07/16/1990 (2)
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ITEM #5 - Other Business:
a) Appointment of Eickhoff, Pieper & Willoughby to serve as Equity Investment
Advisor beginning 7/16/90 for an annual fee of $7,500.00 to Succeed First
Union National Bank
In 1984 and 1985, the Trustees approved two agreements with First Union,
one to serve as Investment Manager for the fixed income portion of the pension
fund assets, and a second to serve as Equity Investment Advisor to assist in
monitoring the performance of the two equity managers. Throughout this time, the
individual at First Union responsible for both functions was John P. Willoughby.
Mr. Willoughby is now a part owner of Eickhoff, Pieper & Willoughby. Under the
proposed agreement, Mr. Willoughby would continue in his role as Investment
Advisor with his new firm, and First Union would continue as FiKed Income
Manager, with no overall increase in fees.
Mr. Willoughby has been involved with the City's plan since 1978. It was
Mr. Willoughby's recommendation that resulted in the liquidation of $10 million
in equities in August of 1987, two short months before the unprecedented market
"crash" of October, 1987. This recommendation resulted in significant savings to
the plan. Staff believes it is ,in the best interest of the plan to keep Mr.
Willoughby as an advisor.
In response to a question regarding the status of the funds that had been
gained from the 1987 stock liquidation it was indicated those funds have been
reinvested in stocks.
Trustee Fitzgerald moved to accept the recommendation of the Pension
Advisory Committee. The motion was duly seconded and carried unanimously.
b) Investment Update on Pension Plan Assets
Regarding the activity of the pension plan for the quarter and the hear
ending March 31, 1990, the pension plan assets total $129.6 million, an increase
of $19.8 million over the preceding year or a 22.4 percent gain.
Questions have been raised regarding the advisability of adding one or more
additional investment managers. This would provide additional diversification
which is probably warranted for a plan of our current size. Mr. Deignan
indicated he may be corning back to the Trustees regarding a recommendation on
this issue.
Mr. Deignan indicated an estimate of cost for an additional manager is
$36,000.00 in soft commissions. . He indicated he would have to get back to the
Trustees regarding current manager costs.
The City Clerk requested direction from the Trustees regarding paying for
the upcoming Pension Advisory Committee election. Direction was that the Pension
Fund should pay these costs.
07/16/90
2
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