R93-113
11
RESOLUTION NO. R93-//~
A RESOLUTION OF THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA,
APPROVING AND ADOPTING THE STATEMENT OF
INVESTMENT POLICY FOR THE EMPLOYEES'
PENSION PLAN, A COPY OF WHICH IS ATTACHED
HERETO AS EXHIBIT "A"i AND PROVIDING AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Boynton
Beach, Florida, upon recommendation of staff, has deemed it to
be in the best interests of the citizens and residents of the
City of Boynton Beach, Florida to approve and adopt the
Statement of Investment Policy for the employees' pension
plan, to reflect the provisions of Ordinance 092-40, adopted
July 21, 1992.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF
THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
Section 1. The City Commission of the City of Boynton
Beach, Florida hereby does approve and adopt the Statement of
Investment Policy for the employees' pension plan, to reflect
the provisions of Ordinance No. 092-40, adopted July 21, 1992,
a copy of the said Policy being attached hereto as Exhibit
"A".
Section 2. That this Resolution
effective immediately upon passage.
shall
become
PASSED AND ADOPTED this ~
day 0 f !1uS4'sr 199 3 .
CITY OF BOYNTON BEACH, FLORIDA
"
ATTEST:
,~A~Ck~
I ~ Clerk
II (Corporate Seal)
Authsig.doc
Pension.G&O
7/14/93
CITY OF BOYNTON BEACH
EMPLOYEES' PENSION PLAN
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STATBKBHT OF INVESTHENT POLICY
GOALS AND GUIDELINES
The guidelines and objectives provided below are designed to
complement all applicable laws. The purpose of these
guidelines is to:
1) Provide the investment manager(s) a more
accurate understanding of the Trustees'
investment objectives and;
2) Indicate the criteria br which the Investment
Manager's performance wlll be evaluated.
The primary investment objective of the City of Boynton Beach
Employees' Pension Plan is the protection and preservation of
the assets while the secondary objective is long-term growth.
As a result, the investment manager(s) shall seek the highest
possible return while maintaining a prudent regard for legal
considerations, fiduciary responsibility, safety of capital
and minimum volatility of returns.
To accomplish these objectives, the Board of Trustees has
elected to retain one or more professional investment
managers. The investment manager(s) retained will b. expected
to employ a balanced investment strategy (a combin~ion of
stocks, bonds and cash).
The following ~idelines, restrictions and objectives shall
apply to each lnvestment manager retained by the Board of
Trustees.
Page 1
1"<\ 7....:l-/'0
rR9)-/IJ
-.,.~
CITY OF BOYNTON BEACH
EMPLOYEES' PENSION PLAN
STATEMENT OP INVESTMENT POLICY
GOALS AND GUIDELINES
The guidelines and objectives provided below are designed to
complement all applicable laws. The purpose of these
guidelines is to:
1) Provide the investment manager(s) a more
accurate understanding of the Trustees'
investment objectives and;
2) Indicate the criteria br which the Investment
Manager's performance wlll be evaluated.
The primary investment objective of the City of Boynton Beach
Employees' Pension Plan is the protection and preservation of
the assets while the secondary objective is long-term growth.
As a result, the investment manager(s) shall seek the highest
possible return while maintaining a prudent regard for legal
considerations, fiduciary responsibility, safety of capital
and minimum volatility of returns.
To accomplish these objectives, the Board of Trustees has
elected to retain one or more professional investment
managers. The investment manager(s) retained will be expected
to employ a balanced investment strategy (a combination of
stocks, bonds and cash).
The following 9uidelines, restrictions and objectives shall
apply to each lnvestment manager retained by the Board of
Trustees.
Page 1
GUIDELINES
Permissible Investments:
within the guidelines contained in this statement of
Investment POlicy, the Investment Manager may invest and re-
invest the assets of the Fund in:
* Time, savings and money market accounts
* E9uities (stocks)
* Flxed income securities (Bonds)
* Mutual funds and commingled funds
Although the equity portion of the portfolio shall not exceed
~ of the Fund's total assets (at cost), there is no limit
imposed on the fixed income or cash portions of the Fund. It
shall be the decision of the investment manager(s) to
determine the most appropriate asset mix (within these
limits) to achieve the Fund's objectives.
