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HomeMy WebLinkAbout2007 09 10 Informational 103 Pension Plan 3rd Quarter FY 2007COMMISSION AGENDA ITEM 103 September 10, 2007 Regular Meeting Consent Informational X Public Hearin Re ular MGR. ~DEPT. Authorization REQUEST: Providing the City Commission with information regarding the City Pension Plan's 3rd Quarter FY 2007 investment performance. PURPOSE: This agenda item is presented to provide the City Commission with information regarding the City Defined Benefit Pension Plan's 3rd Quarter FY 2007 investment performance. CONSIDERATIONS: The City Pension Plan Advisor, Bogdahn Consulting, presented its review and evaluation of the 3rd Quarter FY 2007 performance of the Plan to the Board of Trustees at its meeting of August 22, 2007. This report evaluates the investment performance of the plan as obtained by the Plan's current investment manager, Trusco Capital Management. Bogdahn's report provides two basic points of analysis: Comparison of the City Plan's investment performance to associated benchmark returns. Benchmarks utilized are the S&P 500 for pomestic Stocks, the MSCI EAFE for International Stocks and the Lehman A~~re~ate Bond Index for Bonds. These benchmarks are commonly used industry comparisons for investment performance. In other words, "How are we doing compared to the standard?" 2. Comparison of the City Plan's investment performance to a group of other investment portfolios with similar investment profiles. This group is known as a"universe." In other words, "how are we doing compared to other similar plans?" BENCHMARK COMPARISONS (see page 2 of Bogdahn's report - attached) The City Plan's investment performance exceeded the target benchmarks by 0.21% for the third quarter of FY 2007. However, investment performance has trailed the target benchmarks far the fiscal year to date as well as over the past (trailing) one, three and five year periods. The performance of the Plan relative to these benchmarks is one of the strongest indicators of the success ar failure of an investment strategy. UNIVERSE COMPARISONS (see page 5 of Bogdahn 's report - attached) The City Plan's investment performance relative to the universe was ranked in the 53 percentile for the third quarter of FY 2007 and the 86 percentile for the fiscal year to date. Investment performance relative to the universe over the past (trailing) one, three and five year periods fell between the 84 and 94 percentile. A percentile ranking of 1 is the best, 100 is the worst. For example, a ranking of 25 means that the Plan outperformed 75% of the universe. A ranking of 53 means that the Plan outperformed 47% of the universe. Per Bogdahn Consulting, a ranking of 50 or better is acceptable. A ranking of 25 or better is excellent. A summary of this information is also provided in the attached memorandum from David West, CFA, Partner and CIO/Senior Consultant with Bogdahn Consulting. FUNDING: n/a. RECOMMENDATION: Informational. ATTACHMENTS: 1. Memorandum from David West, CFA, Partner and CIO/Senior Consultant with Bogdahn Consulting. 2. Pages 2& 5 from Bogdahn Consulting Performance Evaluation Report for the Period Ended June 30, 2007. COMMISSION ACTION: ATTACHMEN~' 1 B~JGLIAHN ~fJNSLTLTIN~, L:I~~. simplifying yoicr investment decisions MEMORANDUM TO: Kevin Smith FROM: David West, CFA CIO and Senior Consultant RE: Winter Springs Employees' Retirement System: Summary of Consultants Report for the Quarter Ended June 2007 DATE: September 5, 2007 The following summary of Trusco Capital Management references pages 2 and 5 of our quarterly report. The second quarter resulted in significant