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Agenda 11-08-11 BOYNTON BEACH POLICE OFFICERS' PENSION FUND QUARTERLY BOARD MEETING Tuesday, November 8, 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 I A. Congratulations to Frank Ranzie for certification in the CPPT program II. AGENDA APPROVAL - III. APPROVAL OF MINUTES — Special Meeting September 20, 2011 IV. FINANCIAL REPORTS: A) Quarterly Investment Review & Plan Year End— September 30, 2011 1.) Russell Investment Group — Glenn Harris, Client Executive - 1) Portfolio review - 2.) Burgess Chambers & Associates (BCA) — Frank Wan, Head of Research 1) Fund Performance review — 3) Financial Statements — For your review - June 2011 updated Real Estate Values, and July, August & September 2011. V. CORRESPONDENCE: VI. OLD BUSINESS: N/A VII. NEW BUSINESS: A. Invoices for review and approval: 1) Russell Investment Gp — Quarter End 9 -30 -2011 $96,095.00 2) Russell Payment Services — Quarter End 9- 30 - -2011 - $684.62 3) Burgess Chambers & Assoc — Third Quarter 2011 - $5,000 4) Gabriel Roeder Smith & Co, - Service 9 -30 -2011 - $4,689. 5) Perry & Jensen, LLC — Service Aug/Oct 2011 - $2,963.64 6) Exact Software — Annual Maintenance Dec 2011/2012 - $437.50 7) Micro Focus — Annual Support/Maintenance Jan 2012/2013 - $123.70 B. Service Refund request — Lump sum deposit by Officer Terrence Paramore C. Gabriel, Roeder, Smith & Co. — Update Summary Plan Description — Board Authorization & estimated fee $1500/1800. D. State's New Actuarial Disclosure Requirement — Additional cost $750. 1 E. Attorney Report — Bonni Jensen 1) Russell Authorized Signatures Update 9 -28 -2011 2) Form 1 Reporting - Disclosure of "Intangible Personal Property" and Amendment to Form 1 — Form 1X VIII. PENSION ADMINISTRATOR'S REPORT 1. Schedule of proposed 2012 Quarterly Board Meetings for review. 2. December 2011 Supp Distribution — Board review and approval 3. Benefits as of 11 -01 -2011. IX. COMMENTS: X. ADJOURNMENT: Next Regular Meeting Date — Tuesday, February 7, 2012 @ 9:30 a.m. — Renaissance Commons If you cannot attend, please call Barbara @ 561- 739 -7972 NOTICE IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE POLICE OFFICERS' PENSION BOARD WITH RESPECT TO ANY MATTER CONSIDERED AT THIS MEETING, HE /SHE WILL NEED A RECORD OF THE PROCEEDINGS AND, FOR SUCH PURPOSE, HE /SHE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDING IS MADE, WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED (F.s. 286.0105) 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 BY THE CITY. PLEASE CONTACT CITY CLERK'S OFFICE, (561) 742 -6060 AT LEAST TWENTY -FOUR HOURS PRIOR TO THE PROGRAM OR ACTIVITY IN ORDER FOR THE CITY TO REASONABLY ACCOMMODATE YOUR REQUEST THE BOARD (COMMITTEE) MAY ONLY CONDUCT PUBLIC BUSYNESS AFTER A QUORUM HAS BEEN ESTABLISHED. IF NO QUORUM IS ESTABLISHED WITHIN TWENTY MINUTES OF THE NOTICED START TIME OF THE MEETING THE CITY CLERK OR DESIGNEE WILL SO NOTE THE FAILURE TO ESTABLISH A QUORUM AND THE MEETING SHALL BE CONCLUDED. BOARD MEMBERS MAY NOT PARTICIPATE FURTHER EVEN WHEN PURPORTEDLY ACTING IN AN INFORMAL CAPACITY. S: \CC \WPUANET\POLICE PENSION FUND doc 2 Florida Public Pension Trustees Association yin SSOCIA1 ION ' 2946 Wellington Circle East $ RUSTEES Tallahassee, FL 32309 1 ENSION FLORI BLIC g` October 13, 2011 Frank Ranzie Boynton Beach Police 10( E. Boynton Beach Blvd. Boynton Beach, FL 33435 Dear Frank: Congratulations! You have successfully passed the Advanced Exam and therefore have met all the requirements for Ce tification in the CPPT Program. Your Certification begins immediately. Now that you have completed the Certification Program, you begin the importance of maintaining your CPPT Certification. Post Certification Requirements for the CPPT program are the following: Upon completing the CPPT Certification Program you must complete 10 Continuing Education Units annually beginning January 1, 2012. An FPPTA Trustees School and the CEU Trip to Wall Street will be worth 10 units. The FPPTA conference and approved outside educational conference will be worth 5 unite. We have presently approved participation in the NPEA, NCPERS, NCTR, the Florida Division of Retirement; Police and Firefighters Trustee's School and the International Foundation of Employee Benefit Plans. You will be required to attend at least one FPPTA function per year. Each recipient will be monitored on a calendar year basis to insure that CPPT related education is in fact continuing. You will receive an Annual CPPT Post Certification Requirement Form each December starting in 2012. (Example of CEU form enclosed) It will be your responsibility to complete the form and return it to the FPPTA office by January 15th of each year in order to maintain your CPPT Certification status. The next FPPTA Trustee School will be held February 2 — 5, 2012 at the Hyatt Regency Riverfront in Jacksonville. School information will be mailed out in November. The next FPPTA event will be the 28th Annual Conference, which will be held June 24 — June 27, 2012 at Hilton Disney, Orlando. Conference information will be mailed in April. At the conference there will be an awards presentation Monday, June 25 for those who have become cerified since the last conference. We also have a CPPT breakfast Wednesday morning for those who have earned their Certification. PIease keep this in mind as you make plans for the summer. This will also be your first opportunity to register for the Wall Street Program in 2013. You also have the chance to be the recipient of the CPPT Wall Street Scholarship. We will be sending you a letter in April explaining all this in more detail. Your participation in the CPPT Program is very important to us and if you should have any questions or concerns, please let us know. Sin;,erely, 6 .1144 Kiniberlie E. Ryals, CPPT Chief Operating Officer CPPT Coordinator (800) 842 -4064 • (850) 668 -8552 • Fax (850) 668 - 8514 www.fppta.org • e -mail fppta @fppta.org • FPPTA ,ASSOCIATION Florida Public Pension Trustees Association RUSTEES PENSION CPPT Continuing Education Verification Form PUBLIC For the Year 2009 FLORIDA 2 Designee Information: Name: _ Company/Pension System: * _ Street A• City: State: _ Zip: Phone: E -mail: Please mark the programs you have attended: 10 Continuing Education Units FPPTA Trustees School, February 2009, World Golf Village, St. Augustine, Florida FPPTA Trustees School, October 2009, Hyatt Coconut Point, Bonita Springs, Florida FPPTA CPPT Continuing Education Trip to Stock Exchange, April 2009, New York 5 Continuing Education Units State of Florida Police Officers & Firefighters Trustees School, May 2009, Tallahassee, Florida NCPERS Annual Conference, May 2009, Hyatt Regency Century Plaza, Beverly Hills, California FPPTA Annual Conference, June 2009, Boca Raton Restort, Boca Raton, Florida State of Florida Police Officers & Firefighters Annual Conference, October 2009, Orlando, Florida NCTR, October 2009, Renaissance Esmeralda, Indian Wells, California NPEA, October 2009, Tradewinds Resort, St. Petersburg Beach, Florida International Foundation of Employee Benefit Plans Annual Conference (various locations) Designee Signature: Date: FPPTA V Events ASSOCTION. T • . PENSION • PUBIiC For more information on upcoming or recent F LO, events, please visit our website, www.fppta.org Event Dates Location Trustees School February 5 - 8, 2012 Hyatt Regency Jacksonville Riverfront InterContinental,The Barclay CPPT NYSE Trip March 28 - 31, 2012 New York, New York 8th Annual Fishing April 20 -22, 2012 Tarpon Lodge, Pine Island Tournament (Please note new date) 28t Annual June 24 - 27, 2012 Hilton Disney Conference Orlando Trustees School October 7 - 10, 2012 Hyatt Coconut Point Bonita Springs Trustees School January 27 - 30, 2013 Sawgrass Marriott Ponce Vedra 29t Annual June 23 - 26, 2013 Omni ChampionsGate Conference Orlando PGA National Trustees School September 29 - October 2, 2013 palm Beach Gardens 1 Please note: FPPTA is no longer using registration forms. All event registrations for the annual conference and trustees schools must be completed online by logging into www.fppta.org. if you have not already activated your account, please see our website for help and instructions, or contact FPPTA. FPPTA 2946 Wellington Circle East Tallahassee, FI 32309 Phone: 800 - 842 -4064 I Fax: 850 -668 -8514 c0 4 MINUTES OF THE BOYNTON BEACH POLICE OFFICERS' PENSION FUND Q A ElltY BOARD MEETING HELD ON TUESDAY, SEPTEMBER, 20, 2011 AT 9:30 AM RENAISSANCE EXECUTIVE SUITES — CONFERENCE ROOM #1, 1500 GATEWAY BOULEVARD, SUITE #220, BOYNTON BEACH, FLORIDA PRESENT: Gary Chapman, Chair Barbara LaDue, Pension Administrator Toby Athol, Secretary Bonni Jensen, Board Attorney Scott Caudell Jason Llopis Frank Ranzie I. CALL TO ORDER Chair Chapman called the meeting to order at 9:35 a.m. Glenn Harris, Client Executive, Russell Investments, was present via telephone. II. AGENDA APPROVAL There were no changes to the agenda. III. APPROVALOF MINUTES — Quarterly meeting of August 9, 2011 Motion Mr. Athol moved to approve the minutes. Mr. Caudell seconded the motion that unanimously passed. IV. FINANCIAL REPORTS: NONE V. CORRESPONDENCE: NONE VI. OLD BUSINESS: (TABLED FROM THE AUGUST 9, 2011 QUARTERLY MEETING) 1) Gabriel Roeder Smith & Co. — Steve Palmquist, Actuary a) Review revised October 2010 Actuarial Valuation Report of May 31, 2011. 1 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 Steve Palmquist, Senior Actuary, introduced Peter Strong, who would service the plan with him. Mr. Palmquist summarized they completed the annual report, which the Board had reviewed in February. The 2010 annual report would determine what the 2011/2012 contributions would be The comparison of the Required Employer Contributions reflected after deducting the State revenue, the City would need to contribute $3.8 million for the next fiscal year, of they continued the biweekly payments. If they made a lump sum payment, the contribution would be $3,633,868. This would yield an approximate savings of $164,000 Attorney Jensen pointed out she received an email from the City indicating they would make the lump sum payment. The savings gained in this manner for the City's Fire, Police, and General Employees, combined, would be close to $500,000 This figure was based on the discount rate of 8 %. There was discussion the State has a policy that requires the City to pay at least a percentage of the actual payroll. After this month, they will know what the actual pensionable payroll was for the year, and the City will pay 28.08 %. It was thought the State's position could hurt the plan because if the percentage of payroll was less than what was anticipated, the percent times the lower payroll may yield less money and the City would have to make up the difference. If the amount of payroll at the end of the year was less than what was anticipated at the beginning of the plan year, the City could either keep the balance and apply it to the plan to reduce the unfunded liability, or use the balance as a pre -pay contribution for the following fiscal year. As to the interest rate, they would have to true up on the interest. This was a policy that did not go through the rule process at the State level, but was followed for the last 20 years. Discussion turned to addressing the commodity and contribution issues. Chair Chapman suggested the contributions be made by algorhythmic disbursements, which was the normal process. This would ensure the allocations were in line with the deposits. Mr Harris explained that currently, the commodities allocation was just under 2% and the allocation was 4 %. Overall, commodities were down just under 5 %, but with the concerns regarding the economy and events in Europe, investors would seek out safer assets, such as treasuries on the fixed income side, and natural resources tied to real assets. Equities would be defensive and fall with consumer staples and health care. It was a good time to buy low and expect an increase. Mr. Harris anticipated there would be short-term volatility for the next few months, and most assets were in line with the policy benchmarks, except for commodities. Chair Chapman suggested taking the full initial deposit from the City and use it for the normal deposit procedure for investments versus trying to allocate independently for commodities. 2 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 Motion Mr. Athol moved to make the normal deposit with the City's annual contribution. Discussion followed Russell Investments could accept standing instructions for deposits from the Board. Mr. Harris agreed to confirm with his colleagues. When the Board wanted to amend the procedure, two signatures would be supplied. There were fixed instructions for employee contributions and the one special instruction for the City's deposit. Mr. Harris explained the Board did not modify the fee structure for the biweekly deposits. They would only adjust fees when the commodities allocation reached the 4% target or in November, whichever came first. Currently, Russell Investments would not change its fees, based on the plan's contribution policy, regardless of whether the deposits were biweekly or once a month. Vote Mr. Caudell seconded the motion that unanimously passed. Mr. Palmquist explained the market value of assets on the last valuation date was $3.7 million Tess than the actuarial value of assets. These were losses which occurred in 2008 that were not yet recognized. By the time the plan recognized all those losses, the cost of the plan would be about 1.7% of payroll higher. The relationship to the market value reflected if the plan did not smooth the assets, the cost would be 32% of payroll. The City makes its contribution on the 28 %. As the losses were fully recognized, the cost of the plan would increase regardless of whether the plan eamed the same rate of return. So far, three -fifths of the losses were recognized. There was a question when smoothing was used and the unfunded liability was calculated, if a snapshot was used. Mr. Palmquist explained unfunded liability was based on actuarial value and, to his knowledge, only three plans did not use the smoothing method. Gains and losses were paid off over 30 years, so the thought was in addition to the amortization period, why would one want to smooth over five years. While there was some merit to the thought, when one had a bad year, it caused the cost of the plan to jump, but once the loss occurred, it was over. If the plan had a good year, it did not recognize that either. The plan had a net experience loss of $1.4 million. The investment losses were $2.6 million because of the losses that occurred in 2008/2009. All else was positive. There were no pay increases and they had anticipated 6 %, so the plan had a gain. The $1.4 million experience loss was added to the unfunded liability and caused the cost of the plan to increase by about two- thirds of one percent of payroll. The funded ratio of the plan was 58.7 %, which was down from last year. Mr. Palmquist expected the ratio to level or decrease slightly during the next two years because of the losses from 2008/2009. The average funded ratio of other police /fire plans was about 3 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 70% The Boynton Beach plan was below the ratio The pay increases and the investment returns hurt the plan for the past 10 years Senate Bill 1128 would limit overtime to 300 hours per year Pensionable pay would be limited to the 300 hours and any overtime over that would not be included. The unused leave would also be capped by the amount of hours stipulated in the next Collective Bargaining Agreement (CBA). Rough calculations on the unused leave would gradually be phased out of pensionable compensation. If phased out all at once, the cost of the plan would decrease about 2% of payroll, and the unfunded liability would decrease by over $2 million There were different ways to take the unused leave into account. The Board was waiting for the State to develop guidelines or recommend a formula. Mr. Ranzie left the meeting at 10:07 am On October 1, 2012, a new CBA would commence. Attorney Jensen stated there was a spectrum and as part of the CBA process, changes should be implemented in a way that would be best for the members As Attorney Jensen saw CBAs come up for negotiations, many municipalities wanted pension benefits to be reduced. Any changes made would take place when the parties agreed, not on the effective date of the contract. It was also noted the current CBA has an Evergreen clause Mr. Ranzie returned to the meeting at 10:09 a.m. The City would not be able to retroactively use the vacation and overtime limitations as pension benefits could only be changed prospectively. Accordingly, individuals who retired while the new CBA was being negotiated would retire under the benefits in effect at the time they retired. As to the State revenue, the first $465,000 is applied towards the City's contribution. Anything over that is spent according to plan guidelines. The State monies had decreased the last two years. The majority of the decrease was due to auto insurance premiums, which were not paid. The City's cost, as a percent of payroll, had been between 27% and 30% for the past eight years and had not increased dramatically; however, in terms of dollars, it had, because payroll increased. An inquiry was made about the buyouts in 2001 and if they contributed to the plan's current state. Mr Palmquist responded there were savings in payroll, but pension costs and the unfunded liability increased each of the three times buyouts were offered Impact statements had been prepared each of those times, which reflected the pension costs would increase, but the cost increase was less than the payroll savings. If individuals contributed to make up for the deficit, the unfunded liability and percentage of payroll would be a little better. When the unfunded liability increased, the City did not 4 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 always contribute that amount, unlike individuals who buy back time. The employee had to pay the full amount at once, but the City was paying it off over time. Pension Fund Disbursements and Income reflected a significant tumaround. In 2009, there was $4.5 million in earnings, which translated into a 10% return on market. The investment and administrative expenses totaled about $470,000, and was 1% of the average amount of assets for the year, which was satisfactory. The Investment Rate of Return reflected the return on market average, over 29 years, was 8.8% per year. During the past five years, the fund earned 2.3% a year, and over the past ten years, was 2.6% per year. When a plan expects 8% per year and receives 2 %, the plan falls behind quickly. The unfunded liability 10 years ago was about $3 million and now was $33 million, mostly due to investments. Mr. Palmquist stated there had never been a 10 -year period this bad, even going back to the Great Depression. Mr. Harris agreed, but thought there would be some turn around. Mr. Liopis left the meeting at 10:26 a.m. The return on market compared to the return based on smoothing reflected the return was slightly less. It was still at the discount rate, which was lowered from 8.5% to 8 %. It was noted the rate varied. While it showed the plan was above the expected rate of return, the plan was in a hole. Mr. Palmquist explained the retum was over the 10 years and the plan recognized under the smoothing was below the assumption. The salary increases were greater than the assumption over the past 10 years. Mr. Llopis returned to the meeting at 10:29 a.m. Chair Chapman noted the salary increases before those 10 years were lower and were increased during the last 10 years. The information painted a distorted picture because previously the department was underpaid due to the Tradewinds litigation, which froze all increases for several years. Those were made up post that event and then the market went bad. The police department went through 190 officers in 10 years. The increases were to bring officers up to industry standards. b) Discussion on Interest Assumption and RP -2000 Mortality Table — Experience Study dated February 2011. Mr. Palmquist spoke about the 8% investment return. Based on the capital market assumptions they received from investment consulting firms, and from what was occurring with large retirement systems, entities were reducing the investment returns. The statewide retirement systems in New York, Rhode Island, and Colorado changed from 8% to 7.5 %, and Virginia changed from 7.5% to 7 %. The California Public Employees Retirement System (Ca1PERS) staff recommended reducing the rate from 7.75% to 7.5% but the Trustees opted to keep the rate the same. The California Teachers State Retirement System (CaISTRS) recommended reducing the rate from 8% to 7.5% but the Trustees elected to stay at 8 %. The trend was to reduce the rate. If 5 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 the assumed rate was reduced by .25 %, the annual cost of the plan would increase by 1,7% of payroll The actual number of retirements versus the expected retirements could be reduced, thereby saving 1.25% of payroll. The employment termination rates were only 70% of what was anticipated, and were a big item in the cost of the plan The plan expected more employees would terminate before retirement, and this did not occur The changes would increase payroll by 3.5 %. The new mortality tables would increase the cost of the plan by 2.6% of payroll. The current mortality tables showed life expectancies for individuals aged 55 increased 25 years for males, and 30 years for females, The new mortality tables anticipated for individuals aged 55 in 2010, life expectancy would be almost 29 years. A 55 year -old male in 2025 would have a 30 -year life expectancy. The new table was not a static table. A question was posed if there were any life expectancy studies that gave consideration to law enforcement occupations. Mr. Palmquist responded it takes thousands of employees in a plan for the information to be credible and the Boynton Beach plan does not have enough employees to be credible. Other municipalities have similar mortality rates for each group: police, fire and general employees. The Florida Retirement System also uses the same mortality rates for all employees in the plan. He felt police officer mortality rates were similar to the general public and past studies were inaccurate. The actuarial confirmation of the use of State Chapter Money did not take into account the savings from Senate Bill 1128. If all the recommended changes and the 7.75% assumed rate of return were implemented, the City's cost would increase almost 7% of payroll. Many plans were making the changes incrementally over the course of four or five years. The idea was not to create a big change in the annual required contribution all at once. Chair Chapman inquired about the termination rates. Mr. Palmquist explained the termination rates were based on the past nine years. Over the past nine years, there was a 15% turnover of employees in the first year of service. After four years of service, the termination rate dropped to 4 %. After five years of service, the rate was 3 %. The cost increase was based on a lower amount of employees leaving and Chair Chapman requested clarification on how the 3% rate was calculated. Mr. Palmquist explained when applying the recommended rates to the current employees, as opposed to the rate they were currently using, it resulted in a large increase in the cost of the plan By using the new rates, based on the past nine -year experience, they expect more employees to stay until retirement. Chair Chapman felt this would turn around, and changing this rate was increasing the cost of the plan. The City was reducing benefits and salaries were frozen, but when the market and unemployment rate turned around, there would be dramatic changes with the job He anticipated individuals would leave F Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 the job at the same rate as had occurred before. He asked if a different time period could be used, and why only nine years was used. Mr. Palmquist explained it was the most time they could find as opposed to researching old files. They were attempting to anticipate the future, not the size of the department. When retirements were analyzed, they anticipated 80% would leave when they were first eligible, and they adjusted the rate. The salary increases were not included. They would wait to see what was negotiated for the next CBA before determining what to use for pay increases. There may be some savings. As for the employee termination rates, they were looking to the past for guidance in the future. If the Trustees did not think it was indicative of what would occur in the future, they did not have to use those exact numbers. They could use something between the old and new numbers. The point was individuals were no longer entering DROP when they were first eligible. They were entering it five years later, which could assist with the reduced retirement rate. The 1.28% was understated as far as the savings. He suggested using the 7.75% assumed rate as the State adopted it and required Mr. Palmquist to do the report using the rate. Although the report was only a disclosure item and not for funding purposes, it allowed for a comparison of the plan with other plans. Trustees of other major plans were already reducing the rate and Chair Chapman suggested this may be the time to reduce the rate as well. While it was not the best time to change methodologies, the action may be the least consequential. As to using the new mortality tables, he thought they should make the change