Loading...
546-Firefighters Investment Man CITY OF SANFORD FIREFIGHTERS ~ RETIREMENT SYSTEM STATEMENT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES The guidelines and objectives provided below are designed to complement those provided by Chapter 175, Florida Statutes and Ordinances of the City of Sanford. The objective of these guide- lines is to 1) provide the investment manager a more accurate understanding of the Trustees~ investment objectives and 2) indicate the criteria by which the Investment Manager~s perform- ance will be evaluated. No amendment to this document shall be made except by the consent of the Board of Trustees. The primary objective of the Investment Manager of the City of Sanford Firefighters~ Retirement System shall be the protection and preservation of the assets. In addition, the Investment Manager shall seek the highest possible return while maintaining a prudent regard for legal considerations, fiduciary responsibil- ity, safety of capital and minimum volatility of returns. GUIDELINES Cash: There is a positive cash flow from contributions into the Fund. With respect to cash-equivalent short-term investments, over-all quality and minimal risk guidelines apply. Instruments which may be used are: U.S. Government Obligations, Certificates of Deposit and Repurchase Agreements with major money center banks, Co~/ner- cial Paper rated A-1 by Standard & Poor~s or Moodyes P-1 rating of better. Equity Portfolio (including preferred stocks and convertible bonds): The equity portion of the portfolio shall consist of stocks issued by U.S. corporations and listed on any one of the recog- nized national stock exchanges. Any stock purchased for the portfolio must hold a rating in one of the three highest classi- fications by a major rating service (i.e. Standard & Poor~s, Value Line, or Moodyes). Investment in any single corporation's stock shall not exceed 5% of the equity portfolio~s total value nor shall the equity portfolio~s total value at cost exceed 50% of the fund~s assets. Fixed Income Portfolio: The Fund~s fixed income portfolio shall consist of U.S. Government and U.S. Government Agency bonds and/or bonds issued by United States corporations that are rated "A" or better by Moodyes or Standard & Poors~ rating services. The value of bonds issued by any single corporation shall not exceed 10% of the total bond portfolio. Absolute Restrictions (Prohibited Investments): There shall be no investment activity in the following: 1. Short sales, margin purchases, or borrowing. 2. Private placements or other restricted securities (not freely marketable). 3. Commodities. 4. Puts, calls, straddles or hedging. 5. Foreign securities. 6. Warrants or other options, except as part of purchase of another security. 7. Tax-exempt bonds. 8. Venture capital. 9. Real estate. 10. Any investment prohibited by State or Federal Law. OBJECTIVES Total Portfolio: The total portfolio shall achieve returns over any rolling 3 year period in excess of a custom index. The custom index is defined as a 50% investment in the Standard & Poors' 500 Index and 45% investment in the Lehman Brothers Government/Corporate Bond Index, and a 5% investment in U.S. Treasury Bills. Equity Portfolio: The equity portion of the portfolio shall achieve a return over any rolling 3 year period in excess of the return of the Standard & Poors 500 Index. In addition, it should be a goal of the Investment Manager that the equity portfolio returns in any 12 month period rank in the Top 33% of a representative universe of managers managing similar portfolios. Fixed Income Portfolio: The overall objective of the fixed income portion of the portfo- lios is to add stability, consistency, and safety to the total fund portfolios. As a result, the Investment Manager shall produce a positive rate of return during any 12 month period AGREE1VI~NT FOR INVESThtENT MANAGEMENT AND CUSTODIAL SERVICES / THIS AGREEMENT, made this ../7 day of ,T',,~/vt/,,~t-f , 1~9/4, by and between THE BOARD OF ~TRIISTEES OF THE CITY OF SAttFORD FIREFIGHTERSt RETIREI4E}IT SYSTEIq , not individually, but as Trustees of the Plan referred to below (hereinafter referred .to as the "Trustees"), and SUNBANK, N. A., (hereinafter referred to as the "ManagerD. WHEREAS, by the terms of the CITy OF SANFORD FIREFIGHTERS' RETIRE14ENT SYSTEIt (hereinafter referred to as the Retirement Plan), the Trustees are charged with the duty of receiving and investing funds under the Retirement Plan; and WHEREAS, the Trustees are authorized by the terms of the Retirement Plan to appoint an investment manager and custodian to provide management investment and custodiaI services for the Retirement Plan held by them thereunder. NOW, THEREFORE, the Trustees and the Manager agree as follows: 1. Appointment of Investment Manager. The Trustees hereby appoint the Manager as the Investment Manager and Custodian with respect to those assets of said Retirement Plan transferred to it, together with the income therefrom (hereinafter referred to as the "Investment Account"). The Manager shall be responsible only for those assets of the Retirement Plan actually transferred to it. The Manager shall manage, invest and reinvest the Investment Account pursuant to the provisions hereinafter set forth. At no time shall any part of the corpus or income of the Investment Account be used or diverted for the purposes other than for the exclusive benefit ofemployees and their beneficiaries as provided in the Retirement Plan and for defraylug reasonable expenses of administering the Retirement Plan, to the extent that such expenses am not borne by resources other than resources of the Retirement Plan. By execution of this A~reement, the Manager acknowledges that it is a -1- fiduciaxy of the Retirement Plan within the meaning of the Employee Retirement Income Security Act of 1974 CERISA") and §112.656, Florida Statutes. 