10-25-2000 Special MeetingMIAMI SHORES VILLAGE
POLICE PENSION BOARD
SPECIAL MEETING
OCTOBER 25, 2000
1. CALL TO ORDER
The special meeting of the Miami Shores Village Police Pension Board was held on Wednesday,
October 25, 2000 in the Chamber of the Village Hall. The meeting was called to order at 8:15 A.M.
2. ROLL CALL
The following members present:
Mayor Mark Ulmer
Vice Mayor Robert Blum
Detective Timothy Dearden
Officer Robert Frame
William Heffernan
Also Present: Mark A. Malatak, Plan Administrator
Lisa Keeley, Recording Secretary
3. PRESENTATION BY MERRILL LYNCH - Mr. Jeff Swanson
• Mr. Malatak explained the primary function of the meeting was to establish investment policies as
well as contractual agreements with Merrill Lynch. He explained that there is no current executed
contract with Merrill Lynch. However, the Plan has continued year to year based on the last
agreement from 1989. Mr. Malatak also noted that the Board is to consider the retention of Merrill
Lynch for consulting services as well as the retention of Trusco Investment Management. Mr.
Malatak indicated that the actuary had finalized the pension plan asset split.
•
Mr. Jeff Swanson spoke of the complex issues facing the Board since the splitting of the Plan. The
first item to consider is whether the Board wishes to remain autonomous or coordinate with the
General Employee Board. There could be some significant savings if the Boards were to coordinate
their investments.
Mr. Swanson spoke of the agreement between the Board and Merrill Lynch. A hard dollar fee of
$9,500 is charged per portfolio. However, an investment manager charges based on the percentage
of assets managed; typically the charge is 70 basis points. Merrill Lynch is an independent contractor,
but credits the Village for any transaction commissions done through Merrill Lynch.
Mr. Ulmer inquired as to the services provided for the portfolio fees. Mr. Swanson's reply indicated
Merrill Lynch evaluates the money manager(s), crafts investment policies, recommends asset
allocation based on risk profile and the demographics of the plan and follow all securities in the
investment program. Mr. Swanson cited the Finova Bond issue as an example. He suggested that the
Board instruct the Pension Plan Attorney to investigate the matter to ensure procedures were
followed correctly.
Police Pension Board October 25, 2000 Page 2
Mr. Swanson spoke of a recapture policy whereby another firm will recapture the transaction fees or
the base fee for Merrill Lynch can be directly offset. He noted that investment contracts as well as
State Statutes mandate controls for trading costs.
Mr. Swanson gave an overview of the current investment policy. He suggested that the Board adopt
the current investment policy as well as the Merrill Lynch contract. Discussion regarding the current
investment policy ensued. He noted that the Merrill Lynch contract has a 30 day cancellation clause.
Detective Dearden moved that the Board adopt the current investment policy as it stands until such
time that Merrill Lynch provides a new policy with any needed changes for the Board to review.
Officer Frame seconded the motion with a vote unanimous in favor.
Mr. Heffernan stated that the cost is nominal for the work provided by an investment advisor. There
was further discussion on the Finova Bond issue. Detective Dearden moved to approve the
agreement for consulting services dated October 16, 2000, with a fee of $9,500 offset by soft dollar
commissions and recaptured through a Merrill Lynch account, contingent upon review by legal
counsel. Officer Frame seconded the motion which passed unanimously in favor.
4. ADJOURNMENT
The October 25, 2000 special meeting of the Police Pension Board was adjourned at 9:00 A.M.
•
Timothy /earden, Secretary
•
Mayor Mark Ulmer, Chairperson