when the State required it. Attorney Jensen had noted when other municipalities had CBA issues pending, retirement rates drove a lot of employees eligible for retirement into retirement. She inquired if that would have an impact on changing the rate now. Mr. Palmquist did not think it would. He thought it would be a one -time event that takes the long -term expectations into account. Mr. Palmquist commented moving forward, it would be more difficult to sign off on all the assumptions when they know mortality rates were improving. One of the new requirements was to disclose why one was not using mortality improvement factors. While this may not be an issue now, it would be in the future. There had been kickback from the State regarding plans using the 1983 table and wanting them to update to the more current table. Discussion followed reducing the assumed rate by 25 basis points now, and then phasing in the new mortality tables over the five years may be the best way to proceed. Terminations were monitored each year. Chair Chapman suggested expanding the years studied to determine the rate from nine years to 15 years or going back 18 years from this year. He suggested holding off on the 3.8% termination rate because it was done in anticipation of things that would occur. He thought looking forward, it would not be a 7 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 bright future for emergency responders. The future was uncertain, and Chair Chapman suggested tabling the termination rates, addressing the assumed rate of return by immediately reducing it 25 basis points, and phasing in the new mortality table over five years. Motion Mr. Athol moved to adopt the actuarial assumptions with the exclusion of termination rates until they could be re- evaluated and presented, and implement the changes immediately, with the exception of the mortality tables, which would be phased in over five years. The termination rates would be reviewed nine years further than what was reviewed. Mr. Caudell seconded the motion that unanimously passed. c) New page in Val Report using assumed rate of return by State. d) Estimated payroll /annual deposit. Items c and d were discussed earlier in the meeting. Mr. Ranzie left the meeting at 11:10 a.m. Frank Wan, Head of Research, Burgess Chambers & Associates, was present via telephone at 11:10 a.m. He inquired what Mr. Harris thought of the .25 reduction as it pertained to the asset allocations. Mr. Harris responded he did not see any significant changes to the portfolio. It would be looked at, and they would have their forecast assumptions as of September 30. The long -term assumptions would not change dramatically, but he expressed the short term may change. As to fixed income, they were still looking at an inflationary environment in the next few years. Mr. Ranzie returned at 11:13 a.m. Discussion followed they could keep the current asset allocation aiming for 8 %, which would increase the probability to achieve the 7.75% - 8% target, or aim directly for the 7.75% rate. Mr. Harris explained Russell Investments was closely watching the Eurozone and Japan, and had more concerns outside the U.S. as opposed to inside the U.S. Their view was the Eurozone would continue to worsen, and from an equity standpoint, their recommendation may be to reduce the developed non -U.S exposure They had been doing that over the last few quarters, and implementing some of the alternative allocations to REITS, commodities, and further diversify. As to the overall balance between equities, fixed income, and alternatives, Mr Harris did not see a need to accommodate a 25 basis point reduction in the assumed rate of return. Chair Chapman commented there were several conferences and programs, which reviewed Long- Duration Investments (LDI). He was unsure where that was transitioning to because of where the financial markets were today. He inquired how plans were introducing LDI and lowering risk in order to accomplish a more moderate return 8 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 Mr. Harris responded they had a number of clients incorporating LDI, and the big fear was whether to start aggressively shifting from intermediate fixed income, to longer durations, in light of the fact that rates have decreased. Investors have moved to safety type securities. Rates for long -term fixed income were good. The longest duration U.S. strips were up 40 %. This was to align liabilities to match their assets. Mr. Harris' recommendation to clients was to consider implementing towards LDI. Another way to do so was as funded status improved over time, they dial down the risk and shift from equities and add more longer - duration fixed income. There have not been many changes to programs with this type of strategy, due to equity markets and interest rates declining. There were some exceptions where clients set up schedules to dollar -cost average from intermediate to long duration, and in light of the plan year for many private corporate pension funds being September 15, a number of them have put their contributions into long duration. This was similar to what the Trustees were doing with commodities, using new money to fund that allocation. Mr. Wan offered the following comments in regard to LDI investments: > The investments are a different way of looking at risk and it matched liabilities. The long -term capital market and assumptions should be higher. If they structured the plan's liability and limited it on the upside, they would incur a less than expected return using the LDI strategy. > When moving away from a capital market into a liability frontier, instead of looking at the asset allocation structure, they could structure the portfolio to be agnostic to the actuarial assumption. Y Long - duration Investments avoid market timing. The goal was to be reliant on that number in order to meet the liabilities. > These investments avoid peer comparisons so the plan is purely on the track to meet the end result of the plan. Mr. Wan opined the timing was not there at this time for Boynton Beach. Mr. Harris explained this has to do with rates being so low. If rates started rising, the plan would take a hit. Being intermediate was playing it safe, although it was not the environment they expected to see. Attorney Jensen noted the Federal Reserve was trying to keep the Tong -term interest rates low. That was the quantitative easing, but it would pump more money into the system and spur economic growth. It would keep borrowing costs low and businesses would spend. The goal was to stave off a deflationary environment. 2) Review future employee /employer contribution direction This item was discussed earlier in the meeting. 9 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 3) Financial Statements - For review - October, November, and December 2010: January, February, and March; and April, May and June 2011 VII. NEW BUSINESS: Chair Chapman requested adding Item B. 2) to New Business for the purchase of an antivirus software program and remote printer driver upgrade, The cost was Tess than the approved amount for expenses. There were no objections to the request A. Invoices for review and approval: 1) Perry & Jensen, LLC - Service August 2011 - $1,424,38 Motion Mr. Athol moved to pay the invoices Mr. Caudell seconded the motion that unanimously passed. B. Attorney Report - Bonnie Jensen 1) Commission on Ethics Review 2) Update two software programs on pension system. These are an antivirus software program and remote printer driver upgrade Attorney Jensen stated in June, the County passed an Ordinance regarding Ethics and have since issued several opinions regarding pension plans. A memo had been prepared which was reviewed. The Commission had ruled pension boards were not considered advisory boards. The Trustees were considered City employees, and some were considered officials due to their appointment to the Board by the City Commission. The one area the Inspector General's office would look at was the relationship between the Trustee position and employee status, and the Misuse of Office, which she reviewed. The County developed a Corrupt Misuse of Office, which requires members to disclose voting conflicts through Form 8B. Previously Form 8B was filed with the minutes. The County now requires the form be filed with the minutes and be sent to the County Commission on Ethics. Discussion followed any benefit the Trustees would vote on would affect them personally; however, Attorney Jensen explained the Trustees do not create benefits. The benefits are created on the City level; therefore, the Trustees were not voting to create a benefit. A Trustee would not vote to approve their own retirement, and sometimes when there is a 13th Check provision or cost of living adjustment, the Trustee would need to analyze whether there were enough people that would be receiving the benefit so the Trustee would not be benefitting specifically from the vote There are Statutory provisions, under the State Code of Ethics, which indicate if the benefit encompassed enough people, and it was something provided for in an Ordinance, it was being voted on because it was a required benefit that had to be paid 10 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 and the Trustee was not personally benefitting. This would also include the 185 benefit. Attorney Jensen suggested they ask the Commission on Ethics their opinion the first time they take such action. Attorney Jensen had spoken to Mr. Johnson, Executive Director, Commission on Ethics, and she conveyed Trustees do not vote on their own retirement benefit. They make sure there is a forum, in their absence, so that it could be passed. They would vote on a COLA or 13th Check provision even if they were a retiree and would benefit from the provision. The County's thought was that could be considered a special benefit. Attorney Jensen informed Mr. Johnson of a case when a commissioner voted on a zoning issue which affected her neighborhood. After the review, it was decided there was a big enough group of individuals in her neighborhood that were impacted and that she was not specially and /or financially benefitting from the situation. Mr. Johnson then expressed they would have to review the matter. Attorney Jensen noted there were differences between the State and County provisions. She commented specifically for the Board, they would want to err on the side of caution. Travel expenses were reviewed. Attorney Jensen had asked about another pension plan, (the Boca Raton plan) and was unclear about the provisions. She hoped the Commission would issue more opinions. The County provisions say one can accept nothing while traveling. To her, nothing meant nothing. The way it was written, one cannot accept travel expenses or be reimbursed for the expenses. If one was travelling and had a meal, it was a reimbursement or a travel expense. In speaking with the County verbally, and reading their writings and the two attorney general opinions, they have said when travelling, the same $100 that could be accepted from any vendor applied. Cumulatively, one hundred dollars in gifts could be accepted each year. The State Statute says one can accept $25 per sitting. Chair Chapman suggested the Trustees not accept anything and they accept the City's parameters for per diem. As an example, if they attend a conference in New York and they get a meal, the way the expense form reads, it prompts you that if it is provided, you cannot claim the per diem. The Trustees cannot accept the provision of the lunch. He suggested the Trustees accept nothing, they put in their expense reports and if they go to an area that is more expensive, they adopt a higher return. Attorney Jensen advised that could be done as the IRS has documentation that explains how much meals cost in different geographic areas. Attorney Jensen explained the Florida Public Trustees Association advertises for contributions. Interested contributors would be contributing to the entire event, not any one item even though their name may be placed by an item. The Commission on Ethics agreed that could be the rule. They also agreed the Trustees did not look to the service providers of the pension board because they are not an advisory board; they should look to the City of Boynton Beach. She did not know if that helped the Trustee's in any way because she did not know who the service providers for Boynton Beach were. She works for the City of Boynton Beach and was unsure whether that was considered a 11 Meeting Minutes Police Pension Board Boynton Beach, FL Se.tmber 20, 2011 City of Boynton Beach fund or not. Burgess Chambers and Associates was not a vendor Chair Chapman was not going to accept anything and would submit his expense report. Discussion followed whether it was considered a gift when the Trustees paid for the school. They typically have a speaker who makes a presentation while participants eat. Attorney Jensen clarified if in the agenda documents it says lunch is provided and was part of the registration payment for the conference, it could be accepted, provided it was not a vendor for the City of Boynton Beach. The Opal organization, to Attorney Jensen's knowledge, was not a City vendor or a plan vendor. They have indicated that if there were vendors of the system who are at the conference, Trustees must be cognizant of the fact of whether they were vendors of the City of Boynton Beach and look to the $100 requirement. If it were BCA, and a Trustee accepted a gift over $100, the Trustee would have to report it on the gift disclosure form The members discussed reciprocal and cumulative gifts. Attorney Jensen stated the State of Florida does not believe in reciprocal gifts; however, Mr. Johnson speaks about it. The State views a lunch as a single gift and allows up to $25 per event/gift and has no cap. As an example, Mr. Chambers can take a member to dinner as many times as he wants, but if he spends over $25 each time, he has to report it to the State each time. If he spends more than $100, via State Statute, the Trustee cannot accept it. If a conference has a speaker making a presentation during lunch and registration was paid for by someone other than the Trustee, the Trustee could accept the lunch Breakfasts associated with the event were permitted. As for the Russell events, the current contract with Russell Investment specified educational opportunities would be provided. Under the State Statute, they ruled that as long as it was part of the relationship with the Board, and they were being paid a fee, part of that fee includes educational activities. She did not know what the County Ethics Commission's position was. Before the law was in effect, there was a County Ordinance that pertained to county employees. A county employee went on a trip to New York with her second cousin. A second cousin is not considered a relative. The cousin had no relationship with the county, was not a lobbyist, or vendor. The cousin spent her points at a hotel in New York for two nights. The employee had to report it as a gift because each night at the hotel was more than $100 Reporting requirements extended to everything The State Statute had an exception for businesses. If one had an outside business, they did not have to report whom they had dinner with, but it is not true under the County Ordinance. If a Trustee had dinner with a neighbor and they spent more than $100, it had to be reported because it was considered a gift even if it had nothing to do with the Board. If one received a holiday gift from a neighbor and the Trustee did not reciprocate, it was considered a gift. Attorney Jensen was arguing the provision. 12 Meeting Minutes Police Pension Board Boynton Beach, EL September 20, 2011 Attorney Jensen conveyed one of her clients who is a reporting individual spent time with her friend in Seattle. Each night spent at someone's home was $44 according to the State Statute. Each night was a gift. If she spent more than two nights, she had to report it. Attorney Jensen was discussing the provisions. Some of the rules were State rules and she was unsure, under the State rules whether they had to report gifts. For purposes of the County rules, they could publicly censure one, or impose a $500 fine. If a willful violation was made, they could go to the State Attorney's office and be charged with a first - degree misdemeanor. When Trustees attend a conference or educational meeting, it would be approved by the Board. Trustees should turn in their expense reports as usual. The State Attorney stated they could accept giveaway trinkets; however, Attorney Jensen interpreted the rule to mean when travelling, accept nothing. Chair Chapman thought, if at a conference, they could not get a meal for the per diem amount, they should review the amounts as they had adopted the City's per diem rate. Attorney Jensen commented she did not believe the Inspector General had direct authority over pension boards, but did have direct authority over any City money and the Board used City money. Attending a conference and leaving a tip was discussed. The State valuation ruled for those kinds of events, the issue was the amount of money that was spent divided by the number of people invited - not the number of people attending. If the number was less than $100, the Trustee could accept it under the State rules. The vendors were supposed to provide that information and the lobbyists are required to report amounts between $25 and $100. If the conference was out of state, the participant should find out the information. She commented it was complicated. B. Verification of Benefits — Frank Danysh for review and approval. Ms. LaDue noted this was the first employee with the five years separated from the vacation and sick pay. The documents should reflect the information as the Board should know categorically what it is. The calculations were run both ways as there were different ways to calculate the benefit. Ms. Schaeffer may be able to assist. Motion Mr. Athol moved to approve. Mr. Llopis seconded the motion that unanimously passed. VIII. PENSION ADMINISTRATOR'S REPORT: NONE IX. COMMENTS: NONE 13 Meeting Minutes Police Pension Board Boynton Beach, FL September 20, 2011 X. ADJOURNMENT There being no further business to discuss, the meeting was properly adjourned at 12:05 p.m C CaLL ILLT juiLitwo Catherine Cherry ( i Recording Secretary 110411 14 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND BALANCE SHEET Year -To -Date As Of Pg 16 06/30/2011 ASSETS CHECKING - SUNTRUST 127,316.30 RECEIVABLE -SOLD SECURITIES 266,766.11 RUSSELL TRUST INVEST 56,166,964.26 TOTAL ASSETS 56,561,046.67 LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE 50,379,544.67 NET CHANGE IN FUND RESERVE 6,181,502.00 RESERVE BALANCE 56,561,046.67 TOT. LIABILITY & FUND RESERVES 56,561,046.67 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 06/01/2011 To 06/30/2011 Current YTD Amount Amount ADDITIONS TO RESERVE DROP LOAN REPAYS 4,278.72 33,988.48 UNREALIZED G/L RUSSELL (683,047.96) 3,739,731.57 RUSSELL REALIZED G/L 103,844.35 2,259,917.34 MISCELLANEOUS INCOME 705.28 813.74 CONTRIBUTIONS - MEMBERS 105,408.08 792,346.42 CONTRIBUTIONS - EMPLOYER 407,548.38 2,581,139.74 R/0 MONEY .00 75,423.28 TOTAL ADDITIONS (61,263.15) 9,483,360.57 DEDUCTIONS FROM RESERVE 5, rga PAYMENT TO RETIREES 332,838.69 2,592,924.32 DROP LOANS .00 50,000.00 DROP WITHDRAWALS 28,696.52 299,780.81 REFUNDS TERM EMPLOYEES .00 28,642.18 INVESTMENT FEES 5,000.00 209,633.62 ACTUARIAL FEES .00 27,800.00 OFFICE EXPENSES 1,284.71 5,994.35 COMPUTER /SUPPLY /SOFTWARE / MAINT 825.00 5,618.79 AUDIT FEES .00 15,750.00 SUNTRUST /BANK CHGS 15.00 75.00 PROFESSIONAL SERVICES 1,546.35 11,011.11 PENSION ADMINISTRATOR 1,754.56 15,607.89 BUSINESS MEETINGS 1,563.56 24,096.57 PENSION PROGRAM MAINT (ES) 472.50 2,018.50 MISCELLANEOUS 839.25 12,905.43 TOTAL DEDUCTIONS 374,836.14 3,301,858.57 NET CHANGE IN FUND RESERVE (436,099.29) 6,181,502.00 PafILYAL6-41_ - 1 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND 600 BALANCE SHEET R � M v Year -To -Date As Of 09/30/2011 ASSETS S CHECKING - SUNTRUST 5,819.19 RECEIVABLE -SOLD SECURITIES 266,766.11 RUSSELL TRUST INVEST 51,002,817.42 ff TOTAL ASSETS 51,275,402.72 1,, 1- LIABILITIES AND FUND RESERVES ACCOUNTS PAYABLE 1,205.29 TOTAL LIABILITIES 1,205.29 POLICE PENSION RESERVE 50,379,544.67 NET CHANGE IN FUND RESERVE 894,652.76 RESERVE BALANCE 51,274,197.43 TOT. LIABILITY & FUND RESERVES 51,275,402.72 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 09/01/2011 To 09/30/2011 Current YTD Amount Amount ADDITIONS TO RESERVE DROP LOAN REPAYS 4,821.12 47,367.04 UNREALIZED G/L RUSSELL (3,276,393.77) (2,716,285.86) RUSSELL REALIZED G/L 52,032.86 2,638,277.44 MISCELLANEOUS INCOME 1.83 5,748.51 CONTRIBUTIONS - MEMBERS 122,221.34 1,059,816.50 CONTRIBUTIONS - EMPLOYER 407,548.42 3,532,086.00 CONTRIBUTIONS - STATE 623,167.98 623,167.98 R/0 MONEY .00 87,871.87 TOTAL ADDITIONS (2,066,600.22) 5,278,049.48 DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES 279,446.32 3,433,641.98 DROP LOANS .00 80,000.00 DROP WITHDRAWALS 14,596.52 ✓ 339,770.37 REFUNDS TERM EMPLOYEES .00 78,709.21 INVESTMENT FEES .00 317,438.00 ACTUARIAL FEES .00 28,532.00 OFFICE EXPENSES 1,025.82 V 7,356.61 COMPUTER /SUPPLY /SOFTWARE /MAINT .00 6,443.79 AUDIT FEES .00 15,750.00 SUNTRUST /BANK CHGS .00 75.00 PROFESSIONAL SERVICES .00 12,261.51 PENSION ADMINISTRATOR 1,754.56 V 20,871.57 BUSINESS MEETINGS 810.00 t- 26,967.15 PENSION PROGRAM MAINT (ES) .00 2,018.50 MISCELLANEOUS 656.60 13,561.03 TOTAL DEDUCTIONS 298,289.82 4,383,396.72 NET CHANGE IN FUND RESERVE (2,364,890.04) 894,652.76 /14 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND BALANCE SHEET Year -To -Date As Of 08/31/2011 ASSETS CHECKING - SUNTRUST 10,348.38 RECEIVABLE -SOLD SECURITIES 266,766.11 RUSSELL TRUST INVEST 53, 361, 972.98 1 r TOTAL ASSETS 53,639,087.47 LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE 50,379,544.67 NET CHANGE IN FUND RESERVE 3,259,542.80 RESERVE BALANCE 53,639,087.47 TOT. LIABILITY & FUND RESERVES 53,639,087.47 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 08/01/2011 To 08/31/2011 Current YTD Amount Amount ADDITIONS TO RESERVE DROP LOAN REPAYS 8,557.44 42,545.92 UNREALIZED G/L RUSSELL (2,720,827.89) 560,107.91 RUSSELL REALIZED G/L 269,896.41 2,586,244.58 MISCELLANEOUS INCOME .00 5,746.68 CONTRIBUTIONS - MEMBERS 72,732.70 937,595.16 CONTRIBUTIONS - EMPLOYER 271,698.92 3,124,537.58 R/0 MONEY 12,448.59 87,871.87 TOTAL ADDITIONS (2,085,493.83) 7,344,649.70 DEDUCTIONS FROM RESERVE PAYMENT TO RETIREES 279,446.32 3,154,195.66 DROP LOANS .00 80,000.00 DROP WITHDRAWALS 5,196.52 325,173.85 REFUNDS TERM EMPLOYEES 7 ► --`- 50,067.03 78,709.21 INVESTMENT FEES 107,804.38'' 317,438.00 ACTUARIAL FEES 732.00' 28,532.00 OFFICE EXPENSES 336.44' 6,330.79 COMPUTER /SUPPLY /SOFTWARE /MAINT 825.00 `- 6,443.79 AUDIT FEES .00 15,750.00 SUNTRUST /BANK CHGS .00 75.00 PROFESSIONAL SERVICES 1,250.40 12,261.51 PENSION ADMINISTRATOR 1,754.56L' 19,117.01 BUSINESS MEETINGS .00 26,157.15 PENSION PROGRAM MAINT (ES) .00 2,018.50 MISCELLANEOUS (1.004 12,904.43 TOTAL DEDUCTIONS 447,411.65 4,085,106.90 NET CHANGE IN FUND RESERVE (2,532,905.48) 3,259,542.80 le �►. F R CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND BALANCE SHEET Year -To -Date As Of 07/31/2011 II- -,. ASSETS CHECKING - SUNTRUST 123,501.16 RECEIVABLE -SOLD SECURITIES 266,766.11 RUSSELL TRUST INVEST 55,781,725.68 TOTAL ASSETS 56,171,992.95 LIABILITIES AND FUND RESERVES POLICE PENSION RESERVE 50,379,544.67 NET CHANGE IN FUND RESERVE 5,792,448.28 RESERVE BALANCE 56,171,992.95 TOT. LIABILITY & FUND RESERVES 56,171,992.95 CITY OF BOYNTON BCH POLICE OFFICERS' PENSION FUND ANALYSIS OF CHANGE IN FUND RESERVE For The Period 07/01/2011 To 07/31/2011 Current YTD Amount Amount ADDITIONS TO RESERVE DROP LOAN REPAYS .00 33,988.48 UNREALIZED G/L RUSSELL (458,795.77) 3,280,935.80 RUSSELL REALIZED G /L�„ 56,430.83 2,316,348.17 MISCELLANEOUS INCOME 5,746.68 CONTRIBUTIONS - MEMBERS ed'wti'n 72, 516.04 864, 862.46 AAeourl CONTRIBUTIONS - EMPLOYER v 271,698.92 2,852,838.66 R/0 MONEY .00 75,423.28 TOTAL ADDITIONS (53,217.04) 9,430,143.53 DEDUCTIONS FROM RESERVE C PAYMENT TO RETIREES 281,825.02 2,874,749.34 DROP LOANS 30,000.00` 80,000.00 DROP WITHDRAWALS 20,196.52" 319,977.33 REFUNDS TERM EMPLOYEES .00 28,642.18 INVESTMENT FEES .00 209,633.62 ACTUARIAL FEES .00 27,800.00 OFFICE EXPENSES .00 5,994.35 COMPUTER /SUPPLY /SOFTWARE /MAINT .00 5,618.79 AUDIT FEES .00 15,750.00 SUNTRUST /BANK CHGS .00 75.00 PROFESSIONAL SERVICES .00 11,011.11 PENSION ADMINISTRATOR 1,754.56 17,362.45 BUSINESS MEETINGS 2,060.58` 26,157.15 PENSION PROGRAM MAINT (ES) .00 2,018.50 MISCELLANEOUS .00 12,905.43 TOTAL DEDUCTIONS 335,836.68 3,637,695.25 NET CHANGE IN FUND RESERVE (389,053.72) 5,792,448.28 Invoice Invoice for: Invoice Number Russell Client ID Billing Period Ending City of Boynton Beach Police Retire Fund 18456 C04616001 09/30/2011 Ms.Barbara S. LaDue Pension Administrator Invoice Date Payment Terms Total Amount Due ladueb @bbpdpension.com 11/02/2011 Net 30 Days $ 96,095.00 1500 Gateway Blvd #220 Boynton Beach, FL 33426 Mail to: City of Boynton Beach Police Retire Fund Specify Remittance Information Ms Barbara S. LaDue — Pension Administrator _ Payment by check ladueb @bbpdpension.com Make check payable to Russell Investments 1500 Gateway Blvd #220 Check Amount $ Boynton Beach, FL 33426 _ 11111111111111111111111111111111 _ Request payment by Direct Debit Authorized Signer See additional instructions on reverse side 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 Direct Debit per Description of Service Fee Amount Standing Instructions or Amount Due Payments Received Russell Investments Investment Management Fees $ 96,095 00 $ 0 00 $ 96,095 00 Current Period Fees $ 96,095.00 $ 0.00 $ 96,095.00 Balance Forward 101,819.00 (101,819 00) 0.00 Total Amount Due $ 96,095.00 Invoice Number Invoice Date Russell Client ID Payment Terms Billing Period Ending 18456 11/02/2011 C04616001 Net 30 Days 09/30/2011 Current Period Over 30 Days Over 60 Days Over 90 Days Total Amount Due $ 96,095.00 $ 0.00 $ 0.00 $ 0.00 $ 96,095.00 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 18456 Billing Period Ending 09/30/2011 Russell Investments - FEE DETAIL 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% Fee Amount Market Value Russell Concentrated Equity Fund 4,388,594 0 19750 8,667 00 Russell All International 5,426,078 0 19750 10,717 00 Markets Fund Russell Equity I Fund 9,351,693 0 19750 18,470 00 Russell Multi- Manager Bond Fund 20,208,606 0 19750 39,912.00 Russell Real Estate Equity Fund 2,380,188 0 19750 4,701 00 Russell Global Real Estate Securities 1,646,275 0 19750 3,251 00 Fund Russell Short-Term Investment Fund 5,852 0 19750 12 00 Russell Small Cap Fund 4,317,511 0 19750 8,527 00 Russell World Equity Fund 5,449,928 0 19750 10,764 00 Subtotal 53,174,725 $ 105,021 00 Russell Real Estate Equity Fund - Internal Fee Paid (8,926 00) Account Total $ 96,095.00 Total Investment Management Fees $ 96,095.00 Page 2 'Russell Investment Group MANAGER 4525 - - INVOICE NO. 1109074706 -9997 #774098 DATE 2011/10/31 4098 Solutions Center PAGE 1 OF 1 Chicago, IL 60677 -4000 US TOTAL CHARGES CURRENT PERIOD USD 684.62 9BYM - Police Officer Retirement Trust Police Officer Retirement Trust FOR 3 MONTH PERIOD 7/01/11 to 9/30/11 City of Boynton Beach DB Boynton Police & Fire Pension Fnds, 1500 Gateway Blvd,Suite #220Account ID: BOYNTON POLICE Pension Administrator Pay Type 3 Boynton Beach, FL 33426 ATTENTION Barbara L. Ladue PLEASE DETACH THIS PORTION AND RETURN WITH YOUR PAYMENT CHARGES BENEFIT PAYMENT CHECK FEES ACH Benefit Payments 274 AT 1.25 342.50 Benefit Payments 13 AT 1.25 16.25 Lump Sum Payments 5 AT 10.00 50.00 BENEFIT PAYMENT. OTHER FEES Federal Tax Refunds 1 AT 15.00 15.00 State Tax Filing 3 AT 25.00 75.00 ** SUBTOTAL FEES ** 498 75 OUT OF POCKET CHARGES POSTAGE Advice of Deposit 142.48 Benefit Payment 6.76 Lump Sum 2.60 Confirmation Letters 0.52 UPS DELIVERY UPS CHARGES 07/27/2011 11.17 UPS CHARGES 09/28/2011 11.21 UPS CHARGES 08/30/2011 11.13 33.51 ** SUBTOTAL OUT OF POCKET ** 185.87 CURRENT CHARGES USD 684.62 :NV.