2. Powers and Duties of the Manager. The Manager will have the following powers and duties with respect to any and all monies and securities at any time held by it and constituting part or all Of the Investment Account, such powers to be exercised by it in its sole discretion, except as otherwise provided herein. a. With any cash at any time held by it, to purchase or subscribe for and invest in any securities and to retain such securities in the Investment Account within the restrictions set forth in the Retirement Plan and Investment Policy Statement as amended frc;m time to time and in accordance with State and federal laws. b. To sell, transfer, and convey, redeem, exchange for other securities, or otherwise to dispose of any securities at any time held by it. c. To exercise any conversion privilege and/or subscription right available in connection with any securities at any time held by it; to oppose or to consent to the re- organization, consolidation, merger, or readjustment of the finances of any corporation, company or association or to the sale, mortgage, pledge or lease of the property of any corporation, company or association, any of the securities of which may at any time be held by it, and to do any act with reference thereto, including the exercise of options, the making ._ of agreement or subscriptions, which may be deemed necessary or advisable in connection therewith, and to hold and retain any securities which it may so acquire. d. To vote, personally or by general or limited proxy, any shares of stock which may be held by it at any time and, simila~y, to exercise, personally or by general or limited proxy, any right appurtenant to any security held by it at any ti~c in accordance with the Proxy Policy Voting Statement promulgated by the Trustees. e. To register any securities held by it hereunder in its own name or in the name of a nominee, or any form permitting title to pass by delivery, provided the records of the Manager shall clea~y indicate the ownership of any asset in the Investment Account. -2- f. To make, execute and deliver any and all mortgages, contracts, waivers, releases or other instruments in writing necessary or proper for the accomplishment of any of the foregoing powers. g. The term "securities" used in this Agreement shall be deemed to l~e restricted to include only legal investments for the Trustees under the statutes or rules of law applicable thereto. h. To obtain payment due for or in relation to any asset held for Trustees' account, to sell, transfer or take any other action with relation thereto, including delivering for Trustees any assignments, stock or bond powers, proxies or other documents or instruments which Manager deems necessary or prudent. i. To monitor items requiring action by ~he Trustees with respect to the assets, such as stock dividends, rights, offerings, calls or redemptions of bonds or other items. j. The Manager will provide safekeeping and accounting services for the assets in the Investment Account. k. The Trustees hereby authorize the Manager, if applicable, to maintain the Retirement Plan assets in a correspondent bank or banks or with a depository bank, if the Manager so desires. The Trustees also authorize the Manager to hold all eligible eustodial property at a clearing house corporation under the rules and regulations of such clearing house corporation if the Manager so desires. 1. The Manager will collect the income produced by the assets and retain such income as part of the Investment Account. m. The Manager will collect the proceeds of secut:itie~ which are sold, have matured or have been called for prepayment or redemption and retain such proceeds as part of the Investment Account. Receipts of securities or other property through exchange, contribution, purchase, or otherwise shall also be held as part of the Investment Account. -3- n. The Trustees may contribute property to, or purchase property for the account governed by this Agreement, if such property is acceptable to the Manager. o. The Trustees reserve the fight to withdraw any part of the Investment :: Account at any time, and the Manager will deliver any part or all of the Investment Account in accordance with the written instruction of the Trustees. p. The Manager shall make such payments from the Investment Account at such time or times to such person or persons and in such amounts as the Trustees shall direct in writing. The Manager shall be fully protected in acting upon any such written direction of the Trustees without inquiry or investigation and shall have no duty to determine the fights or benefits of any person under the Retirement Plan or to inquire into the fight or power of the Trustees to direct any such payment. q. The Manager is authorized to invest and reinvest all or any portion of the Investment Account collectively with funds or other trusts qualifying under Section 401 of the Internal Revenue Code or with other eligible investors, in units of participation or ~:i::~i: investment in any common, collective or cornmingled trust fund approved by the Trustees. Manager shall invest assets in the Investment Account in any such common, collective or cornmingled trust only if all investments made in such common, collective or tommingled trust must meet all restrictions for investments set forth in the Retirement Plan and -- ! Investment Policy Statement, as