180.25 22 , 714.88 16,031. 57 47,926.70 3,154,195.66 TOlAL PENSION PAYMENTS ------~._----._-_._--....._..._._--,. .-.. / / PENSION FUNDS OF Boynton Beach Boynton Beach Pollee & Fire Pension Funds 1500 Gatewav Blvd., Suite" 220 Boynton Beach, FL 33426 Pension Administration 561/739-7972 FAX: 5~1/731-2997 EmallladuebfPbbpdpenslon.com rLlJ;( ~ ) - :' 0 q-3~{/ /11~ August 2011 Retirees of the Boynton Beach Police Officers' Pension Plan Enclosed is the Alive & Well Statement for your completion, notary and return to the Pension Administrator. The Police Officers' Pension Board requires this statement once a year. The timely completion and return will not disrupt your monthly pension benefit. Please return this statement prior to August 15,2011, so as to avoid a hold on you September benefit. Please complete with Notary Public and mail to: . Barbara La Due, Pension Administrator Boynton Beach Police Officers' Pension Fund 1500 Gateway Blvd., Suite # 220 Boynton Beach, FL 33426 Please call me at 561-739-7972 if you have any questions or concerns. Thank you. l+~~ Barbara La Due Pension Administrator / !- t, I I /. I ~~ r'- ~: I r' r- -- i r! I. i , I I r- L. ,- I ~ ! f-- I I ----r-- i ?~ - tiIw'f-/Wi ~5' 14~ ~- -II . ff. ~ c70 CITY OF BOYNTON BEACH MUNICIPAL POLICE OFFICERS' RETIREMENT FUND REVISED ACTUARIAL VALUATION REPORT AS OF OCTOBER 1,2010 ANNUAL EMPLOYER CONTRIBUTION IS DETERMINED BY THIS VALUATION FOR THE PLAN YEAR ENDING SEPTEMBER 30, 2012 GRS Gabriel Roeder Smith & Company Consultants & Actuaries One East Broward Blvd. Suite 505 Fr. Lauderdale, FL .)3301-1827 954.527.1616 phone 954.S2S.0083 fax www.gaorielroeder.com May 31,2011 Board of Trustees City of Boynton Beach Municipal Police Officers' Retirement Fund Boynton Beach, Florida Dear Board Members: Weare pleased to present our revised October I, 2010 Actuarial Valuation Report for the Plan. The purpose of the Report is to set forth required contribution levels, to disclose plan assets and actuarial liabilities, to comment on funding progress and to provide supporting information regarding the operation of the Plan. This Report is also designed to comply with requirements of the State. The valuation was performed on the basis of employee, retiree and financial information supplied by the Plan's Administrator. Although we did not audit this information, it was reviewed for reasonableness and comparability to prior years. The benefits valued are outlined at the end of the Report. Actuarial assumptions and the actuarial cost method are also described herein. Any changes in benefits, assumptions or methods are described in the first section. This actuarial valuation and/or cost determination was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate. In my opinion, the techniques and assumptions used are reasonable, meet the requirements and intent of Part VII, Chapter 112, Florida Statutes, and are based on generally accepted actuarial principles and practices. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation. As indicated below, the undersigned is a Member of the American Academy of Actuaries (MAAA) and meets the Qualification Standards of the Academy of Actuaries to render the actuarial opinion herein. We will be pleased to answer any questions pertaining to the valuation and to meet with you to review this Report. Respectfully submitted, GABRIEL, ROEDER, SMITH AND COMPANY Stephen Palmquist, ASA, 'AM, FCA Enrolled Actuary No. 11-1560 ~ TABLE OF CONTENTS Section Title Pa2e A Discussion of Valuation Results 1 Chapter Revenue 4 B Valuation Results 1. Participant Data 5 2. Annual Required Contribution (ARC) 6 3. Actuarial Value of Benefits & Assets 7 4. Calculation of Employer Normal Cost 8 5. Liquidation of the Unfunded Frozen Actuarial Accrued Liability 9 6. Actuarial Gains and Losses 10 7. Actual Compared to Expected Decrements 16 8. Cost of Living Adjustment 17 9. Recent History of Valuation Results 18 10. Recent History of Required and Actual Contributions 19 11. Actuarial Assumptions and Cost Method 20 12. Glossary of Terms 24 C Pension Fund Information 1. Summary of Assets 27 2. Summary of Fund's Income and Disbursements 28 3. Calculation of Actuarial Value of Assets 29 4. Investment Rate of Return 31 D Financial Accounting Information 1. F ASB No. 35 32 2. GASB No. 25 33 3. GASB No. 27 35 E Miscellaneous Information 1. Reconciliation of Membership Data 37 2. Age/Service/Salary Distributions 38 F Summary of Plan Provisions 40 GRS SECTION A DISCUSSION OF VALUATION RESULTS GRS DISCUSSION OF VALUATION RESULTS Comparison of Required Emplover Contributions The following is the required contribution developed in this year's actuarial valuation as compared to last year. For FYE 9/30/12 For FYE 9/30/11 Based on Based on 10/1/2010 10/1/2009 Increase Valuation Valuation (Decrease) Required Employer/State Contribution $ 4,262,661 $ 3,997,173 $ 265,488 As % of Covered Payroll 33.85 % 31.78 % 2.07 % Estimated State Contribution $ 465,087 $ 465,087 $ 0 As % of Covered Payroll 3.69 % 3.70 % (0.01) % Required Employer Contribution $ 3,797,574 $ 3,532,086 $ 265,488 As % of Covered Payroll 30.16 % 28.08 % 2.08 % The required employer contribution has been computed under the assumption that the amount to be received from the State next year will be at least $465,087. The City may not take credit for State revenue in excess of $465,087. If the next payment from the State falls below $465,087, the City must raise its contribution by the difference. The employer contributions listed above is for the City's fiscal year ending September 30,2012 and has been calculated assuming the employer contribution is made biweekly. Alternatively, if the employer contribution is paid in a single lump sum on October I, 2011, the required payment is $3,633,868, or 28.86% of payroll. The actual employer contribution for the fiscal year ending September 30, 2010 was $3,688,516, an amount equal to the required contribution. Required Contributions in Later Years The current calculated City contribution requirement is 30.16% of payroll starting October 1, 2011. For long-term planning purposes, the City contribution rate would be expected to remain near this level if the GRS current actuarial assumptIOns are realized after September 10. 20 I I} It is important to keep in mind that under the asset smoothing method. gains and losses are recognl/eo over five years. As of September 30, 2010. the actuarial value of assets exceeded the market value $3,766,428. Once all the losses through September 30, 2010 are fully recognized in the actuarial asset values. the contribution rate will increase by roughly I .7% of payroll unless there are offsetting gains Relationship to Market Value If Market Value had been the basis for the valuation, the City contribution rate would have been 32Jl% for the fiscal year ending 2012 and the funded ratio would have been 54.1 %. In the absence of other gains and losses, the City contribution rate should increase to that level over the next several years. Revisions in Benefits There have been no revisions in benefits since the last valuation. Revisions in Actuarial Assumptions and Methods There have been no revisions in actuarial assumptions and methods since the last valuation. The Board has authorized an experience study which will indicate recommended changes in assumptions. Actuarial Experience There was a net actuarial loss of $1,404,570 for the year which means that actual experience was less favorable than expected. The actuarial loss is primarily due to a lower than expected return on investments. Salary increases that were less than expected partially offset losses due to investment returns. The net actuarial loss for the year translates into an increase in annual employer contributions of 0.66% of covered payroll. Funded Ratio The funded ratio was 58.7% this year compared to 59.1 % last year. The funded ratio is equal to the actuarial value of assets divided by the actuarial accrued liability. l":R, 3 Analvsis of Chan2e in Emplover Contribution The components of change in the required employer contribution are as follows: Contribution Rate Last Year Actuarial Experience Change in Administrative Expense Amortization Payment on UAL Change in State Contribution Change in Normal Cost Rate Change in Assumptions and Methods Contribution Rate This Year 28.08 % 0.66 0.08 1.20 (0.01) 0.15 0.00 30.16 The remainder of this Report includes detailed actuarial valuation results, financial information, miscellaneous information and statistics, and a summary of plan provisions. GRS CHAPTER REVENUE Increments in Chapter revenue over that received in 1 998 must first be used to fund the cost 0 t compliance with minimum benefits. Once minimums are met, any subsequent additional Chapter revenue must be used to provide extra benefits. As of the valuation date, all minimum Chapter requirements have been met. Actuarial Confirmation of the Use of State Chapter Money 1. Base Amount Previous Plan Year $ 465,087 2. Amount Received for Previous Plan Year 641.483 3. Benefit Improvements Made in Previous Plan Year 0 4. Excess Funds for Previous Plan Year: (2) - (1) - (3) 176,396 5. Accumulated Excess at Beginning of Previous Year 109,354 6. Prior Excess Used in Previous Plan Year 230,718 7. Accumulated Excess as of Valuation Date (Available for Benefit Improvements) 55,032 8. Base Amount This Plan Year 465,087 ~DC SECTION B VALUATION RESULTS GRS 5 I PARTICIPANT DATA I October 1, 2010 October 1, 2009 ACTIVE MEMBERS Number 148 151 Covered Annual Payroll $ 12,134,525 $ 12,537,968 Average Annual Payroll $ 81,990 $ 83,033 Average Age 36.4 35.8 Average Past Service 8.1 7.6 Average Age at Hire 28.2 28.1 RETIREES & BENEFICIARIES & DROP Number 91 88 Annual Benefits $ 3,812,891 $ 3,458,997 Average Annual Benefit $ 41,900 $ 39,307 Average Age 56.5 56.2 DISABILITY RETIREES Number 15 15 Annual Benefits $ 311 ,885 $ 311,885 Average Annual Benefit $ 20,792 $ 20,792 Average Age 60.0 59.0 TERMINATED VESTED MEMBERS Number 3 4 Annual Benefits $ 56,783 $ 87,127 Average Annual Benefit $ 18,928 $ 21,782 Average Age 42.6 43.5 GRS I ANNUAL REQUIRED CONTRIBUTION (ARC) II II ;; A. Valuation Date October 1" 2010 October] . 2010 October I. 2009 H i! ;; i I B. ARC to Be Paid During I Fiscal Year Ending 9/30/2012 9/30/2012 9/30/20 I I ., " n I " ;1 C. Assumed Date of Employer Contrib. 10/1/2011 Biweekly Biweekly iI 11 I i ;; D. Annual Payment to Amortize Ii Unfunded Actuarial Liability $ 2,054,091 $ 2,054,091 S 1,902,222 il I 11 E. Employer Normal Cost 1,895,893 1,895,893 1.931.395 II '! I 'l F. ARC if Paid on the Valuation , 'I ,I ., Date: D+E 3,949,984 3,949,984 3,833,61 7 ! I 'I I : G. ARC Adjusted for Frequency of I I I , Payments I 3,949,984 4,107,983 3,984,010 il I ;1 I :1 1 i 0/ il H. ARC as % of Covered Payroll I 32.55 % 33.85 0' 3J 78 /0 10 Ii I d , II J ~ i, I. Assumed Rate of Increase in Covered l ! N/A %11 Payroll to Contribution Year ! N/A % N/A % i I P J. Covered Payroll for Contribution Year i 12,592,795 * 12,592,795 * 12,577 ,63 7 * n .. I K. ARC for Contribution Year: H x J i 4,098,955 4,262,661 3,997.173 I f ;: L. Estimate of State Revenue in H Contribution Year 465,087 465,087 465,087 , Ii M. Required Employer Contribution (REC) in Contribution Year 3,633,868 3,797,574 3,532,086 N. REC as % of Covered Payroll in Contribution Year: M -7- J 28.86 % 30.16 0/0 28,08 %11 II * Estimated payroll for the year per the City's Finance Department. r:R, 7 I ACTUARIAL VALUE OF BENEFITS AND ASSETS I A. Valuation Date October 1, 2010 October 1, 2009 B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 51,530,350 $ 51,735,425 b. Vesting Benefits 2,628,219 2,518,288 c. Disability Benefits 2,823,092 2,959,327 d. Preretirement Death Benefits 934,789 958,277 e. Return of Member Contributions 98,024 142,361 f. Total 58,014,474 58,313,678 2. Inactive Members a. Service Retirees & Beneficiaries 41,264,959 37,424,949 b. Disability Retirees 2,787,964 2,842,188 c. Terminated Vested Members 514,713 819,746 d. Total 44,567,636 41,086,883 3. Total for All Members 102,582,110 99,400,561 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 81,957,204 78,055,403 D. Actuarial Value of Accumulated Plan Benefits per F ASB No. 35 70,670,498 65,849,052 E. Plan Assets 1. Market Value 44,363,165 39,319,885 2. Actuarial Value 48,129,593 46,116,985 F. Unfunded Actuarial Accrued Liability: C - E2 33,827,611 31,938,418 G. Actuarial Present Value of Projected Covered Payroll 94,279,971 97,808,454 H. Actuarial Present Value of Projected Member Contributions 6,599,598 6,846,592 GRS ENTRY AGE NORMAL METHOD CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date October I. 20] 0 October 1. 2009 B. Normal Cost for 1. Service Retirement Benefits $ 1,983,777 $ 2,033,274 2. Vesting Benefits 272,081 279,629 3. Disability Benefits 237,822 244,319 4. Preretirement Death Benefits 56,636 I 58,564 , 5. Return of Member Contributions 72,571 76,508 -- ..-.,----.'.--- 6. Total for Future Benefits 2,622,887 2,692,294 7. Assumed Amount for Administrative I I Expenses - 122,423 I .--~ 116,759 8. Total Normal Cost 2,745,310 2,809,053 I I C. Expected Member Contribution 849,417 I 877.658 D. Employer Normal Cost: B8-C 1,895,893 I 1,931,395 ! I E. Employer Normal Cost as a % of I I Covered Payroll 15.62% 15.40% f:-U, 9 LIQUIDATION OF THE UNFUNDED ACTUARIAL ACCRUED LIABILITY IA. UAAL Amortization Period and Payments I Original UAAL Current UAAL Amortization Date Period Years Established (Years) Amount Remaining Amount Payment 10/1/98 30 $ 1,331,353 18 $ 1,454,485 $ 109,260 10/1/99 30 1,656,722 19 1,807,930 130,829 10/1/00 30 185,619 20 200,518 14,015 10/1/01 30 46,601 21 50,488 3,417 10/1/04 30 1,166,935 24 1,265,798 78,691 10/1/05 30 2,985,574 25 3,220,186 195,281 10/1/05 30 13,646,165 25 14,718,504 892,572 I 0/1/06 30 2,307,394 26 2,471,831 I 46,442 10/1/07 30 16,404 27 17,373 1,007 10/1/08 30 3,582,504 28 3,726,689 211,563 10/1/09 30 3,419,100 29 3,489,239 194,250 10/1/10 30 1,404,570 30 1,404,570 76,764 $ 31,748,941 $ 33,827,611 $ 2,054,091 B. Amortization Schedule The VAAL is being amortized as a level percent of payroll over the number of years remaining in the amortization period. The expected amortization schedule is as follows: Amortization Schedule Year Expected UAAL 2010 $ 33,827,611 2011 34,315,421 2012 34,753,500 2013 35,134,339 2014 35,449,667 2015 35,690,405 2020 35,391,372 2025 31,258,161 2030 21,495,477 2035 4,935,004 2037 - GRS ACTUARIAL GAINS AND LOSSES The assumptions used to anticipate mortality. employment lurnover, Il1vestment Income, expenses salary increases, and other factors have been based on long range trends and expectations. i<\ctual experience can vary from these expectations. The variance lS measured by the gain and loss for the penod involved. If significant long term experience reveals consistent deviation from what has been expected and that deviation is expected to continue, the assumptions should be modified. The net actuarial gain (loss) for the past year is computed as follows: I A. Derivation of the Current UAAL I 1. Last Year's VAAL $ 31,938,418 2. Last Year's Employer Normal Cost 1,931,395 3. Last Year's Contributions 4.153,603 4. Interest at the Assumed Rate on: a. 1 and 2 for one year 2,709,585 b. 3 from dates paid 2,754 c. a-b 2,706,831 5. This Year's Expected VAAL: 1 + 2 - 3 +- 4c 32,423,041 6. This Year's Actual UAAL (Before any changes in benefits and assumptions) 33,827,611 7. Net Actuarial Gain (Loss): (5) - (6) ( 1,404,570) 8. Gain (Loss) due to investments (2,604,192) 9. Gain (Loss) due to other sources 1,199,622 Net actuarial gains in previous years are detailed in the table on the next page. GRS 11 Change in Employer Year Ended Cost Rate * Gain (Loss) 12/31/82 (0.46) % $ (56,551) 12/31/83 (1.92) (265,213) 12/31/84 0.04 6,977 12/31/85 0.85 185,443 12/31/86 0.59 158,678 12/31/87 (1.67) (516,444) 12/31/88 (0.74) (254,892) 12/31/89 0.52 206,590 9/30/90 (0.24) (94,609) 9/30/91 0.74 286,744 9/30/92 (0.35) (142,237) 9/30/93 1.34 564,365 9/30/94 (2.57) (1,370,604) 9/30/95 1.01 574,379 9/30/96 1.56 938,153 9/30/97 1.60 1,008,362 9/30/98 2.85 1,694,077 9/30/99 0.88 568,386 9/30/00 3.16 1,596,887 9/30/01 (3.92) (1,978,307) 9/30/02 (9.58) (5,069,210) 9/30/03 (3.22) (1,870,014) 9/30/04 (2.75) (1,615,637) 9/30/05 ( 1.85) (1,083,369) 9/30/06 ( 1.46) (2,307,394) 9/30/07 (0.02) (16,404) 9/30/08 (1.84) (3,582,504) 9/30/09 (1.54) (3,419,100) 9/30/10 (0.66) (1,404,570) * Before 9/30/06, change in Employer Normal Cost. GRS Actuarial Gain (+) or Loss (-) $8 $6 $4 $2 $0 ($2) a ($4) :3 ($6) ~ ($8) ($10) ($12) ($14) ($16) ($18) ($20) ,,>'tJ"',,>'tJ~'tJt).,,>'tJ~'tJ~'tJ~'tJ";f:o\fl~ fl '0, fl"q fl"c, flb<o, fl~fl~ fl;" fl'tJo,fl\ ~~~ '0, \~"q 'I,.~~ ~b<o,~~ ~~\~"o, ~\ ~~ \,,'-' " " " " " " " " -, \ , \, Plan Year End - Gain or Loss - Cumulative $6 $4 $2 $0 ($2) ($4) a ($6) :3 ($8) ~ ($10) ($12\ ($14) ($16\ ($18) ($20) GRS Change in Employer Cost Rate 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 13 22% 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% The fund earnings and salary increase assumptions have considerable impact on the cost of the Plan ~ ~ ~ ~ b ~ ~ ~ ~ , ~ ~ ~ ~ b ~ ~ ~ ~ , ~ ~ ~ ~ b ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ "' "' "' "' "' "' "' "' Plan Year End - Employer Cost Rate - Cumulative so it is important that they are in line with the actual experience. The following table shows the actual fund earnings and salary increase rates compared to the assumed rates for the last few years: GRS Investment Return Salary Increases Year Ending Actual Assumed Actual Assumed 12/31/1977 n 12/31/1978 ;,) i X. '. II,..;) !. () 3% (2 vrs 12/31/1979 7.5 12/31/1980 X.O 21.2 03 12 yrs! 12/31/1981 X-, 23.6 " 0 ( .k, 12/31/1982 9.3 0 ]4.6 () 12/31/1983 9.0 () 14.8 ,0 12/31/1984 11.5 10.0 6.8 ]0.0 12/31/1985 16.8 10.0 18.6 10.0 12/31/1986 17.6 10.0 16.3 10.0 12/31/1987 4.4 10.0 15.3 10.0 12/31/1988 9.0 10.0 h7 !. 00 12/31/1989 15.4 10.0 12.4 10.0 9/30/1990 (9 mos.) 1.7 "i 6.1 1 0.0 9/30/1991 11.6 10.0 2.5 100 9/30/1992 9.7 10.0 5.4 10,0 9/30/1993 11.9 10.0 , i 10.0 ; 9/30/1994 3.5 8.0 7.0 h.3 9/30/1995 12.9 8.0 8.5 ,"i,X 9/30/1996 10.8 8.0 4.9 6.:~ 9/30/1997 13.1 X .() 8.7 * ()' 9/30/1998 12.9 S.O 4.6 63 9/30/1999 13.5 8.5 10.9 6.1 9/30/2000 12.1 8.5 3.4 63 9/30/2001 7.5 1\ "i 6.0 5.9 ".--' 9/30/2002 (4.7) 8.S 17.2 5.9 9/30/2003 2.8 8.5 9.5 5.9 9/30/2004 2.6 8.5 11.5 6,0 9/30/2005 3.0 S.5 9.6 0.0 9/30/2006 S '7 S.O 14.4 6.0 ,..1 9/30/2007 9.9 X.O 57 6.1 9/30/2008 4.2 1'.0 13,1 61 9/30/2009 2.8 X.O 9.3 6. I 9/30/2010 3.0 X.O 0.2 6.1 Averages 8.2 % 9.6 % The actual investment return rates shown above are based on the actuarial value of assets. The actual salary increase rates shown above are the increases received by those active members who were included in the actuarial valuations both at the beginning and the end of each year. GRS 15 History ofInvestment Return Based on Actuarial Value of Assets 8% 18% 18% 13% 13% 8% 3% 3% -2% -2% -7% '\ 'b C\ \:\ '\. ~ '" l>< ., '0 '\ 'b ~ ~ " :y ~ b< ., Ie (\ ~ fl) ~ " :y ~ l>< ., Ie (\ ~ \:\" \:\ ~~0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ , ,v, ,v, ,v,v, , , ,v, , -7% Plan Year End __t_ Actual - Assumed History of Salary Increases 25% 25% 15% 15% 20% 20% 10% 10% 5% 5% 0% 0% ,rV~rV'b~'b~'b~'b:rV~rV'b{v'b~rV'b~'b~'b\fI\:\"~';'"fI'\-,, fI"')" fll><" fI\ fI~ fI\fI'b"fI\~\:\,,~\fl\~,\~l><,,~\~~fl\~'b,,~~\'>\:\ Plan Year End Compared to Previous Year - Actual -+- Assumed I GRS Actual (A) Compared to Expected (E) Decrements Among Active Employees ! I Number ! Added Service & i Active During DROP Disability Terminations Members Year Year Retirement Retirement Death Vested Other Totals End of Ended A E A E A E A E A A A E Year 9/30/2002 14 17 I I 0 () 0 0 I 1 15 ]6 8 119 I 1 9/30/2003 14 q 6 4 () 0 0 0 I I 2 3 <) 124 I 9/30/2004 8 23 14 0 0 0 () 0 I ) ..., 9 C) 109 I , 9/30/2005 21 14 I 1 0 0 0 0 I , 10 13 8 llt! i 9/30/2006 25 10 3 :2 0 () 0 0 I I 6 7 9 UI 9/30/2007 17 4 3 3 0 0 0 () I () 1 I 11 144 9/30/2008 14 9 2 I 0 0 0 () (I - 7 12 149 i 9/30/2009 8 6 3 -; 0 () 0 0 I (1 3 ~ 11 IS1 i ~ , 9/30/2010 5 8 4 2 0 0 I) () I 4 4 11 148 9/30/2011 4 ~ I 10 9 Yr Totals * 126 100 37 21 0 0 0 9 54 63 88 I * Totals are through current Plan Year only GRS 17 SUPPLEMENTAL PENSION DISTRIBUTION I Cumulative Actuarial Gains (Losses) I Balance at Year Ending Beginning Gain (Loss) Supplemental Balance at 9/30 of Year Interest for Year Payment End of Year 2000 $ 0 $ 0 $ 1,596,887 $ 0 $ 1,596,887 2001 1,596,887 135,735 (1,978,307) 0 (245,685) 2002 (245,685) (20,883) (5,069,210) 0 (5,335,778) 2003 (5,335,778) (453,541) (1,870,014) 0 (7,659,333) 2004 (7,659,333) (651,043) (1,615,637) 0 (9,926,013) 2005 (9,926,013) (843,711) (1,083,369) 0 (11,853,093) 2006 (11,853,093) (948,247) (2,307,394) 0 (15,108,735) 2007 (15,108,735) (1,208,699) (16,404) 0 (16,333,838) 2008 (16,333,838) (1,306,707) (3,582,504) 0 (21,223,049) 2009 (21,223,049) (1,697,844) (3,419,100) 0 (26,339,992) 2010 (26,339,992) (2,107,199) (1,404,570) 0 (29,851,762) Under certain conditions, participants in payment status can receive a supplemental distribution per Section 18-177 of the Plan. The cumulative actuarial gain for plan years beginning after 9/30/1999 must be a positive amount for a supplemental payment to occur. GRS GRS ~ (J) RECENT HISTORY OF REQUIRED AND ACTUAL CONTRIBUTIONS End of Required Contributions Year To Employer & State Estimated State Net Employer Actual Contributions Valuation Which Valuation %of %of %of Applies Amount Payroll Amount Payroll Amount Payroll Employer State Total 1/ 1/84 12/31/84 $ 269,484 13.47 ~ $ 79,017 3.95 ~ $ 190,467 9.52 ~ $ 173,480 $ 96,004 $ 269,484 1/1/85 12/31/85 288,620 13.68 96,004 4.55 192,616 9.13 178,638 109,982 288,620 1/1/86 12/31/86 363,893 13.48 109,982 4.07 253,911 9.40 227,719 136,694 364,413 1/1/87 12/31/87 405,979 12.28 136,694 4.13 269,285 8.15 228,299 177,681 405,980 1/1/88 12/31/88 531,306 13.87 177,681 4.64 353,625 9.23 335,812 195,494 531,306 1/1/89 12/31/89 635,650 14.47 195,494 4.45 440,156 10.02 411 ,568 224,082 635,650 1/1/90 12/31/90 742,566 14.53 224,082 4.38 518,484 10.14 518,484 240,948 759,432 10/1 /90 9/30/91 784,138 15.04 240,948 4.62 543,190 10.42 543,190 252,430 795,620 10/1/91 9/30/92 732,204 13.84 252,430 4.77 479,774 9.07 477,465 254,739 732,204 10/1/92 9/30/93 761,028 13.52 254,739 4.52 506,289 9.00 493,999 267,029 761,028 10/1/93 9/30/94 737,276 13.42 267,029 4.86 470,247 8.56 459,026 278,250 737,276 10/1/94 9/30/95 899,826 16.57 270,088 4.97 629,738 11.60 583,113 316,713 899,826 10/1/95 9/30/96 925,780 15.54 316,713 5.32 609,067 10.22 608,067 348,374 956,441 10/1/96 9/30/97 888,999 14.12 348,374 5.53 540,625 8.59 527,274 403,134 930,408 10/1/97 9/30/98 879,252 13.89 403,134 6.37 476,118 7.52 451,378 427,874 879,252 10/1/98 9/30/99 863,996 13.88 427,874 6.87 436,122 7.01 426,129 427,874 854,003 10/1/99 9/30/00 920,372 12.92 427,874 6.00 492,498 6.92 490,425 429,945 920,370 10/1/00 9/30/01 742,646 10.75 429,945 6.22 312,701 4.53 312,701 430,572 743,273 10/1/01 9/30/02 1,053,863 16.08 443,454 6.77 610,409 9.31 610,409 443,454 1,053,863 10/1/02 9/30/03 1,929,458 26.14 443,454 6.01 1,486,004 20.13 1,486,004 465,087 1,951,091 10/1/03 9/30/04 2,343,601 29.60 465,087 5.87 1,878,514 23.73 1,878,514 465,087 2,343,601 10/1/04 9/30/05 2,571,109 35.67 465,087 6.45 2,106,022 29.22 2,106,022 465,087 2,571,109 10/1/05 9/30/06 2,808,957 35.85 465,087 5.93 2,343,870 29.92 2,343,870 465,087 2,808,957 10/1/06 9/30/07 3,030,547 32.58 465,087 5.00 2,565,460 27.58 2,685,841 465,087 3,150,928 10/1/07 9/30/08 3,236,241 31.43 465,087 4.52 2,771,154 26.91 2,771,154 465,087 3,236,241 10/1/08 9/30/09 3,710,169 32.17 465,087 4.03 3,245,082 28.14 3,245,082 465,087 3,710,169 10/1/09 9/30/10 4,153,603 33.13 465,087 3.71 3,688,516 29.42 3,688,516 465,087 4,153,603 10/1/09 9/30/11 3,997,173 31.78 465,087 3.70 3,532,086 28.08 na na na 10/1/10 9/30/12 4,262,661 33.85 465,087 3.69 3,797,574 30.16 na na na \0 ACTUARIAL ASSUMPTIONS AND COST METHOD Valuation Methods Actuarial Cost Method - Normal cost and the allocation of benefit values between service rendered before and after the valuation date were determined using an Individual Entry-Age Actuarial Cost Method having the following characteristics: (i) the annual normal cost for each individual active member, payable from the date of employment to the date of retirement, is sufficient to accumulate the value of the member's benefit at the time of retirement; (ii) each annual normal cost is a constant percentage of the member's year by year projected covered pay. Actuarial gains/(losses), as they occur, reduce (increase) the Unfunded Actuarial Accrued Liability. Financing of Unfunded Actuarial Accrued Liabilities - Unfunded Actuarial Accrued Liabilities (full funding credit if assets exceed liabilities) were amortized by level (principal & interest combined) percent-of-payroll contributions over a reasonable period of future years. Actuarial Value of Assets - The Actuarial Value of Assets phase in the difference between the expected actuarial value and actual market value of assets at the rate of 20% per year. The Actuarial Value of Assets will be further adjusted to the extent necessary to fall within the corridor whose lower limit is 80%) of the Market Value of plan assets and whose upper limit is 120% of the Market Value of plan assets. During periods when investment performance exceeds the assumed rate, Actuarial Value of Assets will tend to be less than Market Value. During periods when investment performance is less than