09/17/1990 (2)
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TRUSTEES OF THr EMPLOYEES' PENSION FUND MEETING
September 17, 1990
The City Commission, meeting as the Board of Trustees of the Employees
Pension Fund, met in regular session at City Hall, Monday, September 17, 1990 at
9:07 A.M., with the following members present:
Rita Garvey
Lee Regulski
William Nunamaker
Richard Fitzgerald
Sue Berfield
Chairperson
Trustee
Trustee
Trustee
Trustee
Also Present were:
Ron H. Rabun
Milton A. Galbraith, Jr.
Cynthia E. Goudeau
ITEM #2 - Minutes:
City Manager
City Attorney
City Clerk
Trustee Fitzgerald moved t~ approve the minutes of the September 4, 1990,
meeting. The motion was duly seconded and carried unanimously.
ITEM #3 - Search for Additional Equity Manaqer:
Total assets of the pension plan as of June 30, 1990 were $137.4 million.
The investment committee has reached the consenSllS that our fund has grown
sufficiently to warrant adding a third equity manager. After considerable
discussion, the committee consensus was that a "value" Ol"iented manager would be
the most appropriate to compliment the two existing managers. (Callan Associates
defines "value" as II managers who inve~t in companies believed to be undervalued
or possessing lower than average price/earnings ratios, based on their potential
for capital appreciation.lI)
Callan has also quoted a fee of $36,000.00 to assist the City in selecting
the new manager. This fee would be paid through directed brokerage commissions.
An alternative payment would be to pay $18,000.00 in cash for this service. Once
the manager has been hired, Callan has proposed a fee increase for ongoing
performance measurement services to $28,000.00 per year in d'irected brokerage
commissions. The proposed increase from the current fee is reasonable in light
of the increased workload in providing performance measurement analysis for the
third manager.
The intention is to requir~the new manager to abide by the same annual fee
structure as the two existing managers, which is 5% for the first $25 million
under management, and .375% of all assets over $25 million. This structure
compares favorably with fees recently surveyed by Callan and independently by
Oemarche Associates. With approximately $72 million under management, the
current equity management fee is approximately $333,000.00. By adding a third
manager, total fees will increase. Depending on the ultimate investment mix, the
PFM 9/17/90
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