gains in investment returns driven by a very favorable equity market. Net of fees, plan investments earned 4.48% adding $683,000 to program assets. Overall program results were ahead of the benchmark (60% S&P 500, 10% MSCI EAFE, 30% Lehman Aggregate Bond Index) return of 4.27%. Benchmark out-performance was attributable to managed equities which earned 6.76% vs. the Policy Index of 6.34%. Fixed income was a drag on performance for the period on both an absolute and relative basis (-0.53% vs. -0.52%). Overall fiscal year to date results reflect the influence of a strong equity market, but trail the Policy Benchmark (10.93% vs. 11.29%). Peer group measures continue to languish largely due to managed equity results. The Plan ranked in the 53rd percentile for the quarter and bottom 86th percentile fiscal year to date. Longer term results continue to languish with one, three, and five year rankings of 94t" percentile, 85th percentile, and 84th percentile respectively. Ranking results continue to fail the minimum manager requirements set forth in the Investment Policy Statement for the Plan. -i- 340 West Central Avenue • Suite 300 • Winter Haven, Florida 33880 Telephone (863)293-8289 • Facsimile (863) 298-6762 ATTACHMENT 2 Defined Benefit Plan & Trust for Employees of the City of Winter Springs Executive Summary Account Reconciliation 06/30/2007 2007 10/31 /2000 Qtr YTD Incept ......................... ......................... :#3~~iiiritrig:.Value : ::: : : ................ ................ : : : : : :1~;17$:::~: ............... .............. : :::1~4;538 ::::::: : ............ ............. : : ::: :1:;~~2:: ~~Iet~Fl~ws~::: ~ : : : : : : ......................... ...................... ..................... : : : : : : : :~:43A~: : : ................ ................ ................ ~: : ::~:~:85~: : : : ............... .............. ............... : : : :'C~~5U8~: ...... ~..... ............. ............ ........ ......................... :iii~iestrri:erit:!C3fL~ :::::::::: ................ ................ :::::::::: : G8:3:::: .............. ............... ::;:::: :::$98::::: ............. ............ ::::::4;432:: :~rtdiri~:V~liii~ : ::::: :~:: : : :;: : : ::1~;29t~ : : : ::::1~i;29:t3:: : : : :: ::~i.~;~9Cl;: Investment Policy Index Weight ........................................... ............................................. : &P: .~~04 :: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : ~ ........... .............................. ........................ ....................... : : : : : : : : : : : : : : : : 60:Ud : ................... ... :........ ~~~:~:;i4~ ~ ~ ~~~~~~ ~~ ~~~:Boricl : : : : : : : : : :~: : : : .k:efir~ian . . 99.e9ate . . . . . . . . . . . . . . . . . . . ....................... .............................. : : :~ : : : : : : : : : : : : :3Q:00:: . . . . . . . . . . . . . . . . . . . . . . . . ....................... ........................ . . . .......................................... ............................................ ~~~ ~:I:~~h~E:::::~:::~:~ :::::::::::::::::~:~::: :lv~SC ..:.. ................................ ........................................... ............. ... .. .. ........................ :::~::~:::~::~:::~:::'fiO:i~U: ........................ ....................... :'~ti#~f : : :~: : : : : : : : ~ : : : : : : : : : : :~: : : : :~ : : : : : : : ........................................... :: .~: : : ::: : : : : : : : : : : : . . . . . .O(~.QO. ........................ Trailing Retums through June 30, 2007 10/31 /2000 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr Incept ....................... ...................... :~~~ic1: : : : : :~: :15:~{T:~: ....................... ....................... ...................... ........... ............ : : :'1 Q:67: : : ........... ............ ........... ............ ........... : :~9:7~: : : ............ ........... ............ ........... ........... : :~1:1~:~2~:~: ........... ........... ........... ........... ........... :~: : :8:8~~: : ........... ........... ........... ............ ............ : : :~:6:'1:6: : : ............ ............ ............ ........................................................... ............................................................ :~: : : : :~: : : : : :~: : : : : :~ : : : : : : : : : : : : : : : : : : : : : : : :~: : : : :~: : : : :~:~:5:83~: ........................................................... ............................................................ ........................................................... ....................... ....................... : . .. ~ . ... ::::: :: : :: . :: . : : .#?bf.~X. . . . .~. .1F X:~ . . ............ ........... : :: .:. ... :: . .12.A4 ........... ............ :. . .:: ~~ :::::: ~Q.?~5. . . ........... ........... : ::~ :. ;: ~ ~:::: . .~ 1,3~. . . ........... ........... ::: ::: . :.~ ~ :: : . . ..9 7~4. . .. ............ ............ : ::: : ::~ : : ::: . . .~.,~.~ ...... ............................................................ ........................................................... ::::::::: ::::: ::::: : ::::: ::: : : : : ::::: : ::: : : : : : ::: : : : : ::::: : : : : : : ::: : : : :::. : : :: . ... . ..... . . .. . ... ....... . . . . ... . . ... . . . ... . . . . . . . . . . . . . . ~. . ~.~2.. .'.'.'.'.i~ '•' ' '~.'. ~ :~f~f~: ~ ~ . . . . . . . . . . . ,25. . '.'.'.~r' '•'. . .'.'.' 1. . . . . . . ~7. . . ...... . .'.'.'.' .' . . ~Q~68: : ...... ., . .,.,. ~.. :~(3:1~~~: . .. ,~:.:µ . : ' .:. . . .0.93. :~: . . ...,.,.,.,.,. . ~#};~3 . . . . . . . . . . . . . ... . . . ..... . . ... . ... . . . . . . . . ., . . . . . . ... . . . . . ... . . . . . . . . ~ 1.51::: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Calendar Year Retums 06/30/2007 2007 Qtr YTD 2006 2005 2004 2003 2002 2001 2000 1999 1998 ::::::: :;~:~~ ::::: F~~iCI~:: ~~ ~~ ~ .4S ::: : :p: :::: : ~ . . . .1..... :: :: ~~ ~; ~~~~~::: t15 ~: . .~#. .....8. .... .... ..... . . . ::: ::: :::~.:54:. . :::1:1:::..::;. . ... . ..~~t6 . : ~.~.~.~.~.~.~.~.~.~.~ ~:~:::19:;41:: : . .~.~.~. . . .~. .~. :::~1:~:~1:::: : . .~. . .~.~.~. . . . .~.~.~.~. .~.~.~. .~.~. .~. .~.~. . .~.~.~. .~. . . . .~. : : :;:t;~F8 ::: : : : : : ::::: ::::: :::~: : :::~:~:~: ~ : : : : : :::: : :F~~'ti ~~ : :~:':~: : : : : : : : ~~ .:: ... o .GY ... . . ..... . . . . . . . .:. .4.2.?. ... : : . : . . ..: .. . .5.b8:..: ............. : :13 ~3.. .........:....... 5.14 ...:....:...... . 9 89 .....:.:.:..:.. . ~ 7.4 :..:.:.:...:...... 1 ~ 62 ........:......:.:.......:.....:....:..:....... .=6:~8: . . . : . . . . . . : . . . . . . .~ :#~ifP:~ :~ : :~ ~ : : : : : : : : :~ .~ :~: : .... Q.2~1... : : : ~~~ ~. : : : ....Q.43... : : : .~. . . : : : ......~.'~5..... : :~:~ ~ : . ~~:~: ..-~}f~..... :: :~: :~..~.~:~: ......1..57... : ::: ~:~ ~ ~:~: .....2.33.,.. ~:- ~:~ ~~~ ~ ~: : ...,...(~.4'1...., ~~ : . .~.~. ~:~: : : :~::: ::: : :~: : : : :: :~ : : ::: ::::::: ::: : : ....,.7.?6 .............................~..........~ Returns in Up Markets 10/31 /2000 3 Yr 5 Yr 6 Yr Incept >~ta~ici>'' :.: :.: : :: :::::::::. : ~ :~ : : : : _. .'14.'? . . . . :~: : : . ' :~~ : : : : . . . .~6.~4 .. ..... :~:~;. ~. : ~:~:=: :~: .. ... .~6:~i. . . .... _..... ~:~: :~:~:~: :~~~: . . ..... .1 X, :P~. ."... .. . , : .: . . . s~iey : _. _ . :. : : :.:.:...:. .;:; ~. ,. . . . . 