Equity Portfolio:
To comply with the provisions contained in local Ordinances
092-7 and 092-40 and the ~olicies established by the Board of
Trustees, the equity portlon of the Boynton Beach Employees'
Pension Fund shall consist only of actively traded stocks
that are listed on one or more of the major United states
stock exchanges (includin9 NASDAQ). Investment in stocks
issued by companies domiclled outside of the United states
will be limited to 10% of the value of the Plan's total
assets (at cost). All stocks purchased must hold a ranking
in one of the top three classifications of a major rating
service. Investment in any single stock issue shall not
exceed 2 1/2% of the Fund's total value nor shall the equity
portfolio's total value (at cost) exceed ~ of the Fund's
total assets.
Fixed Income Portfolio:
In compliance with the provisions contained in local
Ordinances 092-7 and 092-40 and the pOlicies established by
the Board of Trustees, the fixed income portion of the
Boynton Beach Employees' Pension Fund shall consist only of
U.S. Government and U.S. Government Agency bonds and/or
bonds issued by domestic corporations that are rated "A" or
better by Moody's or Standard & Poor's rating services.
Investment in any single corporate bond issue shall not
exceed 2 1/2% of the Fund's total value.
Page 2
Mutual Funds and commingled Funds:
Investments in mutual fund shares and bank sponsored
commingled funds are permissible. However, ninety per cent
of the securities held in the mutual or commingled funds must
meet the criteria outlined above.
Prohibited Transactions:
All investments in options, futures, municipal bonds,
precious metals, private placements, short sales and
purchases on margin are prohibited.
GOALS
Total Portfolio:
The total portfolio ~ shall be to achieve returns over any
rolling 3 year period in excess of a Target Index. The
Target Index for the Boynton Beach Employees' Pension Fund is
deflned as a 40% investment in the Standard & Poor's 500
Index and 60% investment in the Merrill Lynch Government/
Corporate Bond Index. It should be a further aoal of the
investment manager(s) that the total portfolio return in any
rolling 3 year period should meet or exceed the Consumer
Price Index ~ 3%.
In addition to the above mentioned relative criteria, a
further 92Al of the total portfolio shall be to provide an
absolute rate of return during any fiscal year equal to or
greater than the actuarial assumption rate of 8%.
Equity Portfolio:
The ~ of the equity portion of the portfolio shall be to
achieve a return over any rolling 3 year period in excess of
the return of the standard & Poor's 500 Index. In addition,
it should be a ~ of the investment manager(s) that the
equity portfolio returns in any rolling 3 year period rank in
the TOP 40% of a representative universe of other equity
portfolios.
Page 3
Fixed Income Portfolio:
The primary objective of the fixed income portion of the
portfolio is to add stability, consistency, and safety to
the total fund portfolio. The secondary objective shall be
total return. As a result it should be a aoal of the
investment manager(s) to achieve a return in excess of the
Merrill Lynch Government/Corporate Bond Index while
maintaining a positive rate of return in any fiscal year
period. It should be a secondary aoal of the Investment
Manager that the fixed income portfolio returns over any
rolllng 3 year ~eriod rank in the TOP 40% of a representative
universe of simllarly managed bond portfolios.
REPORTING AND PERFORMANCB MEASUREMENT
The investment manager(s) for the City of Boynton Beach
Employees' Pension Fund shall provide quarterly reports for
management purposes. The reports shall include data on
investments held, returns earned and any other information
necessary for clarification of the investment manager's
results.
Upon reasonable notice, the investment manager(s) shall
provide any relevant information requested by the Boards of
Trustees.
The investment manager's performance shall be evaluated on a
9uarterly basis in terms of achieving the goals as outlined
ln this statement. In addition, both the equity and fixed
income investments selected by the investment manager(s) will
be evaluated for risk.
In the e9uity portfolio, risk evaluation will include
variabillty and volatility of returns, security
diversification, portfolio price earnings ratio, portfolio
dividend yield, average market capitalization and average
debt to capital.
In the fixed income portfolio, consideration will be given to
variability of returns, as well as .average quality, duration
and maturity.
Page 4
POLICY REVIEW
It is the intention of this Board to review this statement at
least annually and to amend it to reflect any changes in
philosophy or objectives. However, if at anytime the
Investment Manager(s) believes the specific objectives
defined herein cannot be met or that these guidelines
constrict performance, the Trustees should be so notified in
writing.
84/9J
Date
Investment ~nager
Date
Date
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