assumed rate, Actuarial Value of Assets will tend to be greater than Market Value. Valuation Assumptions The actuarial assumptions used in the valuation are shown in this Section. Economic Assumptions The investment return rate assumed in the valuation is 8.0% per year, compounded annually (net after investment expenses). The Wage Inflation Rate assumed in this valuation was 4% per year. The Wage Inflation Rate IS defined to be the portion of total pay increases for an individual that are due to macro economic forces including productivity, price inflation, and labor market conditions. The wage inflation rate does not include pay changes related to individual merit and seniority effects. The assumed real rate of return over wage inflation is defmed to be the portion of total investment return that is more than the assumed wage inflation rate. Considering other economic assumptions, the 8% investment return rate translates to an assumed real rate of return over wage inflation of 4%. The rates of salary increase are as follows: GRS 21 0/0 Increase in Salary Age Merit and Base Total Seniority (Economic) Increase 20 2.5% 4.0% 6.5% 25 2.5% 4.0% 6.5% 30 2.5% 4.0% 6.5% 35 2.5% 4.0% 6.5% 40 1.5% 4.0% 5.5% 45 1.0% 4.0% 5.0% 50 1.0% 4.0% 5.0% 55 1.0% 4.0% 5.0% Proj ected service retirement benefits are increased by 7% to allow for for the inclusion of unused sick and vacation pay in average final earnings. For purposes of financing the unfunded liabilities, total payroll is assumed to grow at 4% per year. The most recent ten-year average is over 4.0%. Demographic Assumptions The mortality table was the 1983 Group Annuity Mortality Table for males and females. Sample Attained Ages 50 55 60 65 70 75 80 Probability of Dying Next Year Men Women 0.39 % 0.16 % 0.61 % 0.25 % 0.92 % 0.42 % 1.56 % 0.71 % 2.75 % 1.24 % 4.46 % 2.40 % 7.41 % 4.30 % Future Life Expectancy (years) Men Women 29.23 34.96 24.87 30.28 20.68 25.71 16.73 21.33 13.22 17.17 10.20 13.42 7.68 10.24 This assumption is used to measure the probabilities of each benefit payment being made after retirement. For active members, the probabilities of dying before retirement were based upon the same mortality table as members dying after retirement (75% of deaths are assumed to be service-connected). For disabled retirees, the regular mortality tables are set forward 5 years in ages to reflect impaired longevity. The rate of retirement used to measure the probability of eligible members retiring under early retirement is 5% per year. For normal retirement these rates are as follows: GRS Number of Years After First Eligibility for Normal Retirement n Probability of Normal Retirement ~o 0';, !i 1(1 (I Ulel J 10 0/0 <; (l (~/() I () 0/0 h "7 1 00 olt) Rates of separation from active membership were as shown below (rates do not apply to members eligible to retire and do not include separation on account of death or disability). This assumption measures the probabilities of members remaining in employment. Sample Ages 20 25 30 35 40 45 50 55 % of Active Members Separating Within Next Year 20.0% 17.0% 13.2% 8.0% 0.0% 0.0% 0.0% 0.0% Rates of disability among active members (90% of disabilities are assumed to be service connected). Sample Ages 20 25 30 35 40 45 50 55 % Becoming Disabled within Next Year 0.14 % 0.15 % 0.18 % 0.23 % 0.30 % 0.51 % 1.00 % 1.55 % GRS Administrative & Investment Expenses Benefit Service Decrement Operation Decrement Timing Eligibility Testing Forfeitures Incidence of Contributions Liability Load Marriage Assumption Normal Form of Benefit Pay Increase Timing 23 Miscellaneous and Technical Assumptions The investment return assumption is intended to be the return net of investment expenses. Annual administrative expenses are assumed to be equal to the average of the prior two years' expenses. Assumed administrative expenses are added to the Normal Cost. Exact fractional service is used to determine the amount of benefit payable. Disability and mortality decrements operate during retirement eligibility. Decrements of all types are assumed to occur at the beginning of the year. Eligibility for benefits is determined based upon the age nearest birthday and service nearest whole year on the date the decrement is assumed to occur. For vested separations from service, it is assumed that 0% of members separating will withdraw their contributions and forfeit an employer financed benefit. It was further assumed that the liability at termination is the greater of the vested deferred benefit (if any) or the member's accumulated contributions. Employer contributions are assumed to be made biweekly effective October 1, 2010. Member contributions are assumed to be received continuously throughout the year based upon the computed percent of payroll shown in this report, and the actual payroll payable at the time contributions are made. Projected normal and early retirement benefits are loaded by 7% to allow for the inclusion of unused sick and vacation pay in final average earnings. 100% of males and 100% of females are assumed to be married for purposes of death-in-service benefits. Male spouses are assumed to be three years older than female spouses for active member valuation purposes. A 10-year certain and life annuity is the normal form of benefit. Middle of fiscal year. This is equivalent to assuming that reported pays represent amounts paid to members during the year ended on the valuation date. GRS Actuarial Accrued Liability (AAL) Actuarial Assumptions Actuarial Cost Method Actuarial Equivalent Actuarial Present Value (APV) Actuarial Present Value of Future Benefits (APVFB) Actuarial Valuation Actuarial Value of Assets Amortization Method GLOSSAR\ The difference between the Actuarial Present Value of Future Benefits and the Actuarial Present Value of Future Nonnal Costs Assumptions about future plan experience that affect costs or liabilities, such as: mortality, withdrawal, disablement, and retirement; future increases in salary; future rates of investment earnings; future investment and administrative expenses; characteristics of members not specified m the data, such as marital status; characteristics of future members; future elections made by members; and other items. A procedure for allocating the Actuarial Present Value of Future Benefits between the Actuarial Present Value of Future Normal Costs and the Actuarial Accrued Liability. Of equal Actuarial Present Value, determined as of a given date and based on a given set of Actuarial Assumptions. The amount of funds required to provide a payment or series of payments in the future. It is determined by discounting the future payments with an assumed interest rate and with the assumed probability each payment will be made. The Actuarial Present Value of amounts which are expected to be paid at various future times to active members, retired members, beneficiaries receiving benefits, and inactive, nonretired members entitled to either a refund or a future retirement benefit. Expressed another way, it is the value that would have to be invested on the valuation date so that the amount invested plus investment earnings would provide sufficient assets to pay all projected benefits and expenses when due. The determination, as of a valuation date, of the Normal Cost, Actuarial Accrued Liability, Actuarial Value of Assets, and related Actuarial Present Values for a plan. An Actuarial Valuation for a governmental retirement system typically also includes calculations of items needed for compliance with GASB No. 25, such as the Funded Ratio and the Annual Required Contribution (ARC). The value of the assets as of a given date, used by the actuary fOT valuation purposes. This may be the market or fair value of plan assets or a smoothed value in order to reduce the year-to-year volatility of calculated results, such as the funded Tatio and the actuarially required contribution (ARC). A method for determining the Amortization Payment. The most common methods used are level dollar and level percentage of payroll. Under the Level Dollar method, the Amortization Payment is one of a stream of payments, all equal, whose Actuarial Present Value is equal to the VAAL. Under the Level Percentage of Pay method, the Amortization Payment is GRS Amortization Payment Amortization Period Annual Required Contribution (ARC) Closed Amortization Period Employer Normal Cost Equivalent Single Amortization Period Experience Gain/Loss Funded Ratio GASB GASB No. 25 and GASB No. 27 25 one of a stream of increasing payments, whose Actuarial Present Value is equal to the UAAL. Under the Level Percentage of Pay method, the stream of payments increases at the rate at which total covered payroll of all active members is assumed to increase. That portion of the plan contribution or ARC which is designed to pay interest on and to amortize the Unfunded Actuarial Accrued Liability. The period used in calculating the Amortization Payment. The employer's periodic required contributions, expressed as a dollar amount or a percentage of covered plan compensation, determined under GASB No. 25. The ARC consists of the Employer Normal Cost and Amortization Payment. A specific number of years that is reduced by one each year, and declines to zero with the passage of time. For example if the amortization period is initially set at 30 years, it is 29 years at the end of one year, 28 years at the end of two years, etc. The portion of the Normal Cost to be paid by the employer. This is equal to the Normal Cost less expected member contributions. For plans that do not establish separate amortization bases (separate components of the UAAL), this is the same as the Amortization Period. For plans that do establish separate amortization bases, this is the period over which the UAAL would be amortized if all amortization bases were combined upon the current UAAL payment. A measure of the difference between actual experience and that expected based upon a set of Actuarial Assumptions, during the period between two actuarial valuations. To the extent that actual experience differs from that assumed, Unfunded Actuarial Accrued Liabilities emerge which may be larger or smaller than projected. Gains are due to favorable experience, e.g., the assets earn more than projected, salaries do not increase as fast as assumed, members retire later than assumed, etc. Favorable experience means actual results produce actuarial liabilities not as large as projected by the actuarial assumptions. On the other hand, losses are the result of unfavorable experience, i.e., actual results that produce Unfunded Actuarial Accrued Liabilities which are larger than projected. The ratio of the Actuarial Value of Assets to the Actuarial Accrued Liability. Governmental Accounting Standards Board. These are the governmental accounting standards that set the accounting rules for public retirement systems and the employers that sponsor or contribute to them. Statement No. 27 sets the accounting rules for the employers that sponsor or contribute to public retirement systems, while Statement No. 25 sets the rules for the systems themselves. GRS Normal Cost Open Amortization Period Unfunded Actuarial Accrued Liability Va/uation Date the annuai cosl ,lSSl~rJ1ed under rile Actuanal COST rvlethmL U1e plan ye31 An open amortization penod is one which IS used 10 determine ine Amortization Payment but which does not change over time. In other words, if the initial period is set as 30 years, the same :~O-year penod IS used in determining the Amortization Period each year. In theory, Ji an Open Amortization Period is used to amortize the Unfunded Actuanal Accrued Liability, the UAAL will never completely disappear. bUl \vill become smaller each year. either as a dollar amount or in relation (() covered payroll The difference between the Actuarial Accrued Liability and Actuanal Value of Assets. The date as of which the Actuarial Present Value of Future Benefits are determined. The benefits expected to be paid in the future are discounted to this date. GRS SECTION C PENSION FUND INFORMATION GRS 27 SUMMARY OF ASSETS September 30 Item 2010 2009 A. Cash and Cash Equivalents (Operating Cash) $ 81,380 $ 12,479 B. Receivables: 1. Member Contributions $ $ 2. Employer Contributions 3,688,516 3,245,082 3. State Contributions 4. Buy-Backs 18,398 38,631 5. Receivable for Securities Sold 281,119 266,766 6. Total Receivables $ 3,988,033 $ 3,550,479 C. Investments 1. Short-Term Investments $ $ 2. Domestic Equities 15,784,213 18,768,495 3. International Equities 12,008,954 6,271,872 4. Domestic Fixed Income 15,631,912 14,456,738 5. International Fixed Income 6. Alternative Investments 3,078,053 1,4l6,658 7. Private Equity 8. Total Investments $ 46,503,132 $ 40,913,763 D. Liabilities and Reserves 1. Benefits Payable $ $ 2. Accrued Expenses and Other Payables (174,601) (74,753) 3. Total Liabilities and Reserves $ (174,601) $ (74,753) E. Total Market Value of Assets Available for Benefits $ 50,397,944 $ 44,401,968 F. Reserves 1. State Contribution Reserve $ (55,032) $ (109,354) 2. DROP Accounts (4,603,461) (3,957,870) 3. Supplemental Benefit Reserve (1,376,286) (1,014,859) $ (6,034,779) $ (5,082,083) G. Market Value Net of Reserves $ 44,363,165 $ 39,319,885 H. Allocation of Investments 1. Short Term Investments 0.00% 0.00% 2. Domestic Equities 33.95% 45.88% 3. International Equities 25.82% 15.33% 4. Domestic Fixed Income 33.61 % 35.33% 5. International Fixed Income 0.00% 0.00% 6. Alternative Investments 6.62% 3.46% 7. Private Equity 0.00% 0.00% 8. Total Investments 100.00% 100.00% GRS PENSION FUND DISBURSEMENTS & INCOME September 30 Item 2010 2009 A. Market Value of Assets at Beginning of Year 'S 44,401.968 'b 43,61 Ll 74 B. Revenues and Expenditures 1. Contributions a. Employee Contributions S 1,014,693 $ 850,493 b. Employer Contributions 3,688,516 3,245,082 c. State Contributions 641.483 698,135 d. Buy Back Contributions 40.124 25,499 e. Health Subsidy Contributions 121,364 123,847 f. Increase in Value of Future Buy Backs (20,233 ) (6,581) g. Total $ 5,485,947 $ 4,936.475 2. Investment Income a. Interest, Dividends, and Other Income $ 69 S 473 b. Net Realized and Unrealized Gains/(Losses) 4,923,271 (87,156) c. Investment Expenses (344,259) (253,716) d. Net Investment Income $ 4,579,081 '5 (340,399) 3. Benefits and Refunds a. Refunds $ (38,620) $ (29,890) b. Regular Monthly Benefits (3,355,163) (3,448,170) c. DROP Distributions (552,787) (204,858) d. Total $ (3,946,570) $ (3,682,918) 4. Administrative and Miscellaneous Expenses $ ( 122,482) $ (122,364) 5. Transfers $ S C. Market Value of Assets at End of Year $ 50,397,944 $ 44,401.968 D. Reserves 1. Supplemental Benefit Reserve $ (1,376,286) $ (1,014,859) 2. State Contribution Reserve (55,032) (109,354) 3. DROP Accounts (4,603,461) (3,957,870) 4. Total Reserves $ (6,034,779) $ (5,082,083) E. Market Value Net of Reserves $ 44,363,165 $ 39,319,885 GRS ACTUARIAL VALUE OF ASSETS ~ Valuation Date - September 30 2009 2010 2011 2012 2013 \J) A. Actuarial Value of Assets Beginning of Year $48,675,119 $ 51,199,068 $ - $ - $ B. Market Value End of Year 44,401,968 50,397,944 C. Market Value Beginning of Year 43,611,174 44,401,968 D, Non-Investment/Administrative Net Cash Flow 1,131,193 1,416,895 E. Investment Income E1. Actual Market Total: B-C-D (340,399) 4,579,081 E2. Assumed Rate of Return 8.00% 8.00% 8.00% 8.00% 8.00% E3. Assumed Amount of Return 3,939,257 4,152,601 E4. Amount Subject to Phase-In: El-E3 (4,279,656) 426,480 F. Phase-In Recognition of Investment Income F1. Current Year: 0.2 x E4 (855,931) 85,296 F2. First Prior Year (2,275,993) (855,931 ) 85,296 F3. Second Prior Year 496,332 (2,275,993) (855,931) 85,296 F4. Third Prior Year (53,896) 496,332 (2,275,993) (855,931) 85,296 F5. Fourth Prior Year 142,987 (53,896) 496,332 (2,275,993) (855,931) F6. Total Phase-Ins (2,546,501) (2,604,192) (2,550,296) (3,046,628) (770,635) G. Actuarial Value of Assets End of Year G 1. Preliminary Actuarial Value of Assets: $51,199,068 $ 54,164,372 $ - $ - $ G2. Upper Corridor Limit: 120%*B 53,282,362 60,477,533 G3. Lower Corridor Limit: 80%*B 35,521,574 40,318,355 G4. Funding Value End of Year 51,199,068 54,164,372 G5. Less: State Contribution Reserve (109,354) (55,032) G6. Less: DROP Account Balances (3,957,870) (4,603,461 ) G7. Less: Supplemental Benefit Reserve (1,014,859) (1,376,286) G8. Final Funding Value End of Year 46,116,985 48,129,593 H. Difference between Market & Actuarial Value $(6,797,100) $ (3,766,428) $ - $ - $ I. Actuarial Rate of Return 2.83% 2.98% 0.00% 0.00% 0.00% J. Market Value Rate of Return -0.77% 10.15% 0.00% 0.00% 0.00% K. Ratio of Actuarial Value to Market Value 115.31% 107.47% 0.00% 0.00% 0.00% tv \0 'i RECONCILIA TION OF DROP ACCOUNTS Value at beginning of year Payments credited to accounts Investment Earnings credited Withdrawals from accounts Value at end of year GRS 31 INVESTMENT RATE OF RETURN The investment rate of return has been calculated on the following bases: Basis 1 - Interest, dividends, realized gains (losses) and unrealized appreciation (depreciation) divided by the weighted average of the market value of the fund during the year. This figure is normally called the Total Rate of Return. Basis 2 - Investment earnings recognized in the Actuarial Value of Assets divided by the weighted average of the Actuarial Value of Assets during the year. Investment Rate of Return Year Ended Basis 1 Basis 2 12/31/82 16.4 % 9.3 % 12/31/83 12.3 9.0 12/31/84 11.9 11.5 12/31/85 23.0 16.8 12/31/86 19.0 17.6 12/31/87 0.3 4.4 12/31/88 10.4 9.0 12/31/89 20.6 15.4 9/30/90 (9 mos.) (1.9) 1.7 9/30/9 I 14.4 11.6 9/30/92 10.0 9.7 9/30/93 12.6 11.9 9/30/94 1.1 3.5 9/30/95 19.1 12.9 9/30/96 12.8 10.8 9/30/97 20.2 13.1 9/30/98 10.1 12.9 9/30/99 10.5 13.5 9/30/00 9.8 12.1 9/30/01 (9.1) 7.5 9/30/02 (9.2) (4.7) 9/30/03 16.1 2.8 9/30/04 8.3 2.6 9/30/05 10.6 3.0 9/30/06 6.9 5.7 9/30/07 13.1 9.9 9/30/08 (15.1) 4.2 9/30/09 (0.8) 2.8 9/30/10 10.2 3.0 Average Compounded Rate of Return for Number of Years Shown 8.8 % 8.3 % Average Compounded Rate of Return for Last 5 Years 2.3 % 5.1 % GRS SECTION D FINANCIAL ACCOUNTING INFORMATION GRS 32 I FASB NO. 35 INFORMATION I A. Valuation Date October 1, 2010 October 1, 2009 B. Actuarial Present Value of Accumulated Plan Benefits 1. Vested Benefits a. Members Currently Receiving Payments $ 44,052,923 $ 40,267,137 b. Terminated Vested Members 514,713 819,746 c. Other Members 24,719,841 23,064,003 d. Total 69,287,477 64,150,886 2. Non-Vested Benefits 1,383,021 1,698,166 3. Total Actuarial Present Value of Accumulated Plan Benefits: 1d + 2 70,670,498 65,849,052 4. Accumulated Contributions of Active Members 5,299,542 4,904,175 C. Changes in the Actuarial Present Value of Accumulated Plan Benefits 1. Total Value at Beginning of Year 65,849,052 62,538,394 2. Increase (Decrease) During the Period Attributable to: a. Plan Amendment 0 0 b. Change in Actuarial Assumptions 0 0 c. Latest Member Data, Benefits Accumulated and Decrease in the Discount Period 8,768,016 6,993,576 d. Benefits Paid (3,946,570) (3,682,918) e. Net Increase 4,821,446 3,310,658 3. Total Value at End of Period 70,670,498 65,849,052 D. Market Value of Assets 44,363,165 39,319,885 E. Actuarial Assumptions - See page entitled Actuarial Assumptions and Methods GRS ~ r:J"j Actuarial Valuation Date 10/1/l991 $ 10/1/1992 10/1 /1993 10/1/1994 I 0/1 /1995 10/1 /1996 10/1/1997 10/1/l998 10/1/1999 10/1/2000 10/1/2001 10/1/2002 10/1/2003 10/1/2004 10/1/2005 10/1/2006 10/1 /2007 10/1/2008 I 0/1/2009 10/1/20 I 0 Actuarial Value of Assets (a) 9,961,491 11,619,301 13,670,651 14,629,045 16,967,617 19,439,074 22,898,830 25,462,061 28,956,651 32,559,614 34,331,760 32,133,373 33,206,438 34,495,794 35,445,474 37,691,909 41,981,125 44,277,726 46,116,985 48,129,593 SCHEDULE OF FUNDING PROGRESS (GASB Statement No. 25) Actuarial Accrued Liability (AAL) - Entry Age (b) $ 11,327,787 13,177,747 15,280,714 17,988,346 19,789,584 21,087,463 24,413,410 25,932,365 29,770,819 33,726,879 37,715,963 40,604,148 44,029,168 48,154,162 56,691,347 61,468,267 66,068,756 72,349,643 78,055,403 81,957,204 .......",b-:---..- ~ Unfunded AAL (UAAL) (b) - (a) $ 1,366,296 1,558,446 1,610,063 3,359,301 2,821,967 1,648,389 1,514,580 470,304 814,168 1,167,265 3,384,203 8,470,775 10,822,730 13,658,368 21,245,873 23,776,358 24,087,631 28,071,917 31,938,418 33,827,611 ..."..-==,,,,,,_..,,.,,~_._. - -"". Funded Ratio (a) / (b) 87.9 % $ 88.2 89.5 81.3 85.7 92.2 93.8 98.2 97.3 96.5 91.0 79.1 75.4 71.6 62.5 61.3 63.5 61.2 59.1 58.7 ",,-""_.. .. Covered Payroll ( c ) 5,288,735 5,627,956 5,493,434 5,430,866 5,957,175 6,298,250 6,329,651 6,225,413 7,121.387 6.907.740 6,555316 7,382,088 7,917,021 7,207,008 7,836,390 9,302,405 10,296,812 11,532,888 2,537,968 12,134,525 U AAL As 0;', of Covered Payroll (b a) , 25 X "0 -">7 - . ~() h 1 (j ! '\ .....,j 'I' ~N. "1 ~~. ~. ~.~ ";4 II Ii !i JI 34 Year Ended Annual Required Actual Percentage September 30 Contribution Contribution Contributed 1990 $ 742,566 $ 759,432 102.3 % 1991 784,138 795,620 101.5 1992 732,204 732,204 100.0 1993 761,028 761,028 100.0 1994 737,276 737,276 100.0 1995 899,826 899,826 100.0 1996 925,780 956,441 103.3 1997 888,999 930,408 104.7 1998 879,252 879,252 100.0 1999 863,996 854,003 98.8 2000 920,372 920,370 100.0 2001 742,646 743,273 100.1 2002 1,053,863 1,053,863 100.0 2003 1,929,458 1,951,091 10l.1 2004 2,343,601 2,343,601 100.0 2005 2,571,109 2,571,109 100.0 2006 2,808,957 2,808,957 100.0 2007 3,030,547 3,150,928 104.0 2008 3,236,241 3,236,241 100.0 2009 3,710,169 3,71O,169 100.0 2010 4,153,603 4,153,603 100.0 GRS ANNUAL PENSION COST AND NET PENSION OBLIGATION (GASH STATEMENT NO. 27) Employer FYE September 30 2011 20]0 2009 Annual Required Contribution (ARC)* $ 3.997. 1 73 5; 4,153.603 $ 3,7 H)J69 Interest on Net Pension Obligation (NPO) 03,316) ( 13,991) ( \4.720) Adjustment to ARC (21,423) (22,421 ) (23.834) Annual Pension Cost (APC) 4,005,280 4,162,033 3.7J9.283 Contributions made ** 4,153,603 3.710.169 Increase (decrease) in NPO ** 8,430 'U14 NPO at beginning of year (166,453) (174,883 ) (1 ~n.997) NPO at end of year ** (166,453 ) ( 174,883) * Includes expected State contribution ** To be determined THREE YEAR TREND INFORMATION Fiscal Annual Pension Actual Percentage of Net Pension Year Ending Cost (APC) Contribution APC Contributed Obligation 9/30/2008 $ 3,244,817 $ 3,236,241 99.7% $ (183,997) 9/3012009 3,719,283 3,710,169 99.8% ( 174,883) 9/30/2010 4,162,033 4,153,603 99.8% (166,453) (;R, 36 REQUIRED SUPPLEMENTARY INFORMATION GASB Statement No. 25 and No. 27 The information presented in the required supplementary schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation: Valuation Date October 1, 2010 Contribution Rates: Employer (and State) Plan Members 33.85% 7.00% Actuarial Cost Method Entry Age Normal Amortization Method Level percent of payroll, closed Remaining Amortization Period 30 years Asset Valuation Method 5-year smoothed market Actuarial Assumptions: Investment rate of return Projected salary increases 8.0% 5.0% to 6.5% depending on age 4.0% NA Includes inflation and other general increases at Cost of Living adjustments GRS SECTION E MISCELLANEOUS INFORMATION GRS 37 RECONCILIATION OF MEMBERSHIP DATA From 10/1/09 From 10/1/08 To 10/1/10 To 10/1/09 I A. Active Members 1. Number Included in Last Valuation 151 149 2. New Members Included in Current Valuation 5 8 3. Non-Vested Employment Terminations (3) (3) 4. Vested Employment Terminations (1) 0 5. DROP Participation (4) (3) 6. Service Retirements 0 0 7. Disability Retirements 0 0 8. Deaths 0 0 9. Number Included in This Valuation 148 151 B. Terminated Vested Members 1. Number Included in Last Valuation 4 4 2. Additions from Active Members 1 0 3. Lump Sum Payments/Refund of Contributions (1) 0 4. Payments Commenced (1) 0 5. Deaths 0 0 6. Other--Return to Actives 0 0 7. Number Included in This Valuation 3 4 IC. DROP Plan Members I 1. Number Included in Last Valuation 11 9 2. Additions from Active Members 4 3 3. Retirements (3) (1) 4. Deaths Resulting in No Further Payments 0 0 5. Other 0 0 6. Number Included in This Valuation 12 11 In. Service Retirees, Disability Retirees and Beneficiaries I 1. Number Included in Last Valuation 92 91 2. Additions from Active Members 0 0 3. Additions from Terminated Vested Members 1 0 4. Additions from DROP Plan 3 1 5. Deaths Resulting in No Further Payments (2) 0 6. Deaths Resulting in New Survivor Benefits 0 0 7. End of Certain Period - No Further Payments 0 0 8. Other -- Lump Sum Distributions 0 0 9. Number Included in This Valuation 94 92 GRS ,\CTIVE PARTICIP.ANT S( .\TTER I Years of Service to Valuation Date I Age Group 0-1 1-2 2-3 3-4 4-5 5-9 10-14 15-] 9 20-24 25+ Totals 20-24 NO. 1 0 I li () 0 () I) I) ) - TOT PAY 53,352 () 62,462 (I II (I !l 0 i 5,1114 AVGPAY 53,352 0 62,462 (t iI 0 0 \) 7()O7 25-29 NO. 1 4 6 4 (t () 0 (I (J 1.7 TOT PAY 49,502 223,506 355,172 266,288 378,546 486,909 (I (l () I '59.923 AVG PAY 49,502 55,877 59,195 66572 63.091 /11,152 (I 0 () /)),] 82 30-34 NO. I () 1 J ; I 16 2 () ~ ) () j4 , , TOT PAY 51,742 0 60,885 183,322 739,270 1,229,000 164,044 () I} () 2.42/1,263 AVG PAY 51,742 0 60,885 61,107 67.206 76,813 82,022 () II ., 1.420 35-39 NO. 0 0 0 2 I 16 17 I (; 0 "7 , , TOT PAY 0 0 0 103,070 70,060 1,286,129 1,620,877 99,802 0 0 3. i 79.938 AVG PAY 0 0 () 5U35 70,060 80,383 95,346 99,802 () S 5 ,944 40-44 NO. 1 0 2 () , 12 i 7 () .