amended from time to time and in accordance with State and federal laws. Assets may be held in time deposits in Manager's bank for short periods of time. r. The Manager shall maintain a financial institution bond The Manager agrees to immediately notify the Trustees, in writing, in the event of any change in its bond and to immediately notify the Trustees if said bond is terminated, cancelled or discontinued, in whole or in part. The Manager agrees to provide the Trustees with a copy of its annual renewal of its bond oil a yearly basis. -4- s. The Manager shall maintain at least Twenty Five Million Dollars ($25,000,000.00) of errors and omissions (Trust E&O) insurance for the Retirement Plan. The Manager agrees to immediately notify the Trustees, in writing~ in the event of any change in its errors and omissions insurance and to immediately notify the Trustees if said insurance is terminated, cancelled or discontinued, in whole or in part. The Manager agrees to provide the Trustees with a copy of its renewal of its errors and omissions insurance on a yearly basis. 3. Information tO Third Parties. SEC Rule 14b-1 provides that unless the Trustees object, the Manager, as custodian, must furnish the Trustees' names, addresses and the Trust share position to companies which issue securities held as custodial property. The intent of the rule is to facilitate communications between issuers of securities 'and shareholders. The Manager is not authorized to disclose Trustees' names, addresses and the Trust share position. 4. Maintenance of Accounts. The Manager shah maintain accounts showing the fiscal transactions of the Investment Account. The Manager shall prepare at least quarterly, and more often as mutually agreed, a report showing in reasonable detail the assets and · liabilities of the Investment Account and giving an account of the operation of the Investment Account for the past quarter. The Manager shall also provide an annual transaction and performance report. The Manager shall also provide a report showing how Manager has voted proxies and a report of brok.erage commissions incurred '(if the assets are not in common trust funds). 5. Discharge of Duties. The Manager shall discha?ge.its duties under this Agreement solely in the interests of the participants in the Retirement Plan and their beneficiaries and (i) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudetit investor acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims; and (ii) in accordance with the provisions of this Agreement insofar as they are consistent with the provisions of the Retirement Plan, Investment Policy Statement and applicable laws, as the same may be amended from time to time. Trustee shall supply Manager with a copy of the Retirement Plan and any amendments thereto within a reasonable time after adoption. Manager shall execute trades on a "best execution" basis within the meaning of ERISA Technical Release No. 86-1 (i.e. competitive commission cost as well as reliability and quality of the execution). 6. Compensation of Manager. In consideration for the services rendered by Manager, Trustees shall pay to Manager an annual fee ~'e ,- ~'x 1,; ~; ;r A ~n the market value of the assets in the Investment Account. The amount to be paid shall be payable quarterly in arrears based on the value of assets in the Investment Account on the last day of the quarter. This shall be the total fee for all administrative custodial ~ervices including, but not limited to, termination fees, transfer fees, fees for checks, statement preparation and other services rendered. This fee is guaranteed not to increase for a period of~C~'~./years from .... the contract date. The fee includes all expenses and costs incurred by Manager in the performance of this Agreement. The Manager shall provide a quarterly statement of fees and fees may be withdrawn directly from the Investment Account, unless paid airectly by the" Trustees ~ ~ or unless Manager has received, within 30 aays after mailing its quarterly statement of fees, a written objection to the statement from the Trustees. 7. Removal and Resignation. The Manager may resign from its duties hereunder by filing with the Trustees a written resignation. Such resignation shali take effect within forty-five (45) days after such notice to the Trustees. The Manager ~ay be removed by the' Trustees at any time upon forty-five (45) days notice. Such removal shall be effected by delivery of written notice of removal executed by the Trustees. Upon resignation Or removal, the Manager shall transfer and deliver the Investment Account to the Trustees, and -6- be paid only fees earned (including any minimum fee) prorated to the effective date of resignation or removal or until the date that the Investment Account assets are actually transferred from the Manager, whichever is later, but only if any delay in such transfer beyond the effective date of removal is not attributable to the Manager. The minimum fee, if any, shall not be promted if this contract is terminated by the Trustees during the furst year. Such payment shah be the only payment of any kind or nature due to the Manager from the Trustees. 8. Instructions. All instructions from the Trustees to the Manager shah be in writing and shall be signed as designated by the Trustees. The Trustees agree to notify the Manager promptly, in writing, of any change in the designation and until such notice is received by the Manager, the Manager shall be fully protected in continuing to rely on the authority of the designated Trustees. 