07-12-2004AGENDA
PENSION
TRUSTEES-
Clearwater
Call to Order
Pension Trustees Aqenda
Date: 07/12/2004
Location: Council Chambers - City Hall
Approval of Minutes
06-14-2004
Pension Trustee Items
Accept the employees listed below into membership in the City of Clearwater's
Employees' Pension Plan.
2 James Hagedorn, Fire Department; Karen Jackson, Fire Department; James Roe, Fire
Department; and Garry Wigington, Fire Department, be granted regular pensions under
Section(s) 2.393 and 2.397 of the Employees' Pension Plan as approved by the
Pension Advisory Committee.
Amend the collective fund custody agreement with Northern Trust Investments by
adding the HTGI-QM Collective Weekly Enhanced EAFE Index Fund-Lending, and that
the appropriate officials be authorized to execute the same.
Authorize the termination of Vanderbilt Capital Advisors as a fixed income money
manager.
5 Approve the contract with Western Asset Management Company as a fixed income
manager and that the appropriate officials be authorized to execute the same.
Other Business
Adjourn
Qeanyat,er Pension Trustee Cover Memorandum
Tracking Number: 673 Actual Date: 07/12/2004
Subiect / Recommendation:
Accept the employees listed below into membership in the City of Clearwater's Employees'
Pension Plan.
Summary:
Pension Elig.
Name, Job. Class, & Dept./Div.
Hire Date Date
Ronald Barton, Parks Service Technician I/Parks & Recreation 5/3/04 5/3/04
Nancy Oakley, Accounting Technician/Parks & Recreation 5/3/04 5/3/04
Jesus Nunez, Police Aide/Police 5/1/04 5/1/04
Patrick Zulla, Parks Service Technician I/Parks & Recreation 5/17/04 5/17/04
Konrad McCree, Jr., Custodial Worker/Parks & Recreation 5/17/04 5/17/04
Bryon Smethers, Development Review Technician/Dev. Services 5/17/04 5/17/04
Matthew Massato, Recreation Programming Sup. Tech./Parks & Rec. 5/17/04 5/17/04
Greg Boos, Firefighter/Paramedic-Fire 5/17/04 5/17/04
Chris Chancy, Firefighter/Paramedic-Fire 5/17/04 5/17/04
Chris Nelson, Firefighter/Paramedic-Fire 5/17/04 5/17/04
Jeff Wallace, Firefighter/Paramedic-Fire 5/17/04 5/17/04
James Westerman, Firefighter/Paramedic-Fire 5/17/04 5/17/04
Originating: Human Resources
Review Approval
Cvndie Goudeau
06-23-2004 10:20:17
Cleanvat.er Pension Trustee Cover Memorandum
Tracking Number: 672 Actual Date: 07/12/2004
Subiect / Recommendation:
James Hagedorn, Fire Department; Karen Jackson, Fire Department; James Roe, Fire
Department; and Garry Wigington, Fire Department, be granted regular pensions under
Section(s) 2.393 and 2.397 of the Employees' Pension Plan as approved by the Pension Advisory
Committee.
Summary:
James Hagedorn, Firefighter, Fire Department, was employed by the City on August 28, 1978,
and his pension service credit is effective on that date. His pension will be effective July 1,
2004. Based on an average salary of approximately $48,824 per year over the past five years,
the formula for computing regular pensions, and Mr. Hagedorn's selection of the 100% Joint &
Survivor Annuity, this pension will approximate $34,015 annually.
Karen Jackson, Firefighter/Paramedic, Fire Department, was employed by the City on May 3,
1976, and her pension service credit is effective on November 3, 1976. Her pension will be
effective June 1, 2004. Based on an average salary of approximately $53,477 per year over I-Ife
Annuity, this pension will approximate $40,544 annually.
James Roe, Firefighter/Driver Operator, Fire Department, was employed by the City on April 14,
1980, and his pension service credit is effective on that date. His pension will be effective June
1, 2004. Based on an average salary of approximately $51,977 per year over the past five
years, the formula for computing regular pensions, and Mr. Roe's selection of the 100% Joint &
Survivor Annuity, this pension will approximate $34,070 annually.
Garry Wigington, Firefighter/Driver Operator, Fire Department, was employed by the City on
August 27, 1973, and his pension service credit is effective on that date. His pension will be
effective September 1, 2004. Based on an average salary of approximately $50,416 per year
over the past five years, the formula for computing regular pensions, and Mr. Wigington's
selection of the 100% Joint & Survivor Annuity, this pension will approximate $42,310 annually.