# 1109074706 -9997 9BYM - Police Officer Retirement Trust 2011/10/31 1281 /Float Disclosure Unless you have negotiated a higher per check charge in exchange for your plan's retention of float, Russell's paying agent, State Street Bank will receive float income on uninvested cash as part of its compensation for services provided to the Plan. The amounts generally earn the rates available on money market instruments. Circumstances where float income will be received on uninvested cash include: Russell's paying agent, State Street Bank will receive float income with respect to the processing of withdrawals, distributions and loans. Float is received from the time a withdrawal, distribution or loan check is processed until the check is cashed, or, with respect to uncashed checks, the date the underlying amounts are returned to the Trust. Checks are typically mailed a few days before funds are debited from the trust account, which is typically the business day following the date the transaction was effected in the participant's account. To limit the period of float on uncashed checks, at least once a year, uncashed checks are cancelled and the underlying amounts are returned to your trust. Additional background regarding check processing is available upon request, and is also contained with the business process flows accompanying the administrative services agreement. Deviations from these timelines are possible in light of administrative impracticability Additional information is available to you upon request. X0185 rev 03/08 GRS Gabriel Roeder Smith & Company Invoice & Actuaries One East Broward Blvd. Suite 505 bate 1nNUlcc Ft. Lauderdale, Florida 33301 - 1804 (954) 527 - 1616 10/6/2011 116543 IiiII 1 I'Icasc Itcunit I o: BOARD OF TRUSTEES, BOYNTON BEACH MUNICIPAL POLICE OFFICERS RETIREMENT FUND Dept. # 78009 Gabriel Roeder Smith & Company Ms. Barbara La Due PO Box 78000 City of Boynton Beach Detroit, Michigan 48278 -0009 Renaissance Executive Suites or 1500 Gateway Blvd., Suite 220 ACH Payment to: Boynton Beach, FL 33426 Gabriel Roeder Smith & Company JPMorgan Chase, ABA #: 072000326 Account #: 0486723 Description Project # k mi n For services rendered through 9/30/2011 1. Charges to date for preparation of the 10/1/2011 Actuarial Valuation 100550 -052 $766 Report; total charges to date equal $766 2. Retirement Benefit Calculation for: Danysh 100550 -052 $225 3. Buy Back Calculation: DeLosRios — VSL t 100550 -052 $450 4. Attendance at 9/20/2011 Board meeting and charges to date for 100550 -052 $3,257 update of Actuarial Experience Study to take into account employment termination experience before 2001 Invoice Total $4,698 Paid to Date Client No. 100550 Amount Due $4,698 PLEASE INDICATE THE INVOICE NUMBER ON YOUR REMITTANCE. THANK YOU. THE LAW OFFICES OF PERRY & JENSEN LLC ANN H. PERRY BONN] SPATARA JENSEN aperry@perryjensenlaw.com bsjensen @perryjensenlaw.com October 20, 2011 Via Email Boynton Beach Police Pension Fund Sgt Gary Chapman, Chairman 100 East Boynton Beach Boulevard Boynton Beach, FL 33425 Re: Legal Services Provided Invoice #70674 Dear Gary: Enclosed please find the Firm's invoice for services rendered for the period that ended 10/15/2011. Thank you for our payment of $1,424.38. Your current balance due is $2,963.64. v'e, If you have any questions, please do not hesitate to contact me. Sincerely yours, Bonni S. Jensen BSJ /Ig 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 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 October 20, 2011 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOLLOWS: Client / File No.: 0188 Invoice #70674 Professional Services Hrs /Rate Amount Attendance at Trustee Meetings Attendance at Trustee Meetings 9/20/2011 BSJ Attend Pension Meeting 2.75 550.00 Attendance at Trustee Meetings 200.00 /hr SUBTOTAL: [ 2.75 550.00] Buyback Buyback 10/5/2011 BSJ Review & Respond to email from Barbara LaDue re: Terrence 0.25 50.00 Paramore 200.00 /hr Buyback SUBTOTAL: [ 0.25 50.00] Commission on Ethics Commission on Ethics 9/22/2011 BSJ Research Commission on Ethics Opinion 11 -11 re: Form 1 disclosure 0.35 70.00 Draft Memorandum to Trustees 200 00 /hr Commission on Ethics Boynton Beach Police Pension Page 2 Hrs /Rate Amount Commission on Ethics 9/28/2011 BSJ Telephone call with Commission on Ethics 0.06 NO CHARGE Research Form 1X 200.00 /hr E -mail to Trustees Commission on Ethics SUBTOTAL: [ 0.41 70.00] Meeting Notices and Agendas Meeting Notices and Agendas 9/19/2011 LG Prepare Attorney Report, Handouts, and Notebook for upcoming 0.30 22.50 Special Meeting - 9/20/11 75.00 /hr Meeting Notices and Agendas SUBTOTAL: [ 0.30 22.50] Miscellaneous Matters Miscellaneous Matters 10/4/2011 BSJ Telephone call with Trish Shoemaker re: Task Force Annual Report 0.06 12.00 Page 12 200.00 /hr Review Request from Task Force Miscellaneous Matters SUBTOTAL: [ 0.06 12.00] Summary Plan Description Summary Plan Description 9/27/2011 LG E -Mail to Steve Palmquist re: Updating Summary Plan Description 0.10 7.50 Summary Plan Description 75.00 /hr SUBTOTAL: [ 0.10 7.50] For professional services rendered 3.87 $712.00 Boynton Beach Police Pension Page 3 Additional Charges : Amount Bill File 10/15/2011 Copy Charges 13.50 SUBTOTAL: [ 13.50] Total additional charges $13.50 For professional services rendered 3.87 $725.50 Total amount of this bill $725.50 Previous balance $3,662.52 Accounts receivable transactions 10/3/2011 Payment - Thank You!. Check No. 053211 ($1,424.38) Total payments and adjustments ($1,424.38) Balance due e i $2,963.64 if THE LAW OFFICES OF PERRY & JENSEN LLC ANN H. PERRY BONNI SPATARA JENSEN aperry@perryiensenlaw.com bsjensen @perryjensenlaw.com September 21, 2011 Via Email Boynton Beach Police Pension Fund Sgt Gary Chapman, Chairman 100 East Boynton Beach Boulevard Boynton Beach, FL 33425 Re: Legal Services Provided Invoice #70623 Dear Gary: Enclosed please find the Firm's invoice for services rendered for the period that ended 9/15/2011. Thank you for your payment of $1,250.40. Your current balance due is $38C. 02 a 3 y If you have any questions, preatrlirrroT7gitate to contact me. Sincerely yours, , rim i9 Bonni S. Jensen BSJ /Ig t i 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 3 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 September 20, 2011 In Reference To: FOR PROFESSIONAL SERVICES RENDERED AS FOLLOWS: Client / File No.: 0188 Invoice #70623 Professional Services Hrs /Rate Amount Actuary - GRS Actuary - GRS 8/19/2011 BSJ Review emails from Barry Attwood re: City Contributions 0.25 50.00 Review Response from Steve Palmquist 200.00/hr Actuary - GRS SUBTOTAL: [ 0.25 50.00] Auditor - DJC Auditor - DJC 8/16/2011 BSJ Correspondence with Richard Cristini re. Auditor Agreement 0.25 50.00 Auditor - DJC 200.00 /hr Auditor - DJC KS E -mail to Richard Cristini, Gary Chapman & Toby Athol re: Auditor 0.15 11.25 Agreement 75.00 /hr Auditor - DJC Auditor - DJC KS Ship via UPS to Richard Cristini re: Auditor Agreement 0.50 37.50 Auditor - DJC 75.00 /hr Boynton Beach Police Pension Page 2 Hrs /Rate Amount SUBTOTAL: [ 0.90 98.75] Commission on Ethics Commission on Ethics 9/1/2011 BSJ Review Commission on Ethics Opinion 11 -60 Commission Meeting 0.10 20.00 re: Gift Reporting & Applicability of Advisory Rules to Pension Boards 200.00 /hr Commission on Ethics SUBTOTAL: [ 0.10 20.00] Investment Policy Guidelines Investment Policy Guidelines 8/23/2011 LG E -Mail to Barbara LaDue re: Signed Investment Policy Statement & 0.10 7.50 status of filing with State 75.00 /hr Investment Policy Guidelines SUBTOTAL: [ 0.10 7.50] Meeting Notices and Agendas Meeting Notices and Agendas 8/16/2011 KS Review Meeting Folder 0.25 18.75 Meeting Notices and Agendas 75.00 /hr SUBTOTAL: [ 0.25 18.75] Minutes of Trustee Meetings Minutes of Trustee Meetings 9/8/2011 BSJ Review minutes of 8/9/11 meeting 0.25 50.00 Minutes of Trustee Meetings 200.00 /hr SUBTOTAL: [ 0.25 50.00] Participant - Holloway Participant - Holloway 8/24/2011 BSJ Review email from Barbara LaDue 1.00 200.00 Telephone call with Kristin McPeek 200.00 /hr E -mail to Kristin McPeek Boynton Beach Police Pension Page 3 Hrs /Rate Amount Review Pension Plan Review Draft Order Participant - Holloway SUBTOTAL: [ 1.00 200.00] Participant - Jones Participant - Jones 8/18/2011 BSJ E -mail to Toby Athol re: IA contact 0.10 20.00 Participant - Jones 200.00 /hr Participant - Jones KS Telephone call with Sergeant Gitto re IA file 0.15 11.25 Participant - Jones 75.00 /hr Participant - Jones KS E -mail to Sergeant Gitto re: Request the IA file 0.15 11.25 Participant - Jones 75.00 /hr Participant - Jones 8/26/2011 BSJ Review IA File 1.50 300.00 Participant - Jones 200.00 /hr Participant - Jones 8/29/2011 BSJ Review IA Statements 3.00 600.00 Review 112.3173 200.00 /hr Research Jenne v. DMS Research Garay v. DMS Telephone call with Suzanne Getto E -mail to Larry Kurty's Office, Corrections Office Participant - Jones Participant - Jones 8/30/2011 BSJ Telephone call with John Kurty 3.00 600.00 Review Information 200.00 /hr Draft Memorandum to Trustees Participant - Jones Participant - Jones 8/31/2011 BSJ Telephone call with Barbara LaDue 0.10 NO CHARGE Participant - Jones 200.00 /hr Boynton Beach Police Pension Page 4 Hrs /Rate Amount Participant - Jones 8/31/2011 BSJ Telephone call with Gary Chapman 0.10 NO CHARGE Participant - Jones 200.00 /hr SUBTOTAL: [ 8.10 1,542.50] Plan Document Plan Document 8/19/2011 BSJ Correspondence with Trish Shoemaker re: Filing Ordinance 11 -011 0.50 100.00 with State 200.00 /hr Plan Document Plan Document KS E -mail to Trish Shoemaker, Lynn Culpepper, Keith Brinkman, Gary 0.20 15.00 Chapman, Toby Athol & Barbara LaDue re Ordinance 11 -011 75.00 /hr Plan Document Plan Document KS Ship via UPS to Trish Shoemaker re: Ordinance 11 -011 0.50 37.50 Plan Document 75.00 /hr Plan Document 8/29/2011 BSJ Telephone call with Steve Palmquist, Jeff Amrose, Larry Wilson, Jim 0.25 50.00 Rizzo, & Theora Braccialargue 200.00 /hr Plan Document SUBTOTAL: [ 1.45 202.50] For professional services rendered 12.40 $2,190.00 Additional Charges : Auditor - DJC 8/16/2011 United Parcel Service Invoice No.: 0000F49280341 5.64 Tracking #1 ZF492800398245544 to Richard Cristini re: 2011 Audit Agreement United Parcel Service Invoice No.: 0000F49280341 6.54 Tracking #1ZF492800398245544 Pickup Request No.: 2947P1CMC51 Re: 2011 Audit Agreement Boynton Beach Police Pension Page 5 Amount SUBTOTAL: [ 12.18] Bill File 9/15/2011 Copy Charges 4.95 Westlaw Research 25.00 Dates - August 1 - August 31, 2011 SUBTOTAL: [ 29.95] Plan Document 8/19/2011 United Parcel Service Invoice No.: 0000F49280351 6.01 Tracking #1 ZF492800392222687 to Trish Shoemaker re: Ordinance 11 -011 to file with the state SUBTOTAL: [ 6.01] Total additional charges $48.14 For professional services rendered 12.40 $2,238.14 Total amount of this bill Previous balance $2,674.78 Accounts receivable transactions 8/22/2011 Payment - Thank You!. Check No. 053201 ($1,250.40) Total payments and adjustments f ($1,250.40) Balance due $3,662.52 t � 3'1 g 3 = Exact And it all comes together. INVOICE Exact Americas 8800 Lyra Drive, Suite 220 Columbus, OH 43240 T: 800 468 0834 The City of Boynton Beach F: 866 544 5456 Barbara La Due Attn: Accounts Payable 1500 Gateway Blvd. www.exact.com Suite 220 Boynton Beach FL 33426 United States of America INVOICE REFERENCES REFERENCES No. 78028387 Prolongation P -12 Ordered By: The City of Boynton Beach Date 12/01/2011 Start Date 12/11/2011 Customer No 8960 Your Ref P:006137:101:001 ITEM CONTRACT Renewal Net End Date Qty Amount AMOUNT MN1044 Maintenance for Designer 006137.101:001 12/11/2012 1 00 $ 125.00 $ 125.00 MN1060 Maintenance for SQL Server System Man (SQLS) 006137 101.001 12/11/2012 1 00 $ 500.00 $ 500 00 MN1101 Maintenance for General Ledger 006137 :101 001 12/11/2012 1 00 $ 125.00 $ 125 00 MN1103 Maintenance for Accounts Payable 006137 001 12/11/2012 1.00 $ 125.00 $ 125.00 P r."-(20‘ so PAYMENT INFORMATION Total amount excl. Tax Net 30 Days ; 875.00 PLEASE REMIT PAYMENT TO: DUE DATE AMOUNT Tax EXACT SOFTWARE NORTH AMERICA LLC 12/31/2011 USD 875.00 1136 PAYSPHERE CIRCLE CHICAGO, IL 60674 www.exact.com Total amount incl. Tax $ 875.00 Ei Page 1 ._. Subsidiary of Exact Holding N.V. On all deliveries, transactions, services and user rights the Exact terms are applicable, which are put down at the Chamber of Commerce Haaglanden and which will be sent to you on request The Exact terms can also be downloaded through the website www.exact.com. = exact And it all comes together Exact Americas 8800 Lyra Drive, Suite 220 Columbus, OH 43240 T: 800 468 0834 Dear Valued Exact Customer: F 866 544 5456 www.exact.com Enclosed is an invoice for your annual service renewal fees. It is important to note that in order to prevent any lapse in service and to avoid late fees', please pay your renewal invoice on time. Payment of your fees ensures that your company continues to receive on -going software upgrades updates, product enhancements, new features and website access. We appreciate your company's trust in Exact and look forward to providing you with the best product and services available. You can view your account and contract information via the Customer Portal. If you have any questions regarding this invoice please contact one of our Maintenance Sales Coordinators at 1 -800 -468 -0834 ext 2680 and they will direct you to your Customer Advocate who will be happy to assist you. Sincerely, Maintenance and Support Sales Department Exact Software North America, LLC. Please reference your invoice number with payment Remit to: Exact Software North America, LLC 1136 Paysphere Circle Chicago, IL 60674 'Reinstatement Fees - If you wish to re- instate the maintenance plan, all back maintenance fees, all current maintenance fees, plus a 50% penalty of the past due maintenance fees will have to be paid A new registration is • J required in order to install future updates to your Progression system. Maintenance fees must be current before shipment of the registration 2 Some exceptions may apply, such as upgrading databases from Pervasive to MS SQL i Q MICPD FOCUS SUPPORTLINE RENEWAL NOTICE Quote Date 10/18/2011 Reference Number: 385845 Renewal Due By: 12/30/2011 Invoice: Police and Fire Pension Funds For the Police and Fire Pension Funds 1500 Gateway Blvd., Suite #220 Attention of: of Boynton Beach Renaissance Executive Suites 7 ° 1500 Gateway Blvd , Suite #220 Boynton Beach, FL 33426 - Renaissance Executive Suites Attn. Barbara Ladue Boynton Beach, FL 33426 Tel . 561.739.7972 Attn. Barbara Ladue Email ladueb @ (2((i:ILQ- bbpdpension com 12 Tel 561.739.7972 Email: ladueb @bbpdpension com Please see the pricing below for your Support & Maintenance Renewal Tel (800) 632 -6265, Opt 2 x5063 Your SupportLine Sales Representative is Teresa Gray, contact details Email teresa gray @microfocus com Fax (301) 838 -5314 Contract Renewal Contract Period (Please see supporting documentation for details) Contract Period 2 x Contract 3 x Contract Price Period Period Support & Maintenance renewal $ 233 40 $ 466 80 $ 700.20 Tax (the tax amount is approximate until invoiced) $ 14.00 $ 28 01 $ 42.01 TOTAL (Currency: USD) $ 247.40 $ 494.81 $ 742.21 Select Appropriate Box for Contract Period 4 4 4 4 4 4 ❑ ❑ ❑ If the renewal meets your requirements, please select the appropriate contract period box above and one of the payment options below Should you have any questions about your Support & Maintenance renewal please contact your SupportLine Sales Representative (please see details above) PLEASE NOTE: Renewals received after 1/29/2012 may be subject to a 20% re- instatement fee. Select Payment Option ❑ Online: Secure E- Approval and credit cards https /supportline microfocus com /eapproval.asp ❑ Purchase Order (PO): Send complete PO with all referenced terms & conditions ❑ Checks: Make Checks Payable to: 'Micro Focus (US), Inc.', and send to. 'Micro Focus (US), Inc., PO Box 19224, Palatine, IL 60055 -9224' ❑ Invoice Me: Complete and sign this page and e-mail to teresa.gray@microfocus.com or fax to (301) 838 -5314 By signing below you represent that you have the authority to bind the company to whom this Notice is addressed above to the terms of this Notice and the User Agreement Authorized Signature Printed Name and Title Terms: Customer irrevocably commits to make the payments specified above and such payments will be due and payable Net 30 Days from the date of invoice Any amounts not paid when due will accrue interest at a rate of 1 5% per month until paid Sales Tax: The Customer is responsible for any applicable tax (including VAT), unless the Customer provides Micro Focus with a copy of its tax exemption certificate If a Purchase Order is required, please provide the information to your Micro Focus Sales Representative before the Renewal Due Date shown above Except as otherwise specified above or agreed in wnting by the parties, the standard Micro Focus support (silver level) terms and conditions shall apply to this order Those terms supersede any terms on a subsequent Purchase Order or other document issued by Police and Fire Pension Funds in relation to this order All terms contained in any Police and Fire Pension Funds provided documents are hereby rejected in full by Micro Focus Tel (800) 632 - 6265, Opt 2 x5063 THANK YOU FOR BEING A MICRO FOCUS CUSTOMER Fax (301) 838 -5314 HTTPS / /SupportLine MicroFocus Com /EApproval ASP Reference No 385845 Page 2 of 2 Police and Fire Pension Funds Product, Hardware, OS, Version and Serial Number Contract Qty Single Contract Period Unit Price Application Server for Net Express with .NET Support Jan -30 -2012 10 23 34 233 40 Jan -29 -2013 Platform x86 running Win NT, 98, 2000, XP, Server 2003 32 Bit Version 4 0 00 Version Status End of Service* - Advice and avoidance support only License Location • Police and Fire Pension Funds, Boynton Beach, Florida Serial Number. 600000039587 Subtotal 233 40 Tax (Please note that taxes are approximate until invoiced) 14 00 TOTAL (Currency: USD): 247.40 The transaction or transactions described in this renewal notice are without prejudice to any rights of Micro Focus arising from, inter alia, breach of any pertinent Micro Focus End User License Agreement and /or breach of Micro Focus's copyrights For full information on supported product versions and details of Sundown and End of service process, please visit http. / /supoortline microfocus com /prodavail aspx Products listed as Sundown or End of Service are subject to limited support services and restrictions on new corrective fixes Your maintenance entitles you to favorable terms on available updates or upgrades and it is highly recommended that you use the latest versions Please contact your sales representative for details Support. http: / /www.microfocus. com /_ex/External /files /Legal /en/ Support /SilverSupportAgreement/ Silver _Support_Terms_EN_050911.pdf Tel (800) 632 -6265, Opt 2 x5063 THANK YOU FOR BEING A MICRO FOCUS CUSTOMER Fax (301) 838 -5314 HTTPS / /SupportLine MicroFocus Com /EApproval ASP MICRO FOCUS October 18, 2011 Police and Fire Pension Funds SupportLine Renewal Notice of Boynton Beach (Reference No. 385845) 1500 Gateway Blvd., Suite #220 Renaissance Executive Suites Boynton Beach, FL 33426 Attn Barbara Ladue Dear Barbara: I am writing to alert you that it's time to renew your Supportline maintenance coverage. We at Micro Focus look forward to continuing support of your mission - critical software with our award- winning technical support services and comprehensive software updates I have attached your renewal notice for your convenience. Please inform us before 12/30/2011 that you would like to renew your support. You can renew online, over the phone, or with the attached renewal quote /order letter. If you would like to use a purchase order (PO), please let me know before 12/30/2011 If you would like to take advantage of Automatic Renewals in the future please contact Teresa Gray on (800) 632 -6265, Opt 2 x5063 to arrange this for your renewal. Many customers move to the automatic renewal option - it's fast, easy, and ensures continuous coverage Multi -Year Renewal Options - Lock in prices and reduce overhead costs! Simplify your financial management by taking advantage of a predictable payment stream for ease of budgeting, lock in your pricing for up to 3 years and avoid annual increases. New Value -added Service Options - Maximize your protection with new Production -Level support plans SupportLine Plan Description Silver (Standard) Our traditional award - winning plan; includes tech support and all software updates Gold Silver plan plus Service Level Agreement (SLA) and Production Support options Platinum Silver plan, plus SLA and complete Production Support for critical applications Extended Custom plans for "End of Service" products Please call to learn more about your options. As always, I will be happy to help you explore your options and to provide additional services, including. • Updating information on your organization, your team members and your installation of Micro Focus products • Synchronizing multiple contracts • Reinstating lapsed agreements I look forward to hearing from you soon Thank you for your continued business with Micro Focus Sincerely, N-CIASCCI.,*(nAt Teresa Gray Account Representative (800) 632 -6265, Opt 2 x5063 teresa.grav(a.microfocus com PS Please contact me before 12/30/2011 to confirm your renewal. It always costs less to renew on time! 1 Barbara Ladue From: Rion .Broshears @gabrielroeder.com Sent: Monday, October 03, 2011 9 AM To: ladueb @bbpdpension.com Cc: c100550 @gabrielroeder com Subject: RE Boynton Beach Police - Data Request Barbara, Per Steve, our fees to update the SPD for the Police Plan would be between $1,500 - $1,800. Thanks, Rion Circular 230 Notice Pursuant to regulations issued by the IRS, to the extent this communication (or any attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax - related penalties under the Internal Revenue Code or (ii) marketing or recommending to another party any tax - related matter addressed within Each taxpayer should seek advice based on the individual's circumstances from an independent tax advisor Rion Broshears Senior Analyst Gabriel, Roeder, Smith & Company One East Broward Blvd , Suite 505 Fort Lauderdale, FL 33301 Telephone 954 - 527 -1616 Fax 954 - 525 -0083 Rion broshearsaaabneiroeder com The above communication shall not be construed to provide tax advice or legal advice unless it contains one of the following phrases, or substantially equivalent language "This communication is intended to provide tax advice" or This communication is intended to provide legal advice " Notice of Confidentiality This transmission contains information that may be confidential and that may also be privileged Unless you are the intended recipient of the message (or authorized to receive it for the intended recipient), you may not copy, forward, or otherwise use it, or disclose its contents to anyone else If you have received this transmission in error, please notify the sender immediately and delete it from your system From: Barbara Ladue fmailto :ladueb ©bbDdpenslon.coml Sent: Monday, October 03, 2011 8:35 AM To: Broshears, Rion (FLP1) Subject: RE: Boynton Beach Police - Data Request Rion: Data request on both, Fire & Police, all OK. Please advise the cost to update the SPD's, it has been awhile. Thanks Barb La Due From: Rion. Broshears(agabrielroeder.com [mailto: Rion. Broshears(@gabrielroeder.coml Sent: Friday, September 30, 2011 1:56 PM To: laduebPbbpdpension.com Cc: c1916@aabrielroeder.com Subject: Boynton Beach Police - Data Request 1 Hi Barbara, I just resent the data request for the Boynton Police Pension Plan. Did you receive it? I'm also enclosing an SPD update request form for the Police Plan as well. Thanks, Rion Circular 230 Notice Pursuant to regulations issued by the IRS, to the extent this communication (or any attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding tax - related penalties under the Internal Revenue Code or (10 marketing or recommending to another party any tax - related matter addressed within Each taxpayer should seek advice based on the individual's circumstances from an independent tax advisor Rion Broshears Senior Analyst Gabriel, Roeder, Smith & Company One East Broward Blvd , Suite 505 Fort Lauderdale, FL 33301 Telephone 954- 527 -1616 Fax 954 - 525 -0083 Rion broshears(aaoabnelroeder com The above communication shall not be construed to provide tax advice or legal advice unless it contains one of the following phrases, or substantially equivalent language "This communication is intended to provide tax advice" or "This communication is intended to provide legal advice " Notice of Confidentiality This transmission contains information that may be confidential and that may also be privileged Unless you are the intended recipient of the message (or authonzed to receive it for the intended recipient), you may not copy, forward, or otherwise use it, or disclose its contents to anyone else If you have received this transmission in error, please notify the sender immediately and delete it from your system 2 SUMMARY PLAN DESCRIPTION UPDATE Board Authorization: The Board hereby authorizes does not authorize Gabriel, Roeder, Smith & Company to perform the biennial update of the Summary Plan Description. Name of Plan: Authorizing Signature: Print Name: Date: To aid us in updating the SPD, please complete the following: 1. Latest Ordinance passed by City regarding Pension matters: 2. Collective Bargaining Agreement(s), if any: (a) Name of Union: Agreement runs from through Article /Section of Agreement referring to pension matters: (b) Name of Union: Agreement runs from through Article /Section of Agreement referring to pension matters: (c) Name of Union: Agreement runs from through Article /Section of Agreement referring to pension matters: 3. Current Custodian of Plan Funds Name: City: 4. Current Investment Manager(s) of Plan Funds (a) Name: City: (b) Name: City: (c) Name: City: (d) Name: City: (e) Name: City: (f) Name: City: G II_ Gabriel Roeder Smith & Company One East Broward Blvd. 954.527.1616 phone Consultants & Actuaries Suite 505 954.525.0083 fax Ft Lauderdale, FL 33301-1827 www.gabrielroeder.com September 22, 2011 Ms. Barbara Ladue City of Boynton Beach 1500 Gateway Blvd., Suite 220 Boynton Beach, Florida 33426 Re: City of Boynton Beach Municpal Police Officers' Retirement Fund Dear Barbara: As you may know, Senate Bill 1128 amended Section 112.63 of the Florida Statutes to create a new actuarial disclosure requirement. All governmental pension plans in Florida must now disclose the present value of the plan's accrued benefits using the assumed rate of return of the Florida Retirement System, currently 7.75 %. The reason for the new disclosure is to facilitate the comparison of a funded ratio based on this liability measure among Florida pension plans. The 7.75% rate does not have to be used for determining the required contributions. In order to satisfy this requirement, we will need to calculate this liability for your Plan, determine the funded ratio based on this liability and include this information in the upcoming Actuarial Valuation Report. The State will likely reject valuation reports that do not contain this information. More of our time will be required to provide this additional information. We recommend that the Board authorize us to provide the information needed to satisfy this actuarial disclosure requirement. Our fee to include this in the valuation report is $750. This charge will appear on an invoice sometime during the upcoming valuation cycle unless you inform us not to provide this additional disclosure. Please contact us if you would like us to provide any additional information. Sincerely, Pd- 1 7 7 1 i J. Stephen Palmquist, ASA, MAAA Peter N. Strong, ASA, M • • • Senior Consultant & Actuary Consultant g P9. 1 Of .2, r AUTHORIZED SIGNATURES : f- 1 , 4 I ! t , l • 1 i NAME OF PLANIPROORAM: BOYNTON BEACH MUNICIPAL POLICE OFFICER' PENSION PLAN ? NAME AND TITLE OF SIGNER SPECIMEN SIGNATURE of SIGNER ALL / THAT APPLY Please Rule out Spaces Not Used i - NAME: GARY CHAPM AN � � � / / � C Trite: CIwRM Au I TRUSTEE F S � Nee:: TOOT ATHOI, TITLE: SECRETARY 1 TRUSTEE SIGNATURE A NAME SCOTT CAUDELL S . 14-------• ' o ' Tm.c TRUSTEE Cl &BD SIGNATURE Ty NAME: JASON LLOPIS " SO Tml: TRUSTEE � CIBBD S1crI�TURE LEGA CI NAME: FRANK RAtmE BD Tm.E: TRUSTEE /:; LEGAL S t T URF LEGAL • CI = Cash Instructions BD = Benefit Disbursing CI&BD = Both LEGAL = Legal The ,S (insert number) signatures written above are the signatures of the persons holding the offices indicated. These persons are authorized to give Instructions to Russell Investments regarding cash Row and trading activity, benefit disbursing activity or are authorized to sign legal documentation. Two of the signatures above are reautred for aiti tMgy. AS By (anti 1 C44PM q!3 ir, Date: t( •2.I1 """...1,010 Tide: 'Unl.� in !17 1:54 r RusselAuthorizetlon: `7 •� 44 � t y fh O NOrmY lvILIC -STATE Or FLORIDA r on iDD87Q5as Authorised Signature For= - w bra pyr Ldoe iOtrA� iHROALr AaT7C Sal mo ca.I Reviled: 9f1?los See Note Below P 5 0 .P 2, ADDITIONAL LIST AUTHORIZED SIGNATURES NAME OF PLAN/PROGRAMI: BOYNTON BEACH MUNICIPAL POLICE OFFICERS' PENSION PLAN NAME AND TrrLE OF SIGNER SPECIMEN SIGNATURE OF SIGNER CIRCLE ALL THAT APPLY Please Rule out Spaces Not Used CI NAME fif03/4/24 � Q u_ L- TInS: /S /QN geltil 5ne4 ;pie SIGNATURE LEGAL - ------ CI NAME: .i� BD TITLE: � SIGNATURE LEGAL CI NAME: f_.r 8D TIfE: LEGA SIGNATURE LEGAL CI NAME: BD TITLE: CABO SIGNATURE LEGAL " CI = Cash Instructions BD = Benefit Disbursing CI &BD = Both LEGAL = Legal The f (Insert number) signatures written above are the signatures of the persons holding the offices indicated. These parsons are authorized to give Instructions to Russell Investments regarding cash flow and trading activity, benefit disbursing activity or are authorized to sign legal documentation. Anv cornblpatIon of two s(anatures from this additional list and t(Le original Ilet date 4/25/2010 e required for all activl . sy: Date: S1 8 L ) ly Title: C 4 4i11 Russell Aulhorizatlon �% - 4i_ 5 1/ 8 /Ti4 v Any one of the signatures on the Authorized Signatures list and the Additional Authorized Signature list -- required for deposits by wire or check Any two signatures from these lists required for withdrawals and any other transactions Authorhed Signature Form additiontal.doe Revised: 9/I2/08 zOOl OO d zze# fig el O1.OZ18l /5O :woad Barbara Ladue From: Delyanis, Peter [Pdelyani @RUSSELL.COM] Sent: Wednesday, September 28, 2011 11:49 AM To: Barbara Ladue; Riley, Brianne Cc: 'Chapman, Gary; 'Athol, Toby' Subject: RE: Boynton Police - Authorized Signatures Attachments: SKMBT_C55011092810500.pdf Hi Barb, I marked out the comment regarding duel signatures on this version of your authorized signers. Going forward only one signature from this file will be required. Thanks for sending the update. If you have any questions please don't hesitate to contact me. Thanks, Peter Peter Delyanis, CEBS Senior Account Executive Russell Investments 1301 Second Avenue, 18th Floor Seattle, WA 98101 toll free 800 - 455 -3782 direct 206 - 505 -4554 fax 253 -779 -1222 SEVENTY -FIVE YEARS of Russell Innovation Securities products and services offered through Russell Financial Services, Inc. (formerly Russell Fund Distributors, Inc.), member FINRA, 1301 Second Ave, 18th Floor, 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. From: Barbara Ladue Jmaifto:Iadueb @bbpdpension.com1 Sent: Wednesday, September 28, 2011 8:27 AM To: Delyanis, Peter; Riley, Brianne Cc: 'Chapman, Gary'; 'Athol, Toby' Subject: Boynton Police - Authorized Signatures It was discussed at our Special Board meeting of 9 -20 -2011 to require only one signature on our bi- weekly deposits to the Plan. Up until this past year, after we switched to wire deposit and had trade instructions involved, we had made all our deposits and withdrawals with one signature. We had this procedure in place for the past 8 years or so. For ease of efficiency we would like to amend the "Authorized Signatures" to require one (1) signature on all deposits by check or wire and also only one (1) signature for withdrawal, wire transfer, to the SunTrust checking account. At this point in time we have no further "trade instructions" in place. Thank you. 1 THE LAW OFFICES OF PERRY &JENSEN LLC ANN H. PERRY BONNI SPATARA JENSEN aperry©perryjensenlaw.com bsjensen©perryjensenlaw.com MEMORANDUM To: Board of Trustees From: Bonni S. Jensen Subject: Form 1 Reporting Disclosure of "Intangible Personal Property" Date: September 26, 2011 The Florida Commission on Ethics recently issued a Ethics Opinion regarding the proper reporting for intangible property under Part D of Form 1 (See attached CEO 11 -11 dated September 14, 2011 and CE Form 1). You should consider this Opinion letter when you complete your next Form 1. This Opinion is also applicable to the Form 1 F, which is the form that you need to file within 30 days of when you no longer serve as a Trustee. The law addressing Form 1 reporting adopts the definition of intangible personal property contained in Section 192.001(11)(b) of the Florida Statutes which states: "Intangible personal property" means money, all evidences of debt owed to the taxpayer, all evidences of ownership in a corporation or other business organization having multiple owners, and all other forms of property where value is based upon that which the property represents rather than its own intrinsic value. The Opinion letter addresses the reporting for six different types of intangible personal property as follows: 1. Assets held in an Individual Retirement Account ( "IRA ") - The IRA account itself is not considered intangible property. However each individual investment in the IRA which exceeds the reporting threshold' should be reported. Mutual funds are considered one investment. 2. Assets held in a 401(k) - The 401(k) account itself is not considered intangible property. However each individual investment in the 401(k) which exceeds the reporting threshold should be reported. Mutual funds are 'The individual Form 1 filer chooses the reporting threshold: either "dollar value" or "percentage threshold." For intangible personal property the dollar value threshold is $10,000 and the percentage threshold is 10 %. 400 EXECUTIVE CENTER DRIVE, SUITE 207.:. WEST PALM BEACH, FLORIDA 33401 -2922 PH: 561.686.6550 •: Fx: 561.686.2802 W.a: ;LCer. -62 Board of Trustees Form 1 Reporting - Disclosure of "Intangible Personal Property" September 26, 2011 Page 2 of 2 considered one investment. 3. Funds invested in the FRS Investment Plan - The FRS Investment Plan itself is not considered intangible property. However each individual investment in the FRS Investment Plan which exceeds the reporting threshold should be reported. Mutual funds are considered one investment. The opinion indicates that a Form 1 filer does not need to report as intangible property the "investment" in the FRS Defined Benefit program. This same logic would apply to local pension plans. The defined benefit program "investment" does not need to be reported as intangible property, but a defined contribution plan's investments would need to be reported. 4. Assets held in the Florida Pre -Paid College Plan - Both the Florida Pre -Paid College Plan and the Florida College Investment Plan need to be reported as intangible property if the values of the accounts exceed the individual reporting threshold. For the Florida Pre -Paid College Plan, the threshold is determined by looking to the balance in the account. For the Florida College Investment Plan, only individual investments in excess of the threshold limits need to be reported. 5. Assets held in a 457 Plan /Deferred Compensation Plan ( "457 ") - The 457 account itself is not considered intangible property. However each individual investment in the 457 which exceeds the reporting threshold should be reported. Mutual funds are considered one investment. 6. Assets in the Florida Deferred Retirement Option Program ( "DROP ") - The DROP account itself is considered intangible property. This same analysis would apply to a local DROP. Please contact me if you have any questions regarding the CEO 11 -11 opinion letter or any matter regarding the Form 1, including the calculation of the dollar threshold or the percentage threshold. H IAII Miscellaneous'ALL BOARD5\2011\CEO 11 -11 Form 1 reporting.wpd CEO 11 -11 — September 14, 2011 FINANCIAL DISCLOSURE METHOD OF REPORTING INTANGIBLE PERSONAL PROPERTY To: Charles M Trippe, (General Counsel, Office of The Governor) SUMMARY: Funds or investment products held in Individual Retirement Accounts, 401(k)s, the Florida Retirement Investment Plan, the Florida College Prepaid Plans, and Deferred Option Retirement Accounts should be reported as intangible personal property on a CE Form 1, Statement of Financial Interests, if their value exceeds the reporting threshold selected by the filer. QUESTION 1: What is the proper method of reporting, on a CE Form 1, Disclosure of Financial Interests, assets held in an Individual Retirement Account? Your question is answered as follows. You write on behalf of several members of the Governor's staff who are required to file CE Form 1, Disclosure of Financial Interests. You have questions pertaining to the proper means of reporting intangible personal property in on a number of scenarios. The first of these involves an individual with an Individual Retirement Account (IRA), the value of which totals $20,000. The individual investment products comprising the IRA consist of a long -term growth mutual fund worth $7,000; a short-term bond fund worth $6,000, and a mid -cap equity fund worth $7,000. The individual has selected the $10,000 reporting threshold' =. Section 112.3145, Florida Statutes, provides, in pertinent part: (2)(b) Each state or local officer and each specified state employee shall file a statement of financial interests no later than July 1 of each year.... * ** (3) The statement of financial interests for state officers, specified state employees, local officers, and persons seeking to qualify as candidates for state or local office shall be filed even if the reporting person holds no financial interests requiring disclosure, in which case the statement shall be marked "not applicable." Otherwise, the statement of financial interests shall include, at the filer's option, either: * ** (a)3. The location or description of real property in this state, except for residences and vacation homes, owned directly or indirectly by the person reporting, when such person owns in excess of 5 percent of the value of such real property, and a general description of any intangible personal property worth in excess of 10 percent of such person's total assets. For the purposes of this paragraph, indirect ownership does not include ownership by a spouse or minor child; .. . http://www.ethics.state.ifus/opinions/11/CE0%2011-011.html A/96/9(11 1 . 4.45v b VJ ..J or (b)3. The location or description of real property in this state, except for residence and vacation homes, owned directly or indirectly by the person reporting, when such person owns in excess of 5 percent of the value of such real property, and a general description of any intangible personal property worth in excess of $10,000. For the purpose of this paragraph, indirect ownership does not include ownership by a spouse or minor child ... . Section 1 12.3145 does not define the term "intangible personal property," but in the gift law the Code of Ethics adopts the definition found in Section 192.001(11)(b), Florida Statutes- which states: "Intangible personal property" means money, all evidences of debt owed to the taxpayer, all evidences of ownership in a corporation or other business organization having multiple owners, and all other forms of property where value is based upon that which the property represents rather than its own intrinsic value. "IRA" is a name given to a retirement savings plan created pursuant to Section 408 of the Internal Revenue Code` and is not property itself. Under the definition in Section 192.001(11)(b), the "IRA" would not be intangible personal property which would have to be reported. Rather, the intangible personal property is the cash or investment products, held within the IRA. In the scenario you have presented, none of the investment products has a value greater than the threshold selected — $10,000, and so none of the products would be required to be reported.• QUESTION 2: What is the proper method of reporting, on a CE Form 1, Disclosure of Financial Interests, assets held in a 401(k)? Your question is answered as follows: A "401(k)" is another type of retirement savings plan, named for Title 26 United States Code § 401(k). In this plan employees can make contributions, which are sometimes snatched by employers, and can select from a variety of investment products. Again, "401(k)" is merely the name given the type of plan —the intangible personal property is the fiends or investment products held in the plan. In the scenario you present, the employee has selected the $10,000 reporting threshold. The employee has a 401(k) with a total worth of $33,250, of which $15,000 is invested in a mutual fund and $13,250 and $5,000 are invested in two different publicly- traded stocks. The employee would be required to report the mutual fund investment and the larger value of stock as intangible personal property, because these two investment products each exceed the reporting threshold.i On the form, for the "general description of intangible personal property" required by the statute, these would be listed as "mutual fund" "name of mutual fund" and "stock" "name of corporation," as the form requires information regarding both "type of intangible and "business entity to which the property relates." QUESTION 3: What is the proper method of reporting, on a CE Form 1, Disclosure of Financial Interests, funds invested in the Florida Retirement System Investment Plan? http : / /www.ethics.state.fl.us/ opinions /11 /CEO %2011- 011.html 0/tA /7n1 r Your question is answered as follows: In this scenario, the employee is a participant in the Florida Retirement System ( "FRS ") Investment Plan, and has $25,000 divided evenly between two mutual funds available under the plan. In responding to the question of how these funds should be reported, it is necessary to describe the difference between the FRS Investment Plan and the FRS Pension Plan. The FRS Pension Plan is a defined benefit plan in which the employer and plan participant make contributions, and, upon retirement, the participant receives a defined benefit arrived at by a calculation based on his or her years of service, FRS membership class (Regular Class, Special Risk Class, etc.) and the particular benefit option chosen at the time of retirement. The participant has no voice in how the funds are invested. Further, absent employment of an actuary, who will even then have to make assumptions about how long the participant will work, how much he or she will earn, and which option he or she will chose at retirement, the plan participant has no way to ascertain the present -day value of the investment. While there is an argument that an FRS Pension Plan should be considered intangible personal property in the strict definition of the term, several factors militate against requiring a reporting individual to report it as such on the Form 1. First, the inability of the participant to know the value of his/her pension at any given time prior to retirement makes it impossible to perform the calculation required to ascertain whether the value of the pension exceeds the reporting threshold chosen. In addition, to the extent that the purpose of the Form 1 disclosure is to identify potential sources of conflict, that purpose is not served by requiring disclosure of his FRS pension. The vast majority of reporting individuals have no influence on pension investment decisions and are unlikely even to know what products Pension Plan funds are invested in. Even in the rare case where a participant does know what products are invested in, the sums invested are so large that an individual's interest in the invested - in company or product is diluted to the point that the potential for conflict is miniscule. In contrast, the FRS Investment Plan is a defined contribution plan, in which employer and participant contributions are set by law, but the ultimate benefit depends on the performance of the participant's investment funds. As with the Pension Plan, it is funded by contributions based on salary and FRS membership class (Regular Class, Special Risk Class, etc.). The Investment Plan directs contributions to individual member accounts, and the participant allocates his or her contributions and account balance among various investment funds. If the participant terminates service prior to meeting the one -year vesting requirement, he or she will be entitled to a refund of contributions. The Investment Plan is in some ways more like an IRA or 401(k) than it is the Pension Plan —the participant can choose and knows, at any given time, where his or her funds are invested and their value, and has the ability to manage those investments. For these reasons, although the potential that these investments would give rise to a conflict may be small, there is a public purpose to be served in requiring disclosure. In the scenario you describe, the employee participates in the Investment Plan, has $25,000 divided evenly between two mutual funds available under the plan, and has selected the $10,000 reporting threshold. Under these circumstances, the employee should report each of the mutual funds as intangible personal property, because each investment exceeds the threshold. QUESTION 4: Should money held in a Florida Prepaid College Plan be reported as Intangible Personal Property, on a CE Form 1, Disclosure of Financial Interests, if its value exceeds the reporting threshold? Your question is answered in the affirmative. http: / /www. ethics. state. fl. us / opinions /11 /CEO %2011- 011.htm1 CO A/9 (II 1 According to its websites, Florida Prepaid College Plans offers two different plans: the Florida Prepaid College Plan and the Florida College Investment Plan. Both are "qualified tuition programs" under Title 26 United States Code § 529. The Florida Prepaid College Plan is a prepaid plan and is guaranteed by the State of Florida pursuant to Section 1009.98(7), Florida Statutes. The plan participant makes no investment choices, can transfer the Plan to another qualified family member, and can cancel the Plan and receive a refund, less a cancellation fee of up to $50 for participants who have had their Plan for less than two years. Participants in these plans would report the Plan as intangible personal property if the balance exceeds the reporting threshold selected. On the form, for the "general description of intangible personal property" required by the statute, this would be listed as "Prepaid College Fund" "State of Florida." The Florida College Investment Plan is an investment vehicle designed to be used to accumulate funds to pay for college expenses. It is not guaranteed, and principal and investment returns fluctuate. Currently, participants may select one or any combination of five investment options. As with the IRA, the plan itself is not the intangible personal property—the investment product is. Therefore, participants in this plan would report the investment product or products as intangible personal property if the amount invested in the product exceeds the reporting threshold. QUESTION 5: Should money held in a State of Florida Deferred Compensation Plan be reported as Intangible Personal Property, on a CE Form 1, Disclosure of Financial Interests, if its value exceeds the reporting threshold? Your question is answered in the affirmative. The State of Florida's Deferred Compensation Program is a participant directed investment plan, pursuant to Title 26 United States Code § 457. Like a 401(k), it allows employees to make tax deferred contributions into a broad range of investment options that have varying degrees of risk and return. As with the examples in questions 1 and 2, relating to IRAs and 401(k)s, the Deferred Compensation Program is not itself the intangible personal property, but merely the vessel for that property. The intangible personal property is the financial product invested in, and that product should be reported if its value exceeds the reporting threshold. g QUESTION 6: Should money held in the Florida Deferred Retirement Option Program be reported as Intangible Personal Property, on a CE Form 1, Disclosure of Financial Interests, if its value exceeds the reporting threshold? Your question is answered in the affirmative. The Deferred Retirement Option Program (DROP) provides members of the FRS Pension Plan with an alternative method for payment of retirement benefits for a specified and limited period. Under this program, the participant stops earning service credit toward a future benefit, his or her retirement benefit is calculated at the time the DROP period begins and the monthly retirement benefits accumulate in the FRS Trust Fund earning interest while the participant continues to work for an FRS employer. Upon termination, the DROP account is paid out as a lump sum payment, a rollover, or some combination of the two. To some extent, DROP is like a savings account that the employee cannot access until termination of employment. However, despite this temporary inability to make a "withdrawal," the http: / /www.ethics.state.fl.us /opinions/11/CEO%2011-011.html 4/96/901 1 employee has an entitlement to the DROP funds. That being the case, the dollars accrued in the account can be said to be intangible personal property of the reporting individual, and should be disclosed as such on the Form 1 if they exceed the reporting threshold. On the form, for the "general description of intangible personal property" required by the statute, this would be listed as "Deferred Retirement Option Account" "State of Florida." ORDERED by the State of Florida Commission on Ethics meeting in public session on September 9, 2011 and RENDERED this 14th day of September, 2011. Robert 3. Sniffen, Chairman UPart D of CE Form 1. UPursuant to Section 112.3145(3) a Form 1 filer may choose either the "dollar value threshold" method of reporting, whereby assets, liabilities, and income exceeding a set dollar amount is reported, or a "percentage threshold" method, under which assets liabilities, and income exceeding a certain percentage of the reporting individual's net worth or gross income must be reported. Lai Section 112.312(12), Florida Statutes, which defines "gifts," states in subsection (a) that the definition of "gift" includes tangible or intangible personal property or the use thereof. Subsection (c) of the law states that "For the purposes of paragraph (a) 'intangible personal property' means property as defined in s. 192.001(11)(b)." UTitle 26 United States Code § 408. vIf using the "percentage threshold," method of reporting, the employee would include the total value of the investments held in the IRA in calculating his or her net worth, and report only those which exceeded 10% of total assets. For example, if the employee's total assets amounted to $60,000, the employee would be required to report the long -term growth mutual fund (worth $7,000) and the mid -cap equity fund (also worth $7,000.) 