\0 I TOT PAY 42,064 0 112,014 0 65,290 971,318 670,484 756,799 () 2,617,969 AVG PAY 42,064 0 56,007 0 65,290 80,943 95,783 108,114 II () '".266 45-49 NO. 0 I 1 {) () " 2 i IJ II TOT PAY 0 52,667 59,059 u 0 219,190 222,154 102,663 371,600 () 1.027,333 AVGPAY 0 52,667 59,059 () II 73.063 111,077 102,663 123.867 () 93.394 i 50-54 NO. 0 0 0 I 0 0 3 1 , IJ 6 TOT PAY 0 0 0 64,291 0 0 239,870 93,071 128,077 0 525,309 AVG PAY 0 0 0 64291 () !I 79,957 93,071 128.077 () ~7.552 55-59 NO. 0 0 0 0 () (I I () () j TOT PAY 0 0 0 () () 0 140,470 () 0 140.4 70 AVGPAY 0 0 0 () 0 () 140,470 0 (J () ! 40,470 -' ~~-- - -~ _._--~----.-- -----..--.----- -.-.-.-- .-,-., ---..--'- TOT NO. 4 5 11 10 19 53 32 10 4 0 148 TOT AMT ] 96,660 276,] 73 649,592 6]6,971 1,253,166 4, ] 92,546 3,057,899 1,052,335 499,677 0 11.795,019 AVG AMT 49,]65 55,235 59,054 6],697 65,956 79,105 95,559 105,234 124,919 0 79,696 GRS 39 INACTIVE PARTICIPANT SCATTER Deceased with Terminated Vested Disabled Retired Beneficiary Total Total Total Total Age Group Number Benefits Number Benefits Number Benefits Number Benefits Under 20 - - - - - - - - 20-24 - - - - - - - - 25-29 - - - - - - - - 30-34 - - - - - - - - 35-39 - - - - - - - - 40-44 3 56,693 - - 4 236,244 - - 45-49 - - - - 16 718,517 1 23,843 50-54 - - 4 83,217 28 1,364,047 - - 55-59 - - 3 61,035 14 552,691 - - 60-64 - - 4 101,599 12 506,659 1 9,397 65-69 - - 3 40,948 8 206,460 - - 70-74 - - 1 25,086 4 98,846 - - 75-79 - - - - 3 96,187 - - 80-84 - - - - - - - - 85-89 - - - - - - - - 90-94 - - - - - - - - 95-99 - - - - - - - - 100 & Over - - - - - - - - Total 3 56,693 15 311 ,885 89 3,779,651 2 33,240 Average Age 43 60 56 54 GRS SECTION F SUMMARY OF PLAN PROVISIONS GRS 40 SUMMARY OF PLAN PROVISIONS A. Ordinances Plan established under the Code of Ordinances for the City of Boynton Beach, Florida, Chapter 18, Article ill, and was most recently amended under Ordinance No.09-021 passed and adopted on its second reading on April 21, 2009. The Plan is also governed by certain provisions of Chapter 185, Florida Statutes, Part VII, Chapter 112, Florida Statutes and the Internal Revenue Code. B. Effective Date August 15, 1981 C. Plan Year October 1 through September 30 D. Type of Plan Qualified, governmental defined benefit retirement plan; for GASB purposes it is a single employer plan. E. Eligibility Requirements All full-time police officers are eligible to participate on the fIrst day of employment. F. Credited Service Service is measured as the aggregate numbers of years and fractional parts of years of service for which a police officer made Member Contributions to the plan. No service is credited for any periods of employment for which the member received a refund of their contributions. G. Compensation Total cash remuneration including overtime and lump sum payments for accumulated sick and vacation leave, but exclusive of any payments for extra duty or special detail work. H. Average Final Compensation (AFC) The average of Compensation over the highest 5 years during the last 10 years of Credited Service. I. Normal Retirement Eligibility: A member may retire on the fIrst day of the month coincident with or next following the earliest of: (1) age 55 and 10 years of Credited Service, or (2) age 50 and 15 years of Credited Service, or (3) 20 years of Credited Service regardless of age. GRS Benefit Normal Form of Benefit: COLA Supplemental Benefit: J. Early Retirement Eligibility: Benefit: Normal Form of Benefit: COLA: Supplemental Benefit: ~.5% of AFC multiphed by years of Credited SeniJce Benetit IS Inmted ill !lo" AFC and the proVisions of lntemal Revenue Code Section ,11:' 10 Years Certain and Life thereafter; other options are also available. None All retirees in pay status are entitled to a monthly supplemental pension benefit paid in a lump sum on October I of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary. A member may elect to retire earlier than the Normal Retirement Eligibility upon attainment of age 50 and 10 years of Credited Service. The Normal Retirement Benefit is reduced by 1.5% for each year by which the Early Retirement date precedes the Normal Retirement date. For this purpose, the Normal Retirement date is the earlier of the date the member would have attained age 55 or completed 20 years of Credited Service had the member continued employment as a police officer 10 Years Certain and Life thereafter; other options are also available. None All retirees in pay status are entitled to a monthly supplemental pension benefit paid in a lump sum on October 1 of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary K. Delayed Retirement Same as Normal Retirement taking into account compensation earned and service credited until the date of actual retirement. GRS 42 L. Service Connected Disability Eligibility: Benefit: Normal Form of Benefit: COLA: Supplemental Benefit: Any member who becomes totally and permanently disabled and unable to render useful and efficient service as a police officer as a result of an act occurring in the performance of service for the City is immediately eligible for a disability benefit. 662/3% of the member's basic rate of earnings in effect on the date of disability, reduced by amounts payable under Worker's Compensation and Social Security PIA with a minimum benefit being the greater of the accrued Normal Retirement benefit on the date of disability or 42% of AFC. 10 Years Certain and Life thereafter; other options are also available. None All retirees in pay status are entitled to a montWy supplemental pension benefit paid in a lump sum on October 1 of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary. M. Non-Service Connected Disability Eligibility: Benefit: Normal Form of Benefit: COLA: Supplemental Benefit: Any member with 10 years of Credited Service who becomes totally and permanently disabled and unable to render useful and efficient service as a police officer is eligible for a disability benefit. The accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of disability with a minimum benefit equal to 25% of AFC and a maximum benefit equal to 60% of AFC. 10 years Certain and Life thereafter; other options are also available. None All retirees in pay status are entitled to a monthly supplemental pension benefit paid in a lump sum on October 1 of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the GRS share value I he bencl]! ceases Upllf1 lhe ialer ul the death lnc i'eUree men or beneficlan N. Death in the Line of Duty Eligibility: Benefit: Normal Form of Benefit: COLA: Supplemental Benefit: Any member whose death is determined to be the result of a servIce incurred imun is eligible for survivor benefits regardless of Credited Service. Spouse will receive the accrued Normal Retirement Benefit taking into accounl compensation earned and service credited as of the date of death with a minimum benefit equal to 30% of APC If there is no spouse. benefits will be paid to the deceased member's estate. Paid until death of spouse. None All retirees and beneficiaries in pay status are entitled to a monthly supplemental pension benefit paid in a lump sum on October 1 of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary. o. Other Pre-Retirement Death Eligibility: Benefit: Normal Form of Benefit: COLA: Supplemental Benefit: Members are eligible for survivor benefits after the completion of 10 or more years of Credited Service. Spouse will receive the accrued Normal Retirement Benefit taking into account compensation earned and service credited as of the date of death. If there is no spouse, benefits will be paid to the deceased member's estate. Paid until death or remarriage of spouse; or 10 years to the member's estate. None All retirees and beneficiaries in pay status are entitled to a monthly supplemental pension benefit paid in a lump sum on October I of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary. GRS 44 The beneficiary of a plan member with less than 10 years of Credited Service at the time of death will receive a refund of the member's accumulated contributions. P. Post Retirement Death Benefit determined by the form of benefit elected upon retirement. Q. Optional Forms In lieu of electing the Normal Form of benefit, the optional forms of benefits available to all retirees are a Single Life Annuity, the 50%, 66 2/3%, 75% and 100% Contingent Annuitant options and the 50%,662/3%, 75% and 100% Survivor Annuity options. R. Vested Termination Eligibility: Benefit: Normal Form of Benefit: COLA: Supplemental Benefit: A member has earned a non-forfeitable right to Plan benefits after the completion of 5 years of Credited Service if they elect to leave their accumulated contributions in the fund. The benefit is the member's accrued Normal Retirement Benefit as ofthe date of termination. For members with at least 5 years of Credited Service, the benefit begins on the date that would have been the member's Normal Retirement date had they continued employment until attaining age 55 with 10 years of Credited Service or upon reaching what would have been 20 years of Credited Service. Alternatively, members with at least 10 years of Credited Service can elect a reduced Early Retirement benefit any time after age 50. 1 0 Years Certain and Life thereafter; other options are also available. None Once in pay status, all retirees are entitled to a monthly supplemental pension benefit paid in a lump sum on October 1 of each year. The supplemental benefit is funded by a 1 % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary. Members terminating employment with less than 5 years of Credited Service will receive a refund of their own accumulated contributions. GRS S. Refunds Eligibility. All members tennmating employment with less than 5 years oj ('redited Service eligible. Optionally, vested members (those with 5 or more years of Creditct! Service) may elect a refund in lieu of the vested benefits otherwise due Benefit: Refund of the member's contributions T. Member Contributions 7% of Compensation U. Employer Contributions Chapter 185 Premium Tax Refunds and any additional amount determined by the actuary needed to fund the plan properly according to State laws. V. Changes from Previous Valuation There have been no changes since the last valuation. W. 13th Check As described under the Supplemental Benefit subsections, a thirteenth check will be paid to retirees on each October 1 of each year following December 1, 2006. X. Deferred Retirement Option Plan Eligibility: Plan members who have less than 30 years of Credited Service but have met one of the following criteria are eligible for the DROP: (1) age 55 and 10 years of Credited Service, or (2) age 50 and 15 years of Credited Service, or (3) 20 years of Credited Service regardless of age. Members who meet eligibility must submit a written election to participate in the DROP. Benefit: The member's Credited Service and FAC are frozen upon entry into the DROP. The monthly retirement benefit as described under Normal Retirement is calculated based upon the frozen Credited Service and F AC. Maximum DROP Period: The earlier of 5 years of participation in the DROP or 30 years of employment. Interest Credited: The member's DROP account is credited at an interest rate based upon the option chosen by the member. Members must elect from 1 of the 3 following options: 1 . Gain or loss at the same rate earned by the Plan, or 2. Guaranteed rate of 7%, or 3. A percentage of the DROP credited at the same rate earned by the Plan and the remaining percentage credited with earnings at a guaranteed rate of 7%. GRS 46 Normal Form of Benefit: Options include a lump sum, equal annual payments over 5 years, or monthly installments based upon actuarial tables until the balance is paid out. COLA: None Supplemental Benefit: DROP retirees are entitled to a monthly supplemental pension benefit paid in a lump sum on October 1 of each year. The supplemental benefit is funded by a I % of pay contribution from the members and a 1 % of pay contribution from the Chapter 185 money. The benefit pool is divided according to the total number of shares of all eligible retirees on a pro-rata basis. The number of shares allotted to each eligible retiree is the sum of credited service at retirement (maximum of 20 years) and the number of years the participant has been retired (maximum of 20 years). An individual retiree's distribution is the number of shares multiplied by the share value. The benefit ceases upon the later of the death of the retired member or beneficiary. Y. Other Ancillary Benefits There are no ancillary benefits not required by statutes but which might be deemed a City of Boynton Beach Municipal Police Officers' Retirement Fund liability if continued beyond the availability of funding by the current funding source. GRS U.S. Economic Review - Second Quarter 2011 Perspective on the Market Environment Second Quarter 2011 : . Economic recovery hits a soft patch . Positive news includes: . U.S. corporate profits remain strong; Russe1l1000@ Index median 1-year EPS growth up 23.8% in June 2011 . Oil and commodity prices declined off recent highs . The Purchasing Managers Index increased to 55.3% in June after decreasing in May. This is the 23rd consecutive month manufacturing expanded . The S&P/Case-Shiller indices showed the first month-on-month increase in April since June 2010 . New orders for durable goods rose 1.9% in May, beating expectations . Still on the cautionary side: . Quantitative Easing 2 (QE2) ended in June; Fed said slower pace of recovery is "likely to be temporary" . Sovereign debt fears remain a concern in Europe . U.S. economy hurt by supply chain effects in Japan . U.S. retail and food services sales remain weak, down 0.2% in May from April; Heavily influenced by slow auto sales . National averages for regular gasoline prices have increased over $0.80 per gallon since last year . Employment continues to falter Sources: Russell, Federal Reserve, Bureau of Labor Statistics, Institute for Supply Management. U.s. Census Bureau, Reuters, Bloomberg, and CNN. There is no guarantee that any stated expectations will occur. Past performance is not indicative of future results. Indexes are unmanaged and cannot be invested in directly. Note: A Purchase Managers Index above 50.0% indicates growth in the manufacturing sector. [;J Russell Investments Index definitions Lit .1 f.ntd- '-'99"'9'1',' 1\11 index, with income reinvested, generally representative of Intermediate-term government bonds, investment grade corporate debt secunlius. and mortgage-backed securities. (specifically. Barclays Capital Government/Corporate Bond !nde> the Asset-Backed Securities Index. and the Mortgage-Backed Securities Index) "c,,~:jilliier ,l()fll[, "nce ."dex A monthly report that measures the change in prices of a group of homes In 20 major metropolitan areas in the US ni' IIldex was set to be at 100 on January 1, 2000 and tracks pnce changes measured as points. It include' homes that have sold before and excludes new construction. Composed or futures contracts on physical commodities Unlike equities, which typically entitle the holder to a continuing stake in a corporation, commodity futuw, contracts normally specify a certain date for the delivery of the underl'(ing physical commodity In order to avoid the delivery process and maintain ,\ long futures position. nearby contracts must be sol(1 and contracts that have not yet reached the delivery penod must be purchased This process is known a~. 'rolling" a futures position "li, uB~j tam.:>! nH. Represents the major commodity sectors within the broad mdex: Energy (including petroleum and naturai gas). Petroleum (includin~ crude oil. heating oil and unleaded gasoline), PrecIous Metals. Industrial Metals. Grains. Livestock, Softs, Agriculture and ExEnergy, Also available are individual commodity sub-indexes on the 19 components currently included in the DJ-UBSCI"', plus brent crude. cocoa feeder cattle, gas oil. lead, orange juice, platinum, soybean meal and tin . rSF Nl<REiT An Index designed to present Investors With a comprehensive family of REIT performance Indexes that span the commercial real estate space across the U,S. economy, offering exposure to all investment and property sectors. In addition, the more narrowly focused property sector and sub-sector Indexes provide the facility to concentrate commerCial real estate exposure in more :,elected markets Housing AffonJab!ilty !nde, Index that indicates what proportion of homebuyers can afford to buy an average-priced home in specified areas The most well known housing affordability index is published by the National Association of Realtors V1SCi EAFL mdf' , An index representative of the securities markets of twenty developed market countries III Europe, Australasia, and the Far East \13~;1 EM ,nde.' A free float-adjusted market capitalization Index that is designed to measure equity market performance in emerging market country indices. Russelil000d'inclex Measures the performance of the large-cap segment of the US equity universe It IS a subset of ttle Russell 3000@ Index and include~ approximately 1000 of the largest securities based on a combination of their market cap and current Index membership. The Russell 1000 represents approximately 92% of the US market. ~us,'..ii :)000'.' :n:ki Index measures the performance of the largest 3000 US compallles representing approximately 98% of the Investable U. S equity market. i.,:usseli 3000'-"> Defeli inuex. Subset of top 3000 U S. equities with companies that demonstratr: less than average exposure to certain risk. (lower stock price volatility. higher quality balance sheets stronger earnings profile) Russell 3000cll: Dynamic index Subset of top 3000 U.S, equities With companies that demonstrate than average e~posure to certain risks (higher stock price volatility. lower quality balance sheets, uneven earnings profile) Russell 3000(". rlllanc.al5 A sector within the Russell 3000 Index that consists of companies that provide financial services including banking. finance. life Insurance, and securities brokerage, and services comparlles Russell DeVelOpetl ex. ~) ,-"rg" Lap 'ndey offers investors access to the large-cap segment of the developed equity universe, excluding securities claSSIfIed in the U.S., representing approximately 40% of the global equity market. ThiS Index Include::, the largest securities in the Russell Developed ex-US Index ,(u""e!i LlIIe:Y"i\j Md'~.('l index measures the performance of the largest investable securities in emerging countries globally, based on markel capitalization. The index covers 21 'Yr) of the investable global market. '~us5eil Global excludH1!J ::c index Index measures the performance of the world's largest IIlvestable securities, based on market capitalization, excluding securities in the Russell 3oo0@. The index includes approximately 7,000 securities and covers 61 % of the investable global market. S Matenal & Proce5sing Within the R300Q, those companies that extract or process raw materials, and companies that manufacture chemicals. construction materials. glass, paper plastiC, forest products and related packaging products. Metals and minerals miners, metal alloy producers, and metal fabricators are included. S Small c:!p Within the Russell 2000, small capitalization investments involve stocks of companies with smaller levels of market capitalization (generally less than $2 billion) than larger company stocks (large cap). Small Cap FinanCial:> ,ectOf within the Russell 2000 Index that consists of companies that provide financial services including banking. finance, life Insurance, and securities brokerage. and services companies d.S T echnoiogy Within the R3000, those companies that serve the information technology. telecommunications technology and electronics industries, U.S Utilities Within the R3oo0. those companies In industries heavily affected by government regulation, such as electric. gas and water utilities Also includes companies providing telephone services ciS well as companies that operate as independent producers or distributors of power. /;] Russell Investments lI> m n o z o o c > jJ -i m jJ '" o -' m () o :J o 3 -. () Q) :J c.. .." -. :J Q) :J () -. Q) ~ Q) -. ;1\ CD r-+ CJ) ::u CD < -. CD ~ Important Information Russell Trust Company Funds are Investment funds of the Russeli Trust Company Commingled Employee Benefit Funds Trust They are not funds of Russell Investment Company nor a mutual fund registered under the Investment Company Act of 1940. Please remember that all investments carry some level of risk, including the potential loss of princIpal invested. They do not typically grow at an even rate of return and may expenenc€ negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could. at certain times, unintentionally reduce returns Diversification and strategic asset allocation do not assure profit or protect against loss in declining markets, Indexes and/or benchmarks are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. Performance is gross of fees unless otherwise noted. Fees will reduce the overall performance of the fund. Only client account performance is reflective of actual Investments from the client investment inception date. Fund performance shown does not reflect individual client investment inception dates or other client specific actions such as contributions, Russell Investments and Standard & Poor's Corporation are owners of the trademark, service marks, and copyrights relating to the Russelilndexes and the S&P 500. respectiveiy Source for MSCI data: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used to create any financial instruments or products or any indices. The MSCI information is provided on an "as is" basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling. computing or creating any MSCI information (collectively, the MSCI Parties.) expressly disclaims all warranties (including, without limitation. any warranties of originality. accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a partiCUlar purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct indirect. special, incidental punitive, consequential (including. without limitation, lost profrls) or any other damages Copyright@ Russell Investments 2011. All rights reserved This material is proprietary and may not be reproduced transferred. or distnbuted In any form Without prior 'Ntltten permission from Russell Investments It is delivered on an "as is" basis without warranty. Russell Investment Group is a Washington. USA corporation, which operates through subsidiaries worldwide, Including Russell investments and 's a subsidiary of The Northwestern Mutual Life Insurance Company. The Russell logo is a trademark and service mark of Russell Investments First used: August 2011 USI-10517-08-12 [;] Russell Investments Quarterly I nvestment Review City of Boynton Beach Police Retirement Fund SECOND QUARTER 2011 Your Client Service Team Glenn Harri, Client Exec/llirl (800) 541-0556 (212) 702-7915 gshanis@russell.c(llll Peter Dclyani:-. Senior ACC{)l1ll1 fxecl/ti\.c (800) 455-3782 (206) 505-4554 pdelyanis@russell.com RusseJJ Investments 130 I Second Avenue, 18th Floor Seattle. WA 98101 Fax (206) 505- 1565 RusseJJ Investment~ 1095 Avenue of the Alllt'l'ica, 14th Floor New York, NY 10022 Fax (212) 702-7901 Michael Auger Regional DireC/OJ (800) 247-8284 (813) 910-7373 mauger@russell.com Russell Investments IS 31 0 Amberely Drivl' Tampa, FL 33647 Fax (813)910-7676 Karen Pheneger Client Service Analnl (800) 439-8506 (206) 505-1972 kpheneger@russell.com Russell Investments 1301 Seeond Avenue. 18th Floor Seattle, WA 98101 Fax (206) 505-1565 [;] Russell Investments Capital markets Period ending June 30, 2011 35 30 - 25 ~ ~ c 20 ~ ~ .. 