Originating: Human Resources
Review Approval
Cvndie Goudeau
06-23-2004 10:22:43
Regular Pensions
Page 2
July 12, 2004
These pensions were approved by the Pension Advisory Committee on June 10, 2004. Section 2.393 provides
for normal retirement eligibility when a participant has completed twenty years of service in a hazardous duty
position. It further specifically defines service as a Firefighter, Firefighter/Paramedic, and Firefighter/Driver
Operator as meeting the hazardous duty criteria. Mr. Hagedorn, Ms. Jackson, Mr. Roe, and Mr. Wigington qualify
under the hazardous duty criteria.
?0Clearivater± Pension Trustee Cover Memorandum
Tracking Number: 677 Actual Date: 07/12/2004
Subject / Recommendation:
Amend the collective fund custody agreement with Northern Trust Investments by adding the
HTGI-QM Collective Weekly Enhanced EAFE Index Fund-Lending, and that the appropriate
officials be authorized to execute the same.
Summary:
With the termination of Invesco the Pension Fund has been under-weight with respect to
International Equity investments.
The best available estimates have International Equity returns out performing Domestic Equity
returns in the near future.
Staff is recommending the addition of the Northern Trust Global Investments Weekly Enhanced
EAFE Index Fund. Weekly refers to the fact that the fund has a weekly valuation. Enhanced
means that the fund may make limited use of futures and/or options for the purpose of
maintaining equity exposure. The fund may also participate in securities lending.
The following is the performance of the Northern Trust EAFE Index Fund V.S. the Benchmark:
Northern Benchmark
1 Year 57.59% 57.54%
3 Years 3.89% 3.43%
5 Years 1.27% 0.52%
10 Years 5.57% 4.55%
Northern Trust charges a fee of 35 basis points (.35 of 1%). This fee is reasonable fee for this
type of product.
The Northern Trust Enhanced EAFE Index Funded will be funded by rebalancing the portfolio.
The contract is available for review in ORLS Dept.
Oriainatino: Finance
Review ADnroval
Marcie Simmons
Cvndie Goudeau
Bill Horne
Tina Wilson
Garrv Brumback
06-21-2004 11:20:36
07-02-2004 11:22:31
07-02-2004 10:46:34
06-21-2004 11:25:40
06-30-2004 16:46:04
AMENDMENT TO COLLECTIVE FUND CUSTODY AGREEMENT
The Collective Fund Custody Agreement between City of Clearwater (Florida)
Employees' Pension Fund and Northern Trust Investments, Inc, now known as Northern
'T'rust Investments, N.A. ("NTI") is hereby amended as follows:
1. By adding the following fund to the list of Designated Funds set forth in Exhibit B:
NTGI-QiVI Collective \\'eekly Enhanced SAFE Index Fund-Lending
2. By adding the following new paragraph to the fee schedule contained in Exhibit C:
Provided, however, that with respect to assets held in the NTGI-QM Collective Weekly
Enhanced EAFE Fund-Lending, the applicable fee schedule shall be as follows:
First $100 million 35 basis points
Second $100 million 30 basis points
Over $200 million 25 basis points
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be executed
this ,day of , 2004.
Appr v to F and Content:
BY
CITY OF CL`EARWATER EMPLOYEES' PENSION FUND
13Y
ATTEST:
NORTHERN TRUS'T' INVESTMENTS, N.A.
BY
ITS ?< (e Pres d
Northern Trust Global Investments - QM
March 31, 2004
Weekly Enhanced EAFE Index Fund
A Collective Fund for Qualified Plans
INVESTMENT OBJECTIVEIPOLICY QUANTITATIVE MANAGEMENT
The primary objective of the Weekly Enhanced EAFE Index
Fund is to provide investment results that exceed the
overall performance of the Morgan Stanley Europe,
Australasia. and Far East (MSCI EAFE) Index with net
dividends (the "Inde)e'). This Index is commonly used to
represent the non U.S. equity markets. To achieve its
objective, the Fund holds units of the following component
Funds: NTGI-OM Collective Weekly Enhanced EAFE
Index Fund-Lending: NTGI-OM Collective Weekly
Enhanced Japan Index Fund-Lending: NTGI-OM Collective
Weekly Enhanced Ex-Japan Index Fund-Lending. The
Fund may make limited use of futures and/or options for
the purpose of maintaining equity exposure. This Fund
may participate in securities lending.
FUND APPLICATIONS
As one of the nation's largest quantitative managers, this
division of Northern Trust offers a comprehensive array of
equity and fixed income index, passive, and quantitative
funds, providing clients with low cost diversification.
maximum selection and flexibility and performance, The
equity fancily of index, passive, and quantitative funds
provides exposure to the publicly traded world equity market,
including all major U.S. equity indices as well as a variety of
international indices.