11 If using the "percentage threshold," method of reporting, the employee would include the total value of the 401(k) investments in calculating his or her net worth, and report only those individual investments which exceeded 10% of total assets. For example, if the employee's total assets amounted to $140,000, the employee would be required to report the mutual fund — valued at $15,000 — but not the other two investments. UIf using the "percentage threshold," method of reporting, the employee would include the total value of the Investment Plan in calculating his or her net worth, and report only those investments which exceeded 10% of total assets. For example, if the employee's total assets amounted to $120,000, the employee would be required to report both mutual funds, as they are worth $12,500 each. 11 Uhttp://www.myfloridaprepaid.com/compare-plans/ Uhttps:// www. myfloridadeferredcomp .com /SOFweb /index.htm vAs with the previous examples, the entire value of the investments held in the Deferred Compensation account should be included in the net worth calculation. http: / /www.ethics. state. fl. us / opinions /11 /CEO %2011 011.htm1 Q /W)(11 Barbara Ladue From: Karl Seifel, Jr. [karl @perryjensenlaw corn) Sent: Tuesday, September 27, 2011 11:51 AM To: ThePensionTeam Subject: Form 1 Reporting - Disclosure of "Intangible Personal Property" Attachments: MEMO -CEO 11 -11 Form 1 rpt pdf, CEO 11- 11.pdf; CE Form 1.pdf Trustees - Please find attached a memo from Bonni Jensen summarizing the recently issued Ethics Opinion regarding the proper reporting for intangible property under Part D of Form 1. Please do not hesitate to contact this office with any questions. Thank you! K a4ye <karl @perryjensenlaw.com> Legal Assistant 6 - Pension Team of Bonni Jensen THE LAW OFFICES OF PERRY & JENSEN, LLC 400 Executive Center Drive, Suite 207 West Palm Beach, FL 33401 -2922 561 -686 -6550 (Phone) 561- 686 -2802 (Fax) The Law Offices of Perry & Jensen, LLC is proud to he an ABA -EPA Law Office Climate Challenge Partner. Think before you print!! ( ON FII)EN hlAL1'f ti' NO") ICI:: 1 his utn Lonf1ctenhhtl ni v he pr n lleged and is ntc.tnt only Col the Intended t ek_tpicnt 11 � ou ale no the intended reLIptent picdse nctif the tender ,ASAP and delete this ntcs age tiwn your s% .fern 1114 ( 114( LAR 230 NO TI(;1:: 10 111 . ec .nt th.tt tlu. 11 +Iii any portion thereof) concern 1:i \ rnaile? it i, 1101 nllen,1ed in he used and cdmo1 he used by a taxpavet 101 the purpose of dA ptlid ii0' that I11 iv be lInpocd ))■ 1av 1 FORM 1X AMENDMENT TO FORM 1 STATEMENT OF FINANCIAL INTERESTS LAST NAME - FIRST NAME - MIDDLE NAME (same as on original Form 1) • THIS FORM 1X AMENDS THE FORM 1 (Statement of Financial Interests) I FILED FOR THE YEAR: MAILING ADDRESS • DURING THAT YEAR, I HELD, OR WAS A CANDIDATE FOR, THE POSITION OF: • WITH THIS GOVERNMENTAL AGENCY: CITY ZIP COUNTY MANNER OF CALCULATING REPORTABLE INTERESTS: PRIOR TO 2001, THE THRESHOLDS FOR REPORTING FINANCIAL INTERESTS WERE COMPARATIVE, USUALLY BASED ON PERCENTAGE VALUES BEGINNING IN 2001, THE LEGISLATURE ALLOWED FILERS THE OPTION OF USING REPORTING THRESHOLDS THAT ARE ABSOLUTE DOLLAR VALUES (see Instructions for further details) PLEASE STATE BELOW WHETHER THIS STATEMENT REFLECTS EITHER (must check one) ❑ COMPARATIVE (PERCENTAGE) THRESHOLDS QE ❑ DOLLAR VALUE THRESHOLDS PART A -- PRIMARY SOURCES OF INCOME [Major sources of income to the reporting person] (If you have nothing to report, you must write "none" or "n /a ") NAME OF SOURCE SOURCE'S DESCRIPTION OF THE SOURCE'S OF INCOME ADDRESS PRINCIPAL BUSINESS ACTIVITY PART B -- SECONDARY SOURCES OF INCOME [Major customers, clients, and other sources of income to businesses owned by the reporting person] (If you have nothing to report, you must write "none" or "n /a ") NAME OF NAME OF MAJOR SOURCES ADDRESS PRINCIPAL BUSINESS BUSINESS ENTITY OF BUSINESS'S INCOME OF SOURCE ACTIVITY OF SOURCE PART C -- REAL PROPERTY [Land, buildings owned by the reporting person] (If you have nothing to report, you must write "none" or "n /a ") PART D — INTANGIBLE PERSONAL PROPERTY [Stocks, bonds, certificates of deposit, etc ] (1f you have nothing to report, you must write "none" or "n/a") TYPE OF INTANGIBLE BUSINESS ENTITY TO WHICH THE PROPERTY RELATES CE FORM 1X- Effective January 1 2011 Refer 10 Rule 34 -8 209(1) F A C (Continued on reverse side) PAGE 1 PART E — LIABILITIES [Major debts] (If you have nothing to report, you must write "none" or "n /a") NAME OF CREDITOR ADDRESS OF CREDITOR PART F — INTERESTS IN SPECIFIED BUSINESSES [Ownership or positions in certain types of businesses] (If you have nothing to report, you must write "none" or "n/a" BUSINESS ENTITY # 1 BUSINESS ENTITY # 2 BUSINESS ENTITY # 3 NAME OF Rl1SINFSS FNTITY ADDRESS OF Al1SINFSS FNTITY PRINCIPAL BUSINESS ACTIVITY POSITION HELD WITH FNTITY I OWN MORE THAN A 5% INTFRFST IN THE Rl1SINFSS NATURE OF MY OWNERSHIP INTEREST PART G — EXPLANATION OF CHANGES IF ANY OF PARTS A THROUGH G ARE CONTINUED ON A SEPARATE SHEET, PLEASE CHECK HERE ❑ SIGNATURE: DATE SIGNED: FILING INSTRUCTIONS: WHERE TO FILE: State officers' or specified state employees' QUESTIONS: Return the form to the location where you filed forms should be filed with the Commission on About this form or the ethics laws may be the Form 1 that you are seeking to amend Ethics, P O Drawer 15709, Tallahassee, FL addressed to the Commission on Ethics, Post Local officers should have filed with the 32317 -5709 Office Drawer 15709, Tallahassee, Florida Supervisor of Elections of the county in which Candidates should have filed their Form 1 32317 -5709, telephone (850) 488-7864 they permanently resided (If you did not together with their qualifying papers permanently reside in Florida, then with the Supervisor of the county where your agency had its head. uarters INSTRUCTIONS FOR COMPLETING FORM 1 X: INTRODUCTORY INFORMATION (At Top of Form) PARTS A through F: NAME, DISCLOSURE PERIOD, NAME OF POSITION, and NAME Use these sections of the form to report the new information you OF AGENCY: Use the same information as on the original Form 1 you believe should have been reported on your original Form 1, continu- are seeking to amend ing on a separate sheet if necessary Additional instructions are MAILING ADDRESS: Use your current mailing address found on pages 3 -5, attached MANNER OF CALCULATING REPORTABLE INTERESTS: Check PART G: the box that corresponds to the type of thresholds you used for the Use this section of the form to explain the changes you are making original Form 1 you are seeking to amend in your original Form 1 CE FORM 1X - Effective January 1, 2011 Refer to Rule 34 -8 209(1) FA C PAGE 2 WHO MUST FILE FORM 1, Statement of Financial Interests: All persons who fall within the categories of "state officers, "'local officers," "specified state employees," as well as candidates for elective local office, are required to file Form 1 Positions within these categories are described, generally, below, the categories are specifically found in Sec 112 3145, Florida Statutes Persons required to file full financial disclosure (Form 6) and officers of the judicial branch do not The Form 1 (see Form 6 for a list of persons who must file that form) STATE OFFICERS include the following state officials (1) persons holding elective State office, unless required to file full disclosure on Form 6, (2) appointed members of boards, commissions, etc having statewide jurisdiction, excluding members of solely advisory bodies, and (3) certain State university system personnel LOCAL OFFICERS include the following local government positions (1) persons holding elective office in any political subdivision (such as municipalities, counties, and special districts), unless required to file full disclosure on Form 6, (2) appointed members of certain boards. councils, commissions, authorities, and other bodies of counties, municipalities, school districts, independent special districts, and other political subdivisions, and (3) persons holding certain appointive positions or employment positions in local government SPECIFIED STATE EMPLOYEES include a number of state positions in the executive, legislative, and judicial branches INTRODUCTORY INFORMATION (At Top of Form): — If you were employed by a company that manufactures computers NAME: Please use the same name as appeared on the original Form 1 and received more than 5% of your gross income (salary, commissions, you are amending etc) from the company (or, alternatively, $2,500), then you should list the name of the company, its address, and its principal business activity MAILING ADDRESS: Please use your current mailing address If you (computer manufacturing) are an active or former officer or employee listed in Section 119 071(4)(d), — If you were a partner in a jaw firm and your distributive share of F S , whose home address is exempt from disclosure, the Commission Is partnership gross income exceeded 5% of your gross income (or, alter - required to maintain the confidentiality of your home address if you submit a natively, $2,500), then you should list the name of the firm, its address, written request for confidentiality . Persons listed in section 199 071(4)(d), F S are encouraged to provide an address other than their home address and its principal business activity (practice of law) DISCLOSURE PERIOD: This should be the same period for which you — If you were the sole proprietor of a ° retail gift business and your gross reported on the Form 1 you are amending income from the business exceeded 5% of your total gross income (or, alternatively, $2,500), then you should list the name of the business, its POSITION HELD OR SOUGHT Use the title of the office or position you address, and its principal business activity (retail gift sales) held or were seeking election to, as reported on the Form 1 you are amending — If you received income from investments in stocks and bonds, you For example, "City Council Member," "County Administrator," "Purchasing are required to list only each individual company from which you derived Agent " or "Bureau Chief " more than 5% of your gross income (or, alternatively, $2,500), rather than NAME OF AGENCY: This should be the name of the governmental unit aggregating all of your investment income which you serve or served, by which you are or were employed, or for which — If more than 5% of your gross income (or, alternatively, $2,500) was you are a candidate For example, "City of Tallahassee," "Leon County," or gain from the sale of property (not just the selling price), then you should "Department of Transportation " list as a source of income the name of the purchaser, the purchaser's MANNER OF CALCULATING REPORTABLE INTERESTS: As noted in address, and the purchaser's principal business activity if the purchas- this portion of the form, beginning in 2001 the Legislature has given filers the er's identity is unknown, such as where securities listed on an exchange option of reporting based on either thresholds that are comparative (usually, are sold through a brokerage firm, the source of income should be listed based on percentage values) or thresholds that are based on absolute dollar simply as "sale of (name of company) stock," for example values Please check the box that reflects the thresholds applicable to the — If more than 5% of your gross income (or, alternatively, $2,500) was Form 1 you are amending in the form of Interest from one particular financial institution (aggregating PART A - PRIMARY SOURCES OF INCOME interest from all CD's, accounts, etc , at that institution), list the name of the institution, its address, and its pnncipal business activity [Required by Sec 112 3145(3)(a)1 or (b)1, Fla Stat 1 Part A is intended to require the disclosure of your principal sources of PART B - SECONDARY SOURCES OF INCOME income during the disclosure period You do not have to disclose the amount [Required by Sec 112 3145(3)(a)2 or (b)2, Fla Stat ] of income received The sources should be listed in descending order, with the This part is intended to require the disclosure of major customers, clients, largest source first Please list in this part of the form the name, address, and principal business activity of each source of your income which (depending on and other sources of income to businesses in which you own an interest You whether you have chosen to report based on percentage thresholds or on dol- will not have anything to report unless lar value thresholds) either (a) If you are reporting based on percentage thresholds exceeded five percent (5 %) of the gross income received by you in (1) You owned (either directly or indirectly in the form of an equi- your own name or by any other person for your benefit or use during the table or beneficial interest) during the disclosure period more than disclosure period, or five percent (5 %) of the total assets or capital stock of a business exceeded $2,500 00 (of gross income received during the disclosure entity (a corporation, partnership, limited partnership, proprietorship, period by joint venture, trust, firm, etc , doing business in Florida); and p y you in your own name or by any other person for your use or benefit) (2) You received more than ten percent (10 %) of your gross You need not list your public salary resulting from public employment, but income during the disclosure period from that business entity, and this amount should be included when calculating your gross income for the (3) You received more than $1,500 in gross income from that busi- disclosure period The income of your spouse need not be disclosed However, ness entity during the period if there is joint income to you and your spouse from property held by the entire- ties (such as interest or dividends from a bank account or stocks held by the entireties), you should include all of that income when calculating your gross (CONTINUED on page 4) co– income and disclose the source of that income if it exceeded the threshold (b) If you are reporting based on dollar value thresholds "Gross income" means the same as it does for income tax purposes, including all income from whatever source derived, such as compensation for (1) You owned (either directly or indirectly in the form of an equi- services, gross income from business gains from property dealings, interest, table or beneficial interest) during the disclosure period more than rents, dividends, pensions, distributive share of partnership gross income, and five percent (5 %) of the total assets or capital stock of a business alimony, but not child support entity (a corporation, partnership, limited partnership, proprietorship, joint venture, trust, firm, etc , doing business in Florida), and Examples CE FORM 1X - Effective January 1 2011 Refer to Rule 34-3209 (1), F A C PAGE 3 (2) You received more than $5,000 of your gross income during the Where property is owned by husband and wife as tenants by the entirety (which disclosure period from that business entity usually will be the case), the property should be valued at 100% If your interests and gross income exceeded the appropriate thresholds Calculations In order to decide whether the intangible property exceeds listed above, then for that business entity you must list every source of income 10% of your total assets, you will need to total the value of all of your assets to the business entity which exceeded ten percent (10 %) of the business enti- (including real property, intangible property, and tangible personal property ty's gross income (computed on the basis of the business entity's most recent- such as automobiles, jewelry, furniture, etc ) When making this calculation, do ly completed fiscal year), the source's address, and the source's principal not subtract any liabilities (debts) that may relate to the property —add only the business activity fair market value of the property Multiply the total figure by 10% to arrive at the Examples disclosure threshold List only the intangibles that exceed this threshold amount Jointly owned property should be valued according to the percentage — You are the sole proprietor of a dry cleaning business, from which you of your joint ownership, with the exception of property owned by husband and received more than 10% of your gross Income (an amount that was more wife as tenants by the entirety, which should be valued at 100% None of your than $1,500) (or, alternatively, more than $5,000, if you are using dollar calculations or the value of the property have to be disclosed on the form If you value thresholds) If only one customer, a uniform rental company, pro- are using dollar value thresholds, you do not need to make any of these calcu- vided more than 10% of your dry cleaning business, you must list the name lations of the uniform rental company, its address, and its principal business achy- ity (uniform rentals) Examples for persons using comparative (percentage) thresholds — You are a 20% partner in a partnership that owns a shopping mall and — You own 50% of the stock of a small corporation that is worth your partnership income exceeded the thresholds listed above You should $100,000, according to generally accepted methods of valuing small busi- list each tenant of the mall that provided more than 10% of the partner- nesses The estimated fair market value of your home and other property ship's gross income, the tenant's address and principal business activity (bank accounts, automobile, furniture, etc) is $200,000 As your total assets are worth $250,000, you must disclose intangibles worth over — You own an orange grove and sell all your oranges to one marketing $25,000 Since the value of the stock exceeds this threshold, you should cooperative You should list the cooperative, its address, and its prncipal list "stock" and the name of the corporation If your accounts with a par - business activity if your income met the thresholds, ticutar bank exceed $25,000, you should list "bank accounts" and bank's PART C -- REAL PROPERTY name [Required by Sec 112 3145(3)(a)3 or (b)3, Fla Stat j — When you retired, your professional firm bought out your partnership In this part, please list the location or description of all real property (land interest by giving you a promissory note, the present value of which is and buildings) in Florida in which you owned directly or indirectly at any time $100,000 You also have a certificate of deposit from a bank worth $75,000 bon dunng the previous tax year in excess of five percent (5 %) of the property's bonds portfolio worth $300,000, c of $100,000 of IBM value This threshold is the same, whether you are using percentage thresholds , v investments mine assets (condo- or dollar thresholds You are not required to list your residences and vacation $50,0 s 0 and a each The vanety f fair r market t vallue ue o of t s worth your remaining a ting ivaf c and homes, nor are you required to state the value of the property on the form minium, automobile, and other personal property) is $225,000. Since your total assets are worth $700,000, you must list each intangible worth more Indirect ownership includes situations where you are a beneficiary of a than $70,000 Therefore, you would list "promissory note" and the name of trust that owns the property, as well as situations where you are more than a your former partnership, "certificate of deposit" and the name of the bank, 5% partner in a partnership or stockholder in a corporation that owns the prop- "bonds" and "IBM," but none of the rest of your investments erty The value of the property may be determined by the most recently assessed value for tax purposes, in the absence of a more current appraisal PART E -- LIABILITIES The location or description of the property should be sufficient to enable [Required by Sec 112 3145(3)(a)4 or (b)4, Fla Stat ] anyone who looks at the form to identify the property Although a legal descrip- In this part of the form, list the name and address of each private or gov- tion of the property will do, such a lengthy description is not required Using ernmental creditor to whom you were indebted for a liability in an amount that, simpler descriptions, such as "duplex, 115 Terrace Avenue, Tallahassee" or 40 at any time during the disclosure period, exceeded acres located at the intersection of Hwy 60 and 1 -95, Lake County" is sufficient (1) your net worth (if you are using percentage thresholds), or In some cases, the property tax identification number of the property will help in identifying it "120 acre ranch on Hwy 902, Hendry County, Tax ID # 131 (2) $10,000 (if you are using dollar value thresholds) 45863 " You are not required to list the amount of any indebtedness or your net Examples worth You do not have to disclose any of the following credit card and retail installment accounts, taxes owed (unless reduced to a judgment), indebted- — You own 1/3 of a partnership or small corporation that owns both a ness on a life insurance policy owed to the company of issuance, contingent vacant lot and a 12% interest in an office building You should disclose the liabilities, and accrued income taxes on net unrealized appreciation (an lot, but are not required to disclose the office building (because your 1/3 of accounting concept) A "contingent liability" is one that will become an actual the 12% interest —which equals 4% —does not exceed the 5% threshold), liability only when one or more future events occur or fail to occur, such as — If you are a beneficiary of a trust that owns real property and your where you are liable only as a guarantor, surety, or endorser on a promissory interest depends on the duration of an individual's life, the value of your note If you are a "co- maker" and have signed as being jointly liable or jointly interest should be determined by applying the appropriate actuarial table and severally liable, then this is not a contingent liability, if you are using the to the value of the property itself, regardless of the actual yield of the prop- $10,000 threshold and the total amount of the debt (not just the percentage of erty your liability) exceeds $10,000 such debts should be reported PART D -- INTANGIBLE PERSONAL PROPERTY Calculations for persons using comparative (percentage) thresholds In [Required by Sec 112 3145(3)(a)3 or (b)3, Fla Stat ] order to decide whether the debt exceeds your net worth, you will need to total all of your liabilities (including promissory notes, mortgages, credit card debts, Provide a general description of any intangible personal property that was lines of credit, judgments against you, etc) Subtract this amount from the worth more than value of all your assets as calculated above for Part D This is your "net worth " (1) ten percent (10 %) of your total assets at the end of the disclosure You must list on the form each creditor to whom your debt exceeded this period Of you are using percentage thresholds), or (CONTINUED on page 5) czr- (2) $10,000 (if you are using dollar value thresholds), and state the business entity to which the property related Intangible personal amount unless it is one of the types of indebtedness listed in the paragraph property includes such things as money, stocks, bonds, certificates of deposit, above (credit card and retail installment accounts, etc) Joint liabilities with interests in partnerships, beneficial interests in a trust, promissory