15 Il '0 10 S 5 0.9 ~ 0 0.0 -5 -0.9 -10 -15 20 Capital Market Returns -2.6 YTD 1 Yr U.S. Equity: (Russell 3000@) U.S. stock index which includes the 3,000 largest U.S. stocks as measured by market capitalization Non-U.S. Developed Equity: (Russell Developed ex-U.S. Large Cap) International market index that includes Western Europe, Japan, Australia and Canada Emerging Markets: (Russell Emerging Markets) Emerging markets index that includes S. Korea, Brazil, Russia, India, and China U.S. Bonds: (BC US Agg Bond) Broad index for U.S. Fixed Income market Global REITs: (FTSE EPRA/NAREIT) Index for global publicly traded real estate securities Commodities: (OJ UBS Comm) Broad index of common commodities Source: Russell, Barclays Capital, Dow Jones. and FTSE NAREIT P 'ad I tha t r ed 33.4 . U.S. Equity . Emerging Mkts . Global REITS . Non-U.S. Developed Eq . U.S. Bonds Commodities 11 q Annualized 3 Yrs 5 Yrs 10 Yrs Capital Markets U.S. equity posts turbulent quarter, but finishes flat · Developed non-U.S. equity overcomes European difficulties to finish in positive territory · Emerging markets trail developed markets during the quarter and one year period · U.S. Bond markets benefit from falling rates to deliver strong quarter · Global REITS are the best performing asset class over the last year Commo~ities struggled during the quarter over fears of slowing economic growth Imll'xc". dll , ' 'I II, Il1c!,'x 1,'11(1 I I ' " I, ,,,,, ,"',1"1 III I I 1\ I '<II( II, , "I 111, ii" Illr 111\' 111,1111 [;jJ Russelllnveslnlt'nls What worked and what didn't in second quarter 2011? What didn't work Equities U.S. Healthcare + 7% Consumer Staples +6% Germany +7% Equities Energy -5% U.S. Financial Services -4% Microcap -3% Greece -15% I Canada -5% Fixed Income Global Emerging Market Debt +3% Fixed Income Asset backed home equity loans -6% Real Assets Sugar +6% / Gold +4% Listed Infrastructure: Energy +5% REITs Europe +8% Real Assets " Cotton -28% / Wheat -26% REITs Asia 0% Index Legend: U. S Healthcare Russell 3000 Healthcarl' Sector, US Consumer Staples Russell 3000 Consumer Staples Sector. Germany Russell Germany Il1dex. El1ergy Russell 3000' Energy Sector; US Financial Servrces-- Russell 3000 Financial Servrces Sector; Microcap - Russell Microcap' Index; Greece Russell Greece Index; Canada Russell Canada Index; Global Emerging Market Debt BC Emerging Mkt Index; Asset backed home equity loans - BC ABS Home Equrty Loan Index; Cotton- DJ UBS Cotton Sub-index, Sugar - DJ UBS Sugar Sub-index; Listed Infrastructure Energy- S&P Gfoballnfrastructure Energy Sub-index; REIT's Europe -- FTSE/EPRA NAREIT Developed Europe Sector Wheat- DJ UBS Natural Wheat Sub-index: Gold - DJ UBS Gold Sub-index; REIT's Asia - FTSE/EPRA NAREIT Developed ASia Sector Indexes are unmanaged and cannot be invested in directly. Past performance IS not indicative of future results. !;] Russell Investments Commodity Index returns Don't let short-term volatility mask potential long-term diversification benefits 40 l fI) E ::l - G) 0:: ! c ~ 20 o 2005 2006 2007 - u.s. Equity - u.s. Bonds - Commodities -20 -40 2009 2010 Jan-Jun 2011 U.S. Equity - Russell 3000. U.S. Bonds - BC US Aggregate Bond Index, Commodities - DJUBS Commodities Index Returns for other periods may be lower or higher than those shown above Represent a broad set of investment options · Energy, industrial metals, precious metals, agriculture, livestock · Commodities can be very volatile - a little goes a long way · Which commodity? How much? Diversification benefits · Commodities, fixed income and equities don't always move together · Globally focused · Viewed as an inflation linked asset Commodities: Futures and option trading is inherently complex and risky. and it is not appropriate for all investors. You should know how much you potentially can lose and honestly evaluate if you can afford to lose it in view of your financial resources and investment goals. Because trading in futures and options is appropriate only for certain businesses and individuals. the Commodity Futures Trading Commission requires that a broker provide you with a disclosure document that describes the risks involved in entering into futures and option contracts. Your returns may change radically at any time because futures and options are subject. by nature. to abrupt changes in price. Commodity prices are volatile because they respond to many unpredictable factors: weather, labor strikes, inflation, foreign exchange rates, government monetary policies. etc. And. in an individual account, because your position in futures and options is leveraged. even a small move against your position may result in a large loss. including the loss of your entire initial margin payment and liability for additional losses. Indexes are unmanaged and cannot be invested in directly. Index returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment. [;jJ Russell 1m esl mellls Market outlook A bumpy road to recovery R Y~.~~Jr;;J)~I~.Q~(;liye Maintain outlook for steady economic improvement Corporations expected to capital expenditures and hlrmg Speed bumps to recovery: slow improvement in employment and housing Market fluctuations driven by macro events Debt ceiling, deficit reduction, and Eurozone Man~g~r~ P~rspectlve k~y finging~ In,,~~ln1~nl M~J1C:!g~fQ~~J1QQt\ ')lJn~~Ql Manager sentiment on the impact of QE2 ending Forecasting represents predictions of market prrces and/or volume patterns utilizing varYing analytical data It is not representative of a projectron of the stock market. or of any specific Investment. There is no guarantee that the stated results will be met These views are subject to change at any time without notice. The opinions expressed in this material are not necessarily those held by Russell Investment Group. its affiliates or subsidiaries. While all material is deemed to be reliable, accuracy and I b ed Th . f . I' d .. d h fl' f ' I d . d d t 'd l d' .. ... . . recommenrl(1+ ( t II I, '('1 II [j' f 11\11\) [;jJ Russell Investments 1Il )> m 0 0 0 z 0 0 " c: 0 )0 :ll C -4 m :J :ll ... r-+ 0 ... ... "'U CD ~ ..., 3 Q) :J 0 CD ::0 CD < -. CD ~ Asset Summary Report City of Boynton Beach Pollee Retirement Fund As of June 30, 2011 Market Actual PolIcy HoldIng Value Holding HoldIng Variance Boynton Beach Police Officers Retirement Trust Investment Account - QU7W Total Aauts $ 56.330.177 100.00 % 100.00 % -% RTC Equity I Fund 10,005,295 17.76 17.00 0.76 RTC Concentrated Equity Fund 4,708,374 8.36 8.00 0.36 RTC Small Cap Fund 4,708,374 8.36 8.00 0.36 RTC AIM Fund 5,885,468 10.45 10.00 0.45 RTC World Equity Fund 5,885,468 10.45 10.00 0.45 RTC Multi-Manager Bond Fund 20,545,633 36.47 35.00 1.47 RTC Global Real Estate See Fd 1,765,640 3.13 3.00 0.13 RTC Real Estate Equity Fund 2,276,627 4.04 5.00 ~.96 RTC Commodities Fund 256,425 0.46 4.00 -3.54 RTC STIF 5,852 0.01 0.00 0.01 Cash,Payab~Recewab~ 287,022 0.51 0.00 0.51 P~ase read the endnotes included with the report. Endnotes' Mar1<et value is as of the quarter ending 03131/11. PRELIMINARY REVISED 28-Jul-2011 4:37:20 PM EDT Gh.I Russl'lI Illwsllllt'nls Market Value Reconciliation City of Boynton Beach Police Retirement Fund As of June 30, 2011 FYTD One Month Three Months Year to Date 09130 Beginning Market Value $ 56,991,928 $ 55,544.988 $ 53,507,101 $ 46,784,250 Inflows 518.390 1 ,444,439 2,531.851 7.177,242 Outflows -497,385 -1,230,644 -2,473,590 -3,527,471 Net Inflows/Outflows 21,006 213,796 58.260 3.649,770 Appreciation/Depreciatlor -682,757 571,390 2,764,813 5.896.095 Income Earned 0 2 2 60 Net Market Gain/Loss -682,757 571,393 2.764,815 5,896,156 Ending Market Value 56,330,177 56,330.177 56,330,177 56,330,177 PRELIMINARY REVISED 28-Jul-2011 4:37:20 PM EDT [;] Russell Investments Performance Report City of Boynton Beach Police Retirement Fund As of June 30, 2011 Annualized Market One Th.... Year to FYTD One Th.... FlYe Seven Since Inception Value Month Months Date 09130 Year Yea,.. Vea,.. Yea,.. Inception Date Boynton Beach Police Officers Retirement Trust Investment Account - QU7W Total AMets-Gross 1,2 $ 56.3~,325 -1.20 % 1.03% 5.18% 11.98 % 22.91 % 4.32% 4.59 % 5.63% 8.18% 07101/2002 Total Aaets-Net 1.2 56,324,325 -1.28 0.84 4.79 11.34 21.97 3.55 3.84 4.88 5.42 07101/2002 Russell Custom BenchmarK 3 -1.19 1.07 4.68 10.81 20.83 4.27 4.60 5.40 6.03 Consultant Benchmark 4 -1.16 1.21 5.29 11.96 22.44 5.18 5.02 5.92 6.34 Total Equity 31,192,979 -1.87 O.~ 8.17 17.89 33.80 2.25 2.83 5.18 8.38 07/0112002 RTC Equity I Fund 10,005,295 -1.63 -0.38 5.84 18.82 32.38 1.92 2.97 5.03 5.89 0710112002 Russell 1000 Index -1.75 0.12 6.37 18.27 31.93 3.68 3.30 4.76 5.87 sap 500 Index -1.67 0.10 6.02 17.43 30.69 3.34 2.94 4.22 5.32 RTC Concenu.ted Equity Fund 4,708,374 -1.77 -0.31 5.80 18.59 33.47 10.07 09l3O/2008 Russell 1 000 Index -1.75 0.12 6.37 18.27 31.93 9.83 RTC Small Cap Fund 4,708,374 -1.98 -0.. 8.42 27.49 41.57 4.56 3.05 5.70 7.52 0710112002 Russell 2000 Index -2.31 -1.61 6.21 23.47 37.41 7.77 4.08 6.28 8.06 Russell 2500 Index -2.20 -0.59 8.06 24.12 39.28 8.17 5.20 7.41 9.22 RTC AIM Fund 5,885,468 -1.39 1.09 4.45 11.83 32.28 -0.. 3.17 3.17 0710112006 AIM Composite Index 5 -1.41 0.76 4.64 11.64 30.21 -1.11 2.51 2.51 AIM Custom Composite Index 6 -1.28 1.29 4.61 11.61 30.17 -1.12 2.50 2.50 Please read the endnotes included with the report. PREUMINARY REVISED 28-Jul-2011 4:37:20 PM EDT !;h.I Russell 1I1wsl nwnls Performance Report City of Boynton Beach Police Retirement Fund As of June 30, 2011 Annualized Market One Three Vearto FYTD One Three Five Seven Since Inception Value Month Months Date 09130 Year Years Years Years Inception Date RTC World Equity Fund $ 5,885,468 -1.70% 1.07% 5.79% 15.41 % 32.11 % --% --% .... 0/0 26.20 % 0611412010 Russell Dev Lg Cap Index Net (linked\ -1.60 0.45 5.57 15.02 30.86 24.87 MSCI World Net Dividend Index -1.58 0.47 5.29 14.71 30.51 24.55 Total Fixed Income 20,545,633 -0.51 2.08 3.42 2.88 6.86 8.45 7.34 6.24 6.02 09/0112002 Barclays Capital US Aggregate Bond Inde. -0,29 2.29 2.72 1.39 3.90 6.46 6.52 5.48 5.19 RTC Multl-Manager Bond Fund 20,545,633 -0.51 2.08 3.42 2.88 6.86 10.20 09/30/2008 Barclays Capital US Aggregate Bond index -0.29 2.29 2.72 139 3.90 6.76 Total Alternative Investments 4,042,267 -1.01 1.34 4.80 10.62 18.29 -10.06 -1.42 -1.42 07/0112006 RTC Global Real Estate Sec Fd 1.765,640 -2.27 3.13 5.86 11.85 22.45 08/2412010 FTSE EPRAlNAREIT Dev Real Estate Net -2.54 2,71 5.69 12,04 23.00 RTC Real Estate Equity Fund 2,276,627 0.00 0.00 4.07 9.90 15.71 -10.72 -1.86 -1.86 07/01/2006 NFI-ODCE-EQ 9 0.00 0.00 4.01 9.06 15,10 -9.73 -1.35 -1.35 Total Real Assets 256,425 -4.72 0610912011 RTC Commodities Fund 256,425 -4.72 0610912011 DJ UBS Commodities Index -4.87 Please read the endnotes included with the report Endnotes' Fee adjusted returns are estimated using basIs point adjustments Returns are geometrically linked and could experience compounding effects PRELIMINARY REVISED 28-Jul-2011 4:37:20 PM EDT !;] Russelllnveslments Performance Report City of Boynton Beach Police Retirement Fund As of June 30. 2011 Endnotes. 2 RTC Real Estate Equity Fund market value is as of the quarter ending 03131/11. The market value is reported net of fees while retums are reported gross of fees unless otherwise noted. Fee adjusted retums are estimated using basis point adjustments. Retums are geometrically linked and could experience compounding effects. 3 Russell Custom Benchmark currently consists of: 27.5% R1ooo. 8.8% R2OOO. 11.0% AIM Custom Composite, 11.0% MSCI World Net, 38.4% BC Aggregate. 3.3% FTSE EPRAlNAREIT Net. 4 Consultant Benchmark. currently consists of: 34.0% R1ooo, 11.0% Russell Mid-Cap, 11.0% MSCI EAFE Net, 4.0% MSCI Emerging Markets Net. 5.0% FTSElNAREIT, 30.0% BC Intemdt Aggregate, 5.0% Barclays Capitel US TIPS. 5 Currently consists of: 90.0% Russell Dev Ex-US LC Net. 10.0% Russell Emerging Markets Net. 6 Currently consists of: 90.0% MSCI EAFE Net, 10.0% MSCI Emerging Markets Net. 7 ElfectIve December 31,2010 the benchmark for this fund changed from the MSCI World Index Net to the Russell Developed Large Cap Index Net. 8 Historical performance prior to January 1, 2011 is linked to the MSCI World Index Net. 9 NCREIF Fund Index Open-End Diversified Core Equity-Equal Weight (NFI-ODCE-EQ). PRELIMINARY REVISED 28-Jul-2011 4:37:20 PM EDT GAl Rus...P11 In\{'sllllt'nl... Equity Characteristics RTC Equity I 300/0, RTC Cone. Equity 140/0, RTC Small Cap Equity 140/0, RTC AIM 180/0. RTC World 180/0, RTC GRESF 60/0 As of June 30, 2011 REGION/COUNTRY Relative to MSCI All Country World Index Under/Over Europe Europe ex-UK UK Pacific BaSIn Pac BaSin ex-Japan Japan Americas Africa/MIddle East Multi ,Country % Equity in Country RUSSELL SECTORS Under/Over % of Fbrtf oho 20.4 % Technology 3.4% 13.8 % 14.5 Health Care 9.9 5.9 Consumer Disc & Serv 4.1% 15.3 9.8 Consumer Staples 6.9 5.7 Other Energy 9.7 41 Materials & Processing -3.6% 6.4 188% 693 Producer Durables 11.6 0.5 Financial Services 22.3 o 1 Utilities -4.1% 4.1 !11% 09% 0.1% Emerging Mark.ets "9.1%i 4.4 400% -200% 0.0% 20.0% 400% Country DeVIation 24.2 SIZE Under/Over % of Fbrtfolio Large -7.9% 27.9 Med/Large 30.2 Medium 17.1 Med/Small 12.3 Small 10.1% 12.2 Unclassified 0.0% 0.3 -30.0%.15.0% 0,0% 15.0%30.0% Sector De\oiation STYLE Price/Earning ex Neg Price/Book Price/Sales Forecasted Grw L T Style Score3 -10.0% 0.0% 10.0% 8.5 Fbrtf olio Value 017 155 2.0 1.4 12.5 -0.4 -0.2 0.0 0.2 0.4 1Also embedded in the regional/country allocation above. 2Market-relative z-score values in bar chart represent a market value-weighted comparison of countries in common between portfolio and index 3Style Score is an equal weighted composite of Price/Book and L T Forecasted Growth z-scores. similar t th t d f R II US E 't . d . Data IS as of the date specified Curlent data may be different !;] Russell Investments Ul m (") o z c C c: )> :u -4 m :u N o ... ... c . en . m ..c c -. I"""+- '< -n c :3 C. :::0 (1) < -- (1) ~ Market Environment Strong Absolute Returns - Russell Indexes Sector Returns (0/0) - Second Quarter 2011 STABILITY 10.0 j 8.0 6.0 4.0 t 2.0 0.0 -2.0 -4.0 Russell 1 OOO~efensive STYLE 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 SIZE 10.0 8.0 @ Russell 1 000 Growth . Second Quarter . Year-to-Date 6.0 4.0 2.0 0.0 -2.0 . @ . Russell 1000 DynamIc -4.0 <ID Russell Midcap Index . Second Quarter . Year-to-Date . Second Quarter . Year-to-Date RusseIl1000@ @ Russell 2000 Defensive> Dynamic Mid Cap> Large Cap> Small Cap Growth> Value Russell 1 OOO\alue Source RDB Indexes are unmanaged and cannot be invested in direcUy. Past perfoonance is not indicative of future results. WJ Ru<.;<..,cll Imc"llllt'llh Market Environment Factors Second Quarter 2011 Defensive factors were rewarded most measures of risk were penalized Quality High Return on Equity Stocks High Return on Assets Stocks Valuation Low Price to Book Stocks Low Price to Sales Stocks Safety and Stability Higher Dividend Yielding Stocks Defensive Sectors Cyclicality High Earnings Variability Stocks More Cyclical Sectors including Energy, Technology Market sensitivity Higher Beta Stocks Small-Cap Stocks Past performance IS not rndrcative of future results !;J Russell Investments Market Environment Russell 1 OOO@ Index Sector Returns - Second Quarter 2011 Market flat overall during second quarter, defensive sectors led 15 5 J .- r 10 o -5 -10 Health Consumer Consumer R1000 Materials & Producer Financial Care Staples Utilities Discretionary Index Processing Durables Technology Services Energy . 7.2 5.7 4.2 3.7 0.1 -0.4 -0.9 -1.7 -4.6 -5.1 . 14.0 9.4 8.9 8.4 6.4 5.0 7.9 1.2 -1.0 10.8 Source: Factsel Source: FactSet Indexes are unmanaged and cannot be invested in direcUy_ Past performance is not indicative of future results_ GhJ RUSSdllll\l'"lllH'llh Market Environment Russell 1 OOO@ Index Stock Correlations - Second Quarter 2011 Correlations were low at the beginning of the second quarter before rising to even higher levels than the first 08 .n 'J 04 r-' rJ- \r--J "t.---t' , i -,. ~ -~"'\ j"-' "^-'\ ",,,/ ""'" ,~-"! -""'- "'...... J) f"; ,i""-. J " \. ./\...-' l-'\ U-," ,.) 0,2 - 2D-Oay Correlation o 1 -60-0ay Correlation -Long Term (25 Yean Average 0,0 Jan 3 Jan 17 Jan 31 Feb 14 Feb 28 Mar 14 Mar 28 Aprl1 Apr 25 May 9 May 23 Jun 6 Jun 20 Source Russell Cross section of the stock correia trans for the entire Russell 1 000 Index. Past performance is not indicative of future results Id ednd tbe teddcll , [;jJ Russell I nVl'sl nwnls Fund Performance Russell Equity I Fund - Performance Ending June 30, 2011 The Fund underperformed its benchmark, the Russell 1 OOO@ Index, by SObps for the second quarter and outperformed by 43 bps for the one year rolling period ending June 30, 2011 Fund positioning entering quarter (benchmark relative): . The fund was positioned for a moderate economic recovery with a slight overweight to higher beta companies and an underweight to high dividend yielding companies . The fund had overweight allocations to pro-cyclical sectors including consumer discretionary and technology, but was underweight to the defensive sectors including utilities and consumer staples What happened during the quarter: . Underweights to defensive sectors, most notably utilities, detracted from returns as investors sought low volatility and safety during the quarter . Stock selection within the financial services sector detracted most from fund returns, due to holding large banks (JPMorgan Chase, Wells Fargo, Goldman Sachs), which were also some of the Russell 1000 Index's largest performance detractors . A moderate overweight to stocks with higher betas hurt performance as investors avoided risk and moved toward stocks with more defensive characteristics Stock specifics: . JPMorgan Chase & Co, Wells Fargo & Co. and Goldman Sachs: Overweights to all three detracted from performance during the quarter as investors questioned the economic recovery and the potential effects of sovereign debt contagion . Google reported a profit that was lower than most analysts' expectations. The stock struggled throughout the quarter due to increased competition and concerns that future growth prospects may be less than previously thought. The fund's overweight detracted from performance . Johnson & Johnson was the largest contributor to returns in the Russell 1 000 Index for the quarter as investors sought stability and defensiveness. The fund's underweight to Johnson & Johnson hurt performance Source; BNY Mellon Indexes andlor benchmarks are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. Any stock commentary is in reference to its affect on the Fund performance. it is not a recommendation to purchase or sell any specific security.. The Russell Equity I Fund is not a mutual fund, but a fund of the Russell Trust Company Commingled Employee Benefit Funds Trust Performance is gross of fees. Fees will reduce the overall perfonnance of the fund. [;h.J Russdlln\'('<.,tmI'Ilh ,0 ;:::,',' : R Russell Equity I Fund Period ending june 30, 2011 'f~j Seeks high, long-term returns that exceed the Russell 100()'ID Index by investing in common stocks that rank among the iargest 1,000 companies in the US stock market ___.m__...._..._ _._;. _., __...........,...........".._._. _._"~1 JPMorgan Chase & Co Pfizer, Inc Apple, Inc. Oracle Corp. Qualcomm, Inc Chevron Corp. Wells Fargo & Co PepsiCo, Inc ConocoPhillips I nternational Business Machines Corp. Total ......~ 2.43 2.30 2.17 2.02 1.62 1.45 132 1.29 128 127 17.15 ..... 1.33 119 2.30 0.92 0.65 1.56 1.12 0.75 0.86 1.52 12.20 The top ten holdings list does not retrectthe Investment of cash Ie serves and cash collateral received in securities lending transactions in one or more of Russell's money market funds " Source: BNY Mellon Asset Servicing ...luut.,U lI1C+}1 AIIergan Inc. Accenlure Pic Berkshire Hathaway Inc (CI B) Exxon Mobil Corp Visa Inc. ...[LIT] J~tQlIe[Dt1 (-) : J P Morgan Chase & Co Goldman Sachs Group Inc Johnson & Johnson Arch Coal Inc. Devon Energy Corp I Source: FactSet .. 0.72 1.02 -1.00 -2.80 0.52 *' 1.32 0.69 -0.78 0.32 0.59 ~,. eo:' . 'Ale. 0.11 0.10 0.08 0.08 0.Q7 -0.16 .0.12 -0.11 -0.10 -0.09 .U1rlli)~F.~L. Russell Equity I Fund Russell 1 OQ()'ID Index S&P 50()'ID Index ~m . n m 1 L 111 Jl~ Tolal Net Assets Portfolio PIE - I/B/E/S 1 yr Forecast EPS IT Growth ForecaslllBJEJS Medians Price/book Ratio $ Weighted Average Market Capitalization Portfolio Beta vs. Russell 300()'ID Index ~ 32.36% 31.93 30.69 l....rli.f -0.38% 5.84% 0.12 6.37 0.10 6.02 f -Iii" . $5.09B 13.0 11.96% 2.20 $70.61B 1.03 1.92% 3.68 334 r-~' 2.97% 3.39% 3.30 3.21 2.94 2 72 T:\~~JlIl ~Jr $13.79T 13.5 11.43% 2.23 $78.97B 1.00 1QIItt . --h_.if,.;... $13.76T 13.8 10.920/0 2.31 $83.37B 099 ....... l"I~~l;~:._t- ~ 1 Source: BNY Mellon Asset Servicing except Total Net Assets .Russell Equity I Fund .Russell1J()(Jl!) Index ~onsumef lJIScretionary lndel{ Rtturns % 368 568 .46'1 y-, .042 .506 .0.87 .166 421 20 ..t:c---.="'-~~-_.::...:'_ $5.30B 13.3 11.35% 2.21 $73.10B 1.05 . Value Market-oriented . Growth 36 32 32 36 32 32 Consumer Staples FinanCial Services Health Care Materials and Processing .. !II'I_. of, f!lt8d...... liIg;! -Ii ~ R&l1ID' lAb Fk-, ~J:I~ ..., Q.9~Q -- Energy Sa! l _1Iut~_holI;tnIt_"'JDl<ndmw-d _"~_-..nIlr""lnI_~ Mrirn ___-~_pdcnd-RIl:""'~ IlII1IIIIlIDI<ndalnkb..,......_-... \lile ~ 3\Ia GotoIh Producer Durables Technology utilities ~ 1) l5 1 Source: BNY Mellon Asset Servicing Advisors listed are current as of June 30, 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell Equity I Fund is an investmenttund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company. It is not a mutual fund. Performance shown is gross of fees. Fees will reduce the overall performance of the fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. !;] Russell Investments Fund Outlook Russell Equity I Fund - Second Quarter 2011 . Fund continues to be positioned for a moderate but choppy economic recovery . Russell is emphasizing consistent growth (Montag & Caldwell) and larger-cap, higher quality, value-oriented (MFS Institutional Advisors, Institutional Capital, Lazard Asset Management) advisors, while tactically underweighting more cyclically sensitive advisors (Schneider Capital Management, Suffolk Capital Management) . During the second quarter of 2011, the fund's biggest moves were toward the consumer discretionary and consumer staples sectors and away from the technology and financial services sectors Source: Russell Advisors are current as of June 2011. Russell has the nght to engage or terminate an advisor at any time and without notice. The Russell Equity I Fund is an investment fund of the Russell Trust Company Co/Mlingled Employee Benefit Funds Trust; it is not a mutual fund Gh.l Russelllnw....IIlH'llh Fund Performance Russell Concentrated Equity Fund- Performance Ending Junp 30 2011 The Fund underperformed its benchmark, the Russe1l1000@ Index, by 43 bps for the second quarter and outperformed by 154 bps for the one year rolling period ending June 30, 2011 Fund positioning entering quarter (benchmark relative) Overweight to pro-cyclical sectors including technology and consumer discretionary and underweight to defensive sectors Including utilities and consumer staples The fund was underweight defensive charactenstlc,:> (dividend yield) and overweight pro-cyclical characteristics (beta earnings variability) What happened during the quarter The fund's emphasis on pro-cyclical. higher beta stocks was penalized during the quarter As investors looked for risk averse and defenSive assets during the quarter the fund's focus on stocks that are expected to benefit more from a recovery was not rewarded Stock specifics, Johnson & Johnson was the largest contributor to return In the Russell 1000 Index for the quarter as investors sought stability and defensiveness The fund's underweight to Johnson & Johnson hurt performance Staples was down during the quarter due to worse than expected first quarter earnings, downwardly revised full year 2011 expectations and ratings cuts by major investment banks. The fund's overweight hurt performance Sanofi SA was up during the quarter after the French healthcare company announced positive first quarter earnings and a host of new and positive information with regard to drug testing. including diabetes drugs The fund's overweight benefitted performance Source BNY Mellon Indexes and/or benchmarks are unman aged and cannot be Invested In directly Past performance IS not Indicative of future results Performance rs gross of fees. Fees will reduce the overall performance of the fund Any stock commentary rs in reference to its affect on the Fund performance. It IS not a recommendation to purchase or sell any specifiC secunty The Russell Concentrated Fund rs an Investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust; It IS not a mutual fund !;J Russell Investments Russell Concentrated Equity Fund Period ending June 30, 2011 1 Seeks to generate excess return over its benchmark the , Russell 1 ()()()e Index on an annualized basis over a full market cycle. -~Ij~ Appl!-_'~. ., 2.59 2.30 I . Pfizer, Inc. 2.41 1.19' ,. -----_._..._-~-,~.__.. MetLife, Inc. 1.91 0.21 ..., . Time Warner, Inc. .....~+_.--u7~=.."-_... 0.29 ...J Qualcomm, Inc. 1.76. 0.65 , I ,_.. '-"~'--"'-+---"----l : Microsoft Corp. 1.66__..~_i . Visa, Inc. u...._.~._!.:..~_..-+--~_ . ~ . PepsiCo. Inc. 1.52 0.75' ~- -'--'-'-'-"-~---'- ---." : Johnson Controls, Inc._.1.42 _. _ .. .'. 0.20 _...1 , JPMorgan Chase & Co. 1.42 1.33' , .-----~-----_.--_._-_._--_... ......-.- Total 18.09 8.57 1 The top ten holdings list does not reflect the investment of cash re- serves and cash collateral received in securities lending transactions in one or more of Russell's money market funds. 2 Source: BNY Mellon Asset Servicing _~_._.J 0.18 0.16 0.14 . "'0:09- -.J ! Russell Concentrated Equity Fu~~ I Russell1()()()e Index n_ i 6.37 ; 3.68 1 Inception date 10131/05. The date shown represants the date the index comparison began and may not be the actual index inception date. Total Net Assets I l POrtfoli() 'p1~-IIB1EJ~l yr. Forecast EPS I I LT Growth Forecast 1/~~.~edian~...._~2.49%_J 11.43% l I Price/BoOk Ratio 2.23 -+-._....~.._+. $ Weighted Avera~e Market Capitaliza!i.()~_,... ..... $63.29~ ...\. ..._._~~~?!3 ._ ..~. I Portfolio Beta vs. Russell ~ Index_~__._ 1.04..~___..... 1:~_____ i 1 Source: BNY Mellon Asset Servicing except Total Net Assets. $13.76T 13.8 10.92% '-2.31- '1 $83.378-' '-, "'U~_~_'__'_ 0.99 T t .--------+ i ~_...... .... ...., ",'.c~4:-,{~~;':fPf",;-"":.'1 = ~t;;_:~~iL1s1t2~:~j;';~0;i:]+_:...~ i ! i .Russell Concentrated Equity Fund .Russetl1:lOQllD k1dex Index Returns % i . Value ..._~_.__. I Market-oriented L i L.!. Growth_..~__ I 1 .. .j.. . , .__---L____ u_____. '1 Consumer __. ----..---------~---'"---..' Discretionary Consumer ~........"-M-r- ;. Staples Financial....... SelVices ;,,_m'l HeaKh Care ..- .... .. .. Materials and III. i . Processing I . 3.68 ~.\,."'"C.ii..", :.", ,', , ____l'''"'''",,"'';'~;'''''->'''''~',"',,_ :,.' _ "",", , " " __ "__ __, ',__' ,,>"f:'\ ?!'-'~'.>~:-,<::-~.": ICAPe ':"r}Zr?,;lri!fj:';~~i1 r 5.68 -4.61 L_ 7.fi _MlIC_ EquIty Fund * Russell 1 0011" .... Index -0.42 Energy Sound Shore SuIIoIk SID -5.06 Wells -0.87 . Producer Durables Det.~ j .166 . First e.gIe Technology utilrties ... 421 Medium o 5 n fi ~ -.- ~---~-_._~---- -'-'-'.'- ..~,_.._. . 