NORTHERN TRUST GLOBAL INVESTMENTS
The Weekly Enhanced EAFE Index Fund can serve as a
core stock investment vehicle to provide exposure to
non-U.S. equity markets, or as a complement to an actively
or passively managed portfolio.
VALUATION FREQUENCY
Weekly
INCEPTION DATE
January 1. 1992
Northern Trust Global Investments is a global, multi-asset
class investment manager serving clients worldwide.
Northern Trust Global Investments brings together the
resources of The Northern Trust Company, Northern Trust
Investments, Inc.. Northern Trust Global Advisors, Inc. and
other affiliates to offer investment products and services to
personal and institutional markets. We take a consultative
approach in assessing client needs and implementing
innovative investment solutions, ranging from specific
investment product mandates across the capital market
matrix to total investment program management.
PORTFOLIO CHARACTERISTICS
Assets Allocation By Country
Market value ($Mil) 5571.05 Australia 5.15%
Number of Equity Holdings 983 Austria 0.26
Return on Equity 9.87 Belgium 1.07
Dividend Payout Ratio-5 Year Growth 1.27 Denmark 0.76
5-Year Beta 1.01 Finland 1.81
France 9.54
Germany 6.67
Greece 0.44
Hong Kong 1.67
Ireland 0.74
Italy 3.60
Japan 23.58
Netherlands 4.85
New Zealand 0.22
Norway 0.51
Portugal 0.38
Singapore 0.83
Spain 3.54
Sweden 2.33
Switzerland 7.11
U. K. 24.95
100.00%
N r][IrU ? Northern Trust Global tnvestmenta The Nzcthern Trust Company 50 South La Safe Street Chicago, Illinois 60675 17-13070
a oi new iC$6 - For more information call (312) 444.7933
Northern Trust Global Investments - QM
Weekly Enhanced EAFE Index Fund
A Collective Fund for Qualified Plans
70
60
50
c 40
30
20
10
0
(10)
50
30
vt 10
c
v (10)
lY
;e (30)
(50)
(70)
f
Trailing Total Returns for Periods Ending 03131104
°M
Q
!n
N N
N
O
March 31, 2004
D N
Q
1Qtr2004 YTD 1 Year 3 Years 5 Years 10 Years
¦ Weekly Enhanced EAFE Index Fund
MSCI EAFE
Annual Total Returns for Periods Ending 12131
00 ,n
r` V °; n_
O - r.j G N pOj I
O O N so N
v n
1W- n
ri ?-
1=0 -4-1
°v
n a N
M K M V N Y1
N N "
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
¦ Weekly Enhanced EAFE Index Fund
MSCI EAFE
Performance shown for periods greater than one year is annualized.
Northern Trust Global Investments (NTGI) comprises Northern Trust
Investments. N.A(NTI). Northern Trust Global Investments IEurope)
Ltd(NTGIE) Northern Trust Global Investments Japan. K K., the nrrrestmenl
advisot division of The Northern Trust Company (TNTC) and Northem Trust
Global Advisors. and its subsidiaries to offer investment products and services
to personal and institutional markets. As of 3/3112004. NTGI had assets under
management totaling $521 billion. For purposes of compliance with AMR
Performance Presentation Standards (AIMR-PPS), we have defined our firm
as Northern Trust Global Investments Services (NTGIS, a subset of NTGI)
that includes those investment products that are produced and managed by
NTI, NTGIE, NTGIJ, and TNTC and that are distributed through national
channels.
As of 3/3112004, Northern Trust Global Investment Services (NTGIS) had
assets under management totaling $297 billion (preliminary).
' Northern Trust Investments. Inc. has managed this Fund since 1/31/03.
As of Year End'
M of Product Firm % of Firm Standard
Year Accounts Assets (Smell Assets (Smel l Assets Deviation
2004 1 571.1 296,924.6 0.2 % n/a
2003 1 579.1 285, 539.2 0.2 % n/a
2002 1 422.0 164,099.0 n/a n/a
2001 1 469.8 162,057.1 n/a n/a
2000 1 274.1 156,338.8 n/a n/a
1999 1 351.2 142,244.1 n/a n/a
1998 1 275.7 116,507.1 n/a n/a
1997 1 220.7 99,578.1 n/a n/a
1996 1 172.4 54,222.5 n/a n/a
1995 1 162.1 46,097.2 n/a n/a
•oweAnt for current vear
14TGIS has prepared and presented this report with the AIMR-PPS. the U.S. and Canadian version of the Global Investment Performance Standards (GIPS). Prior to 1/1/93, all
discretionary accounts may not have been included in a composite. AIMR has not been Involved with the preparation or review of this report. The composite was created in
November of 1999 when Northern Trust Global Investment Services became compliant with the AIMR-PPS. A stated minimum asset size is not applicable to this composite.