notes owed others for which you are "jointly and severally liable," meaning that you may be to you, accounts receivable by you, IRA's, and bank accounts Such things as liable for either your part or the whole of the obligation, should be included in automobiles, houses, jewelry, and paintings are not intangible property your calculations based upon your percentage of liability, with the following Intangibles relating to the same business entity should be aggregated, for exception joint and several liability with your spouse for a debt which relates example, two certificates of deposit and a savings account with the same bank CE FORM 1X - Efiectwe January 1, 2011 Refer to Rule 34 -B 209(1) F A C PAGE 4 to property owned by both of you as "tenants by the entirety" (usually the case) percent (5 %) of the total assets or capital stock of one of the types of business should be included in your calculations by valuing the asset at 100% of its entities granted a privilege to operate in Florida that are listed below. You also value and the liability at 100% of the amount owed must complete this part of the form for each of these types of businesses for Examples for persons using comparative (percentage) thresholds which you are, or were at any time during the disclosure period, an officer, director, partner, proprietor, or agent (other than a resident agent solely for — You owe $15,000 to a bank for student loans, $5,000 for credit card service of process) debts, and $60,000 (with your spouse) to a savings and loan for a home The types of businesses covered in this disclosure are only state and mortgage Your home (owned by you and your spouse) is worth $80,000 federally chartered banks, state and federal savings and loan associations; and your other property is worth $20,000 Since your net worth is $20,000 ($100,000 minus $80,000), you must report only the name and address of cemetery companies, insurance companies (including insurance agencies), the savings and loan mortgage companies, credit unions, small loan companies, alcoholic beverage licensees, pari - mutuel wagering companies, utility companies, entities con- - You and your 50% business partner have a $100,000 business loan trolled by the Public Service Commission, and entities granted a franchise to from a bank, for which you both are Jointly and severally liable The value operate by either a city or a county government of the business, taking into account the loan as a liability of the business, is $50,000 Your other assets are worth $25,000, and you owe $5,000 on If you have or held such a position or ownership interest in one of these a credit card Your total assets will be $50,000 (half of a business worth types of businesses, list (vertically for each business) the name of the busi- $50,000 plus $25,000 of other assets) Your liabilities, for purposes of ness, its address and principal business activity, and the position held with the calculating your net worth, will be only $5,000, because the full amount of business (if any) Also, if you own(ed) more than a 5% interest in the business, the business loan already was included in valuing the business Therefore, as described above, you must indicate that fact and describe the nature of your net worth is $45,000 Since your 50% share of the $100,000 buss- your interest ness loan exceeds this net worth figure, you must list the bank (End of Instructions ) PART F - INTERESTS IN SPECIFIED BUSINESSES [Required by Sec 112 3145(5), Fla Stat ] You are required to disclose in this part of the form the fact that you owned during the disclosure period an interest in, or held any of certain posi- tions with, particular types of businesses You are required to make this disclo- sure if you own or owned (either directly or indirectly in the form of an equitable or beneficial interest) at any time during the disclosure period more than five OTHER FORMS YOU MAY NEED TO FILE IN ORDER TO COMPLY WITH THE ETHICS LAWS In addition to filing Form 1, you may be required to file one or more of the special purpose forms listed below, depending on your particular position, business activities, or interests As it is your duty to obtain and file any of the special purpose forms which may be applicable to you, you should carefully read the brief description of each form to determine whether it applies Form 1F — Final Statement of Financial Interests: Required of local officers, state officers, and specified state employees within 60 days after leaving office or employment This form is used to report financial interests between January 1st of the last year of office or employment and the last day of office or employment [Sec 112 3145(2)(b), Fla Stat ] Form 2 — Quarterly Client Disclosure: Required of local officers, state officers, and specified state employees to disclose the names of clients represented for compensation by themselves or a partner or associate before agencies at the same level of government as they serve The form should be filed by the end of the calendar quarter (March 31, June 30, Sept 30, Dec 31) following the calendar quarter in which a reportable representation was made [Sec 112 3145(4), Fla Stat ] Form 8A — Memorandum of Voting Conflict for State Officers: Required to be filed by a state officer within 15 days after having voted on a measure which inured to his or her special private gain (or loss) or to the special gain (or loss) of a relative, business associate, or one by whom he or she is retained or employed Each appointed state officer who seeks to influence the decision on such a measure prior to the meeting must file the form before undertaking that action [Sec 112,3143, Fla Stat ] Form 8B — Memorandum of Voting Conflict for County, Municipal, and Other Local Public Officers: Required to be filed (within 15 days of abstention) by each local officer who must abstain from voting on a measure which would inure to his or her special private gain (or Toss) or the special gain (or loss) of a relative, business associate, or one by whom he or she is retained or employed Each appointed local official who seeks to influence the decision on such a measure prior to the meeting must file the form before undertaking that action [Sec 112 3143, Fla Stat ] Form 9 — Quarterly Gift Disclosure: Required of local officers, state officers, specified state employees, and state procurement employees to report gifts over $100 in value The form should be filed by the end of the calendar quarter (March 31, June 30, September 30, or December 31) following the calendar quarter in which the gift was received [Sec 112 3148, Fla Stat ] Form 10 — Annual Disclosure of Gifts from Governmental Entities and Direct Support Organizations and Honorarium Event Related Expenses: Required of local officers, state officers, specified state employees, and state procurement employees to report gifts over $100 in value received from certain agencies and direct support organizations, also to be utilized by these persons to report honorarium event - related expenses paid by certain persons and entities The form should be filed by July 1 following the calendar year in which the gift or honorarium event - related expense was received [Sec 112 3148 and 112 3149, Fla Stat ] Copies of these forms are available from the Supervisor of Elections in your county and from the Commission on Ethics, Post Office Drawer 15709, Tallahassee, Florida 32317 -5709 telephone (850) 488 -7864 They also are posted on the Commission's website at www ethics state fl us Questions about any of these forms or the ethics laws may be addressed to the Commission on Ethics, Post Office Drawer 15709, ,Tallahassee, Florida 32317 -5709, telephone (850) 488 -7864 CE FORM 1X - Effective January 1, 2011 Refer to Rule 34 -8 209)1), F A C PAGE 5 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Scheduled 2012 Quarterly Board Meetings February 7, 2012, Tuesday, @ 9:30AM May 8, 2012, Tuesday, @ 9:30AM August 14, 2012, Tuesday, @ 9:30AM November 13, 2012, Tuesday, @ 9:30AM (Meeting dates on 2 Tuesday of the Month) Meeting Location: Renaissance Commons Executive Suites 1500 Gateway Blvd., Suite 220 Boynton Beach, FL 33426 November 8, 2011 CITY OF BOYNTON BEACH POLICE PENSION SYSTEM * * HEALTH INSUTANCE SUBSIDY INTEREST * * * POST * FOR PLAN YEAR ENDING: 09/30/2010 DFTE PREPARED: December 15, 2010 CURRENT PLAN YEAR CONTRIBUTIONS $ 121,161.87 MATCHING FUNDS $ 121,161.87 REFUNDS ( -) $ 4,478.18 ADDITIONAL DISTRIBUTION $ .00 TOTALS CONTRIBUTIONS $ 833,699.36 MATCHING FUNDS $ 833,699.36 REFUNDS ( -) $ 39,040.80 ADDITIONAL DIS`RIBUTION $ - 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T F-'00N -3 Q-1 0 010 Barbara Ladue From: Chapman, Gary [ChapmanG @bbfl.us] Sent: Monday, November 07, 2011 12 PM To: Barbara Ladue Cc: Llopis, Jason; Caudell, Scott; Ranzie, Frank, Athol, Toby Subject: FW: CPPT Fees Attachments: 2011 CEU Form.pdf, 01 -2012 Membership Fees pdf Hello Barb, please include the payment for the annual membership for the Board for 2012. Also be advised that there is an additional $30 per annum CPPT renewal fee. I have attached the payment invoice for the $600 which I paid with the credit card and the info on the $30 CPPT fees. THE ANNUAL MEMBERSHIP FEES HAVE BEEN PAID FOR THE FUND. THE CPPT RENEWAL FEES FOR 2012 HAVE NOT BEEN PAID AND ARE DUE MARCH 1, 2012. l ieutenant Vary a t&Virnan 561- 742 -6135 CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. c)1. Active criminal intelligence information and active criminal investigative information are exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution. This transmission is protected by the Electronic Communications Privacy Act, 18 U.S.C. Sections 2510 -2521 and intended to be delivered only to the named addressee(s) and may contain information that is confidential, proprietary. If this information is received by anyone other than the named addressee(s), the recipient should immediately notify the sender by E -MAIL and by telephone (561) 742 -6135 and obtain instructions as to the disposal of the transmitted material. In no event shall this material be read, used, copied, reproduced, stored or retained by anyone other than the named addressee(s), except with the express consent of the sender or the named addressee(s). Thank you. _ From: Kim Ryals fmailto:kim@fppta.orgl Sent: Monday, November 07, 2011 12:15 PM To: Chapman, Gary Subject: CPPT Fees Hi Gary- Attached is our CEU form which explains the fee schedule. Basically to enter the CPPT program there is a onetime fee of $800. A trustee has three years to complete all three courses. Once Certification is achieved the trustee needs to maintain 10 CEU credits per year. Along with that they need to submit a fee of $30. As of January 2012 you will not be required to submit a CEU form unless you attend a function other than FPPTA. The scanning records have proved to be reliable so FPPTA staff will enter the CEU credits from the scanning records. In the next week or so you will be able to pay the CEU fee online. Our programmer is putting the finishing touches on the that phase of the system. 1 Please let me know if I can assist with anything else. Kim kiir E. Rgak Kimberlie E. Ryals, CPPT FPPTA Chief Operating Officer 800 - 842 -4064 ext 101 www.fppta.org 2012 Membership Will be Open Online the week of October 17th Trustees School February 5 - 8, 2012 Hyatt Regency Jacksonville 2 ASSOCIA 1IOM RUST! FPPTA Online Payment Confirmation ini ,..,t-tu... P Invoice #. 7490 Status* Paid Amount Paid: $600.00 Date Paid: 11/7/2011 12 PM Paid By. Gary Chapman ((561) 739 -7972) ChapmanG ©bbfl.us Transaction ID. MC0080543398 Authorization Code. 007802 Card Number: ""8239(Visa) Expiration 1/2012 Name on Card: Gary Chapman Comment Act Mem. Boynton Beach Police Pension Fund (2012) Thank you for your payment online. If you have any questions, please contact our friendly staff at FPPTA 2946 Wellington Circle East, Suite A Tallahassee, FL 32309 Phone 800 - 842 -4064 Fax 850 -668 -8514 Date Printed: 11/7/2011 12:01 PM Florida Public Pension Trustees ), Association . A �} 1 PI 2011 CPPT Continuing Education Units Verification Form P I , j 1 , 2011 Annual Re- Certification Invoice F. { ' " Designee Information: Name: Company /Pension System: Street Address: City: State: Zip: Phone: E -mail: CEU Information: Please mark the programs you have attended: With the implementation of the scanning program we are able to use this information to record your attendance at FPPTA functions. We will automatically record your CEU credits from our scanning records after each function. The only need for completing this form is if you attend anything other than an FPPTA event. 5 Continuing Education Units ❑ State of Florida Police Officers & Firefighters Trustees School, May 2011, Tallahassee, Florida ❑ NCPERS Annual Conference, May 2011, Fontinbleau Hotel, Miami, Florida ❑ NCTR, October 2011, Hilton Baltimore, Baltimore, Maryland ❑ NPEA, October 2011, Naples Beach Hotel and Golf Club, Naples, Florida ❑ International Foundation of Employee Benefit Plans Annual Conference (various locations) Designee Signature: Date: S30 Re- Certification Fee: This Form Must Accompany Payment. Payment Method: ❑ Check enclosed Credit Card: ❑ American Express ❑ Visa ❑ Master Card Name on Card: Billing Zip Code: Signature: Card Number: Expiration Date: Certified Public Pension Trustees Program (CPPT) New Post Certification Requirements: Effective January 1, 2011 CEU Requirements: After completing the CPPT Certification Program everyone must complete 10 Continuing Education Annually to maintain your CPPT Certification. An FPPTA Trustee School and the Wall Street Program will be worth 10 units and any other educational function attended will be worth 5 units either with the FPPTA or an approved outside educational conference. (See website, www.fppta.org, for CEU forms). We will be scanning at all FPPTA functions. With the implementation of the scanning program we are able to use this information to record your attendance at FPPTA functions. We will automatically record your CEU credits from our scanning records after each function. The only need for completing this form is if you attend anything other than an FPPTA event. We have presently approved participation in the NPEA, NCPERS, and International Foundation of Employee Benefit Plans also the Florida Division of Retirement including, "Police and Firefighters Trustee's School" and the Orlando Conference. Each recipient will be monitored yearly to insure that CPPT related education is, in fact, continuing. You are required to attend at least one FPPTA function per year. There also may be requirements that you attend specific courses related to new investment or pension issues which will be determined by the FPPTA Education Committee. Post Certification Requirements will be monitored on a calendar year basis beginning the day you pass the advanced exam. • If you are certified at the January/February school, your certification period will run from the date you are certified through December 31 of that year. • If you are certified at the September /October school, your certification begins the date you are certified but you do not have to begin earning Continuing Education Units until January 1 of the following year. If you attend any functions between your certification date and the end of the year, the credits will count. Your certification period will begin January 1 and end December 31 Re- Certification F'ee: There will be an annual $30 re- certification fee due along with your CEU form. CEU forms and re- certification fees are due by March 1. For your convenience, FPPTA will forward a CEU form along with the re- certification form in November. The forms are also available on our website, www.fppta.org under `Certification Program'. If you have any questions please feel free to contact Kim Ryals at 800 - 842 -4064 or by e -mail kim @fppta.org. Mail CEU form and payment to: C 1 FPPTA 1 .()( Hc t\ 2946 Wellington Circle East Tin t 1 L Tallahassee, F1 32309 �� 111t >\ Phone: 800 - 842 -4064 P I r i 1 t Fax: 850- 668 - 8514 l E -mail: fppta @fppta.org j GitS Gabriel Roeder Smith & Company One East Broward Blvd 954.527.1616 phone Consultants 8c Actuaries Suite 505 954.525 0083 fax Ft. Lauderdale, FL 33301-1827 www.gabrielroeder.com November 1, 2011 Ms. Barbara La Due Pension Administrator Renaissance Executive Suites 1500 Gateway Blvd. Suite 220 Boynton Beach, Florida 33426 Re: City of Boynton Beach Municipal Police Officers' Retirement Fund Dear Barbara: As requested by the Board, we are providing a Supplemental Actuarial Valuation Report illustrating the impact of changing the assumed employment termination rates to reflect actual plan experience prior to 2001. Our Experience Study shows employment termination rates for the nine years ending in 2010. The Board asked us to add experience for the nine years before 2001, but we only have retrievable records back to 1997. The results are based on census and asset data as of October 1, 2010 and have been shown in combination with other assumption changes outlined in our Experience Study Report dated February 15, 2011. We would ask the Board to review this information so a decision can be made on whether to adopt the changes. The following scenarios were developed to illustrate the effect of the change in termination rates: > Scenario 1 - Same assumption set as the October 1, 2010 Valuation. > Scenario 2 - Change the assumed rate of return from 8.0% to 7.75 %, reduce first year retirement rate assumption to 40 %, phase in the RP -2000 Combined Healthy Participant Mortality Table with full generational mortality over a period of five years. > Scenario 3 - Same as Scenario 2 above, except use 2001 -2010 employment termination rates. > Scenario 4 - Same as Scenario 2 above, except use 1997 -2010 employment termination rates. In an actuarial valuation it is necessary to evaluate key economic and demographic assumptions occasionally to keep cost projections as accurate as possible. These assumptions include the investment rate of return the assets will achieve in the future and the life expectancy of the members of the Plan. Adopting the proposed assumption changes would provide results more representative of the Plan's true cost. This report is intended to describe the financial effect of the proposed plan assumption changes. No statement in this report is intended to be interpreted as a recommendation in favor of the changes, or in opposition to them. The calculations are based upon assumptions regarding future events, which may or may not materialize. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic assumptions; changes in economic or demographic assumptions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the additional cost or contribution requirements based on the plan's funded status); and changes in plan provisions or applicable law. If you have reason to believe that the assumptions that were used Ms. Barbara La Due November 1, 2011 Page 2 of 2 are unreasonable, that the plan provisions are incorrectly described, or that conditions have changed since the calculations were made, you should contact the author of the report prior to relying on information in the report. The calculations in this report are based upon information furnished by the Plan Administrator for the October 1, 2010 Actuarial Valuation concerning Plan benefits, financial transactions, plan provisions and active members, terminated members, retirees and beneficiaries. We reviewed this information for internal and year -to -year consistency, but did not otherwise audit the data. We are not responsible for the accuracy or completeness of the information provided. This report was prepared at the request of the Board and is intended for use by the Retirement Plan and those designated or approved by the Board. This report may be provided to parties other than the Retirement Plan only in its entirety and only with permission of the Board. The undersigned are members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions contained herein. The undersigned actuaries are independent of the plan sponsor. This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the Plan as of the valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, and with the Actuarial Standards of Practice issued by the Actuarial Standards Board and with applicable statutes. We welcome your questions and comments. Sincerely yours, )411-4-' A 71 , J. Stephen Palmquist, ASA Peter N. Strong, ASA Senior Consultant and Actuary Consultant and Actuary JSP /rb Enclosures Gabriel Roeder Smith & Company 1 SUPPLEMENTAL ACTUARIAL VALUATION REPORT Nan City of Boynton Beach Municipal Police Officers' Retirement Fund Valuation Date October 1, 2010 Date of Report November 1, 2011 Report Requested by Pension Board Prepared by J. Stephen Palmquist Group Valued All active and inactive Police Officers Plan Assumptions and Methods Being Considered for Change ➢ Lower the assumed rate of return from 8.0% to 7.75 %, reduce first year retirement rate assumption to 40 %, phase in the RP -2000 Combined Healthy Participant Mortality Table with full generational mortality over a period of five years (Scenario 2). ➢ Same as Scenario 2, except use 2001 -2010 termination rates. ➢ Same as Scenario 2, except use 1997 -2010 termination rates. Plan Provisions Being Considered for Change None Participants Affected None Actuarial Assumptions and Methods Same as October 1, 2010 Actuarial Valuation Report with exceptions as noted above. Some of the key assumptions /methods are: Investment Return — 8.0% Salary increase — 5.0% to 6.5% depending on age Cost Method — Entry Age Normal Amortization Period for Any Change in Actuarial Accrued Liability 30 years Summary of Data Used in Report See attached page. 2 Actuarial Impact of Proposal(s) See attached page(s). Special Risks Involved With the Proposal That the Plan Has Not Been Exposed to Previously None Other Cost Considerations None Possible Conflicts With IRS Qualification Rules None 3 ANNUAL REQUIRED CONTRIBUTION A. Valuation Date October 1, 2010 October 1, 2010 October 1, 2010 October 1, 2010 Valuation 7 75% interest 7 75% interest 7 75% Interest Ret rate change Ret. rate change Ret rate change 80/20 blend 83 GAM 80/20 blend 83 GAM 80/20 blend 83 GAM and RP -2000 mortality and RP -2000 mortality and RP -2000 mortality 2001 -2010 term rates 1997 -2010 term rates B. ARC to Be Paid During Fiscal Year Ending 9/30/2012 9/30/2012 9/30/2012 9/30/2012 C. Assumed Date of Employer Contrib. 