1 Source: BNY Mellon Asset Servicing Vlllue MIIr1c",-orientad ~ Growth 25 Advisors listed are current as of June 30, 2011. RusseK has the right to enllage or lerminate an advisor al any time and without notiCe. The RussaK Concentrated Equity Fund is an investment fund of the Commlllgled Employee Benefit Funds Trust established by Russell Trust Company. II is not a mulual fund. Performance is shown gross of iges. Fees wK' reduce the overall performance of the fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. GhJ Russell JIIwslmpnls . -:. t, '. '" R Fund Outlook Russell Concentrated Equity Fund- Second Quarter 2011 The Russell Concentrated Equity Fund continues to be positioned for a moderate economic recovery, one In which stocks with strong balance sheets. Industry-leading positions and continued attractive growth prospects are rewarded ilIt The fund's largest overweight position is In the more growth and cyclically oriented consumer discretionary and technology sectors, while its largest underweight is to the utilities sector During the second quarter of 2011 the fund's biggest moves were toward the consumer discretionary sector and away from the financial services sector there IS no guarantee the stated expectations will occur Source Russell The Russell Concentrated Equity Fund rs an Investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust, It IS not a mutual fund ~ Russell Investments Russell Small Cap Fund Period ending June 30,2011 .... .. '.. . . .. ...... ... .... ..... ." '> .d'.' ." . - . -. -- ~ . Seeks high. long-term returns that exceed the Russell 2()()()'1ll r Index by investing in smaller capitalization stocks of the U.S. stock market. -~, , SXC Health Solutions Corp.. 0.93 0.11, ,.. . --.---- ..~. I ,':l.""SH()ld!ngsCorp: 0.80 0.07 Catalyst Health Solutions, Inc. 0.68 0.07, : Tenneco, Inc. "---~+---_. 0.63 -"~----+----- 0.08-- I I ~.._..~~--t---"'---'""----'-+----'--~--"-i . Hittite Microwave Corp. 0.62 0.06 i " ...--.---..".......---.-.--...."1-" --------1 " TreeHouse Foods, Inc. 0.61 0.06! . ---.... --_.._~--------- , BE Aerospace, Inc. 0.61____ -__..J.-____~~~____ ; BJ'sRestaurants, Inc. 0.61 0.03 .. .__e--_____.____ ._~..- EZCORP, Inc. 0.60 0.05 -----..--.--.----- --.,. ._-~..~,- _.~. --.-.\ Robbins & Myers, Inc. 0.58 0.06 I Total 6.68 0.70 1 The top ten holdings list does not reflect the investment of cash reserves and cash collateral received in securities lending transactions in one or more of Russell's money market funds. 2 Source: BNY Mellon Asset Servicing i BJ's Restaurants Inc. , Cornerstone Properties, Inc. Carpenter Technology Corp. i Ezcorp Inc. ICI A) : Robbins & Myers Inc. .-'...____ 0.59 0.29 0.09 ..___.._ j 0.27 t' 0.08 ! --------- -.----4 +-_ 0.55 1--~--1 0.44 I 0.07____J i IntraLinks Holdings Inc. '0.24 -0.11 [Approach ResourceSlnc~m! .. ... 0.23--1 '-:0.09---1 i NatlOnaJsemlCOnductor Corp.--___..:~~-+_ -o.09._J : Green Mountain Coffee -0.28 I -0.09 i Roasters Inc. _____ J . .__.___. ' , Motricity Inc..____________ 0.09 i -0.09 1 Source: FactSet Russell Small Cap Fund I Russell 2()()()'i Index Il Russell 2500™ Index --- ._~___u.......'.,_....,.... I Total Net Assets $1.088 i Portlolio PIE - I/BlBS 1 yr. Forecast EPS t-----rr:4-- I LT Growth Forecast VBlE/S Medians - r 14.55% I Price/Book Ratio .--------t" -~-~- 2.00 I $ Weighted Average Market caPits"iizstion1 $1 .90B -~---$1.28B ---- I Po.rtl.~Ii?Betit ~s.Russell 3QOO.Bl1;;de~ 1 1.27 1.28 1 Source: BNY Mellon Asset Servicing except Total Net Assets. 4.56% i 3.05%' 6.06% i ---.---t----.-+-~--"1 7.77 . 4.08 , 6.27 ; -- .. -t..-- ----~ +.---,----..-~.~--.i 8.17 ! 5.20 ! 7.40 , $1.148 ._~------_.- --~_.~- 18.1 ..---r--,..--.----~...-- : 14.43% t ._- 2.25 , -------t--.--.- $2.028 I 1.30 $1.27T 1~-'-' _.._.._-~-~ 13.20% -.-----. 2.14 .-------- $1.438 1.32 t- ---+---- 3.42 I~_.E'~"'''..... ! 1 Medium ! i .~.,,,..'c.i:fi.-::_:..e;. i'<~j'L:,~tg;-:j,;.'>;- l . ---..~. . i I !_"-~7n-;n;~"",~w>1 . __ _n' -."~j!j;--Ji:i!n~~';;"""- '.',', U"..,._" '_.~'. ,".~."",' ,,~:~"'.,. .. ", _,".' ,_"."" .' ..-'>l'<_._""." ~~".;;r,___,._.:..-~':' _'.,~._','.:._, ' ... __ .... ",'_ .. ,_, .,_,u ," .. .RuuellSmatlCapFund .Ruuell2OOOlD ftdex Consumer Discretionary +----. + Index Returns '!. 193 -2.39 Russell 2500"" Value Ind. Russell 2500™ fndex .& Tygh Russell . 2500™ Growth Index Consumer . St_pJes ~:.... ~~eC':~:i:d" ~ Ene~ ~_ . ,~=~ Utilities .. 1) 20 25 3.72 -4.06 -6.99 SID In1eI7iIY . . DRZ S.....I Value Buckhead _s . R_ _I Cap Fund. .SUrmil .~ Rwlger Century !; 1 Source: BNY Mellon Asset Servicing -4.06 -4.43 525 ClllriVest Russell 2~ Index Market-Clriented 8\yt4t GrowII1 Advisors listed are current as of June 30, 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell Small Cap Fund is an investment fund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company. It is not a mutual fund. PeIformance shown is gross of fees. Fees will reduce the overall performance of the fund. Indexes are unmanaged and cannot be invested 1/1 directly. Past performance is not indicative of future results. !;] Ru""dl 111\('''1 nwnls ~ ~ I t ~ ; ~~. III In (") o z c " C Jo :II -I In :II N Q ... ... - ::J r-+ CD .., ::J Q) r-+ -- o ::J Q) - -n c: :J a. ;0 CD < -. CD ~ Russell All International Markets Fund Period ending June 30,2011 ., international stock market by investing in companies from : developed and emerging countries around the world. ; 1;-~~~~~1 ~':' ,-,oS,",-,.,. ;...",.","- -_";";'~!'~~-'-:'" '- ',', -,'"., '__"..__i-~~D?..rf,:, I Russel Errerging Markets Fund 10% R-lsseU I1ternalional Fund 90% 1 Please see the Russelllntemational Fund and Russell Emerging Markets Fund pages for fund advisors and styles. Russell All International Markets Fund 1.09% L.AIM Composite Index" _~--==~~_.-?76 _-1... 30.21 .-L _::.~__l ,.~~~l. 1 AIM Composite Index currently consists of 90% Russell Developed ex-US Large Cap Index Net"/10% Russell Emerging Markets Index Net*. Russell International Fund , II'" Russell Developed ex-US LSr96 capi;;de~' 0.94 I 30.46 . Net (Unked)'* i ! 1~~:~"i==1~=~~r:ET~E:r (Linked)'* I ' i - MSCI Emerging Markets Index Net(USD)* I -l.'lSJ' "0.88 -'-' ... 27.00! 5.67 1.48 t-~- ---.------""--""1 14.02 , 11.35 ----r--- -1.n 6.45 4.11 5.66 18.16 16.16 , --I 4.22 11.42 I Total Net Assets $1.658 ----+--~!.T ! Portfolio PIE 13.6 . 12.8 ! Portfolio PIE -1IB1E/S 1 yr. ForecastEPS'-'l'-- 12.0 __un .-t. .. '1T.6' 1__ .-.-....-'-.-- ;, 1 Year EPS Forecast - I/BlE/S Medians .___~_L_ .____.__~___ ___.u_.j_____ ._ _~~~,____________L__ 1 Source: BNY Mellon Asset Servicing except Total Net Assets United Kingdom_ ...___ 17.01. Japan +___ 15.86... France i 8.16 I Germany I 6.32 SWitzerland' I 7.19 I 5.88 1 Netherlands __ __=t=_~--=t==-.5.85 _'_~~~ I ~::d:ong --..-..~.,-==~~~=. --. . t ~:~: ___+.nn__ ::~ 'u_ ~, I Australia -r ----.- -0.61---"1' 2.96 [So~th Korea ,-- 2.73 1 Source: FaclSet 0.62 1.40 ~--_. -0.19 -0.80 __,_._._ -0.70. 2.64 .._--~._-~ -4.87 0.42 -3.78 1.37 8.35 7.12 6.58 . ""--.---,-.-..- 3.21 -.--"-..-,.-...- 9.31 2.91 6.74 1.35 I __.I I "j 'j The Russell AIM Fund. Russelllntemational Fund and Russell Emerging Markets Fund are investment funds of the Commingled Employee Benelit Funds Trust established by Russell Trust Company. They are not mutuallunds. Performance is shown gross of fees. Fees will reduce the overall performance of the fund. Indexes are unmanaged and cannot be invested in directly. Past performance IS not indicative of future results. "Effective December 31, 2010. the MSCI indexes included in the benchmark changed to Russell indexes as follows: MSCI EAFE Index Net to Russell Developed ex-US Large Cap Index Net and MSCI Emerging Markets Index Net to Russell Emerging Markets Index Net. *Historicel performance prior to January 1, 2011 is linked to the MSCI EAFE Index Net and MSCI Emerging Markets Index Net at the same weights. Gh.l Russell Il1w'slml'nts Russell International Fund with Active Currency Penod ending June 30. 2011 ..ie. if Seeks to provide a favorable total return and additional diversification through a fund of non-U.S equity Investments and active currency management strategies. Fund .....1 Cash" 5% Russell international Fund' 95% The fund has an active currency overlay, advised by Principal Gie lJallnvestors. LLC and First Quadrant. 'The Russell International Fund is an investment fund of the Rus. sell Trust Company Commingled Employee Benefit Funds Trust. it is not a mutual fund. "Liquidity reserve/collateral for the currency managers. Cash eq. uitization techniques are utilized with derivatives in order to approach a fully invested portfolio position and to earn "market like" returns on the fund's excess and liquidity reserve cash balances Russell International Fund with Active Currency Russell Dev ex-US LC Net (Linked)t MSCI EAFE Index Net (USO)^ Russell International Fund 0.38% 0.94 1.56 1.24 4.80% 29.23% -0.68% 5.06 30.46 -175 4.98 30.36 1.77 4.78 32.42 .1.82 1.46% -0.06 -0.07 , Inception 10/31/06. The date shown represents the date the Index comparison began and may not be the actual Index Inception date. ota et Assets PortfOllC;PiE POrtfofi'oP/E - I/B/ElS 1 yr. Forecast EPS 1 YearEPS Forecast - IIBIEIS Medians 1 Source: BNY Mellon Asset Servicing except Total Net Assets ~l~l~_~~l(TIMI!~~J1!~~I~ 15 10 - 14.4 12.0 19.2 - - 5 I CHF CAD SEK - c: ~ 0 Q) 0.. -5 -10 -15 USD EUR JPY GBP AUD NZD 1 Source: Russell Investment Management & Research. Advisors are current as of June 30. 2011. Russell has the right to engage or terminale an advisor at any lime and without notice. The Russell International Fund with Active Currency is an investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust Russell International Fund with Active Currency; it is not a mutual fund periormance is shown gross of fees. Fees will reduce the overall performance of the fund, Indexes are unmanaged and cannot be invested in directly. Past periormance is not indicative of future results. ^Effectiv.e December 31. 2010 the benchmark for this fund chal1{l8d to the Russell Developed ex-US Large Cap Index Net. *Historical performance prior to January 1, 2011 is linked to the MSel EAFE Index Net. !;] Russell Investments Russell International Fund Period ending June 30, 2011 - Seeks high. long-term ~t~rns :o~parable to the broa~ i~terna-"'1 tional stock market by investing in non-U.S. companies from the ! developed countries around the world. i , ~E~~ ~~~;~~'NV mm_____ "'. ..-+"~:~}-.+{~ .... . Vodafone Group PLC--'''I"1:05 l-1:O1'- . B.F'PLC ___, __ . ~.03 I 1:03 .. . Seven & I Holdings Co., Ltd. ' 0.99 I 0.16 ! HSBC Holdings PLC .. - , "'---~"~T1:31u .. Sanofi-Aventis .1. 0.93 ..r~=0:.62'~! . Nestle SA i 0.93 i 1.50 ,Royal Dutch She"PL~__... . ........:t 0.88 ...t. 0.94 _...'......' Total__ 10.34 _L 8.5!.n 1 The top ten holdings list does not reflect the investment of cash reserves and cash collateral received in securities lending transactions in one or mora of Russelrs money marl<et funds. 2 Source: BNY Mellon Asset Servicing · Research In Motion Ltd. ------~._..-->----- Hyundai Mobis Co. Ltd. ! Canon Inc. I Swatch Group AG : Sanofi-Aventis "t ... -------t.- --==.'={ : OGX Petroleo e Gas Participacoes S/A ! Barrick Gold Corp. iROCheHOklingAci" ! Nestle SA ! Youku.com Inc. CI A ADS 1 Source: FactSet Russell International Fund ' I Russell Developed ex-US Large Cap Index Net (Linked)~ i MSCI EAFE Index Net (USD)"-.----..----------- i _ . u~~..___.._..______._....__.'_ 'I' Total Net Assets_. Portfolio PIE i"POrtfolio'P/E: IJB/Etsf yr. Forecast EPS i 11' yeBrEi5SForeeast -ItBlE7SM8dians , ...) [$ Weighted Average M~r~~~~taIiZ~onr'H'-- L% in Emerging Markets__,_.,........ _,......L_.____.-I===~:_._,_..., 1 Source: BNY Mellon Asset Servicing excapt for the fund's Total Net Assets. --i _!!.>....:!!....,...<~ c'~~_"'-~- ." <.rh- -. ~ ~'- - _~ *,' ~%~~~~~.W~l I . i ._..._noIF.... ._OwE>oUSlJIrgoClo>_ InftX Net Ret..... " . Value --~---_._._----............- I . Marl<et-oriellt~_ -- , . Growth eo...... rMcNtiorwy 7.40 ~__,~,;~~i"~;:kc:~::~;:.~:~t~':,;;;,y?,:,,~'1 I I Co__~ 7.13 Er1IIw 4.44 ~ Mondrian . MSCI EAFE Index Nel ... FirwlcWs -ll.66 8.89 MFS 0.53 Mersico -. WoIIi8m - AxIom. . UBS del Rev -:ee Pzena GLG -280 -ll51 _I __I Fund 0.91 0.01 '() '62025 30 Smoll 1 Source: BNY Mellon Asset Servicing & FactSet V.lue Marke1-oriented ~ GrowIh , Advisors listed are current as of June 30, 2011. Russell has the right to engage or terminate an advisor at any time and without notice. i.... The RUBselllnternational Fund is an investment fund of the Russell Trust Company Commingled Employee Benefit Funds Ti'ust; it is not a mutual fund. Performance is shown gross of fees. Fees will reduce the overall performance of the fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future resulls. "Effective December 31, 2010 the primary benchmarl< for this fund chanaed to the Russell Developed ex-U.S. Large Cap Index Net. *Historical performance prior to January 1, 2011 is linked to the MSCI EAFE Index Net r;] Russell InW'stmenls Russell International Fund Peflod ending June 30. 2U1 i Cauntry 1111'.._1....1 (CM.) . Russell International Fund .Russell Dev ex-US LC Net' United Kingdom =========-- Japan France Germany Switzerland Netherlands Canada Australia Hong Kong Spain Other Developed Emerging Markets Exposure o )4 13 'B 2 4 6 8 tJ 12 , Source: FactSet Russell Dev ~x.US LC Net Return % Local C urr~ncy U S$ Currency 1.93 209 -2.37 0.19 3.57 5.82 4.95 7.22 -1.34 7.19 -5.36 -3.33 A.96 -4.21 -3.99 -0.61 -015 -0.14 -102 1.11 20 Performance is for 2Q2011 The Russell International Fund is an investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust, It is not a mutual fund Performance is shown gross of fees. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. 'Effective December 31, 2010 the primary benchmark for this fund changed to Russell Developed ex-US Large Cap Index Net !;] Russell Investments Russell Emerging Markets Fund Period ending June 30, 2011 Seeks high, long-term returns comparable to investments in emerging markets by investing in stocks from newly developed emerging market economies. ~1~~1 , Samsung Electronics Co., Ltd. i 2.23 I 1.67 ~~l1eSis Indi~~ Illvestrrl~nt Co., Ltd. 1 2.22 1 i Lukeil Holdings i 1.90 i 0.96 . SHS GENESIS SMALLER CO . '-~-l-1"":81...+"1--.-..-c I Taiwan Semiconductor ManufacturillgT 1.76-. .. 1.18 \C~Ltd ! I .......-.......---... -+ ...-.----+.. '. Anglo American PLC -I 1.33 I 0.10 .. :~:: Movil SA de CV._--~~.~J.~~1!l l.~..' Sberbank of Russian Federation ! 1.17 I 0.05 .-..-... .---..--.~-.. f I KGHM Polska Miedz SA i 1.01 i 0.19 To'" J~,09 l_~~~ 1 The top ten holdings list does not reflect the investment of cash reserves and cash collateral received in securities lending transactions in one or more of Russell's money market funds. 2 Source: BNY Mellon Asset Servicing i Petroleo Brasileiro SI A .. Petrol Brasileiros Com NPV ] KGHM Polska Miedz SA ; Gazprom OAO jCompanhia de Bebidas das Americas ADS r Gazprom OAO (ADS) , Petroleo Brasileiro S1A (ADS) : Lukeil Holdings (ADS) Hyundai Mobis Co. Ltd. America Movil SA de C.v. 1 Source: FactSet ADR: American Depository Receipts I Total Net Assets_._.._ .__._...___..1. . $848.52M_. .t . .~854.09_M;. Lf>o~lio P/E___ _ _) 11.8 T 12.7 I I P()rtfolio p~~. ~I/I3/E/.S1J..r.!or~llst~f'S I 11.2 I 10.9 l [J :;~~: ~~;~~~a~~:~~J~~=.!~~:;4B ~~:.~t..~.__....-~-:~~~~~2B--=t:_. . 1 Source: BNY Mellon Asset Servicing except for the fund's Total Net Assets $5.08T 14.4 12.2 26.2 I . . $45.91B -.. -1 ._~_FlI'Id ._a.lIlkNol Indox Not -..% 7.41 8.11 -7Zl .131 3CIl Ul -4.55 ~ 4V 'D1 2l) 25 . Value I I Market-oriented : . " I . Growt..'1...........__ 0____ .... I -. ^~._._, I eo...... ~ f"'Jl'Jililml ).' ! ";;Li/;;;:;:j-~j',t''''' eo......_ ...,.. SlB QreOs .1 q~~Q RaIljI e..grg u-.- . MIIeII Ard o -- fWhc..j -- -.. - I'licm - TocIrtoIog, - T """"""'"'* - l.liIIioo" tl fi ____.1 1 Source: BNY Mellon Asset Servicing & FactSet - SnlI Mr1& Oinld ~ Qo.\Ih Advisors listed are current as of June 30. 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell Emerging Markets Fund is not a mutual fund. but is an investment fund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company. Periormance is shOwn gross of fees. Fees will reduce the overall performance of the Fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. "Effective December 31, 2010 the benchmark for this fund changed to the Russell EmeI'Qlng Ma~ets Index Net. tHlstoricaJ performance prior to January 1 , 2011 is linked to the MSCI Emerging Markets Index Net. !;] Russell Investments Russell Emerging Markets Fund Period ending June 30 2011 ~-' --(tfi.~.' -ij . _.'~. .,. '.-. ..-...........-_.~--~~-_.__.-"" South Korea Brazil Russia China T a/wan South Africa Hong Kong India Mexico Indonesia Other 0 1 Source: FactSet .Russell Emerging Markets Fund .Russell EM IdxNet' Russell EM Idx Net Return % Local Currency US$ Currency -1.01 1.70 -7.14 -3.32 -6.58 -4.94 -2.79 -2.80 -0.85 1.51 1 12 -140 0.10 -014 -1.85 -2.09 -1.81 -0.33 5.86 749 5 20 25 1) 15 Performance is for 2Q2011 The Russell Emerging Markets Fund is not a mutual fund, but is an investment fund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company Performance is shown gross of fees. Indexes are unmanaged and cannot be invested in direclly. Past performance is not indicative of future results. 'Effective December 31,2010 the benchmark for this fund changed to the Russell Emerging Markets Index Net. /;] Russell Investments Russell World Equity Fund Periad ending June 30, 2011 -~ ,... . " ,.. ",' .. ',.:' __-.-' _' _,_",'''*+''f.._,*.-4_.:.:,., . 0 .,."" . . ., " .,.",' ....... ' . .'1 Seeks to outperform the MSCI World Index Net over a full I market cycle. The fund's goal is to provide a favorable total i return relative to the benchmark, primarily through long-term capital appreciation. "N13stle~!-l. 1.57 i .1>.74 ,,~pple,lnc. ..._..__..+_1.~-+._.-!..:~. ; Linde AG \ 1.29 i 0.11 ..__.-_........-!.._--+-_..~ i Intel Corp. ..... ..___.....+.. 1.27_}. 0.43 ."" LJPMorgan9hase & Co. .~:~1 I 0.60 . : Heineken NV ' 1.10 i 0.07 'CompagnieFinanciereRicheniontSA....t" 1.08"'r'" 0.12 ..... ~ --_.-_._-~------_._~~-_._--,..-. i .. --~--- . Walt Disney Co. (The) _______L.l.03.l. 0.27. , LVMH Maet Hennessy Louis Vuitton SA +-~-+ ....c>.:~_ Total I 12.57 I 3.79 1 The top ten holdings list does not reflect the investment of cash reserves and cash collateral received in securities lending transections in one or more of Russell's money market funds. 2 Source: BNY Mellon Asset Servicing [,... ,'." ". "~ .."~.""",,,...~w,,~_1I' ... 11 ""=~ 3-)-S;*~.:;~_U~~::w , " , " ii,'<...~ ,_Y~jJj: . , Accenture Pic , Linde AG :M8sterC:al-d Inc. (CI A) I LVMH Moat Hennessy Louis Vuitton , Merck KGaA , 0.15 ... t... 0:13 ---I I 0.1~_J I 0.11 ~ I 0.10 J ! Bank of New York Mellon Corp. I Applied Materials Inc. !\'\IlIIt.l:li~ll9.Y Co: .... ~ J P Morgan Chase & Co ! Micron Technology Inc. 1 Source: FactSet l. ..._=.+ Russell World Equity Fund ll'!..~Sl!I~()~~ Large c;aj) '-ndex Nett , i n. [MSCI World Net Dividend Index (USD)._.......'-._ .... 5.29._1.._.~~.1_..L__.Q,47 .i..._.":-. 1..Q..l.9 1 Inception 11/30106. The date shown represents the date the index comparison began and may not be the actual index inception date. liPootrlitfolf\lll'o~tp'.~/E-.ts .'1 ......-11.4~..-673M I $27.30T ~. 14:8 l Portfolio PIE ~~/BlEtS 1 yr..FOrecaStEF)s:L._~:_12.7_:.~~.]_..-.~2.6 ._~. 11 Year EPS Forecast. IIB1EtS Medians I 15.8 t 16.5 ($ Weighted Average Market Capitalizaiicin t . $56.138:-'- $65.368 ! % in Emerging Markets _.._.__.__._~6Jl.l>___ J 1 Source: BNY Mellon Asset Servicing except for the fund's Total Net Assets [ $27.16T . [ 15.3' i -+~_._._-~ i 12.8 i 16.6 TH'17.5 : $56.708"--1 . $67.38B "-1 6.52 1 - .. ---'-.~ ~-";~!l _,.....,.:'k,._,':.'.,..,,0,_......._.,...7 !. .. ._..' _...~. .Jc:~~~e~:. .RltSsellWorkl EqudyFund ........ Ne. ReIIK" ~USSel Dev lC hdex Net ... Consum. Drscrelionary 525 Consumer Staples 633 F nartcHlI ServICes 250 Health eWe 7.67 M&terilMsand Processing -1)66 E....., -4.74 Producet" Dur8b18s Technology 150 Uhlill6'S 229 " ~ 20 25 __ _._."~__m _~. 50 20 _;~if~^J:~'"~Jy;,,:~::~,:~~~~:\~~tj I ! Lup I I .- t MSCI Wood . I Indell (net) i -- A RTC_ I EqoOty Fund llFS \ C.. * ISIu - -GlG - I I -. T. RowIi Pncej s_ v.... _.()riootN G..... Sly" 1 Source: BNY Mellon Asset Servicing & FactSet Advisors listed are current as of June 30. 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell World Equity Fund is an investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust; it is not a mutual fund. Performance is shown gross of lees. Fees will reduce the overall performance of the fund, Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. 'Eflectjve December 31, 2010 the primary benchmark for this fund changed to Russell Developed Large Cap Index Net. *Historical performance prior to January 1. 2011 is linked to the MSCI World Net Dividend Index. GhJ Russell InVt'slmt'nls Russell World Equity Fund Period ending June 30 2011 C.....',lK'I..~1~ _Russell World Equity Fund .Russell Developed Large Cap rndex "Russell Developed LC Index Net Return % United States __,,_..J Unit ed Klngdo rn Local Currency US$ Currency Canada ... Spain I other Developed - Ernergll1g M arke!s Exposure - 0.10 0.10 195 2.11 ,136 7.14 3.57 5.82 -2.37 0.19 495 722 -541 -3.45 -6.87 -4.83 -4.94 -4.20 -102 111 S'Mtzerland __ France _ Japan Germany . Netherlands. ChlOa . o 1) 20 30 40 50 , Source. FactSe! per10rmance is for 2Q2011 The Russell World Equity Fund is an investment fund of the Russell Trust Company Commingled Employee Benefil Funds Trust; il is not a mutual fund Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. 'Effective December 31,2010 the primary benchmark for this fund changed to Russell Developed Large Cap Index Net. [;] Russell Investments Ul C '" 0 0 - z en c 0 c: ~ ." :II ... '" -- :II >< N Cl CD ... ... c. - :::J 0 0 3 CD ." c: :::J 0- ;0 CD < -- CD ~ Fund Performance Russell Multi-Manager Bond Fund - Performance Ending June 30, 2011 The Fund underperformed its benchmark, the Barclays Capital US Aggregate Bond Index, by 21 bps for the current quarter and outperformed by 296 bps for the one year rolling period ending June 30, 2011 Fund positioning (benchmark relative): . Duration maintained short position relative to the fund's benchmark . Treasury and government-related debt remain underweight . Agency mortgage-backed securities (MBS) were underweight and stable at 5% . Non-agency MBS exposure stable at 11 % . Investment grade corporate overweight relatively stable at >+2% with finance-related securities remaining largest sub-sector overweight (2.7%) . High yield corporate (5.0%) and bank loan (1.5%) overweight remains largely unchanged . Commercial MBS overweight remained close to 3% . Emerging market debt overweight remained largely unchanged at 0.4% Indexes and/or benchmarks are unmanaged and cannot be invested in directly Past performance is not indicative of future results Performance is gross of fees. Fees will reduce the overall performance of the Fund The Russell Multi-Manager Bond Fund is a fund of the Russell Trust Company Commingled Employee Benefit Funds Trust. It is not a mutual fund. [;jJ Russ<.'ll Investments Fund Performance Russell Multi-Manager Bond Fund ~~ PerforrnanCt-: Ending Jum' 30 .2011 What happened during the quarter: Ii Absolute returns were positive but benchmark-relative performance was negative .11 Performance themes/drivers during the quarter were . Non-agency mortgage-backed securities (MBS) it Finance-related investment grade corporate bonds and high yield corporate Advisor specifics' . Mixed results with tactical sector mandates, bank loans helped while non, agency MBS t1Urt ~ Logan Circle Partners, L P was the top performing core plus advisor In the fund however, performancE' was modest Indexes and/or benchmarks are unmanaged and cannot be Invested in directly Past performance IS not indicative of future results Advisors are current as of June 2011 Russell has the nght to engage or termrnate an advisor at any trme and without notice The Russell Multr-Manager Bond Fund rs a fund of the Russell Trust Company Commingled Employee Benefit Funds Trust It IS not a mutual fund [;J Russell Investments Russell Multi-Manager Bond Fund Period ending June 30, 2011 market by investing in bonds representing diverse sectors and maturities. 31.3 23.1 6.7 >------_.__._._-_.~~_.,- -..__..~_..- : A o12.3_~__._ 'BBB i 11.8 8.7 i BB -------- ..--------;-----3.8--"-----0.0- . rs----------tnn-s:3 cee & Below -------~-- ----' t---5A--~-- .. -------t .--- .'--.----- . --..........~"...--,--_.. Unrated ._ _________l___~~_ __ ___n_ _ _;~t~_itl o to 3 Years I 28.0 . 26.6 . 3 to 5 Years ------.. ..... -r-~.n.. - .... 29.9 u___ 5 to 7 Years .-.-- -------.---;---25:2------ 22..7 .. 7lO 10 Years --+ 1'6~7 9.7 ~_'_L____"_ .__!- _..__. __~__.. . 10 to 15 Years i 2.8 1.4 15 to 20 Years -t .. _u__ 2.6 ---1:9'-- n n__~ i ~~o to 2.5.."'ears -l 1.8 1.6 ~ 25+ Years .--L....~_--'-~___..c 1 Source: Wilshire Associates Credh quality exposures and/or maturity distributions may not equal 1 00 per- cent as a resuft 01 the fund's use 01 certain financial instruments such as fu- tures. forwards. options. swaps and when issued transactions or fOlWard commitments. In the event short positions are created. they may be reflected as nEl\!8tive weiglltings in sector allocations, credit quality exposures and/or maturity distributions. 1 Russell Multi-Manager Bond Fund .___..