1 ~ 4 ~.: `:.:.:.>:.~ ~~.2 :_ ~,~: .:.':.:.:.~.:::. .: . ~'~ 9 . :~::.: . ::. .:. 1 ~:. :Ra~::~:.:..:: tro .:::.::~:~ ~ ~: 95.~: :~:~:~ : :~: :~ ~ ~ :~2: : : >: ~0 . . . . . .. ~ :::: :. ..: :.: :.:.: :.:. ..... . ~~.? . . . . . . : :. :.:.. . . : . . . . 95, ~ Inception date is October 31, 2000 All dollar values are shown in thousands. Returns for periods exceeding one year are annualized. Retums are net of fees. ~ Retums in Down Markets 10/31 /2000 3 Yr 5 Yr 6 Yr Incept ~21 :~i~id : :~:~: : : :~: : : :~:~:~:~2:8: : :~: : :~:~:~:'E1~:~:~: : : :~: : :~:~5:~:~: : : : : ~: : : :~~~:~:~: .~ ~. . . ..'.'.' ' . ...o#.c~! :. . . . . .'.'''.'.'.'.'.'N '~'.'.'.' . . ... . .. . .2._... ... .'.'.'.4~~~ ~'~ '.'.'.' . ... . .~.~. . ... .~.'.'.4'• . .'. .'.'.'.'.'. .. . ... f7.7. . . . . .' . .'.r.•.~ .. .'. .~. .... .:1.9.1.. ~f~ tio: : : : ;: : .~ ......... : : : : :~fi 1~8:'# : : : ................ : ;>:~:91::8 : >: ............. : : : : :8~: ~ : `;'> ........~ ..... : : : : : :7~1: ~`: .........5. ATTACHMENT 2 ~ Defined Benefit Pl~n & Trust for Emplayees of the ~ City af Winter ~prings Universe Comparisons ~ 60% Lg Cap Core, ~0% Hg Ctuality Bd, 10°/a Int"I i rai~~ng Keturns tnraugn ,~une ~u, ~uu r 2 Cttrs 3 G1trs 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr ~ 7 Yr ~ 8 Yr .... ... ...... . . ~ .~.~ .:.:...: . :..:.:..•.~. . . fu~nd; : .:.. : .: Return 6.p1 10.93 ~ 5.50 10.67 9.77 11.22 6.81 6.16 %-tile 41 86 94 96 85 59 $4 51 , . , . . : . Pt~l~~y . > , . Return 5.58 1"i .29 "16.79 12.fl4 1 ~.45 11.38 9.74 6.19 °1o-tile 66 72 53 67 55 51 44 49 ... . ..... . , , . , : ~ .. ......... . : : . : ; . : 4~ni~+ec~8 ~ ~~ , . . . .,. :. . . 5th %-tile 7.58 14.77 19.73 15A5 13.3U 13.72 11.82 8.31 8.22 7.30 25th °lo-tile 6.39 12.55 17,$7 13.11 11.36 12.09 10.23 ?A5 5.54 5.$2 60th %-tile 5.84 11.79 16.84 12.37 10.55 11.4~ 9.61 6.16 4.23 4.62 75th °/n-tile i 5.46 11.22 16.32 11.79 . 10.07 1 t~.90 9A5 5.65 3.68 ~ 4.06 ~ 95th %-tile 4.88 10,21 15.2$ 1Q.~'2 8.9$ 9.72 $.03 4.93 2.39 2.92 Galendar Year Retums Qtr YTD 2006 2005 20Q4 2003 2002 2001 20Q0 1999 . .. .• . .... . ... ........ ... ~: > . ~ :::: .,., ~~ ~;:> :_ .. .,... .;' . .~: : ,: .; :. ..;: ~~ . ~ ~ F~eturn 4,48 6.01 10.58 4.50 11.46 19.41 -12.21 1.48 °/a-UI@ 53 41 95 86 14 8$ 55 5 ~ h . .'.'. .....' ,: , . ,';, . : ;,, : : : , . . .: . : : :. .: . . : :.:~.,'~ .. , : ,. , . ;,';, ,, ,. ,, ,.: ; ., .,,::: : ; : ;:;:;~ ;:< ~ : '- :' ; ;':. ',;, ' , ':, .;.` . ' ' , ' . ,% , .:. . ~.pb~1~51 ..: . :::.::. :.:.;: :.: : : : '•: :~: :-:•:~: : : : : : :~: : : :•: : :~: >:•:•:~: : :•:-:•:-:-: :~::~:•: :•: : :-:-: :-: :-: :•: :•: .: :-: : >: : :::: : : :~: : : : : : ; : : : : : : : : , : : : : : ::: : ;. ::.: , : _ ; .... .... . ........... ............................................... .................................... ................ ... .. ... Retum 4.27 5.58 13.33 5.14 9.89 21.74 -12.62 -6.28 %-tlle 71 66 44 60 42 46 65 60 : .. . . . . . . . . .. . . . . :, ,, ,., , . , , . .. .. .;.;. . ... .~.: . : ~~;~ :< : : ,. , .~. . :.3:lnlv~s~% ;. : ~. : ;: >:~.~: : :.: : , . . . ., . . . . . . ~:~ -:~ 5th °!o-tile 5.76 7.58 '! 7.25 8.82 12.70 25.22 ~.21 0.24 12.08 25.92 25th °!a-tile 4.92 8.3$ 14.20 6.43 10.69 22.E38 -10.62 -3.72 3.94 16.86 50th °Jo-tile 4.52 5.84 13.21 5.46 9.61 21.57 -12.09 -5.96 -2.55 14.86 75tt1 °lo-tiEe 4.17 5.46 12.47 4.78 8.$9 20.50 -~ 3.04 -6.84 -3.96 11.88 95th %-tils 3.64 4.68 9.92 3,$~ 8.~9 18.34 -14.66 -11.50 -7.1Q 1.64 Retums are In percent. "0lo-die" Is the peroenUle ranking witliin the universe. ~ Retums for peMods exc~seding one year are annualized. Ir-cept Is C3ctober 31, 20tX} to June 3t}. 2407 ~...,,1 ;~