10/1/2011 10/1/2011 10/1/2011 10/1/2011 D. Annual Payment to Amortize Unfunded Actuarial Liability $ 2,054,091 $ 2,101,979 $ 2,014,000 $ 2,010,638 E. Employer Normal Cost 1,895,893 1,973,063 2,440,886 2,313,221 F ARC if Paid on the Valuation Date: D +E 3,949,984 4,075,042 4,454,886 4,323,859 G. ARC Adjusted for Frequency of Payments 3,949,984 4,075,042 4,454,886 4,323,859 H. ARC as % of Covered Payroll 32.55 % 33.58 % 36.71 % 35.63 % I. Assumed Rate of Increase in Covered Payroll to Contribution Year N/A % N/A % N/A % N/A % J. Covered Payroll for Contribution Year 12,592,795 * 12,592,795 * 12,592,795 * 12,592,795 * K ARC for Contribution Year: H x J 4,098,955 4,228,661 4,622,815 4,486,813 L Estimate of State Revenue in Contribution Year 465,087 465,087 465,087 465,087 M. Required Employer Contribution (REC) in Contribution Year 3,633,868 3,763,574 4,157,728 4,021,726 N REC as % of Covered Payroll in Contribution Year 28.86 % 29.89 % 33.02 % 31.94 % O. Change in ARC from Valuation 1. Dollar Amount N/A 129,706 523,860 387,858 2. % of Pay N/A % 1.03 % 4.16 % 3.08 % * Estimated payroll for the year per the City's Finance Department 4 ACTUARIAL VALUE OF BENEFITS AND ASSETS A. Valuation Date October 1, 2010 October 1, 2010 October 1, 2010 October 1, 2010 Valuation 7 75% interest 7 75% interest 7 75% interest Ret rate change Ret rate change Ret. rate change 80/20 blend 83 GAM 80/20 blend 83 GAM 80/20 blend 83 GAM and RP -2000 mortality and RP -2000 mortality and RP -2000 mortality 2001 -2010 term rates 1997 -2010 term rates B. Actuarial Present Value of All Projected Benefits for 1. Active Members a. Service Retirement Benefits $ 51,530,350 $ 54,236,909 $ 60,362,309 $ 54,463,657 b. Vesting Benefits 2,628,219 2,803,759 2,873,105 5,993,102 c. Disability Benefits 2,823,092 3,804,418 4,145,241 3,830,927 d. Preretirement Death Benefits 934,789 1,204,589 1,310,872 1,203,056 e. Return of Member Contributions 98,024 98,189 46,892 53,461 f. Total 58,014,474 62,147,864 68,738,419 65,544,203 2 Inactive Members a. Service Retirees & Beneficiaries 41,264,959 42,521,005 42,521,005 42,521,005 b. Disability Retirees 2,787,964 2,824,122 2,824,122 2,824,122 c. Terminated Vested Members 514,713 594,059 594,059 594,059 d. Total 44,567,636 45,939,186 45,939,186 45,939,186 3. Total for All Members 102,582,110 108,087,050 114,677,605 111,483,389 C. Actuarial Accrued (Past Service) Liability per GASB No. 25 81,957,204 83,754,722 82,100,252 82,037,034 D. Plan Assets (Actuarial Value) 48,129,593 48,129,593 48,129,593 48,129,593 E Unfunded Actuarial Accrued Liability: C -D 33,827,611 35,625,129 33,970,659 33,907,441 F Actuarial Present Value of Projected Covered Payroll 94,279,971 107,986,009 124,916,269 117,664,675 G. Actuarial Present Value of Projected Member Contributions 6,599,598 7,559,021 8,744,139 8,236,527 H. Funded Ratio: D/C 58.73 % 57 46 % 58.62 % 58.67 % 5 CALCULATION OF EMPLOYER NORMAL COST A. Valuation Date October 1, 2010 October 1, 2010 October 1, 2010 October 1, 2010 Valuation 7 75% interest 7 75% interest 7 75% interest Ret rate change Ret rate change Ret rate change B. Normal Cost for 80/20 blend 83 GAM 80/20 blend 83 GAM 80/20 blend 83 GAM and RP -2000 mortality and RP -2000 mortality and RP -2000 mortality 2001 -2010 term rates 1997 -2010 term rates 1. Service Retirement Benefits $ 1,983,777 $ 2,014,467 $ 2,579,441 $ 2,282,985 2. Vesting Benefits 272,081 281,345 201,184 379,207 3. Disability Benefits 237,822 270,311 287,949 276,715 4. Preretirement Death Benefits 56,636 64,525 73,197 68,563 5. Return of Member Contributions 72,571 69,409 26,110 32,745 6. Total for Future Benefits 2,622,887 2,700,057 3,167,880 3,040,215 7. Assumed Amount for Administrative Expenses 122,423 122,423 122,423 122,423 8. Total Normal Cost 2,745,310 2,822,480 3,290,303 3,162,638 As % of Covered Payroll 22.62 % 23.26 % 27.12 % 26.06 % C. Expected Member Contribution 849,417 849,417 849,417 849,417 As % of Covered Payroll 7.00 % 7.00 % 7.00 % 7.00 % D. Net Employer Normal Cost: B8 -C 1,895,893 1,973,063 2,440,886 2,313,221 As % of Covered Payroll 15.62 % 16.26 % 20.12 % 19.06 % 6 PARTICIPANT DATA October 1, 2010 October 1, 2010 Increase Baseline After Changes (Decrease) ACTIVE MEMBERS Number 148 148 0 Covered Annual Payroll $ 12,134,525 $ 12,134,525 $ 0 Average Annual Payroll $ 81,990 $ 81,990 $ 0 Average Age 36.4 36.4 0.0 Average Past Service 8.1 8.1 0.0 Average Age at Hire 28.2 28.2 0.0 RETIREES, BENEFICIARIES & DROP Number 91 91 0 Annual Benefits $ 3,812,891 $ 3,812,891 $ 0 Average Annual Benefit $ 41,900 $ 41,900 $ 0 Average Age 56.5 56.5 0.0 DISABILITY RETIREES Number 15 15 0 Annual Benefits $ 311,885 $ 311,885 $ 0 Average Annual Benefit $ 20,792 $ 20,792 $ 0 Average Age 60.0 60.0 0.0 TERMINATED VESTED MEMBERS Number 3 3 0 Annual Benefits $ 56,783 $ 56,783 $ 0 Average Annual Benefit $ 18,928 $ 18,928 $ 0 Average Age 42.6 42.6 0.0 7 Employment Termination Rates These rates are based on service for the first five years of employment, thereafter based on age Recommended Rates Years of Actual Rates Based on Data From Service 2001 -2010 1997 -2010 2001 -2010 1997 -2010 0 -1 15.6 % 18.2 % 15.0 % 18.0 % 1 - 2 10.9 12.5 10.0 12.0 2 - 3 6.8 9.7 7.0 9.0 3 - 4 4.5 5.7 5.0 6.0 4 - 5 4.1 5.9 4.0 5.0 Ages for Those with at Least 5 Years of Service 25 - 29 0.0 4.6 4.0 5.0 30 - 34 3.4 4.1 3.0 4.0 35 - 39 2.0 2.8 2.0 3.0 40 - 44 2.1 3.6 1.0 2.5 45 - 49 0.0 2.1 0.0 2.0 50 -54 0.0 3.8 0.0 0.0 Actual Number of Terminations 63 119 % of Total Terminations with >5 Years of Service 17 % 23 % Expected Number of Terminations Based on Recommended Rates 59 113 % of Expected Terminations with >5 Years of Service 17 % 21 % Barbara Ladue From: Chapman, Gary [ChapmanG ©bbfl us] Sent: Monday, November 07, 2011 10:11 AM To: Barbara Ladue Subject: RE Supplemental Act Val Report Barb, place this on future items for discussion. l ieutenant 'ary a t4man 561- 742 -6135 CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. c)1. Active criminal intelligence information and active criminal investigative information are exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution. This transmission is protected by the Electronic Communications Privacy Act, 18 U.S.C. Sections 2510 -2521 and intended to be delivered only to the named addressee(s) and may contain information that is confidential, proprietary. If this information is received by anyone other than the named addressee(s), the recipient should immediately notify the sender by E -MAIL and by telephone (561) 742 -6135 and obtain instructions as to the disposal of the transmitted material. In no event shall this material be read, used, copied, reproduced, stored or retained by anyone other than the named addressee(s), except with the express consent of the sender or the named addressee(s). Thank you. From: Barbara Ladue jmailto :IaduebCalbbpdpension.coml Sent: Monday, November 07, 2011 9:26 AM To: Chapman, Gary; Athol, Toby Subject: Supplemental Act Val Report Gary &Toby: Steve Palmquist has prepared the attached with various assumptions the Board has addressed at previous meetings. This is not on tomorrow's agenda. Should we schedule a special Board meeting and invite Steve & Pete Strong to attend? Thanks. Barb La Due From: fax(acompson.com rmailto:fax0compson.coml Sent: Monday, November 07, 2011 9:20 AM To: laduebftbbpdpension.com Subject: Message from KMBT_C550 1 Barbara Ladue From: Barbara Ladue [ladueb @bbpdpension.com] Sent: Thursday, October 13, 2011 11.58 AM To: 'paramoret @bbfl.us' Subject: Service Refund -- ' j 0tAavv\- Terrence: Received your completed request for the refund on your $6,000. I had contacted the Plan attorney to advise that this was in the works. She requested that I present to the Board, for their review, before issuing a refund check. The scheduled Board meeting is set for November 8 which is a few weeks away. Hope this doesn't present a problem. Thanks. Barb La Due BOYNTON BEACH MUNICIPAL POLICE OFFICERS PENSION FUND REQUEST TO'RMINATE BUY BACK OF PERMISSIVE SERVICE AND RECEIVE REFUND Name: l A-. ?cyv)c Social Security Number. I herby state that I request to terminate my participation in the buy back process and to receive a refund of the money I have put into the Boynton Beach Municipal Police Officers Pension Fund ('Fund") to purchase such service . I have an immediate and heavy financial need that is: CHE K ONE 1) medical expenses previously incurred by me, my spouse or dependents, or amounts necessary for these people to obtain medical care; 2) costs related to my purchase of a principal residence (not including mortgage payments); 3) payment of tuition and related educational fees and room and board expenses for the next 12 months of post- secondary education for me, my spouse, children or dependents; or 4) payments necessary to prevent my eviction from my principal residence or to avoid foreclosure on the mortgage on that residence. Additionally, 1 need to terminate my participation in the buy back process and receive a refund of the money I have put into the Fund to purchase such service because the distribution is necessary to satisfy my financial need. I cannot relieve my financial need through reimbursement or compensation by insurance or otherwise; by reasonable liquidation of my assets; by other distributions or nontaxable (at the time of the loan) loans from other plans of my employer or by borrowing from commercial sources at reasonable ten * of by cessation of elective contributions to other plans. Page 1 of 2 I hereby acknowledge that I have been advised to seek the counsel of a qualified tax advisor regarding this uest and its tax consequences. nature of Member Date STATE OF FLORIDA COUNTY OF PALM BEACH SWORN TO (or affirmed) and subscrbed before me this / day of 6Ce , 2905, by who , wn to me or has produced as identification. / I/rG Not Pu k - S of Florida /ylgry� f Nc�J • u 4 MARGARET Printed Name of Notary ijii �T h"' N° f r Y � 3 t � [NOTARY SEAL] H:1BB 07 (CATION TO TERMINATE BUY BACK.wpd Page 2 of 2 BOYNTON BEACH MUNICIPAL POLICE OFFICERS PENSION FUND STATEMENT OF CONSULTATION WITH TAX ADVISORS , Name: \ e C fe -'y e- A . i Soci Security Number: __________M&OblieMill&______ 1. I hereby state that I have discussed my request to terminate my purchase of permissive service and to take a refund of my contributions to purchase this permissive service as a result of financial hardship with a tax advisor as follows: Name of Advisor / Company / 2. I have chosen not to consult with a tax advisor. Signature of Mem 1O 1 Date STATE OF FLORIDA COUNTY OF PALM BEACH SWORN TO (or affirmed) and subscribed before me this I. day of .&- A , 29987 by who rsona nown to me or has produced as identification. _ i �r� „�-- zN , ry Public - S to of Florida '= MY��i * 4 �f'�ll AlCZir Bonded Two Printed Neme of Notary 1 NOTARY SEAL ] H'188 01881BuybseKRamositax consuN.wpd Barbara Ladue From: Bonni S Jensen [bsjensen @perryjensenlaw.com] Sent: Wednesday, October 05, 2011 10 30 AM To: Barbara Ladue Cc: ThePensionTeam @perryjensenlaw.com Subject: Re Boynton Police - Service Buy -Back - Terrence Paramore Barbara, There could be tax consequences to Officer Paramore. His distribution is rollover eligible and if he takes cash he will be taking an early distribution. This also should be a matter that is brought before the Board at the next meeting for discussion before any payments are made. TO SEND MAIL TO MY ENTIRE TEAM, PLEASE RESPOND TO THEPENSIONTEAM @PERRYJENSENLAW.COM Bonni S. Jensen <bslensen@perryjensenlaw.com> Law Offices of Perry & Jensen, LLC 400 Executive Center Drive, Suite 207 West Palm Beach, Florida 33401 Telephone: (561)686 -6550 Facsimile: (561)686 -2802 CONFIDENTIALITY NOTICE: This communication is confidential, may be privileged and is meant only for the intended recipient. If you are not the intended recipient, please notify the sender ASAP and delete this message from your system. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. On 10/5/2011 9:34 AM, Barbara Ladue wrote: Bonni: Officer Paramore bought back some previous service he had with Riviera Beach Police. He rolled over employee contributions of $6,000 lump sum and then was going to have payroll deduction for the balance of service he was purchasing. He has, however, some financial difficulty and requested a refund of his $6,000. (he never initiated the payroll deduction). I sent him the papers for this type of refund and when I receive I will forward for your review and further advice. We processed this type refund for two officers back in 2005. Thanks. Barb La Due From: fax@ compson.com [mailto:fax(a>compson.com] Sent: Wednesday, October 05, 2011 9:20 AM I. cn Z cu cu - c a a) ^� W ct `I- b ^ c s W ' E E — fie., CD 't CD ♦ N \ W > $ C O 8 c� N 1 = c Q N � W CZ �+/ _< W Q O O G 0 0 z § 5 7 - 0 w Ce E 2 - y § 2 ƒ _ X22 } \f� /{ g =QC e7 ;3 <3 _ ` G G b = - ® ©5 \ f ƒ §01 —c mt§@a §\ \/ A /3J£» z= e E ` � , N- \ pp ` ::-Z k � / -> &e04 r - v r / / \ ,. \ k �/ 4� = ® rt / /J / ae / / i k«3B ) ? 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For the current installment of the survey, Rachel Carroll, CFA, Russell collected the opinions of senior -level investment decision Consultant makers at equity investment management firms, as well as at COUNTRY fixed - income investment management firms. For this iteration, 102 managers participated in the survey. United States SYNOPSIS WHY IS IT IMPORTANT? Russell's quarterly survey of managers and their views of the market. By providing insights into investment managers' market perspectives and opinions, Russell's Investment Manager ai Outlook helps advisors and investors better understand the 5 a) direction of the markets and key investment trends. m ca 2 /r^ U l C CO c c CO U - o ri 0 Russell Investments // September 2011 p 0 r U RUSSELL INVESTMENT MANAGER OUTLOOK Summary of key findings and Russell's perspective SUMMARY OF KEY FINDINGS Key trends / September 2011 Investment Manager Survey* The majority of managers surveyed say they do not believe the United States is entering a No double dip recession double -dip recession. Additionally, managers indicate increased optimism for emerging markets equities and for the technology sector. A significant majority, 79 percent of managers, say they do not believe the United We currently believe that investors are overstating the States is entering a double - dip recession. case for renewed recession. While some economic reports Most cited strong corporate balance sheets have been weak, others have been decent. Interest rates and high corporate profit levels as the main are low and wit remain so. " reason for their belief. Despite this optimism, 62 percent of those managers who rejected the double -dip recession theory do believe U.S. economic growth will remain slow for the next several years. Other economic MORE BEARISH indicators frequently cited by managers as support for their opinions that the United States will avoid a double -dip recession include the U.S. Federal Reserve's long "Until there is more evidence of stronger U.S. growth, U.S. Treasury rates will stay low. " low interest - rate policy, declining oil prices and U.S. dollar weakness. Principal GI, >' > On the other hand, 11 percent of managers believe the United States is entering a double - dip recession and another 10 percent believe *Compared to results from the June 2011 Russell Investment Manager the country has already entered a double -dip Outlook survey. recession. Of those managers, 95 percent cited a jobs recovery as the critical element required to help the country recover. The next most cited elements by these managers are improving consumer confidence and consumer consumption, resolution of political/ policy issues with respect to U.S. debt, successful resolution of the European debt crisis and a U.S. housing market recovery. > Bullish sentiment regarding emerging markets equities gained considerable ground in the September survey. Optimism for the asset class rose 15 percentage points from the June 2011 survey, when 59 percent were bullish, to the September survey, now 74 percent bullish. Emerging markets lead the bullish sentiment asset -class list, followed closely by U.S. large cap growth (73 percent bullish) and U.S. large cap value (63 percent bullish). r Russell Investments // September 2011 P 2 c C C C C RUSSELL INVESTMENT MANAGER OUTLOOK C c Summary of key findings and Russell's perspective (CONTINUED) C C > Non -U.S. developed markets equities lost Do you believe the U.S. economy is entering a c ground during the September survey, with double - dip recession? L • • bullish sentiment dropping from 53 percent C in June to 45 percent in September, an eight 79 (8) percentage point downward shift. No > Managers remain bearish regarding U.S. C corporate bonds and U.S. Treasuries. 0 11 C However, the level of bearish sentiment Yes decreased for both sectors in September. o I believe we are C Bearish sentiment for U.S. corporate bonds o already in a 10 stood at 41 percent in September versus 57 double - dip recession percent in June, a 16 percentage point shift. ("' Bearish sentiment for U.S. Treasuries is 74 0 10 20 30 40 50 60 70 80 percent, according to the September survey, versus 82 percent in June, an eight (8) (IF YES /ALREADY IN© ) What will it take to avoid/Iead percentage point change. the United States out of a double - dip recession? C (Please choose top three priorities) C RUSSELL'S PERSPECTIVE ON KEY FINDINGS > Russell agrees with the 79 percent majority Jobs recovery 95 C of surveyed managers who believe the United States will avoid a double -dip recession. Strong Improving consumer C corporate balance sheets and high corporate confidence and 45 consumer consumption C profits should ensure that the United States avoids a new recession. However, Russell Resolution of also believes, along with the majority of the political /policy issues 40 _. 9 1 Y with respect to U.S. debt managers surveyed, that we will see a slow- growth trend for the next several years, as well „, Successful resolution of 40 C , as ongoing market volatility. Additionally, the t the European debt crisis uncertainty around resolution of the European C ' debt issue has caused market volatility to spike, F. Recovery in U.S. 30 r and we believe it is currently the dominant o housing market issue and greatest threat to systematic stability. Improving gross > Of particular note to Russell is the significant domestic product 20 divergence in viewpoint between professional (GDP) growth 5 a) money managers, as evidenced by survey C responses, and individual investors. The Continued strength of 15 m growth rate in China CU C majority of professional money managers L are not reading market volatility as a warning `° C sign of an impending economic meltdown. QE3 (additional 10 quantitative easing) To Instead, many are treating volatility as a buying opportunity. Russell believes the nervousness c Oil prices remaining in the ` 10 c C and extreme risk aversion displayed by low $80 per barrel range ii izs c 0 20 40 60 80 100 m U E / O C Russell Investments // September 2011 p 3 M O r— U w RUSSELL INVESTMENT MANAGER OUTLOOK Summary of key findings and Russell's perspective (CONTINUED) average investors is an emotional response (IF N013 1 What economic indicators do you feel support that the to ongoing market volatility, rather than a United States is not headed into a double -dip recession? rational response to underlying company (Please choose top three priorities) fundamentals. ) While managers are still more bearish than Strong cchrporate balance profit levels sheets 7s bullish regarding U.S. corporate bonds, the 16 percentage point increase in bullish While the United States is not sentiment, now at 33 percent for the asset � headed ed f a 9 o ubl to ip e rec s low 62 class, is worth noting. Russell believes for the next several years this may reflect an increased desire for an U Federal Reserve's decision investment option that is less volatile than 49 to keep interest rates low u ion equities but still provides a sufficient return mid monetary policy) level, which cannot be achieved with U.S. Treasuries at current yields. Declining oil prices 35 > Russell continues to believe that emerging 0 markets equities provide good growth U.S. dollar weakness 24 potential and attractive diversification o opportunities for investors. The latest survey results also reflect manager optimism for Better-than-expected 13 the asset class. While the growth outlook jobs report in July for U.S. markets and developed markets has weakened, emerging markets, with their Market response to U.S. Treasuries 4 growing middle class and increasing ability despite the U.S. debt downgrade to spend, offers an opportunity for investors. The United States never exited the 2 "Great Recession" of 2008 -2009 0 10 20 30 40 50 60 70 80 MAINNIMaff MOW Russell Investments // September 2011 p General disclosures Performance quoted represents past performance This Is riot an offer, solicitation, or r ecommendation and should not be viewed as a representation of to purchase any security or the services of any future results. organization We define bearish as0 on balance, an Please note, managers surveyed do not necessarily organization's or individual's predominant view manage Russell products based on a belief that general market conditions for the period in question will be negative and Forecasting represents predictions of market prices relative valuations of securities in general will trend and /or volume patterns utilizing varying analytical downward This view should not be considered data It is not representative of a protection of the investment advice nor does it apply to any specific equity and fixed income markets, or of any specific security investment 2 We define bullish asL7 on balance, an organization's Russell Investment Group is a Washington, USA or individual's predominant view based on a belief corporation, which operates through subsidiaries that overall market conditions for the period in worldwide including Russell Investments, and question will be positive, and relative valuations of is a subsidiary of The Northwestern Mutual Life securities in general will trend upward This view nsurance Company should not be considered Investment advice nor does it apply to any specific security Russell Investment Manager Outlook is a product of Russell Investments, produced independently of Russell's investment and manager research services The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness cannot be guaranteed The infor mation, analysis, and opinions expressed herein result 0 om surveys of persons outside Russell Investments and may riot represent the opinion of Russell Investments, its affiliates, or subsidiai res This report is provided for general information only and is riot intended to provide specific advice or recommendations for any individual or entity Russell Financial Services, Inc., member FINRA, part of Russell Investments. 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Q y palsi�� `o 0 o t A pn63 t woaui pexu �eaa a� t U Q c a E c c 00 H C gelayieW O ° u �w w f e C Quarter Ending September 30, 2011 C Russell Trust Company Commingled Funds c C Russell Global Listed Infrastructure Fund I C The Russell Global Listed Infrastructure Sector weightings ( %) e Fund seeks to outperform its benchmark with above - average consistency and with C lowertracking error relative to other funds. ■S &P Global Infrastructure Index e Strategy C The fund aims to provide investors with exposure to a diversified portfolio of listed Airport Services C companies involved in providing services that are essential fora functioning modern C economy, including roads, utilities, hospi- Electric Utilities tals, schools and airports. To help achieve its objectives, multiple advisors with com- e plementary strategies are employed in the Highways & Railtracks approach to portfolio construction. Each of these advisors takes an active manage- Independent Power ment approach with a 'pure play bias - Producers &Energy' C meaning they select companies with Traders e assets that tend to be monopolistic, highly regulated, long - lived, with steady cash Marine Ports CC iC flows. As a real asset category, infrastruc- Services a) ture offers a distinct risk, return, and c E diversification profile relative to other . i= multi-Utilities o e asset classes. 4 " The Russell Global Listed Infrastructure °. C Fund is designed to provide a reliable oil & Gas Storage& means of excess return generation while Transportation D managing risks. o e Risk management structure water Utilities Q C The fund seeks to outperform its bench- mark with above - average consistency by o 5 v s 20 25 30 C combining strategies with different payoff C patterns over different phases of eco- nomic and market cycles. The goal is to There is no restriction on the number of e reduce dependency on a particular eco- underlying funds or advisors the fund may nomic or market scenario by creating an employ - this number represents Russell's C aggregate portfolio of underlying advisors desire to achieve adequate diversification. C (see descriptions on reverse) that pro- Allocations to underlying advisors reflect vides opportunities to outperform the their structural importance and Russell's e benchmark in many market confidence in their ability to add value. C environments. C Characteristics C Total net assets TBD C Inception date 10/31/2011 rw Number of Advisors 3 C C C a) Russell N C www.russell.com /institutional Investments c r^ Russell Global Listed Infrastructure Fund September 30, 2011 SAIN/III/ Russell Global Listed Infrastructure Fund advisors Macquarie Capital Investment Management Nuveen Asset Management, LLC Cohen & Steers Capital Management, Inc. LLC Target weighting: 40% Target weighting: 20% Target weighting: 40% Advisor since 2011 Advisor since 2011 Advisor since 2010 • Will focus on companies that own or operate • Employs an investment process featuring • Has historically had a lower tracking error tangible, long -lived assets offering steady, bottom -up and top -down components portfolio than the other advisors in the fund predictable cash flows with minimal ongoing designed to integrate company, sector. • Features a bottom -up, fundamentals -based capital expenditures and macro -level analysis investment style, with robust proprietary • Invests in a universe that is considerably larger • Aims to provide income generation, low valuation models than that represented by any of the volatility and low correlations to broader • The investment team is among the largest and infrastructure indexes, including the S &P equities most experienced in the peer group Global Infrastructure Index • Invests in companies that own long -lived • Tends to feature positions in emerging assets that have monopolistic markets, and in a variety of sectors outside the characteristics, a universe largely benchmark, including natural gas and consisting of regulated entities alternative energy Advisors listed are current as of 10/31/2011. Russell Diversification does not assure a profit and does not Russell Investments and Standard & Poor Corpora- has the right to engage or terminate an advisor at any protect against loss in declining markets. tion are owners of the trademark, service marks, and time and without notice. Advisors and target weights Investments in infrastructure - related companies copyrights relating to the Russell Indexes and the may be changed by Russell at any time in its sole dis- have greater exposure to the potential adverse eco- S &P 500, respectively. cretion. The investment strategies are the goals of nomic, regulatory, political and other changes Copyright Russell Investments 2011. All rights the individual advisors; there is no assurance that the affecting such entities. Investment in infrastructure- reserved. This material is proprietary and may not be exact objective will always be met. Target weight related companies are subject to various risks reproduced, transferred, or distributed in any form totals may exceed or fall below 100 percent due to including governmental regulations, high interest without prior written permission from Russell Invest - rounding. costs associated with capital construction programs, ments. It is delivered on an "as is" basis without The Russell Global Listed Infrastructure Fund is an costs associated with compliance and changes in warranty. investment fund of the Commingled Employee Ben- environmental regulation, economic slowdown and Indexes and benchmarks used in this material are efit Funds Trust established by Russell Trust surplus capacity, competition from other providers of unmanaged and provided for general comparison Company. It is nota fund of Russell Investment Com- services and other factors. Investment in non -U.S. only. They cannot be invested in directly. pany, nor a mutual fund registered under the and emerging market securities is subject to the risk Russell Investments. a Washington USA corpora- Investment Company Act of 1940. These funds are of currency fluctuations and to economic and political tion, operates through subsidiaries worldwide, available to certain tax - qualified plans only. risks associated with such foreign countries. including Russell Investments and is a subsidiary of Please remember that all investments carry some The S &P Global Infrastructure Index (Net) provides The Northwestern Mutual Life Insurance Company. level of risk, including the potential loss of principal liquid and tradable exposure to 75 companies from The Russell logo is a trademark and service mark of invested. They do not typically grow at an even rate of around the world that represent the listed infrastruc- Russell Investments. return and may experience negative growth. As with ture universe. To create diversified exposure across any type of portfolio structuring, attempting to reduce the global listed infrastructure market, the index has First used: October 2011 risk and increase return could, at certain times, unin- balanced weights across three distinct infrastructure USI 10956 - 01 - 12 tentionally reduce returns. clusters: Utilities. Transportation, and Energy r V Russell M , /-ii Investments c c r c c c x c c c c c c c c c a) c �> c c c c C c W r - . ( ^ v , Q O 1 c c c c c y � � N J i ' e 11 • Dil c m m O O 1 uli � 1y��r • m � � � � � �� °��>.