~_ _ I Barclays CllllitallJ~_~~regate Bond Index 2.29 : 1 Inception date 4130103. The date shown represents the date the index comparison began and may not be the actual index inception date. Total Net Assets i i Current Yield 4.24% 4.19% i !WelghtedAVerage Yield to Maturity 4.2% 4.2% : I Weighted Average Life -7.1 yrs.---==___ 6.5 ~~__--L_ 6.~ y~~=~r I Weight~_Average DU~~____ ____n~=---_- 4-:-iY~~~~n___~.6 yrs._ .t. ____~y~~:_ . . .~_. [~~era~.aUality*..~u________~_~___~_~______ . __ Aal ~_ Aa3 1 Source: Wilshire Associates except lor Total Net Assets 2.76% 2.7% 6.2 yrs. 4.5 yrs. Aa1 ,j r==""==,,,,~~~L ~ ~~-=".......~= ~ !'>!f;; ~~"""""'''"~'''''''> ,,'~- 'f . ~ ~.1;~;l:'" ~ . -'- ~~_~",",,*,,~,,;..:;~~~~~ "-~~ ~ ~:-..",.~ "",,,.J ~ ! . Sector rotation , 30.5 30.5' : U.S. Government/Agency 12.5 43.3 2.24 I ---~----._------------ ., ilnvestmentGradeCredit 21.7 19.6 2.51* I High Yield .~_.-----M--~-' .. O.O~ - 1.0S-;^ - [ Commercial Mortgage 5.3 2.4 1.63 ! Backed I ResidentiliTMortQage' 33.3 2.28 i Backed -_._-~-------~-- I Asset Backed ________+-_~.._+---~---~.~..J ! Emerging Markets Debt . __~~._,~_+ 3.37* - J Non-US DoIlarlForeign Exch.!, ~:O 0.0 1.43** I Net Cash & Equivalents i 11.8 0.0 -- Other -0.0 0.0--------1 _~_^___~_.._ j J 1 Sector Allocations may not equar 100 percent as a resull of the fund's use of certain financial instruments such as futures. forwards, optiOns, swaps and when issued transactiOns or forward commitments. In the event short pos~ tions are created, they may be reflected as negative weightings in sector al- locations. 2 The Other sector includes pooled investment vehicles, certain derivatives, stocks and other investments not falling within one of the other listed sectors. 3 As of March 31. 2011, the Bank Loan sector weighlinll is now included in the High Yield sector. The prior quarter's Bank Loan secfor weighting was iden- tified as lis own sector. 4 Source: Wilshire Associates, Bloomberg and BNY Mellon Asset Servicing 'Lehman Live is Source for Index Retum "Citigroup is Source for Index Return f Il.J.,II_~c;:".;ri~~~~~2~,~; --.- Pacific ~veslrT1lnt Managerrent Corrpany, LLC 22.5% Goldman SachsAsset Managerrent. L. P. 25.0% Logan Orcla Partners. L.P. 22.5% Brookfield Investment Management ~c. 8.0% Advisors listed are current as of June 30, 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell Multi-Manager Bond Fund is an investment fund of the Commingled Employee Baneth Funds Trust established by Russell Trust Company. II is not a mutual fund. Performance shown is gross of fees. Fees will reduce the overall performance 01 the Fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. *"1he sum of the debt instrument quality ratings Is based upon the Barclays Capital index methodology, which reflects the ratings of three nationally recognized statistical rating organizations in such a wgy that if three different ratings exist lor the same instrument, the median rating is used; n two different ratings exist. the lower of the two is used and n only one rating exists. then thet rating is used. " the debt instrument has not been rated by any 01 the three rating agencies. the security is classified as 'Unrated." !;] RUSSl'1l InveslllH:'nls Fund Positioning Russell Multi-Manager Bond Fund Second Quarter 2011. Fund positioning going into next quarter: Slow and volatile recovery expected to continue .. Weakness in housing continues-affordability is near 10-yr high II Consumer deleveraging continues, access to credit still weak " Second half of year is expected to see better growth but lower than original expectations-Japan production impact to roll off . E merging economies expected to continue with growth .. Europe remains a driver of volatility Fund will remain short duration Overweight to finance and non-agency mortgage-backed securities will remain There IS no guarantee that any stated expectation will occur The Russell Fixed Income I Fund IS a fund of the Russell Trust Company Commrngled Employee Benefrt Funds Trust It IS not a mutual fund [;J Russell Investments en m n o z c o c: ,. ::II -t m ::II N Cl ... ... en -0 CD o -- Q) - ,..-+0. '< -n c: ::J C. ::0 CD < -- CD ~ Russell Commodities Fund Period ending March 31,2011 -"'~'._.- ,L,cc _ """;;",,,,,,,,,,,,,L,,,,l.,,,,,,,',\"",,*,", '..""""""'''4 The Russell Commodities Fund seeks to provide exposure i to the commodities markets and provide returns that ganer- ! ally correspond to the performance of the Dow Jones - UBS Commodity Index Total Return. 1 Source: BNY Mellon Asset Servicing except for the fund's Total Net Assets. I I i I I Im__' n _, __~m___ lSource,BNY Mellon Asset Servicing Oow Jones- UBS Commodity Total Return IndexSM is an index composed 01 futures contracts on 19 physical commodities. Indexes are unmanaged and cannot be invested In directly. .OowJone-USB CommodityTotill Return Index Aluminum __ Coff.. _ Copper Com Cotton _ CI\IdeOil Gold Heati1g Oil _ L.... Hogs _ LiveCattre_ Nat.... Gas Nickol_ \JnIeaded Gasoline _ Silver_ So ybeaI\ Soybeal\ Oil _ SuiIa< ..- -- Zine _ Gresham nvestrrent Management 33% Credit Suisse Asset Managerrent 34% 0,05 OJ Jefferies Asset Management 33% 0:6 02 Advisors listed are current as of April 27, 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell Commodities Fund is an investment fund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company. It is not a fund of Russell Investment Company, nor a mutual fund registered under the Investment Company Act of 1940. These fUnds are available to certain tax-qualified plans only. Performance is gross of lees. Fees will reduce the overall performance of the Fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. 11 ~hJ RlI'.,..,t'l1 TJ1\'{'..,lnH'nls Russell Global Real Estate Securities Fund Period ending June 30. 2011 Seeks to provide current income and long-term capital growth It strives to outperform the FTSE EPRAlNAREIT Developed Real Estate Index Net with above-average consistency. .- .llRe Russell Global Real Estate Securities Fund 3130j~ 5.86% 32.60% 3.85% 037 7 690.'0 Seator atIoCIIIIoft- FTSE EPRA-NAREIT Developed Rea! Estate Index Net (Iinked)2 271 5.69 32.52 i .50 1,44 565 Inception date 6/30/04. The date shown represents the dale the Index comparison began and may '-".)f lll' tile aclual mdex ",cepIIlH' eJate 2 Historical performance prior to September 30.2007 is linked to the FTSE NAREIT Equity REITs. Warehouse 4.J,,/g 1IIIiJIIi'f Total Net Assets S hOp P in 9 Center 11.5"10 $320.88M '.1 $302.90M Sell storage / 2.0./g Reglonai Malls Apl!lrtman~ 8.9'~'o Percentage of Total Net Assets Equities 94.6% 96.8% -:'1 \;e!!nd;;"t 7.5% rial gO~i" Cash Equivalents 5.4% 3.2% 0.2% \ \ Health Can, \. 4.0"/, HotellLeisur . 3.8'% 11 .4 ~i, Manufacture d Horn illS Fund advI80r styles .Val(je Market-oriented . Growth Simon Property Group, Inc Simon Property Group, Inc. Sun Hung Kai Properties. Ltd Sun Hung Kai Properties, Ltd Mitsui Fudosan Co.. Ltd Mitsui Fudosan Co., Ltd. AWtiIor~ Unibail-Rodamco Unibail-Rodamco Large Vornado Realty Trust Equity Residential Russell Global Real Estate Securities Fund Cohen & Steers.,/ .* FT~E Westfield Group Western Digital Corp Equity Residential Stockland iNVESCO Prologis, Inc. Boston Properties, Inc. Siz. Mitsubishi Estate Co., ltd. Hongkong land Holdings, Ltd. AEW EPRA'NAREI",' nd!'!, Hongkong land Holdings, Ltd. AvalonBay Communities, Inc , The top ten holdings list does not reflect the investment of cash reserves and cash collateral received in securities lending transactions in one or more of Russell's money market funds. Small Value Style Growth 'Sector Allocation pie total may exceed or fall below 100 percent due to rounding. Advisors listed are current as of June 30, 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The Russell Global Real Estate Securities Fund is an investment fund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company. It is not a mutual fund. Performance is shown gross of fees. Fees will reduce the overall periormance of the Fund. Indexes are unmanaged and cannot be invested in directly. Past periormance is not indicative of future results. !;] Russell Investments Russell Real Estate Equity Fund Period ending March 31, 2011 and enhanced core real estate investments with a focus on high i current income. Manages risk through property type and re- ! gional diversification and generally limits portfolio leverage to 30 percent. 1 --"~---_._._j 1 RTC-REEPs leverage of 30.1% as of 3/31/2011 was basically in line with the general guideline limit of 30% that is consistent with a core real estate strategy. As property values continue to recover and as capitel is aHocated to adjust weights in the underlying funds, R1C-REEPs leverage ratio is expected to remaln at or below the guideline limit. I_Ff'\~~~1Ij .\... .. .. .. ''''_ _y~~4t;p!{~;.~iIiIl-'i,-1i1ijf'.~1M;%<__~,,3~ ..,,', ,-","'." " - , '",. .__._....,-""._,'~_~1'~n':,3'~~,.._,,;;,,"'.' ''',',f' , Russell Real Estate Equity Fun~_. 21.02% ._+-~10.~o/~_._.+- -1.03"1" INFI-OOCE-EQl (1 19~~__ j -9.54 i -0.53 1 NCREIF Fund Index Open-End Diversified Core Equity - Equal Weight (NFI-ODCE-EQ). M()rgall ~tanley ~rirne~!operty_F.l:I~ INVESCO Core Real Estate - U.S.A. _.-_._---,-----------, J.P. Morgan Strategic Property Fund 11~~~la!i()t1~ioll.~~()P8r~s FUrld.'~~- ..-------- I Prudential Property Investment Separate Account I BlackRock Granite Property Fund "'m_ 162.8 132,3 i 131.8 -t---"---~ - I ~10 I 56~3 I 0-10 t-~- 0-10 48.0 -~- ~~-- 4.97 -i 18.94 20.84 17.46 ,j 24.60 i i . 25.28 __J 20.66 i Income I' Capillll Appreciation L_ i 1 , -i i I : I r_t~~iff~~;;)1:;~..'..?-..;~; 1.26 2.81 _ ~.__._._J__ 6.02 14.37 >:,"J"',--", ";';'.,-,~:i.." -~~,.- H'_ ~ ,:_-,-')':":-'i,,,,,;_,J(~,"_:;Y,(.:',,:_., :--i<;:;?;:l-"'f-<;;::'7i&.~'~;':~~" SeW Storage . PACIFIC 32% 2.4% . MOUNTAIN 50/. . WEST NORTH CENTRAl 2'fo Apartments 25.6% Other . SOUTHWEST 9% 0.6% . EA<;T NORTH CENTRAl 5% . NOR~T 21% 0 MIDEAST 14% . SOUTHEAST 11% Funds listed are current as of March 31. 2011. Russell has the right to engage or terminate a fund at any time and without notice. The RusseN Real Estate Equity Fund is an investment fund of the Commingled Employee Benefit Funds Trust established by Russell Trust Company. It is not a mutual fund. Performance is shown gross ot fees. Fees will reduce the overall performance of the fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. [;h.] Russdl I Ilv('sl menls Russell Trust Company Real Estate Equity Fund Portfolio summary as of March 31, 2011 Portfolio summary as of March 31 J 2011 Six fund investments with net investment value of $583 million Exposure to 883 properties, combined net assets of $35 billion Broadly diversified by property type and region Redeemed the two enhanced core funds that represented about 7% of portfolio last year Cash balance approximates 3.5% of NAV Redemption queue: $50.9 million Portfolio leverage of 30.1 %, down from 41 % one year ago Portfolio summary as of March 31, 2008 Nine fund investments with net investment value of $1,241.3 million Exposure to 1 ,282 properties, combined net assets of $60 billion Cash balance approximates 1.7% of NA V Redemption queue: $0.0 Portfolio leverage of 27.4% [;jJ Russell Investments RTC REEF Performance Periods ending March 31, 2011 25% 20% 15% 10% c ... 5% :s .... Q) IX: 0% -5% -10% -15% Three Months 21.02% 19.94% . RTC REEF . NFI-ODCE EQ 5.31% 4.97% 6.11% 6.03% -1.03% -0.53% One Year Five Years Annualized Ten Years Annualized Since Inception (411/84) Annualized Three Years Annualized Source: Russell. Periods ending March 31, 2011. Returns for RTC REEF and Benchmark are gross of fees; fees will reduce the overall performance of the Fund. Indexes are unmanaged and cannot be invested in directly. Past performance is not indicative of future results. !;h.I Russclllnve~tmenb RTC REEF Cash Flows Quarters ending March 31 250.0 200.0 ~ / '\ 198.8 ! \ \ \ " \ ~ 150.0 (J) c .9 . ..U1.3 . 125.5 '.m.7 96.2 ~ 100.0 6.5 2 0 1 7 0.0 1.90.0 . 0.0 . 50.0 I / ; 0.0 ~co ~CO ~CO ~ ~ ~ ~OJ ",OJ ",0: ~co ~ ,,-0: ~OJ ~OJ ~OJ ~ ^~ ~ ~o: "," ",0: ~OJ ~ ,,-OJ ~~ ~~ ~ ~ ~OJ ",OJ ~~ ~ ",0: ~ ~ ~ ~~ ~ ~()J - Contributions _ Redemptions -11--- Outstanding Redemptions /;] Russell Investments Redemption queues-NFl ODCE vs RTC REEF As % of NAV 30.0% 25.0% . z -s 20.0% - I A 15.0% 110,,", J 5.0% 0.0% " ~f$J ~~~ ~# 'o~ ~" 'o~ ~, ~~ ,y; ~.I' "'P~ ~ ~ 'o~ ~ ~o ~-.; "," -Open End Core Universe Redemption" of Nl\V -RTC REEF Redemption" of NAV Source: Russell Investments As of 3/31/2011 [;] Russell Ime~tmellb Russell Trust Company Real Estate Equity Fund Property type diversification as of March 31,2011 50 50 45 . Benchmark* . RTC REEF I Target Range 45 40 40 ~ 35 35 0 c 0 30 30 +:i co 0 0 25 25 4: 20 20 .3 15 15 .6 10 10 5 5 0 0 Office Retail Apartments Industrial Other . Benchmark is NFI-ODCE-EO; target range is the Benchmark + or - 10% Data is as of the specified date. Current data may be different. [;jJ Russell Investments Russell Trust Company Real Estate Equity Fund Recent activity YTD through June 30, 2011 · Positive appreciation expected for first half of 2011. Appreciation of 2.80/0 posted in 1 st Quarter 2011 · Five consecutive quarters of positive returns · New contributions of $72 million · Invested incremental $20 million to Clarion Lion Prop Fund · Extinguished redemption pool with payments of $77 million · Received full redemption payments from PRISA II, PRISA III, and RREEF America II. Blackrock Granite Fund full redemption request still outstanding · Quarterly income distributions have resumed for all funds in portfolio · Adequate liquidity in portfolio but additional capacity challenged by deposit queues in underlying funds · Previously approved commitments to UBS TPF and TIAA CREF still outstanding · UBS Trumbull Property Fund has a lower-risk profile including low leverage (<200/0) and no development and is positioned to deliver a strong and consistent current income return. This provides some downside protection during weak periods of the real estate cycle Past performance is not indicative of future results. Advisors are current as of June 2011. Russell has the right to engage or terminate an advisor at any time and without notice. GhJ Rlisr.,clllny('..,lmt'nh Russell Trust Company Real Estate Equity Fund 2H 2011 strategy and objectives Position fund to accommodate up to $200 million of new investor contributions including $100 million from redemption payments Monitor fund liquidity to manage potential new investor redemption requests Elect to reinvest cash in funds with limited capacity Position portfolio based upon recent research ranks Monitor PRISA performance and fund liquidity for appropriate timing for redemption Continue to monitor UBS TPF entry queue to identify timing to make a commitment [;jJ Russell Investments Russell Trust Company Real Estate Equity Fund Proforma property type diversification1 50 45 40 ~ 35 0 c: 0 30 ~ ~ 0 25 <( 20 15 10 5 0 Office . Benchmark'" . RTC REEF .4 Retail Apartments 1Based on proposed new target ranges and Implementation Target Allocation 'Benchmark is NFI-ODCE-EQ; target range is the Benchmark + or - 10%. Based on 3/31/11 composition Data is as of the specified date. Current data may be different. I Target Range 50 45 40 35 30 25 20 15 10 4 5 0 Other .3 Industrial WJ Rli~~l'l1ln\t',>lllll'llb Russell Trust Company Real Estate Equity Fund Favorable results* from implementing new target ranges Position fund to outperform benchmark based on research ranks Focus on core private real estate fund investments Goal to have total of five to six underlying funds Proposed allocations in compliance with advisor limit of 400/0 and fund investment limit of 330/0 Maintain annual income yield of 60/0 while reducing risk Maintain aggregate portfolio-level leverage in line with guidelines and fund benchmark Projected portfolio level leverage: 29.40/0 Projected property type weights relative to benchmark 'II Office overweight 2.0% '" Retail underweight 1.1 % Apartments overweight 2.4% Industrial underweight 4.0% Other overweight 0.7% * Results are based upon fund statistics as of 3/31/11 and the specific outcomes identified above would necessitate immediate implementation of the new target ranges; results have been identified as general outcomes of implementing the new target ranges. [;jJ Russell Investments Property sector outlook Apartments Office Retail Industrial New ... Low Low Low Low Demand fer .... i +-+ ! +-+ Vacancr ! ! i +-+ Rents i i ! +-+ ReIIIlve Positioning Overweight Neutral Underweight Underweight Source: Russell Investments [;J RlI",<;\'IlI11\l'~llIll'lIh Ul ;0 m 0 0 c: z c en 0 c: en )0 ::a CD ~ m - ::a - II) Q C ... ... "'0 a. 0) ..... CD Russell Updates & Events Second quarter 2011 Webcast: Mid-year market outlook July28 - 2:00 PM-3:00 PM (EST) Join Mike Dueker and Erik Ogard for an interactive discussion about Russell's mid-year market outlook. If you're unable to attend the live broadcast, a recording will be available on ClientLlNKafterits conclusion. Seattle Sea hawks game September 25 -1 :15 PM (PST) Join us for a fun aftemoon at CenturyLink field in downtown Seattle to see the Seahawks versus the Arizona Cardinals. Save the date - October 6: Regional conference in New York Connect with us at an industry conference September 12-14- NMS Fall Forum, Washington D.C. September 13-14 -Institutional Investors Defined Contribution Symposium, San Francisco September 19-22 - PSCAAnnual Conference, Las Vegas September 19-21 - Council on Foundations Community Foundations Forum, San Francisco September 22-23 - Boardsource Leadership Forum, Atlanta Mike Dueker, Chief Economist and Erik Ogard, Director, Multi-Strategy Solutions ~ Russl'li Inwslnwnts )> -c -c C'D :J C. -. x r:1 Russell IIAJ Investments Advisor Change .--- T 1<, \\'(' Pi'Ii" 11'0, iUIL". [II,. I\"UI I 'i'lIlilld/(,'[ 1.\'10/ / [III t ,/",'(/ / (rill, I [ [m,'I'Ii!"\, / f( 'dud ne[d'r d/i' /11\'('.1/1/1('11/ ILI"II 'f"\ It,'!"l' II in'u Russell Emerging Markets Fund: One advisor terminated, two hired Advisor changes finalized April 6, 20111 Russell's research recently led to changes in the following fund: . Russell Emerging Markets Fund (RTC) 2 As a result, the following Russell funds were also affected: . Russell All International Markets Fund (RTC) 2 . Russell Global Balanced Fund (RTC) 2 . Russell Aggressive Balanced Fund (RTC) 2 . Russell Global Equity Fund (RTC)2 . Russell Target Date Funds (RTC) 2 Unless otherwise noted, investment objectives, risk parameters and fund portfolio characteristics such as valuation and growth relative to each fund's respective benchmark will not materially change as a result of this advisor change. NEW ADVISORS . Axiom Intemationallnvestors, LLC . Delaware Investment Advisers NEW PORTFOLIO MANAGERS . Luiz Soares and Chris Lively (Axiom) . Lui-Er "Nu. Chen (Delaware) AXIOM INTERNATIONAllNVESTORS,llC . Focuses on fundamentals, along with quality and sustainable improvement at the stock level . Selects stocks with momentum characteristics, bringing a unique approach to the fund 1 The effective date refers to when an advisor trans.ion was completed. 2 This fund is an investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust. It is not a mutual fund. Russell rnvestments II Advisor change: Russell Emerging Markets Fund (RTC) en CD - %I Focuses on quality franchises and cash flow generation Brings some downside protection to the fund through its approach to stock selection T Rowe Price Associates. Inc Assets previously allocated to T, Rowe Price have been distributed to Axiom and Delaware. The fund also now has six advisors instead of five. We believe these changes will improve the fund's retum expectations and diversification properties by broadening the advisor line-up and adding advisors with distinct approaches compared to the fund's other advisors. For example, we believe Axiom's momentum orientation and Delaware's downside protection strategies will benefit the fund. It also increases the breadth and depth of the fund's active, stock- specific exposure Axiom The lead portfolio manager is Luiz Soares who works closely with the co-portfolio manager Chris Lively. They maintain a constant interaction with other analysts and portfolio managers at Axiom. They are also supported by the firm's pool of analysts who cover their respective universes and propose stocks for Axiom's portfolios. They employ a bottom-up, growth-oriented investment discipline that relies on detailed fundamental stock analysis to identify companies that are improving more quickly than IS generally expected in the current operating fundamentals of the business. This discipline is rooted in their basic philosophy that companies reporting better-than- expected operating results, or positive surprises relative to forecasts that are built into consensus expectations, will generally outperform. Their primary emphasis is to isolate those companies that are likely to exceed expectations by identifying and monitoring the key business drivers of each stock, Country, sector and industry allocations are Included as part of the stock selection process, Axiom does not engage in currency hedging. Its currency views will be included in its analysis of individual company Investment opportunities Delaware With 15 years of investment experience, Liu-Er Chen is the portfolio manager of Delaware's strategy. The firm seeks to provide consistent investment returns utilizing a bottom-up, fundamental investment process that identifies companies with sustainable business franchises and strong management teams, a supportive regulatory environment, financial strength, and minimal operational risks, Delaware's investment process combines active, bottom-up company research with top-down market analysis. The firm expects that the primary source of alpha over full- market cycles will be stock selection, which also drives their sector and country o r-- Anvijsor chanqe: Russell Emerqinq Markets Fund fRTC - allocation decisions. Currency valuations are also considered during the bottom-up fundamental company analysis. Delaware's decision to invest in a stock is based on the stock's discount to intrinsic value. Delaware defines a company's intrinsic value as the discounted value of its future cash flows. Its analysis emphasizes a company's or an operating unit's ability to consistently eam returns above its cost of capital. The firm will only invest in a particular company after analyzing the structural determinants of its potential future returns and those of its industry. Country allocations are a residual of bottom-up security selection, although weightings relative to the benchmark are reviewed continuously as part of Delaware's portfolio/risk monitoring process. The firm also recognizes that in certain emerging markets, macroeconomic factors/conditions can strongly influence prospects for individual enterprises. In such cases, country-level analysis becomes a more critical component to fundamental evaluation. Delaware does not hedge currency exposure in its portfolio. Currency analysis is an integral part of the stock valuation process, particularly to the extent that it impacts the intrinsic value of an enterprise. As such, currency valuation is an important input into investment decisions, but Delaware does not make active currency bets relative to its benchmark. HOW DO THE NEW ADVISORS COMPLEMENT THE EXISTING ADVISOR STRUCTURE? Axiom Axiom's approach and orientation toward momentum is distinct from Harding Loevner's market-oriented approach to investing in quality, growth companies. Harding Loevner looks for stocks from companies with strong balance sheets that may also benefit from a sustainable, advantageous market positioning. Delaware Delaware's focus on quality franchises and cash flow generation is distinct from AllianceBernstein's focus on deep value stocks. Delaware also provides some downside protection to the fund through its approach to stock selection. WHY HAS RUSSELL BROADENED THE NUMBER OF ADVISORS IN THE FUND? The six advisor structure offers more diversification for investors. Additionally, we wanted to balance risks in the portfolio-we believe Delaware and Axiom complement each other and the fund's other advisors. WHAT EFFECT WILL THESE CHANGES HAVE ON THE FUND? This change will not materially change the style or expected tracking error for this fund, but may slightly improve expected retums. The new target weights are illustrated on the following page. Russell Investments II Advisor change: Russell Emerging Markets Fund (RTCl I P 3 - to- _ oJ1'. I Russell Emerging Markets Fund (RTC ! ... , ! T Rowe Price Associates, Inc. Growth 20% 0% i Axiom International Investors, LLC Growth 0% 12.5% I Delaware Investment Advisers Value 0% 125% ! AllianceBernstein, LP Value 20% 17.5% ! Arrowstreet Capital, Limited Partnership Market-oriented 20% 17.5% I Genesis Asset Managers, LLP Market-oriented 25% 20% Harding Loevner lP Market-oriented 15% 20% Contact your Russell representative or visit ClientLlNK at http://clientlink.russell.com. Important information <nmg contaJr:ec rqatenai is mtenoecJ to ::.onstltute iegai tax, S2cuntJes, '::;I!investment advJce nor an opJnJOn regardmg the ,DDfopnateness of any investment nOI a solicitation of any type The general Information contained in this publication should nO! be acted 'Nlthc' 't ontalnHl.g soeClfic legal, tax and Investment adVice from a ilcensed professlona! .ssei: Cornpa:ry FundS are lfl\lestrnent funds ~1f trls RUSSeJi T'rust C0t11pany Commingled Employee Benef1t FUf:ds fundS RusseU investment Company nor d mutuel fund registered under the Investment Company Act of 1940 ,hey are ~Uf;2nt as ;i,pni 2Cl Russed nas the 119nt tc engage terminate an adVisor at any time and Without notice '''3tegles are the goals of the Individual adVisors there IS no assurance that the exact objective wrll always be met 'nvestment t:~a:5e rerr:emlJer U18t :nvestments '~.ar(y some leVEl :1n even rate of return and may expenence negative rease reLiT 8t certaIn Times U:1!ntentiona!h' risk iw;!uOing rile potential lOSS of princlpa! Invested They do not tYPically grow A.S With any type of portfolio structurrng attempting to reduce risk and ret!,Irns 'sU al~:=:qlc asset C!f'tec againsT n ciec!