Financial leverage Is not employed as a part of the overall Investment strategy of this composite. Financial derivatives, in the form of futures contracts and options, may be
utilized for the purposes of liquidity, market exposure. or Investment opportunity. Standard Deviation is not applicable to this composite. Comparative benchmark returns represent
a blend of composite and exchange pricing, indicative of the funds' pricing This Product was produced and is managed by the Quantitative Management Group. The Quantitative
Management Group Is a division of Northern Trust Investments, Inc. (1/711), a Registered Investment Advisor. The Quantitative Management Group Is Included in the AIMR
compliant firm effective 12131197. All returns Include capital gainsAosses, Income and are net of eligible expenses in the performance return. The investment advisory tee Includes
Trustee Services. The performance figures do not reflect the deduction of investment advisory fees, which, In conjunction with any other management expense. would reduce the
total return amount. Annual fee schedule per Form ADV. Part 11 First $100 millicim .30%, next $100 million:.25%, over $200 millions .20% As an illustration, a $100 million
account which earned n 10% annual return and paid an annual fee of 0 50% would grow in value over five years to $161 million before fees. and $157 million after deduction of
fees The investment a Wsory fees are described in Part 11 of NTII's Form ADV. Past performance is no guarantee of future results This information is intended for one-on-one
presentation GAly A complete list and description of NTGI Service's composites is available upon request
Northern Trust Global Investments The Northern Trust Company 50 South La Salle Street Chicago. Illinois 60675
Northern'llvat For mote information call (3121444-7933
o
?Cleanvater Pension Trustee Cover Memorandum
Tracking Number: 679 Actual Date: 07/12/2004
Subiect / Recommendation:
Authorize the termination of Vanderbilt Capital Advisors as a fixed income money manager.
Summary:
For the year ending 3/31/04 Vanderbilt Capital Advisors placed in the 72nd percentile. For the
last three-year and five-year periods Vanderbilt placed 96th and 95th.
The Investment Committee has been monitoring the performance of Vanderbilt very closely.
At this time the Investment Committee recommends termination of Vanderbilt. The plans two
advisors, John Willoughby and Paul Troup concur with this recommendation.
The assets under Vanderbilt's management will be transferred to a new manager, Western Asset
Management Company (WAMCO). WAMCO is being hired under a separate agenda item.
Originating: Finance
Review Approval
Maraie Simmons 06-21-2004 09:22:18
Cvndie Goudeau 07-02-2004 11:26:57
Bill Horne
Tina Wilson
Garrv Brumback
07-02-2004 10:47:07
06-21-2004 11:05:01
06-30-2004 16:47:15
i '
Clearwater Pension Trustee Cover Memorandum
Trackinq Number: 680 Actual Date: 07/12/2004
Subject / Recommendation:
Approve the contract with Western Asset Management Company as a fixed income manager and
that the appropriate officials be authorized to execute the same.
Summary:
Under a seperate agenda itern the plan has terminated Vanderbilt Capital Advisors.
Last summer when the Plan conducted a search for a fixed income manager. The top three
ranked firms were:
Dodge & Cox Funded 2/1/04 with $75 million
Western Asset Management Co. (WAMCO)
PIMCO
Callan has updated their search information and WAMCO still appears very favorable.
WAMCO finished a very close second to Dodge & Cox in last years search.
Staff has updated it's research and noticed that a number of plan sponsors have been moving
assets to WAMCO because of problems with other fixed income managers. WAMCO has
informed staff that they are able to take on additional assets without any difficulties.
The minimum funding for WAMCO is $75 million. Funding will come from the termination of
Vanderbilt and rebalancing of the portfolio.
WAMCO changes a fee of .30 of 1% for the first $100 million and .15 of 1% on all amounts over
$100 million. This is competitive to what other money manager charge for this type of product.
The contract is available for review in ORLS Dept.
Originating: Finance
Review Approval
Maraie Simmons 06-21-2004 11:22:11
Cvndie Goudeau 07-02-2004 11:27:38
Bill Horne 07-02-2004 10:44048
Tina Wilson 06-21-2004 11:26:19
Garrv Brumback 06-30-2004 16:45:24