� R � min O 3 10 p m U C � G (O M r 0 m I p c R m u. H Q O C �r L m U Z e 3N� C m aOc c W m ~ m _ 8 E N� a {�pp �( T� W y N m m m T m rii 11 C C Ol � 01 m � m .> N E c m 1'0107 L V ao t O m0 1 Il"lIIP. v 7 7 c _ � t0 _ � $ � m � � N .4 c 3 � o L O U' 7 H oN iii o W a`o Imo - l9 � rnn E m w o d �c a 1v d [. y aw. c _ _ _ _ _ _ _ _E m C N • c m e 7 UL m. 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I u_ F d en e C r" C 0 e c c e e e c c 0 0 0 N C" o_ c 0 Q 0 0 C 0 c c c Russell V/IJ Investments Ad visor C im Russell Concentrated Equity Fund: One advisor terminated, one hired � BlackRock Advisor changes finalized September 15, 2011 Financial Russell's research recently led to changes in the following fund: /�✓ lllanagement, In, Russell Concentrated Equity Fund (RTC) was hired; As a result, the following Russell funds were also affected: Wells Capital Russell Conservative Balanced Fund (RTC) 2 Management was • Russell Global Balanced Fund (RTC) 2 terminated. • Russell Aggressive Balanced Fund (RTC) • 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. c NEW ADVISOR BlackRock Financial Management, Inc. c NEW PORTFOLIO "•` "! Jeffrey Lindsey and Edward Dowd BLACKROCK FINANCIAL MANAGEMENT, INC - Employs a bottom -up, fundamental approach to stock selection Invests in a blend of opportunistic and consistent growth stocks TFRMINATED ADVISOR L.. Wells Capital Management a) a) Q ' The effective date refers to when an advisor transition was completed. 0 _ 2 This fund is an investment fund of the Russell Trust Company Commingled Employee Benefit Funds Trust. It is not a mutual fund. Russell Investments!/ Advisor change: Russell Concentrated Equity Fund (RTC) c c MEI MOW k Assets previously allocated to Wells Capital have been distributed to BlackRock. Slight adjustments to target weightings for the fund's other advisors are designed to maintain the fund's diversification and moderate the portfolio's growth bias. Questions and answers WHY IS RUSSELL MAKING THESE LHANGES fta t HE i UNI) Given some recent organizational changes at Wells Capital, Russell's analysts recently lowered their ranking of the growth product managed by the firm's Indianapolis team. We believe that BlackRock offers higher excess return potential and complements the fund's other advisors well. We've researched co- portfolio manager Jeffrey Lindsay since 1999 and also followed his prior work with Edward Dowd before both portfolio managers were employed at BlackRock. They are experienced investors who oversee --$13 billion on behalf of their clients. BlackRock is a large cap growth manager that invests in a blend of opportunistic and consistent growth stocks. Using a bottom -up, fundamental research process, BlackRock's investment team looks to identify stocks with potential growth that is not being rewarded. BlackRock's concentrated portfolio includes –30 -35 stocks with a range of growth rates —some have higher levels of earnings momentum, while others have greater earnings consistency. Blackrock's broad definition of growth and willingness to buy companies which are going through change they expect to enhance growth is attractive to Russell. The extent to which they tilt the portfolio in one direction or another toward opportunistic and cyclical names or more consistent growth focused names depends on the opportunities they see present in the market. HOW DOES THE NEW ADVISOR COMPLEMENT STRUCTURE? We believe that BlackRock's opportunistic, high growth approach complements that of Delaware, the fund's other growth advisor. BlackRock's process is distinct from Delaware's focus on higher consistent growth stocks. Compared to BlackRock, Delaware also includes more mid -cap stocks in its portfolio. They often look for more mid -cap oriented companies that, they believe, have unique growth opportunities which will drive earnings growth into the future and then ride the company up as it becomes larger in capitalization. This change will not materially change the style or expected tracking error for this fund, but may improve expected returns. The new target weights are illustrated on the following page. Russell Investments /1 Advisor change: Russell Concentrated Equity Fund (RTC) O CD 0 0 • 0 11110r1111■I 0 / Russell Concentrated Equity Fund (RTC) a w" Advisor vlous target Curr >- t weight tar ..eight Wells Capital Management Growth 20% 0% BlackRock Financial Management, Inc. Growth 0% 19% Delaware Investment Advisers (a series of Growth 15% 15% Delaware Management Business Trust) First Eagle Investment Management, LLC Market - oriented 9% 9% Suffolk Capital Management, LLC Market - oriented 18% 16% Institutional Capital, LLC Value 23% 25% Sound Shore Management, Inc. Value 15% 16% e 0 For more informatio=' Contact your Russell representative or visit ClientLlNK at http: / /clientlink.russell.com. Important information Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion 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 advice from a licensed professional. 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 September 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. 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 experience 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 no assure profit or protect against loss in declining markets. �..r Large capitalization (large cap) investments involve stocks of companies generally having a market capitalization between $10 billion and $200 billion. The value of securities will rise and fall in response to the activities of the company that issued them, general market conditions and /or economic conditions. A Copyright © Russell Investments 2011. All rights reserved. This material is proprietary and may not be reproduced, transferred, or 4.r 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: September 2011 USI- 9861 -05 -12 - 0 C O 0 Russell Investments if Advisor change: Russell Concentrated Equity Fund (RTC) / p 3 0 0 Ru Investments Advi sor h n � a ge Russell International Fund One advisor hired, one terminated Advisor changes finalized September 12, 2011' Russell's research recently led to changes in the following fund: Russell International Fund (RTC) As a result, the following Russell funds were also affected: t/ h" • Russell International Fund with Active Currency (RTC) • Russell All International Markets Fund (RTC) • Russell Global Balanced Fund (RTC) lcrrrti< cu/eit' • Russell Aggressive Balanced Fund (RTC) • Russell Global Equity Fund (RTC) • Russell Target Date Funds (RTC) 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 ADVISOR Driehaus Capital Management LLC Dan Rea Employs a bottom -up, research -driven approach. Stocks chosen are mainly driven by expectations of future growth prospects, where the markets have potentially mispriced the expectations UBS Global Asset Management (Americas), Inc. The effective date refers to when a manager transition is completed. Russell Investments // Advisor change: Russell International Fund (RTC) cc* c • c IMPACT ON FUND STRUCTURE UBS Global Asset Management (Americas), Inc. is being terminated and replaced by Driehaus Capital Management. Questions and answers 1 WHY IS RUSSELL HIRING THIS ADVISOR AND WHAT IS THE EXPECTED BENEFIT TC, THE CHANGE? Russell believes that the replacement of UBS with Driehaus provides the fund with better opportunities for excess return potential. At the same time, we believe this change improves the quality of advisors that the fund employs; Driehaus is ranked higher than UBS by our manager research professionals. c WHAT TYPE OF PROCESSES DOES THIS NEW ADVISOR USE AND HOW DOES IT USE THEM? Driehaus invests in stocks with high expectations of future growth. They tend to be more tilted toward small capitalization companies, but will invest in large companies if the growth prospects look attractive. Driehaus believes that the market will occasionally misprice future growth expectations and attempts to exploit these inefficiencies. Driehaus looks to lower risk entry points into these securities, possibly buying when the price has recently been depressed. Driehaus' strategy is driven by a bottom -up, research - intensive process which is split among 17 global sector analysts all providing their best ideas to the portfolio manager. The stock weights are determined by the team's conviction in that particular security and can be changed as opportunities arise. HOW DOES THIS NEW ADVISOR COMPLEMENT THE EXISTING ADVISOR STRUCTURE? Driehaus will add a smaller cap presence to the fund, as its portfolio is mainly comprised of the smaller companies in the index. It will be the only momentum -based growth manager in the fund, complementing the core growth and aggressive growth managers. WHAT ABOUT THIS NEW ADVISOR DOES RUSSELL FIND PARTICULARLY INTERESTING OR INTRIGUING? C Russell has been researching Driehaus for over 10 years and has actually used this advisor in its funds before. Russell has recently gained increase confidence in the organizational structure, the portfolio manager, and the investment discipline at Driehaus. Russell also is intrigued by the small cap exposure that Driehaus will provide for the fund. * WHAT EFFECT WILL THE CHANGES HAVE ON THE FUND This change will not materially alter the expected alpha or tracking error for this fund. The new target weights are illustrated on the following page. • e C c Russell Investments // Advisor change: Russell International Fund (RTC) p 2 OD e e Russell International Fund (RTC) Driehaus Capital Management LLC Growth 0% 5% UBS Global Asset Management (Americas) Inc. Growth 7% 0% Axiom International Investors, LLC Growth 7% 6% Marsico Capital Management, LLC Growth ' 11% 11% William Blair & Company, LLC Growth 8% 8% del Rey Global Investors, LLC Value 10% 10% Mondrian Investment Partners Limited Value 14% 14% Pzena Investment Management, LLC Value 13% 13% AQR Capital Management, LLC Market - oriented 12% 13% GLG Partners LP Market - oriented 6% 8% MFS Institutional Advisors, Inc. Market - oriented 12% 12% Contact your Russell representative or visit ClientLINK at http: / /clientlink.russell.com. Important information Advisors current as of September 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 material is intended to constitute legal, tax, securities, or investment advice, nor an opinion 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 advice from a licensed professional. Unless otherwise noted, 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. 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 return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns. Non -U.S. markets entail different risks than those typically associated with U.S. markets, including currency fluctuations, political and economic instability, accounting changes, and foreign taxation. Securities may be less liquid and more volatile. Investments in emerging or developing markets involve exposure to economic structures that are generally less diverse and mature, and to political systems which can be expected to have less stability than those of more developed countries. Securities may be less liquid and more volatile than U.S. and longer - established non -U.S. markets. 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 Investment Group. First used: September 2011 USI- 10820 -09 -12 Russell Investments 1/ Advisor change: Russell International Fund (RTC) / p 3 CO • 0 0 0 Russell �i Investments Ad visor C Russell Real Estate Equity Fund: Three funds terminated 0 C Advisor changes completed during first half of 2011 Russell's research recently led to changes in the following fund: Prudential Real Russell Real Estate Equity Fund (RTC REEF) 2 Estate Investors Unless otherwise noted, investment objectives, risk parameters and fund portfolio ` Property Investme,ti characteristics relative to the fund's respective benchmark will not materially change as a result of this advisor change. Separate Account II (PRISA II), TERMINn " "` '.._ O • Prudential Real Prudential Real Estate Investors Property Investment Separate Account 11 (PRISA II) Estate Investors Prudential Real Estate Investors Property Investment Separate Account III Property Investment (PRISA III) Separate Account III The RREEF Funds RREEF America REIT II (RREEF II) (PRISA 11I) and '*+ The RREEF Funds Assets previously allocated to PRISA 11, PRISA III, and RREEF II have been reallocated RREEF America to RTC REEF's other advisors and used to fund outstanding redemption requests. REIT II (RREEF II) Questions and answers were terminated. WHY IS RUSSELL MAKING THESE CHANGES TO RTC REEF? Russell is making these changes to position RTC REEF as a pure core -like real estate investment. PRISA 11, PRISA III, and RREEF II all implemented "enhanced core" strategies that brought higher risk and increased leverage to the fund. By implementing +, these changes, we will reduce the fund's risk profile and exposure to development. VAl22 \ ARE THE EXPF — - 7 ' , ANGES? As noted above, these changes are designed to reposition RTC REEF as a core real estate investment by materially reducing our exposure to higher -risk enhanced core strategies. We are targeting an annual income yield of 6% with a lower overall risk profile. As of June 30, 2011, the fund's overall leverage has been reduced from 41 % to 30 %. 1 0 The implementation time period refers to when an advisor transition was undertaken. 2 This fund is an investment fund of the Russell Trust Company Commingled Employee Benefits Funds Trust. It is not a mutual fund. • o Russell Investments //Advisor change: Russell Real Estate Equity Fund (RTC) (O 0 WHAT EFFECT WPP. i THESE TERMINATIONS HAVE ON RTC REE''q iNVFSTMFNT ALLOCATION The new target allocation ranges are illustrated in the table below. Russell Real Estate Equity Fund (RTC REEF) Prudential Real Estate Investors Property Investment Separate Enhanced Core 0 -10% 0% Account 11 (PRISA 11) Prudential Real Estate Investors Property Investment Separate Enhanced Core 0 -5°% 0% Account III (PRISA III) The RREEF Funds RREEF America REIT II (RREEF II) Enhanced Core 0 -15% 0°% UBS Trumbull Property Fund Core 20 -30% 10 - 20% ING Clarion Lion Properties Fund Core 0 -10% 0 -10% INVESCO Core Real Estate — U.S.A. Core 15-25% 15 -25% J.P. Morgan Investment Management Strategic Property Fund Core 20 -30% 20 -30% Morgan Stanley Prime Property Fund (PRIME) Core 10 -20% 15 -25% BlackRock Granite Property Fund Core 0 -10% 0 -10% Prudential Real Estate Investors Property Investment Separate Core 0 -10% 0 -10% Account (PRISA) Russell Investments // Advisor change: Russell Real Estate Equity Fund (RTC) p 2 t0 tD 0 0 0 0 0 0 For more informatio Contact your Russell representative or visit ClientLINK at http: / /clientlink.russell.com. Important information 0 Russell Trust Company Funds are investment funds of the Russell Trust Company Commingled Employee Benefit Funds Trust. / mo w They are not funds of Russell Investment Company, nor a mutual fund registered under the Investment Company Act of 1940. L ,r' Advisors current as of September 2011. Russell has the right to engage or terminate an advisor at any time and without notice. The �p 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 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 advice from a licensed professional. 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 experience negative growth. As with any type of portfolio structuring, attempting to reduce `► risk and increase return could. at certain times, unintentionally reduce returns. "+r✓ Diversification and strategic asset allocation do no assure profit or protect against loss in declining markets. Specific sector investing such as real estate can be subject to different and greater risks than more diversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate investments. Fund investments in non -U.S. markets can involve risks of currency fluctuation, political and economic instability, different accounting standards and foreign taxation. 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: September 2011 USI- 10817 -09 -12 0 0 0 0 0 0 0 C 0) • 0 C Russell Investments // Advisor change: Russell Real Estate Equity Fund (RTC) / p 3 r ti 0 0 c c c Peter & Paula Rothstein Russell November 7, 2011 V /IJ Investments Global infrastructure: Investments in infrastructure - related companies have greater exposure to the potential adverse economic, regulatory, political and other changes affecting such entities. Investment in infrastructure - related companies are subject to various risks including governmental regulations, high interest costs associated with capital construction programs, costs associated with compliance and changes in environmental regulation, economic 7:5 slowdown and surplus capacity, competition from other providers of services and other factors. Investment in non -U.S. and emerging market securities is subject to the risk of currency fluctuations and to economic and political risks Q associated with such foreign countries. Fixed income: Bond investors should carefully consider risks such as interest rate, credit, repurchase and reverse repurchase transaction risks. Greater risk, such as increased volatility, limited liquidity, prepayment, non - payment and ,* increased default risk, is inherent in portfolios that invest in high yield ('junk ") bonds or mortgage backed securities, C.. especially mortgage backed securities with exposure to sub -prime mortgages. Investment in non -U.S. and emerging market securities is subject to the risk of currency fluctuations and to economic and political risks associated with such foreign countries. Global high yield bond Bonds that are rated below investment grade at the time of purchase. These bonds have a higher risk of default or other adverse credit events, but typically pay higher yields than better quality bonds in order to make them attractive to investors. Private equity An investment in alternative investments can be highly illiquid, are speculative and not suitable for all investors. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing to bear the high economic risks associated with such an investment. Investors should carefully review and consider potential risks before investing. Certain of these risks may include: loss of all or a substantial portion of the investment due to leveraging, short- selling, or other speculative practices; lack of liquidity in that there may be no secondary market for the investment and none is expected to develop; volatility of returns; restrictions on transferring interests in the investment; potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized: absence of information regarding valuations and pricing; complex tax structures and delays in tax reporting; less regulation and higher fees than mutual funds; and advisor risk. Individual funds will have specific risks related to their investment programs that will vary from fund to fund. Hedge funds Hedge Funds often engage in leveraging and other speculative investment practices that may increase the risk of investment loss. They can be highly illiquid and are not required to provide periodic pricing or valuation information to investors. Hedge Funds may involve complex tax structures and delays in distributing important tax information. They are not subject to the same regulatory requirements as mutual funds and often charge high fees. Private real estate: Specific sector investing such as real estate can be subject to different and greater risks than more diversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate investments. Fund investments in non -U.S. markets can involve risks of currency fluctuation, political and economic instability, different accounting standards and foreign taxation. Income from funds managed for tax efficiency may be subject to an alternative minimum tax, and /or any applicable state '11, and local taxes. Small company issues are subject to considerable price fluctuations and are more volatile than large company stocks. Small cap funds may involve considerably more risk than funds investing in larger -cap companies. Russell Investment Group 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. Securities products and services offered through Russell Financial Services, Inc., member FINRA, part of Russell Investments. Revised: June 2010 RFS# 3691 e e A page 38 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 aims; 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 8/812011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement effectiveness of the investment manager(s): A. Total Fund Performance 1. 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, 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 Weight. The Consultant Benchmark is comprised currently of: 34% Russell 1000 Index, 1 I% Russell Mid -Cap Index, 1 1% 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 alternatives 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 for the current year, for each of the next several years, and for the long -term thereafter. B. U.S. Equity Performance 1. 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 Eouitv 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 OFFICERS' PENSION FUN!) Investment Policy Statement attempt will be made to snatch investment maturities with 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 of the Board or the Board's designee. Security transactions between a broker dealer and a 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 flow needs and market conditions, analyze and select one or more optimal types of investment, and competitively bid the security in question when feasible and appropriate. Except as otherwise required by law, the most economically advantageous bid muse be selected. Risk and Diversification: 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 Invgit uts: 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 at 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Polley Statement 1. Illiquid investments, as described in Chapter 215.47, Florida Statutes, are prohibited. 2. Foreign investments are limited to 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) i. 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 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 telephone notice to the Trustees of any significant market related or non - market 6 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Police' Statement 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 managers) 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 of an investment manager may be made. With this in mind, the following are adopted; If, at any time, any one 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 40 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 (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. 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 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 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 31st 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 7 Pages 818/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND Investment Policy Statement 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 -terms basis, in light of current and projected investment environments To insure broad diversification in the long -term investment 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: Strategic Allocation Policy Range Allocation Asset Class/Strategy ( %) ( %) US Equities 35 26 66 Non -US Equities _- 15 5 25 Fixed Income 35 30 – 40 Cash/Money Market 0 0 -- 5 Alternatives: 15 2 - 20 Total 100 ALTERNATIV,I3S — Private Real Estate 5 2 5 Public Real Estate (REITs)* 3 0 - 5 Listed Infrastructure* 0 5 Commodities (CCFs)* 4 0 - 5 _ *Under consideration as of July 2009. - -- — - -- 8 of 8 Pages 8/8/2011 BOYNTON BEACH POLICE OFFICERS' PENSION FUND htvestment 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 B CH POLICE OFFICERS' RUSSELL INVESTMENTS PENSION F �► k� s As: C a' t' 7 oard of Trustees By: dh /ii As: Investment Ma er Date: / _ Date: g (1 ( L BURGESS CHAMBERS & ASSOCIATES, INC. By: As: Registe Advisor Date: e/9/11 9 of 8 Pages 8/8/2011 • C •" O rd) .2 co) pt � 44 o (-41 g C4 d v 0I Pt \ 'ft" rnd Z oo 0 1 O Z 0 a m g o 3 m 4 < II 1 T u I t st [� "gf M Tai tt V O E PA m w � m O oc, o mn O t.4 5 0 m * m 3 ,J . 581 1.—k 1 la LI cA 3 R d 11 0 ril s 3 m T J . y T g cd O g b U P b oct cn a) N +r a) s•. 0 • S m U 4-. p O 'e cl i! .� W R ' . ( 9 . ^ C _ N C O O. 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