\nlng markets iestmer.,ts ,:;rnerging or developing nlarkets exposure to eConOrlllC structures that are generally less diverse and mature and political systems which can be expected to have less slabillty than those of more developed countrres Securities may be less IIqUJd and volatile than US and longer-established non-US mark.ets '~'arkets enuw different qsks tnan tJ1QSe tY'plcaily associated With US rnafkets ,ncludmg currency fluctuations nOlitlcai ana :nstabi!!tv ;:1r:CQuntlng changes and foreign "axatlon Secuntles r"flav be jess !Iquld and more volatile ~;Pvnght 'i<,trrbuted RLiSSe!1 i'lVestmems i i i"lghts :-eser',j8(j anv'\"yn; Nlthout pnor wntten penTlISSIOI": materralls Propnetary and may not be leproduced transferred or Russell Investments It is delivered on an 'as IS" baSIS Without warranty i.jSSel: Investment 'estments ~ncj '5 a "IVasrHngton US,2., corporation ;)perates throug~l Subsldlanes worldwide mcludlng Russei! of The Northwestern Mutua! life Insurance Cornpapv /~dvisor chanqe: Rus'Sell Ernerginq MaJ"kNs I=und !RTC N .... r:1 Russell IIAJ Investments Advisor Change .~ Russell Commodities Fund: One advisor hired C;"l',\,h/I/.I Advisor changes finalized April 27, 2011 ' Russell's research recently led to changes in the following fund: . Russell Commodities Fund (RTC) 2 As a result. the following Russell funds were also affected: Russell Balanced Income Fund (RTC)2 Russell Conservative Balanced Fund (RTC)2 Russell Global Balanced Fund (RTC)2 Russell Aggressive Balanced Fund (RTC) 2 Russell Global Equity Fund (RTC) 2 Russell Target Date Funds (RTC) 2 Unless otherwise noted, investment objectives, risk parameters and fund portfolio characteristics such as valuation and growth relative to each fund's respective benchmark will not materially change as a result of these changes. /11\"('\ 1/11('111 \/U1I( /:':'('11/0.'111 IJ ( II'U' ,!,/t/l'li If! 11/,' [(u\\\ il ('( ilIIII/C)( lillt" FIiI I< I NEW ADVISOR Gresham Investment Management. LLC NEW PORTFOLIO MANAGER Randy Migdal GRESHAM INVESTMENT MANAGEMENT, LLC . The advisor employs a fully discretionary approach to roll timing, and possesses one of the most experienced trading desks in the industry . Traders combine robust statistical analysis with a real-time assessment of liquidity levels, seasonality aspects and the overall trading environment for individual commodity contracts when making investment decisions 1 The effective date refers 10 when a manager transition was completed. 2 This fund is a fund of the Russell Trust Company Commingled Employee Benefits Trust. It is not a mutual fund. Russell rnvestments II Advisor change: Russell Commodities Fund (RTC) M .... ,<1' ~. ;:i,'irlJ The firm has been running long commodity portfolios for over 30 years and their flagship strategy, the Tangible Asset Program. predates most well-known contemporary commodity indexes. Gresham Investment Management, LLC. has been hired to replace Macquarie Capital Advisors, who was terminated April 1. 2011 Macquarie notified Russell that they would be exiting the commodities business so Russell terminated them and hired Gresham. Gresham is a 4-ranked manager, which IS Russell's highest ranking. The Gresham A Strategy combines fundamental and quantitative approaches to the Investment philosophy. The strategy trades the commodity constituents of the DJ-UBS Commodity Index while seeking to add alpha via discretionary roll implementation as well as the Term Structure Monetization (TSM) contract selection strategy. Traders for the TSM strategies are permitted to purchase commodity futures contracts up to 6- months forward under close examination of aspects such as liquidity and seasonality, and have the ability to roll these contracts up to 30 days before the earlier of their first notice day or last trading day. This roll implementation is completely discretionary and timing is dependent upon the decisions of the portfolio managers, based on the liquidity and price activity within the market. Through such roll timing and positioning of the exposure on the futures curve Le. contract selection of each commodity contained in the respective portfolio. Gresham could potentially boost performance when compared to index products This change will not materially change the style or expected tracking error for this fund but may slightly improve expected retums. The new target weights are illustrated in the table below Russell Commodities Fund f .-]rCJt'f ,afeer wen nr Gresham Investment Management, LLC Jefferies Capital Partners Credit Suisse 0.0% 330% 500% 330% 50.0% 34.0% Contact your Russell representative or visit ClientLlNK at http://clientlink.russell.com. ,i\rlvisor r:hanqe Russell Comrnorlities ~und H~TC" ~ ,... - Important information Russell Trust Company Funds are investment funds of the Russell Trust Company Commingled Employee Benefit Funds Trust They are not funds of Russell Investment Company, nor a mutual fund registered under the Investment Company Act of 1940 Advisors current as of April 2011. Russell has the right to engage or terminate an advisor at any time and without notice The investment strategies are the goals of the individual advisors; there is no assurance that the exact objective will always be met Nothing contained in this matenal is intended to constitute legal, tax, securities, or Investment advice, nor an oprnion regarding the appropriateness of any investment. nor a solicitation of any type The general information contained in this publication should not be acted upon without obtaining specific legal. tax, and investment advrce from a licensed profeSSionaL DiverSification and strategic asset allocation do no assure profit or protect against loss In declining markets Please remember that all investments carry some level of risk. including the potential loss of principal invested. They do not tYPically grow at an even rate of retum and may expenence negative growth As with any type of portfOliO structuring. attempting to reduce risk and increase return could. at certain times. unintentionally reduce returns. Exposure to the commodities markets may subject the Fund to greater volatility than Investments in traditional securities. particularly If the investments involve leverage. The value of commodity-linked denvative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or sectors affecting a particular industry or commodity and international economic, political and regulatory developments The use of leveraged commodity-linked derivatives creates an opportunity for Increased return, but also creates the possibility for a greater loss The Fund may also make investments in derivative rnstruments, Includrng options, futures, swaps, structured securities and other derivative instruments Use of derivative instruments may involve certain costs and risks such as liquidity risk. market risk, credit nsk and default risk The Fund may also invest in foreign securities, which may be more volatile than Investments in US securities and will be subject to fluctuation and sudden economic and political developments The Fund may also invest in non-investment grade fixed-income securities. which involve higher volatility and higher risk of default than investment grade bonds Copyright @ Russell Investments 2011. All rights reserved ThiS material IS proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments. It is delivered on an "as is" basis without warranty. Russell Investment Group is a Washington. USA corporation, which operates through subSidiaries worldwide, Including Russell Investments. and IS a subsidiary of The Northwestern Mutual Life Insurance Company. The Russell logo is a trademark and service mark of Russell Investments First used: April 2011 USI-9523-04-12 Russell Investments II Advisor change: Russell Commodities Fund (RTC) I P 3 In ..... r:1 Russell IIhJ Investments Advisor Change ...- Russell Commodities Fund: One advisor terminated Russell's research recently led to changes in the following fund: Russell Commodities Fund (RTC).2 As a result, the following Russell funds were also affected; Russell Balanced Income Fund (RTC)2 Russell Moderate Fund (RTC) 2 Russell Global Balanced Fund (RTC)2 Russell Aggressive Balanced Fund (RTC) 2 Russell Global Equity Fund (RTC) 2 Russell Target Date Funds (RTC) 2 Unless otherwise noted, investment objectives, risk parameters and fund portfolio characteristics such as valuation and growth relative to each fund's respective benchmark will not materially change as a result of these changes. Macquarie Capital Advisors Macquarie Capital Advisors has been terminated and assets have been reallocated to two other fund advisors Macquarie notified Russell that they are exiting the commodities business. In the interim Russell is reallocating assets to the two other fund advisors, but negotiations are currently in-process to hire a third advisor The effective date refers to when a manager termination was completed , ThIs fund is a fund of the Russell Trust Company Commingled Employee Benefits Trust It IS not a mutual fund Advis.or chanoe: Russell Commortities Fund p::nc: CD r-- - WHAT EFFECT WILL THIS CHANGE HAVE ON THE FUND? This change will not materially change the style or expected tracking error for this fund but may slightly improve expected returns. The new target weights are illustrated in the table below. Russell Commodities Fund (RTC) Advisor Previous target Current weight target weight Jefferies Capital Partners 33.0% 50.0% Credit Suisse 34.0% 50.0% Macquarie Capital Advisors 33.0% 0.0% For more information: Contact your Russell representative or visit ClientLlNK at http://clientlink.russell.com. Important information Russell Trust Company Funds are investment funds of the Russell Trust Company Commingled Employee Benefit Funds Trust They are not funds of Russell Investment Company, nor a mutual fund registered under the Investment Company Act of 1940 Advisors current as of April 2011. Russell has the right to engage or terrmnate an advisor at any time and without notice The investment strategies are the goals of the individual advisors: there is no assurance that the exact objective will always be met Nothing contained in this material IS intended to constitute legal, tax. securities, or investment advice, nor an opinion regarding the approprrateness of any investment. nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional. Diversification and strategic asset allocation do no assure profit or protect against loss in declining markets Please remember that all investments carry some level of risk, including the potential loss of principal invested They do not typically grow at an even rate of retum and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase retum could. at certain times, unintentionally reduce returns Exposure to the commodities markets may subject the Fund to greater volatility than Investments in traditional securities. particularly if the investments involve leverage The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or sectors affecting a particular industry or commodity and international economiC, political and regulatory developments. The use of leveraged commodity-linked derivatives creates an opportunity for increased return, but also creates the possibility for a greater loss The Fund may also make investments in derivative instruments, Including options, futures. swaps, structured securities and other derivative instruments. Use of derivative instruments may involve certain costs and risks such as liquidity risk. market risk, credit risk and default rrsk The Fund may also invest rn foreign securities. which may be more volatile than Investments in U.S. securities and will be subject to fluctuation and sudden economic and political developments. The Fund may also invest in non-investment grade fixed-income securities. which involve higher volatility and higher risk of default than investment grade bonds Copyright @ Russell Investments 2011 All rights reserved ThiS material IS proprietary and may not be reproduced, transferred, or distributed in any form without prior written permission from Russell Investments It is delivered on an "as is" basis without warranty. Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments. and is a subsidiary of The Northwestern Mutual Life Insurance Company The Russell logo is a trademark and service mark of Russell Investments First used: April 2011 USI-9335-04-12 Russelllnvestmenls /I Advisor change: Russell Commodities Fund (RTC) I P 2 .... .... 0= = ~ ~ ~ ~ 9 ~= ~= i~.o- m c,.. ~ ...... en Ei - '''' ~CQ ~ -: iF; d II.. :T ~ (tl .... CD5'rI:l ~= Q' ~ to=-= ~ ~ (tl n= ~ Q ..... =~ ~~ ;;- ~ Q ;: Q ~ ..... = ...... ~ ~ '-It ~ ~ . Boynton Beach Police Pension Fund BCA Market Perspective @ July 2011 Why Equities Have the Advantage over Bonds The current economic and monetary policy environment favors owning stocks over bonds. The current Fed policy of near zero interest rates is subsidizing the rebirth of American enterprise, while discouraging investment in fixed income. What makes this point in time remarkable is the growing strength of corporate balance sheets, as measured by cash and low borrowing costs. With improved balance sheets and a low dollar, American corporations are better positioned to compete globally. Price-to-earnings expansion is inevitable when interest rates are low. Expectations of future earnings growth is driven by the lower associated earnings discount rate, improving cash flows, strong balance sheets and competitive advantage. Another boost derived from low interest rates is a lower valued U.S. dollar that makes exports more attractive and higher foreign earnings translated back into dollars. When interest rates are high, investors are rewarded with attractive bond coupon levels. In contrast, corporate borrowers are faced with paying more interest to banks and bond investors; resulting in lower earnings. While this was the environment during the 1980s, it is clearly the opposite today. Bond prices are sensitive to changes in interest rates, as measured by duration. As the bond coupon declines for newly issued bonds, the sensitivity to interest-rate change increases; the result being higher volatility risk. Lower coupons stretch out the payback period of each bond, thus increasing the risk. Duration risk may be managed with owning shorter maturities and higher yielding issues. Higher yielding securities are associated with increased default risk. Selecting a shorter than normal duration today may be defensive, but the drop in expected return is significant. Domestic stocks are offering dividend yields that are comparable to the five-year treasury, a situation that has emerged over the past year and not observed since the 1950s. Thus, large-cap equities offer bond-like yields, along with the potential to appreciate; even in the face of rising interest rates associated with an improving economy. A stronger economy means higher corporate profits, a formula for improving dividends. In contrast, bond prices decline during these periods. While the environment favors stocks over bonds for reasons stated above, adding stocks to the allocation adds additional volatility risk to the portfolio. '..' I i i : I I l.,"____~~ BOYNTON BEACH POLICE PENSION FUND INVESTMENT PERFORMANCE PERIOD ENDING JUNE 30, 2011 NOTE: For a free copy of Part II {mailed wli 5 bus. days trom request receipt} of Burgess Chambers and Assooales, Jne. '5 most recent form ADV which details pertinent businesss procedures, please contact 601 North New York Avenue, Suite 200, Winter Park, Florida 32789, 407-644-0111, info@burgesschambers.com - Boynton Beach Police Pension Fund Total Fund Investment Performance June 30, 2011 Dollars Quarter Fiscal YTD One Year Beginning Market Value 55,544,988 46,784,250 42,727,750 Ending Market Value 56,433,730 56,433,730 56,433,730 Net Contributions +312,760 +3,938,102 +3,946,016 Investment Gain/(Loss) +575,982 +5,711,378 +9,759,964 Investment Return, Net + 1.2 % +11.7% +22.4% Consultant's Benchmark + 1.3% +11.8% +22.5% Fiscal Year: October 1 st - September 30th 3 r.--._C_1 I I I r . I ! . I L--_,",--,--...1 Boynton Beach Police Pension Fund Total Fund lnvestment Summary June 30,2011 l.J For the quarter the Fund eamed $575,982 (-.;- i2"/,; net), Ul l1m: with the consultant henchmark rrivate real estate (i45(J/,~), global REIT ( '12";(;) and multi manager bond ( 21 %) the best three pcrfonnmg asset categoric" 'Vt~n: =.J jl~cal year 10 date (ending June 30), the Fund earned $5 mJlllOn net), in 1m/;; wIth the i:onsultanl benchmark ( X':o [] For the 12-month period, the Fund earned $9,8 million U22.4% net), similar to the consultant benchmark (+22.5%). The best three performing assel categories were: small-cap (+41.4%), concentrated equity (+35,6%), and large-cap equity (+33.3%) The last 24 months, the Fund has earned an average 01 111.9% per year o For the three and five year periods. the Fund earned an average Of16~'o and .-4.1 "t, per year (grossL respectively C'ompliancc: I ncreasing the international limitation to 25"1{, is reflected in the proposed IPS. Large-cap Equity I While three year perfarnlancc \vas below the benchmark and 40th percentile nbjective. the 2 and 24-month results have beeD excellent BCA recommends no action" .1 Concentrated equity has beaten ils benchmark and the 40th percentile peer group for the one and two""year periods. The risk and value-added profiles arv favorable. 4) Small-cap: Three and five-year results were below the benchmark and 40th percentile objective. BCA recommends a replacement. 5) International equity fund's three and five-year results were superior to the benchmark and peer rankings were better than the objective for five years Risk and value-added profiles are favorable. 6 ) World equity fund beat its benchmark for the 12-month period. Multl-manager bond fund beat its benchmark by a wide margin for the 24 month period 8) Real-estate fund: three and five-year results were below the benchmark and ranking were poor (bottom percentile). RCA recommends a replacement. 9) The commodities fund was funded in June 2011. . Boynton Beach Police Pension Fund Total Fund Compliance Checklist June 30, 2011 The total Fund's annualized three-year performance achieved the Consultant's Benchmark. The total Fund's annualized three-year performance ranked in the top 40th percentile of the universe. The total Fund's annualized five-year performance achieved the Consultant's Benchmark. The total Fund's annualized five-year performance ranked in the top 40th percentile of the universe. The total Fund's annualized three-year performance achieved the +8.0% actuarial assumption rate. The total Fund's annualized five-year performance achieved the +8.0% actuarial assumption rate. Large Cap Equity's annualized three-year performance achieved the Russell 1000 index. Large Cap Equity's annualized three-year performance ranked in the top 40th percentile of the universe. Large Cap Equity's annualized five-year performance achieved the Russell 1000 index. Large Cap Equity's annualized five-year performance ranked in the top 40th percentile of the universe. Small Cap Equity's annualized three-year performance achieved the Russell 2000 index. Small Cap Equity's annualized three-year performance ranked in the top 40th percentile of the universe. Small Cap Equity's annualized five-year performance achieved the Russell 2000 index. Small Cap Equity's annualized five-year performance ranked in the top 40th percentile of the universe. International Equity's annualized three-year performance achieved the international benchmark. International Equity's annualized three-year performance ranked in the top 40th percentile of the universe. International Equity's annualized five-year performance achieved the international benchmark. International Equity's annualized five-year performance ranked in the top 40th percentile ofthe universe. Real Estate Equity's annualized three-year performance achieved the real estate benchmark. Real Estate Equity's annualized three-year performance ranked in the top 40th percentile of the universe. Real Estate Equity's annualized five-year performance achieved the real estate benchmark. Real Estate Equity's annualized five-year performance ranked in the top 40th percentile ofthe universe. Investments in equity securities were 61.1 % which did not exceed 65% of Fund's assets at market value. Foreign equity investments were 22.8%* (at market) and did not exceed the 20% ofthe total Fund's assets at market. *Equity Fd: 1.3% + Concentrated: 0.8% + SC: 0.3% + AIM: 9.7% + World: 4.9% + Multi Mgr: 4.1% + Global RE: 1.7%. Yes No o ~ o ~ o ~ o ~ o ~ o ~ o ~ o ~ ~ 0 o ~ o ~ o ~ o ~ o ~ ~ 0 o ~ ~ 0 ~ 0 o ~ o ~ o ~ o ~ ~ 0 o ~ 1.1 I .j 4 r ACTUAl, ASSET ALLOCATION FIXED INCOME 36.41% P\TERNA TIONAL 20,860/(.> DOMESTIC EQL1IY 34.42% Boynton Beach Police Pension Fund Total Fund Actual vs Target Asset Allocation June 30, 2011 TARGET ASSET ALLOCATION FIXED INCOME 35.00% CASH 0.52% ALTERNATIVI 7,80";;, ~ ALTERNATIVE . 5.00'., iNTERNATIONAL 15.00% DOMESTIC F(li., 35 .()O"i~ MARKET VALUE PERCENT MARKET VALUE PERCENT MARKET VALUE PERCENT ACTUAL ACTUAL TARGET TARGET DIFFERENCE DIFFERENCE DOMESTIC EQUTTY 19,422,043,3 34A% 19,751,805.6 35.0% (329,762.3 ) (0.6%) INTERNA TIONAL 1] ,770,935.3 20.9% 8,465,059.5 15.0% 3,305,875.8 5.9% FIXED INCOME 20,545,632.5 36.4% ] 9,75] ,805.6 35.0% 793,826.9 1.4% CASH 292,873.2 0.5% 0.0 0.0% 292,873.2 0.5% ALTERNATIVE 4,402,246.0 7.8% 8,465,059.5 15.0% (4,062,813.6) (7.2%) TOT AL FUND $56,433,730.3 100.0% $56,433,730.3 100.0% $0.0 0.0% - 5 Boynton Beach Police Pension Fund Total Fund Asset Allocation TOTAL MARKET VALUE AS OF JUNE 30, 2011 $ 56,433,730 Rle MULTI MaR BOND FUND RTC CASH VALUE 20,545,633 10,005,295 5,885,468 5,885,468 4,708,374 4,708,374 2,380,181 1,765,640 292,873 256,425 RTC MULTI MGR BOND FUND RTC LG CAP EQUITY I RTC INTERNATIONAL FUND RTC WORLD EQUITY FUND RTC CONCENTRATED EQ FD RTC SMALL CAP FUND RTC REAL ESTATE EQUITY FD RTC GLOBAL REIT FD RTC CASH RTC COMMODITIES Po PERCENT 36.41 17.73 10.43 10.43 8.34 8.34 4.22 3.13 0.52 0.45 - Boynton Beach Police Pension Fund Total Fund Allocation of Assets October 31, 2007 Through June 30, 2011 ~ :::; f-< ;< (5 ~ < 'lJ V1 <( 12/2007 6/2008 12/2008 6/2009 12/2009 6/2010 . DOMESTIC EQUITY . INTERNATIONAL . FIXED INCOME o CASH o ALTERNATIVE 1212010 6/201 I . Boynton Beach Police Pension Fund Total Fund June 30, 2011 Gross of Fees aTR FYTD 1 Year 2 Year 3 Year 5 Year Name Market Values ROR ROR ROR ROR ROR ROR ----~--~--,.~----~- --~-~-~.~~~._-~~-~_._~~- - ------ -------- Domestic EQuity RTC Lg Cap Equity I 10,005,295 0.2% 19.4% 33.3% 23.5% 2.7% 3.7% RTC Concentrated Eq Fd 4,708,374 1.1% 20.2% 35.6% 24.7% N/A N/A RTC Small Cap Fund 4,708,374 -0.9% 27.6% 41.4% 30.3% 5.7% 3.8% Total Domestic Equity 19,422,043 0.1% 21.6% 35.2% 24.9% 3.8% N/A International EQuity RTC International Fund 5,885,468 1.1% 11.9% 32.3% 20.6% 0.1% 3.9% RTC World Equity Fund 5,885,468 1.1% 15.4% 32.1% N/A N/A N/A Total Equity 31,192,979 0.6% 18.1% 34.1% 23.7% 2.9% N/A Fixed Income RTC Multi Mgr Bond Fund 20,545,633 2.1% 2.8% 6.8% 12.4% N/A N/A Total Fixed Income 20,545,633 2.1% 2.8% 6.8% 12.4% 9.1% N/A Cash RTC Cash 292,873 0.0% 0.1% 0.1% 0.0% 2.4% 1.4% Alternative RTC Real Estate Equity Fd 2,380,181 4.5% 14.1% 19.7% 4.3% -10.2% -2.1% RTC Global REIT Fd 1,765,640 3.2% 11.6% N/A N/A N/A N/A RTC Commodities 256,425 N/A N/A N/A N/A N/A N/A TOTAL: (1, 2, 3, 4) 56,433,730 1.4% 12.3% 23.3% 18.9% 3.6% 4.1% Consultant's Bnch 1.3% 11.8% 22.5% 19.1% 5.2% 5.0% Russell Custom Bnch 1.1% 11.5% 21.3% 16.6% 4.8% N/A Russell 1000 Index 0.1% 18.3% 31.9% 23.3% 3.7% 3.3% Russell 2000 -1.6% 23.5% 37.4% 29.2% 7.8% 4.1% International Bnch 1.3% 11.6% 30.2% 18.3% -1.1% 2.1% MSCI AC Wrld X US 0.6% 11.7% 30.3% 20.2% 0.1% 4.1% Fixed Income Bnch 2.3% 1.4% 3.9% 6.7% 6.5% 6.5% NCREIF ODCE 4.6% 14.2% 20.5% 6.4% -7.7% 0.0% Wilshire REIT 3.9% 19.6% 35.6% 45.2% 4.9% 1.8% 1 Consultant's Bnch (IPS hybrid benchmark objective): Sep'09 is 34% Russell 1000 + 11% Russell Mid-Cap+ 11% MSCI Net EAFE + 4% MSCI Net EM + 5% Wilshire REIT + 30% BC Aggregate + 5% BC TIPS; from May'05 was 34% Russell 1000 + 16% Russell Mid-Cap+ 10% MSCI Gross EAFE +5% Wilshire REIT + 30% LB Intermediate Aggregate + 5% Lehman Intermediate TIPS; from Jun'02 was 60% S&P 500 + 35 Lehman Gov't1Credit. 2 Russell Custom Bnch: Sep'09 is 35% Russell 1000 + 10% Russell 2000 + 15% AIM Composite (90% MSCI NET EAFE + 10% MSCI Net EM) + . 35% BC Aggregate + 5% NCREIF; from Jun'OS was 41 % Russell 1 000 + 10% Russell 2000 + 9% AIM Composite (90% MSCI NET EAFE + 10% 8 r~ Boynton Beach Police Pension Fund Total Fund June 30, 2011 Gross of Fees MSC! Net EM) ... 5% NCREIF 35% L8 Aggregat<, 3 International Benchmark from ,Jun.08 IS 00% AIM Composite 190% MSCI Net EAFElO% MSCi Emerging Markets Net); pnol was MSCI Gross EAfr. 4 Fixed Income Bnch (IPS fixed Income hybrid) Sep'09 is 100% BC Aggregate; from MayOS was 100% 1.8 Intermediate Aggregate, from Jun'02 was 1000;'. ! ehmar' Gov't/CrediL - q ~ ~ ~ f:-< ~ ~ o Ul f:-< ~ -14.00 -16.00 -18.00 FISCAL YTD TF 12.27 2010 11.67 Boynton Beach Police Pension Fund Total Fund Fiscal Year Rates of Return September 30, 2002 Through June 30, 2011 2009 0.26 2008 -17.85 2007 14.21 2006 7.85 2005 11.83 2004 8.14 2003 15.90 i_I l_.~=__j 10 !! 32.00 30.00 28.00 26.00 24.00 22.00 ~ 20.00 ~ 18.00 ::l ~ 16.00 ... 14.00 o LJ.l 12.00 Eo-< ~ 10.00 8.00 6.0 4.0 2.00 0.0 -2.0 HIGHEST VALUE FIRST QUARTILE MEDIAN VALUE TffiRD QUARTILE LOWEST VALUE MEAN 6. TF . CONSULTANT'S BNCH Boynton Beach Police Pension Fund Quartile Ranking Total Fund Versus BNY Mellon Public Funds Universe June 30,2006 Through June 30, 2011 - ...~- . LATEST QUARTER 3.13 1.52 1.29 0.90 -0.35 1.28 LATEST UARTER RETURN RANK 1.41 36 1.30 47 ONE YEAR 30.55 23.30 21.31 19.55 0.75 19.88 ONE YEAR RETURN RANK 23.26 26 22.48 36 TWO YEARS 24.89 18.73 17.30 15.56 1.91 16.20 TWO YEARS RETURN RANK 18.93 21 19.08 21 THREE YEARS 7.94 5.26 4.35 3.35 -0.06 4.22 THREE YEARS RETURN RANK 3.56 68 5.22 26 - Boynton Beach Police Pension Fund RTC Lg Cap Equity I Performance Profile Through June 30,2011 --~-~-~-~---~ -~----_.- TOTAL # OF PERIODS: 60 ENDED RETURN BEST OUARTER 9/2009 16.41 # OF PosmVE PERIODS: 36 WORST OUARTER 12/2008 -23.00 # OF NEGATIVE PERIODS: 24 BEST 40UARTERS 6/2011 - 33.25 ~~ARTIL~_ 6/2009 -28.86 ~- -~- ---~--- --- QUARTER TO FISCAL ONE TWO THREE FIVE DATE YTD YEAR YEARS YEARS YEARS TOTAL FUND 0.21 19.43 33.25 23.46 2.73 3.72 RUSSELL 1000 INDEX 0.12 18.27 31.93 23.30 3.68 -~-"~ --.- EXCESS 0.09 1.16 1.32 0.16 -0.95 0.42 RISKLESS INDEX 0.04 0.13 0.16 0.16 0.42 2.00 REAL ROR -0.78 15.61 28.74 20.75 1.81 1~ -~ -----. ----r---~ -- I -- UNNERSE STD SHARPE INFO PERIOD RETURN RANKING DEV RATIO ALPHA BETA R.SQUARED RATIO ONE YEAR 33.25 28 14.14 2.34 -0.87 1.07 99.72 0.96 TWO YEARS 23.46 31 15.53 1.50 -0.43 1.03 99.48 0.16 THREE YEARS 2.73 72 21.95 0.11 -0.92 1.02 99.15 -0.39 FIVE YEARS 3.72 55 18.68 0.09 0.44 1.03 98.70 0.23 . .._-_._-"-,_.-----~ The risk benchmarkfor this analysis is the Russell 1000 Index. l:. The universe used was the Large Cap Boynton Beach Police Pension Fund Total Fund Growth Of A Dollar Analysis June 30,2006 Through June 30, 2011 140.Ofh I I /30.001 I I 120.001 l ; ~ no.ool ... I ~ I """ C ~ 100.0 90.001 80000L. 70'/;~006 - 6/2007 6/2008 6/2009 6/2010 TF CONSULTANT'S BNCH LATEST T--.. .>.-:---.------1.---. --. -..---i-..>----.-T------------1 QUARTER.._.+-. FISCAL YTD__I YEAR TO DATE I_ONE YEAR_j_!HREE YE~~L !:!~_YEA~_ J .-_ ~::~ -~~t___ ~~:~~ -:=t=~~ ~:~:-=~t--=- ~~:~: _~n~i=_-~ ~:~~~~-+=_ :::;~.=j 12 127.89 122.09 I I ~ 6/2011 - Boynton Beach Police Pension Fund RTC Lg Cap Equity I Performance in Rising and Declining Markets June 30, 2006 Through June 30, 2011 UP MARKET PERFORMANCE 65.00 60.00 55.00 50.00 ....... -15.00 e:, ~ -20.00 ~ -25.00 t5 -30.00 Ul f-< ~ -35.0 -40.00 ~ 45.00 ~ 40.00 f-< ga 35.00 t5 30.00 Ul ~ 25.00 20.00 15.00 10.00 YTD ONE YEAR THREE YEARS FIVE YEARS TOTAL FUND 9.65 44.54 65.55 53.79 RUSSELL 1000 INDEX 9.44 42.09 64.85 51.55 DIFFERENCE 0.21 2.45 0.70 2.24 RATIO 1.02 1.06 1.01 1.04 UP PERIODS 4 9 23 38 TOTAL FUND RUSSELLI000~EX DIFFERENCE RATIO DOWN PERIODS 14 DOWN MARKET PERFORMANCE 0.00 -5.00 -10.00 -45.00 -50.00 -55.00 YTD -2.87 -2.80 -0.06 1.02 2 ONE YEAR -7.81 -7.15 -0.66 1.09 3 THREE YEARS -55.83 -54.36 -1.47 1.03 13 FIVE YEARS -47.47 -46.72 -0.76 1.02 22 - r BE_SJ Q~~I{TE~_ "YOR~EQIL~]"R BEST 4 QlJAJ{"lliRS WORST 4 QUARl:J3]{S TOTAL FUND ------~-~--_._.- RUSSELL 1000 INDEX ---. ....--,--_.. EXCESS RISKLESS INDEX REAL ROR - --..- -----~-- PERlOD ONE YEAR ---- ~- TWO YEARS QUARTER TO DATE . .J.O:S-i 0.12 : 0.93 : 0041 --'-'--i 0.06 ! ENDED 9/2009 6/2010 6/2011 6/2010 Boynton Beach Police Pension Fund RTC Concentrated Eq Fd Performance Profile Through June 30, 2011 RET1 JRN 15.33 10.70 35.60 14.62 FISCAL ONE TWO '(TD __YEAR___YEARS _ 20_20 i 35.60 24.67 18.271 i[}l3,u__ 23.30 L93 i 3.66 . 1.37 (j.13 I _jl_:f6;__ 0.16_ ____1&~_~L:__~L93 . UNIVERSE I sm _, RETURN L RANKING I _ DEV_ 35.60 ~U____ 14.24 24.67 1 _l."LL_ ~o The risk benchmark jar this analysis is the Russell 1000 Index. The universe used was the Large Cap SHARPE RATIO 1,49. 1.58 . IOTM, II OF PERlODS: I! OF POSITIVE PERIODS :! OF NEGATIVE PERIODS ALPHA 0.94 0_70 BETA L07 L02 R-SQUARED __ 28.21~ 98.56, 2tJ 16 R INFO RATIO lAD 0.62 - 45.00 0.0 40.00 -1.0 35.0 ~ ~ -2.00 ~ e ~ 30.00 ~ -3.0 f-< f-< gj 25.0 gj ~ ~ 0 0-4.0 ~ 20.0 ~ f-< f-< ~ 15.00 ~ -5.00 10.00 -6.0 5.00 -7.00 0.00 YTD ONE YEAR YTD ONE YEAR TOTAL FUND 10.89 46.27 TOTAL FUND -3.23 -7.29 RUSSELL 1000 INDEX 9.44 42.09 RUSSELL 1000 INDEX -2.80 -7.15 DIFFERENCE 1.45 4.17 DIFFERENCE -0.43 -0.14 RATIO 1.15 1.10 RATIO 1.15 1.02 UP PERIODS 4 9 DOWN PERIODS 2 3 Boynton Beach Police Pension Fund RTC Concentrated Eq Fd Performance in Rising and Declining Markets June 30,2010 Through June 30,2011 UP MARKET PERFORMANCE 16 DOWN MARKET PERFORMANCE ....._i. ' , i I 1 t1 L...~~_~__._.._,____. j BEST~Ui\RTJiR w:oRsI_QYMIl':~ JmST_~QT1ARTEB.S WORST 4 QUARTERS TOTAL FUND ----- ---- RUSSELL 2000 --------------.-- EXCESS -~~--- -- RISKLESS INDEX REAL ROR QUARTER TO DATE -0.87 -1.61 0.74 0.04 .1.85 ENDED 6/2009 12/2008 -----,- 6/2011 6/2009 FISCAl YTD 27.61 23.47 4.14 0.13 2357 Boynton Beach Police Pension Fund RTC Small Cap Fund Performance Profile Through June 30, 2011 PERIOD ONE YEAR TWO YEARS --------~---- THREE YEARS ------ FIVE YEARS . UNIVERSE RETURN i RANKING i ..;....._.._M~._~_... i.-___.... ____...._ _.. __...._.._.....__~ 41.40 ! 41 ! ..--j-i _30.33_t 58L 5.69 i 83 ! 3.83' 76 . The risk benchmark for this analysis is thc Russell 2000 The universe used was the Small Cap RET! !RN 17.61 -24.65 41.40 -30.50 ONE TWO YEAR ! YEARS 41.40 r 30.33 .. 3t~_~ ---:r~1; 36.651=_~27.48+ STD- r . SHARPE D_EV I RA TIO_, I7.I5~01 19.26 1.57 i 25.55 . 0.21! 21.65 0.08 ! )01 AL Ii OF PERIODS Ii OF POSITIVE PERIODS 1J OF NEGATIVE PERIODS rHREE YEARS 5.69 7.77 -2.08 0.42 4.76 ALPHA 3.78 1.54 -1.65 . .0.18 HVE YEARS 3.83 4.08 ' -0.25 2.00 171 BET A R-S9uARED 0.97,_ _ u 2.8.90 :... 0.97 _ 99d~i 0.93] 96.'7..4 j 0.94 ! 95.86 nU 37 21 INFO RATIO 1.56 ' ---- 0.45 -0.49 -0.12 - Boynton Beach Police Pension Fund RTC Small Cap Fund Performance Profile Through June 30, 2011 - ---------- -~-----~ TOTAL # OF PERIODS: 60 ENDED RETURN BEST OUARTER 6/2009 17.61 # OF POSITIVE PERIODS: 37 WORST OUARTER 12/2008 -24.65 # OF NEGATIVE PERIODS: 23 BEST 40UARTERS 6/2011 41.40 WORST 4 OUARTERS 6/2009 -30.50 ~---- -_._~ ---T--- QUARTER TO FISCAL ONE TWO THREE ! FIVE DATE YTD YEAR YEARS YEARS YEARS TOTAL FUND -0.87 27.61 41.40 30.33 ~~ t--__3~ RUSSELL 2000 -1.61 23.47 37.41 29.20 7.77 4.08 EXCESS 0.74 4.14 3.99 1.13 -2.08 -0.25 RISKLESS INDEX 0.04 0.13 0.16 0.16 0.42 2.00 REAL ROR -1.85 23.57 36.65 27.48 4.76 1.71 . SID SHARPE --,--- UNIVERSE INFO PERIOD RETURN RANKING DEV RATIO ALPHA BETA R-SQUARED RATIO ONE YEAR 41.40 41 17.15 2.40 3.78 0.97 98.90 1.56 TWO YEARS 30.33 58 19.26 1.57 1.54 0.97 99.24 _o~ THREE YEARS 5.69 83 25.55 0.21 -1.65 0.93 96.74 -0.49 FIVE YEARS 3.83 76 21.65 0.08 -0.18 0.94 95.86 -0.12 The risk benchmarkfor this analysis is the Russell 2000. - The universe used was the Small Cap ~_._--_. [ Boynton Beach Police Pension Fund RTC Concentrated Eq Fd Performance in Rising and Declining Markets June 30,2010 Through June 30,2011 UP MARKET PERFORMANCE DOWN MARKET PERFORMANCE ---_._.~--"~ 45.0 40.0 1.00 35.00 ~ 200 ~ _.c ~ 30.00 ~ ~ ;:J ;:J -3.00 f-< f-< ~ 25.0 ~ u.. u.. 0 o A.OO u.l 20.00 u.l '- f-< ~ 15.00 ~ SOO 10.00 -6.00 5.00 -7.00 0.00 ,--- -----~-.-----.--..- -----i--------- --- TOTAL FUND I RUSSELL 1000 INDExt DIFFERENCE RATIO UP PERIODS TOTAL FUND RUSSELL 1000 INDEX DIFFERENCE RATIO DOWN PERIODS ..-----..,.--...- u_ YTD_. .1._ ONE YEAR 10.89 i 46.27 i -:~ =-~_+-~-=- 4;:1 ;=~ ~ - YTD ------- -3.23 -2.80 -0.43 LIS 2 ONE YEAR n -!~~!~_~l - Boynton Beach Police Pension Fund RTC International Fund Performance Profile Through June 30, 2011 ENDED 6/2009 9/2008 6/2011 6/2009 RETURN ~ 26.50 -21.65 32.34 -30.92 TOTAL # OF PERIODS: # OF POSITIVE PERIODS: # OF NEGA rIVE PERIODS: 60 34 26 QUARTER TO FISCAL ONE TWO THREE FIVE DATE YTD YEAR YEARS YEARS YEARS TOTAL FUND 1.11 11.89 32.34 20.56 0.13 3.94 .. INTERNATIONAL BNCH 1.29 11.59 30.16 18.34 -1.08 2.05 EXCESS -0.19 0.30 2.18 2.22 1.21 1.89 RISKLESS INDEX 0.04 0.13 0.16 0.16 0.42 2.00 REAL ROR 0.11 8.30 27.85 17.89 -0.79 1.79 ,------ -- --_..~ ~. ------------- - UNIVERSE STD SHARPE INFO PERIOD RETURN RANKING DEV RATIO ALPHA BETA R-SQUARED RATIO ONE YEAR 32.34 48 17.41 1.85 0.97 1.03 99.24 1.12 TWO YEARS 20.56 42 18.81 1.08 1.11 1.05 97.55 0.67 THREE YEARS 0.13 49 26.74 -0.01 1.38 1.03 98.83 0.47 FIVE YEARS 3.94 36 22.38 0.09 1.93 1.03 98.46 0.69 ~'lr this analysis is the International Bnch. . EAFE lilt '.....-._.......;.~;...._~.~ 19 Boynton Beach Police Pension Fund RTC Small Cap Fund Performance in Rising and Declining Markets June 30, 2006 Through June 30, 2011 UP MARKET PERFORMANCE iOO.OO 95.00 90.00 85.00 80.0 75.00 -- 70.00 o tiS.DO- ~ 60.00 H 5S.00 g:j SO.OO C; 45.00 ;::; 40.00 ;2 35.00 30.00 25.00 20.00 15.0 10.00 5.00 0.00 ~ -20.00 ~ -25.00 f-< g:j -30.00 u., o -3S.00 U;l f-< ~ -40.00 -45.00 I iOT ALFUND I RUSSELL 2000 DIFFERENCE i RATIO r----uPPERIODS YTD I ONE YEAR 12.09 --. 57.75 ~-~^. 0--1 -~~-"'5~ .--------r- ..... .. ~-~._ : :~:. -~1:=___ ~~~J _-- I THREE YEARS ~+JIVE YEARS; 85.76 ' 64.34 : 97.38 .. - 69.40-=] -11.62 -5.06 I 0.88 0_93 ----I ----~ --------..1 __~__ __ 38 __J TOTAL FUND RUSSELL 2000 DIFFERENCE RATIO DOWN PERIODS DOWN MARKET PERFORMANCE 0.00 -5.00 -10.00 -IS.00 -SO.OO -S5.00 -60.00 i-YTD - -3.17 -4.38 122 0.72 3 ._,- THREE YEARS -61.03 -63.06 2.02 0.97 13 FIVE YEARS] -53.02 _; -55.12_-.J 2.11 i o_~~ ~ ONE YEAR -10.3 7 -11.46 -._--- LlO 0.90 4 - Boynton Beach Police Pension Fund RTC International Fund Performance in Rising and Declining Markets June 30, 2006 Through June 30,2011 UP MARKET PERFORMANCE '"" ~ ~ -15.00 '-' ~ -20.00 f-o ga -25.00 .... o ~ -30.00 ~ -35.00 ~ ga .... o ~ ~ YTD ONE YEAR THREE YEARS FIVE YEARS TOTAL FUND 10.22 50.30 121.71 75.24 INTERNATIONAL BNCH 10.73 48.89 109.54 67.55 DIFFERENCE -0.51 1.41 12.18 7.69 RATIO 0.95 1.03 1.11 1.11 UP PERIODS 3 7 17 34 TOTAL FUND INTERNATIONAL BNCH DIFFERENCE RATIO DOWN PERIODS ?n DOWN MARKET PERFORMANCE -40.00 -45.00 -50.00 YTD -5.07 -5.55 0.48 0.91 3 ONE YEAR -11.95 -12.58 0.63 0.95 5 THREE YEARS -50.83 -49.46 -1.37 1.03 19 FIVE YEARS -47.50 -46.63 -0.87 1.02 26 -; Boynton Beach Police Pension Fund RTC World Equity Fund Performance Profile Through June 30, 2011 c13EST QUARTER . WORST QUARTER . BEE 4 QlJMTERS . WORST 4Q...l[f\I~TgRS ENDED ~_ 9/Z010: 6/2011 6/Z011 6/2011 RETURN _ _ -.--...---- .1.44 L _1.1}] 3Z-,liJ 32lj ! roTAL II OF PERIODS: II OF POSITIVE PERIODS If OF NEGATIVE PERIODS \2 7 TOTAL FUND --._---- MSCI AC WRLD X US . EXCESS ~--_..- RISKLESS INDEX , REAL ROR QUARTER TO DATE l.l3 0.61 0.53 0.04 " 0.14 FISCAL ONE YTP_L YEAR 15.43 . 3Z.14 11.661 30.Z7 3.77+-__ -1~87 __~ __O.~6 ] 1.74 . 27.66 PERIOD _..----_.------ ONE YEAR UNIVERSE RETURN i RANKING 32.14 50 STD SHARPE DEV RATIO ALPHA - -_.__._._-----_.~-- 15.82 2.02 2.15 INFO BETA .. R:,~QUARELJ RATIO 0.97 96.34 0.46 The risk benchmark for this analysis is the MSCI AC Wrld X US The universe used was the International Large Cap - .-. 35.00 ~ ~ 30.00 Eo-< gj 25.0 ~ o ~ 20.0 ~ 15.00 TOTAL FUND MSCI AC WRLD X US DIFFERENCE RATIO UP PERIODS Boynton B<:ach Police Pension Fund RTC 'World Equity Fund Performance in Rising and Declining Markets June 30, 201(~ Through June 30, 2011 UP MARKET PERFORMANCE 50.00 45.00 40.00 10.00 5.0 0.0 YTD 10.44 8.83 1.62 1.18 3 ONE YEAR 47.68 45.57 2.11 1.05 7 ?? 0.00 -1.00 -2.00 .-. -3.00 ~ ~ -4.00 Eo-< gj -5.0 ~ 0 -6.00 ~ Eo-< ~ -7.00 -8.0 -9.00 -10.00 YTD TOTAL FUND -4.10 MSCI AC WRLD X US -4.33 DIFFERENCE 0.23 RATIO 0.95 DOWN PERIODS 3 DOWN MARKET PERFORMANCE ONE YEAR -10.52 -10.51 -0.01 1.00 5 - BEST QUARTER . WORST QUARTER BEST 4 QlJ1\~TERS WO:R~T 4.Q!L~T~~S TOTAL FUND ----.--.-------- FIXED INCOME BNCH EXCESS RISKLESS INDEX ----..--. ------ REAL ROR - -------- PERIOD -----------. ONE YEAR TWO YEARS Boynton Beach Police Pension Fund RTC Multi Mgr Bond Fund Performance Profile Through June 30, 2011 ENDED ....---- 9/2009 ---~.-- 12/2010 6/2010 6/2011 i -t------ ! I QUARTER TO DATE --._--- 2.10 2.29 -0.19 0.04 1.09 nSCAL YTD 2.82 1.39 1.43 0.13 -0.50 UNIVERSE -. RETURN I RANKING_.. . 6.80 20 i -+----............---.l.. -- ...-------. 12.44 ! 12 The risk benchmark for this analysis is the Fixed income Bneh The universe used was the Fixed income RETURN ----------------- 8.07 ------ -0.60 -----~ 18.38 6.80 ONE YEAR .. 6.80 i 3.90 . _ 2.90 i 0.16 : _:Un STD DEV __ 2.80 ~._ 3.70 . TWO YEARS 12.44 6.66 5.78 0.16 9.96 SHARPE RATIO _ n_8 ; 3.32 TOTAL # OF PERIODS: II OF POSITIVE PERIODS II OF NEGATIVE PERIODS ALPHA 2.68 4.91 BET A . R.SQUARED tQL~ __ 89.54. 1.07 69.59 24 11) -; INFO RATIO 3.10 2.66 - 9.0 8.00 7.00 t6.0 ~ f-< 5.00 ~ ~ 4.00 ~ ~ 3.0 2.00 1.00 0.0 TOTAL FUND FIXED INCOME BNCH DIFFERENCE RATIO UP PERIODS Boynton Beach Police Pension Fund RTC Multi Mgr Bon.d Fund Performance in Rising ar..d Declining Markets June 30,2010 Through June 30, 2011 UP MARKET PERFORMANCE YTD 3.96 3.02 0.94 1.31 5 0.0 ""' ~ '-" ~ f-< ~ ~ -1.0 o ~ f-< ~ ONE YEAR 8.81 5.95 2.86 1.48 9 TOTAL FUND FIXED INCOME BNCH DIFFERENCE RATIO DOWN PERIODS '>" DOWN MARKET PERFORMANCE YTD -0.50 -0.29 -0.21 1.71 1 ONE YEAR -1.84 -1.93 0.09 0.95 3 - BE_SI. QUARTER .~__u_____ WQ~S_T QUARTER _ BEST 4Q!,JJ..R 1'gJ{S ; WORST 4 QUARTERS_L RTC!{jOAL ESTATE EQUITY r._ . l'iC_REIF ODCE_ EXCESS RISKLESS INDEX --..--.-.. ---- REAL ROR QUARTER TO DATE 4.55 4.62 -0.07 0.04 355 Boynton Beach Police Pension Fund RTC Real Estate Equity Fd Performance Profile Through June 30, 2011 ENDED 12/2010 3/2009 6/2011 . 612009 ONE YEAR 19.6S 20.47 -0.79 016 15.6S PERIOD THREE YEARS .----..- FIVE YEARS . UNIVERSE : RETURN RANKING i _ .---- i ---------, _~ J.2! -2.13 i 96 : IflC rISk benchmark/or this analysis is the NCREIF ODCE f1le universe used was the MS Real Estate. RETURN - ----~- 5.23 -14.59 19.68 --------- -33.46 TWO YE~ 4.31 6.43 i -2.12 I n-il~r _0.16 I .VJj.l THREE YEARS -10.21 -7.67 -2.53 0.42 -ll.ll STD SHARPE DEV RATIO .--------t-n-------t 14.33 -0.74 12.33 -0.34 roT AL II OF PERIODS It OF POSITIVE PERIODS II OF NEGATIVE PERIODS 20 14 b fIVE YEARS -2.13 0.01 -2.14 2.00 -4.1S ALPHA - - ---------------- -2.02 -1.95 BET An LI\:SQUARED. I.Q7[ 99'~<4 1.07 99.25 INFO RATIO -1.60 -1.55 . Boynton Beach Police Pension Fund RTC Real Estate Equity Fd Performance in Rising and Deciining Markets June 30, 2006 Through June 30, 2011 UP MARKET PERFORMANCE ONE YEAR TWO YEARS THREE YEARS FIVE YEARS TOTAL FUND 19.68 15.98 15.98 13.31 NCREIF ODCE 20.47 17.04 17.04 14.56 DIFFERENCE -0.79 -1.06 -1.06 -1.25 RATIO 0.96 0.94 0.94 0.91 UP PERIODS 4 6 6 14 ?fl 0.00 -2.00 -4.00 -6.00 -8.00 g -10.00 ~ -12.00 f-< ~ -14.00 1:5 -16.00 ~ -18.00 ~ -20.00 -22.00 -24.00 -26.00 -28.00 -30.00 TOTAL FUND NCREIF ODCE DIFFERENCE RATIO DOWN PERIODS DOWN MARKET PERFORMANCE ONE YEAR N/A N/A N/A N/A o TWO YEARS -12.88 -10.55 -2.34 1.22 2 THREE YEARS -30.48 -27.17 -3.31 1.12 6 FIVE YEARS -30.48 -27.17 -3.31 1.12 6 4.00 ~ 3.00 ~ ~ C5 2.00 u.< f-< ~ 1.00 0.00 !! HIGHEST VALUE .... ....... FIRST QUARTILE ..,....... MEDIAN VALUE . .. .. THIRD QUARTILE LOWEST VALUE MEAN MEMBERS 6.RE . WILSHIRE REIT Boynton Beach Police Pension Fund Quartile Ranking RTC Global REIT Fd Versus MS Real Estate March 31, 2011 Through June 30, 2011 Boynton Beach Police Pension Fund Total Fund Capital Market Line June 30, 2008 Through Jun~ 3-3, 2011 -2. 8. 9. MORE RETURN LESS RISK MORE RETURN MORE RISK if:. 6. A FIXED INCOME BNCH ~ RUSSELL 2000 7. ~ 5. gj 4. ~ o ~ 3. ;:i 2. ~ ~ t::3 ~ ~ O. ~-1. CONSULTANT'S BNCH A o TAL FUND RUSSELL 1000 INDEX ML 3M TBill . INTERNATIONAL BNCH -3. LESS RETURN LESS RISK . REAL EST ATE BNCH LESS RETURN MORE RISK 10.00 12.00 14.00 16.00 18.00 20.00 22.00 24.00 26.00 28.00 30.00 32.00 VARIABILITY OF RETURNS (RISK) -2.00 0.00 2.00 4.00 6.00 8.00 RETURN STD DEV BETA ALPHA R-SQUARED & TOTAL FUND 3.56 15.42 0.96 -1.41 96.46 . CONSULTANT'S BNCH 5.22 15.86 1.00 0.00 100.00 o RUSSELL 1000 INDEX 3.68 21.36 1.00 0.00 100.00 TRUSSELL 2000 7.77 26.91 1.00 0.00 100.00 . INTERNATIONAL BNCH -1.08 25.79 1.00 0.00 100.00 & FIXED INCOME BNCH 6.46 4.10 1.00 0.00 100.00 . REALESTATEBNCH -2.57 8.91 1.00 0.00 100.00 . 28 z :>:: . FIXED INCOME BNCH f-. w..; 0:: "" o I ~ 10(1 ~ 201 ~ I ~ [.0 \1L 3M THIll Boynton Beach Police Pension Fund Total Fund Capital Market Line June 30, 2006 Through June 30, 2011 ",~O~;'''TANrs BNn' ~1OTAL FUND i MORE RETURN MORE RISK ~ RUSSELL 2000 o RUSSELL 1000 INDEX . INTERNATIONAL BNCH , {'AL ESTATE BNCH LESS RETURN MORE RISK -~----"~.,----------~~~,--- 9.00 10.00 11.00 12.00 13.00 14.00 15.00 16.00 17.00 18.00 19.0020.0021.0022.0023.0024.0025.0026.0027.00 V ARlABILITY OF RETURNS (RISK) .1.0 LESS RETUR., LESS RISK -2.00 - 1.00 0.00 100 2.00 3.00 4.00 5.00 6.00 7.00 8.00 RETURN I... TOTAL FUND -_.._.~.._-_._- 4.07 . CONSULT ANT'S BNCH --------_._~._. 5.04 o RUSSELL 1000 INDEX 3.30 TRUSSELL 2000 . 4.08 . INTERNATIONAL BNCH 2.05 ... FIXED INCOME BNCH . 6.52 . REALESTATEBNCH -0.21 " -----~-.---~._..- , , , -I- I ~-~~TD -DE-~_ --------_--1_ 12.85 I ---~._.- 13.14 ------~_..__..- 18.06 ~---~---_._.._.__..- 22.57 21.53 3.51 13.01 BETA 0.96 -.---"-------..---. 1.00 ~_._------ 1.00 1.00 1.00 1.00 1.00 ALPHAi . ~-SQUAREDn_.--" -0.82 r 96.40 I 0.00 ---t --100.00' J -~1t~~{_-~ 1i.~j . Boynton Beach Police Pension Fund Total Fund Performance in Rising and Declining Markets June 30,2006 Through June 30, 2011 UP MARKET PERFORMANCE DOWN MARKET PERFORMANCE 0.00 -2.0 -4.00 -6.00 -8.00 -10.00 ~ -12.00 ~ -14.0 E-< -16.00 gj -18. ~ -20.0 ~ -22.00 ~ -24.00 -26.00 -28.0 -30.00 -32.00 -34.00 -36.00 ~ 35.00 ~ E-< 30.00 gj ... 25.00 o ~ ~ 20.0 15.00 10.0 5.0 YTD ONE YEAR THREE YEARS FIVE YEARS TOTAL FUND 7.30 29.13 48.38 37.72 CONSULTANT'S BNCH 7.03 27.87 52.02 39.34 DIFFERENCE 0.27 1.26 -3.65 -1.62 RATIO 1.04 1.05 0.93 0.96 UP PERIODS 4 8 21 36 TOTAL FUND CONSULTANT'S BNCH DIFFERENCE RATIO DOWN PERIODS ~n YTD -1.60 -1.59 -0.02 1.01 2 ONE YEAR -4.54 -4.22 -0.33 1.08 4 THREE YEARS -37.40 -37.14 -0.27 1.01 15 FIVE YEARS -31.63 -31.25 -0.39 1.01 24 .' Boynton Beach Police Pension Fund Glossary of Terms ACCR\ !ED INTEREST Bond mteres! earned smce the last llllerest paymeJl! bur no' yet received -ALPHA. A linear regressive constant that measures the manager's expected return mdependent orBet,,; ASSET i\LLOCATION. The optimal division of portfolio asset classes in order to achieve an expected investmem objecu\' -BET A- A measure of portfolio sensitivity (volatility) in relation to the market, based upon past experience. .BOND DURATION. A measure ofportfolio sensitivity to interest rate risk .COMMINGLED FUND- An investment fund which is similar to a mutual fund lJJ that lI1vestors are permitted to purchase and redeem UTIits that represent ownership in a pool of securities. -CORE- A type of investment strategy that has approximately an equal weighting III both growth and value stocks m order to achIeve a return that is comparable to the broad market performance (i.e.. the S&P 500). -CORRELATION COEFFICIENT - A statistical measure of how two assets move togetheL The measure IS bounded by 1 and - move together positively, while a measure of. 1 means that the assets are perfectly negatively correlated I means that the two assets .INDEXES. Indexes are used as "independent representations of markets" (e.g.. S&P 500 and LBGe) -INFORt\1ATION RATIO. Annualized excess return above the benchmark relative to the annualized tracking error. .GROWTH MANAGER- A growth manager generally invests in companies that have either experienced above-average growth rates and/or are expected to experience above-average growth rates in the future. Growth portfolios tend to have high price/earnings ratios and generally pay little to no dividends. -LARGE CAP. Generally, the term refers to a company that has a market capitalization that exceeds $5 billion -MANAGER UNIVERSE- A collection of quarterly investment returns from various investment management finns that may be subdivided by style (e.g. growth, value, core). -MID CAP. Generally, the term refers to a company that has a market capitalization between $1 and $5 billion. - NCREIF - A quarterly time series composite total rate of return measure of investment performance of a large pool of individual commercial real estate properties acquired in the private market for investment purposes only. -NCREIF ODCE - Open End Diversified Core Equity index which consists of historical and current I~turr.., from 26 open-end commingled funds pursuing core stategy. This index is capitalization weighted, time weighted and gross offees. - Boynton Beach Police Pension Fund Disclosure Advisory services are offered through or by Burgess Chambers and Associates, Inc., a registered SEC investment advisor. Performance Reporting: I.Changes in portfolio valuations due to capital gains or losses, dividends, interest or other income are included in the calculation of returns. All calculations are made in accordance with generally accepted industry standards. 2.Transaction costs, such as commissions, are included in the purchase cost or deducted from the proceeds or sale of a security. Differences in transaction costs may affect comparisons. 3.Individual client returns may vary due to a variety of factors, including differences in investment objectives and timing of investment decisions. 4.BCA does not have discretion or decision making authority over any investments. All decisions regarding investment manager selection and retention, asset allocation, and other investment policies were made by the client. While BCA provides recommendations and choices regarding suitable investments, not all clients take these recommendations or select from the choices offered. 5.Portfolio returns are generally shown before the deduction of investment advisory fees. 6.Performance reports are generated from information supplied by the client, custodian, and/or investment managers. BCA relies upon the accuracy of this data when preparing reports. 7. The market indexes do not include transaction costs, and an investment in a product similar to the index would have lower performance dependent upon costs, fees, dividend reinvestments, and timing. Benchmarks and indexes are for comparison purposes only, and there is no assurance or guarantee that such performance will be achieved. 8.Performance information prepared by third party sources may differ from that shown by BCA. These differences may be due to different methods of analysis, different time periods being evaluated, different pricing sources for securities, treatment of accrued income, treatment of cash, and different accounting procedures. 9.Certain valuations, such as alternative assets, ETF, and mutual funds, are prepared based on information from third party sources, the accuracy of such information cannot be guaranteed by BCA. Such data may include estimates and maybe be subject to revision. 10.BCA has not reviewed the risks of individual security holdings. The firm's ADV, Part II, is available upon request. _I Boynton Beach Police Pension Fund Glossary of Terms BALANCED UNIVERSES SNY Mellon Public Funds, Endowments &. hJllIldatlOllS \ pee; gnmp' ,tn.d PSI'. p" ','I ~(r(1Up~. RATE OF RETURN, The percentage change !t1 the value 01 an mvcstmcn' -RISK MEASURES- Measures of the mvestment nsk level. mduding oeteL credit. duration,tandard devmtJDl1 ~md others thm are based dr ennemmd historical data. -R-SQUARED- Measures how closely portfolio returns and those of the market are correlated, or how much vanation mthe portfolio returns may be explained by the market. An R2 of 40 means that 40% of the variation in a fund's price changes could be attributed to changes in the market index over thc time period -SHARPE RATIO- The ratio of the rate of return earned above the risk-free ratt' to the standard deviation of the portfolIO !t measures the number ,)funit:; return per unit of risk. -STANDARD DEVIATION- Measure of the variability (dispersion) of lustoneal retums around the mean it measures how much exposure to volatility wa' experienced by the implementation of an Investment strategy -SYSTEMATIC RISK- Measured by beta. It is the nsk that cannot be d1versiJ\ed ~lway i market risk i - TIME WEIGHTED (TW) RETURN - A measure of the investments verses the investor When there arc no flows the TW & DOLLAR weighted (DW) return are the same and vice versa, CFA Institute recommends using the TW retum. AIMR reasons that the mvcstmcnt mgr can not control when an investor has flow- & thus should not be measured by that SCA uses TW method. -TRACKING ERROR- A measure of how closely a manager's performance tracks an mdex; it 18 the annualized standard deviation ofthc differences between the quarterly returns for the manager and the benchmark. -TREYNOR RA TIO- A measure of reward per unit of risk (excess return divided by beta) -UP-MARKET CAPTURE RATIO- Ratio that illustrates how a manager performed relative to the market during rising market periods; the higher the ratio, the better the manager performed (i.e., a ratio of 110 implies the manager performed 10% better than the market) VALlIE MANAGER- A value manager generally Invests III companies that havc low price, to-earnings and pm;c -to-honk ratios and/or above-average LlIvldend yields - ~?