9. Consultation. The Manager shall consult at least quarterly with the Trustees regarding the investment performance of the Investment Account and the financial require- ments of the Retirement Plan. 10. Construction of Aereement. This Agreement shall be construed in accordance with the laws of the State of Florida to the extent not pre-empted by federal law and the provisions hereof shall be governed by such law. All prior agreements between the parties are hereby terminated and superseded by this Agreement. 1 I. VenUe. Any action under this Agreement shah be brought in Orange County, Florida. 12. Aeknowledgement. TrusteesacknowledgereceiptofdocumentsfromManager which comply with the Investment Advisers Act of 1940, Rule 204:g. Trustees have the right to terminate this Agreement without penalty within five (5) business days after date of this Agreement. -7- 13. Assignment. This Agreement may not be assigned by the Manager without the consent of file Trustees. 14. Public Entity Crimes Bill. Pursuant to Section 287.133, Florida Statutes, the Manager must disclose any past, present, or future litigation arising out of violation of this statute by executing a sworn affidavit herein provided as Exhibit 15. Plan Amendments. The Trustees shall provide the Manager, by verbal notice at a meeting of the Board or by copies, the amendments to the Retirement Plan that are relevant to the Manager's duties hereunder and amendments to the Investment Policy Statement on or before the effective date of the amendment. IN WITNESS WHEREOF, the Board has signed duplicates hereof, and SunBank, N.A. has caused its corporate name to be signed to said duplicates by its proper officers thereunto duly authorized on the day and in the year first above Written. SUNBANK, N.A. · ~ As Ch A ~f., ATTEST: .A'I'~ T:, ~ '~'fl~f' Ai'Seeretary -8- EXHIBIT A SUNBE, N.A. FEE SCHEDULE FOR CITY OF SA~FORD POLICE & FIRE PENSION I~FESTMENT MANAGEMENT SERVICES & CUSTODIAL SERVICES ALL SERVICES INCLUSIVE 50 Basis Points first $10,000,000 40 Basis Points next $40,000,000 Per Section 6 FEE GUARANTEED FOR A PERIOD OFFIVE YEARS !~ ~ " EXHIBIT C CITY OF SANFORD FIREFIGHTERS' RETIREMENT SYSTEM STATEmeNT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES The guidelines and objectives provided below are designed to complement those provided by Chapter 175 of the Florida State' Statutes. The objective of these guidelines is to 1) provide the Investment Manager with a more accurate understanding of the Trustees' investment objectives and 2)indicate the criteria by which the Investment Manager's performance will be evaluated. The primary objective of the Investment Manager of the City of Sanford Firefighters' Retirement System shall be the protection and preservation of the assets. In addition, the Investment Manager shall seek the highest possible return while maintaining a prudent regard for legal considerations, fiduciary responsibility, safety of capital and minimum volatility of returns. GUIDELINES A. Cash. There is a positive cash flow from contributions into the Fund. With respect to cash-equivalent short-term investments, over-all quality and minimal risk guidelines apply. Instruments which may be used are: U.S. Government Obligations, Certificates of Deposit and Repurchase Agreements with major money center banks, Commercial Paper rated A-1 by Standard & Poor's or Moody's P-1 rating or better, with the exception of the custodian's money market account. B. Equity Securities (including preferred stocks). The equity portion of the portfolio shall consist of stocks issued by U.S. ' corporations and listed on any one of the recognized national stock exchanges. Any stock purchased for the portfolio must hold a rating in one of the three highest classifications by a major rating service (Value Line). Investmen.t in any single corporation's stock shall not exceed 5% of the equity portfolio's total value nor shall the equity portfolio's '- total value at cost exceed 30% of the Fund's assets. C. Fixed-Income Securities. The Fund's fixed-income portfolio shall consist of U.S. Government and U.S. Government Agency bonds and/or bonds issued by U.S. corporations that are rated "A" or better by Moody's or Standard & Poor's rating services. The value of bonds issued by any single corporation shall not exceed 10% of the total bond portfolio. A minimum of 70% of the total assets at cost will be committed to fixed-income securities. D. Absolute Restrictions. The investment activity in the following is prohibited: 1. Short sales, margin purchases, or borrowing. 2. Private placements or other restricted securities ( not freely marketable ). 3. Commodities. 4. Puts, calls, straddles or hedging. 5. Foreign securities. 6. Warrants or other options, except as part of purchase of another security. 7. Tax-exempt bonds. 8. Venture capital. 9. Speculative investments. STATEMENT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES (Cont.) OBJECTIVES A. Total Portfolio. The total portfolio shall achieve returns over any rolling 3 year period in excess of a custom indexes. The custom index is defined as a 30% investment in the Standard & Poor's 500 Index and 70% investment in the Shearson Lehman Government/Corporate Bond Index. B. Equity Portfolio. The equity portion of the portfolio shall achieve a return over any rolling 3 year period in excess'of the return of the Standard & Poor's 500 Index. In addition, it should be a goal of the Investment Manager that the equity portfolio returns in any 36-month period rank in the top 50% of a representative universe of managers managing similar portfolios. C. Fixed-Income Portfolio. The overall objective.of the fixed-income portion of the portfolio is to add stability, c~ms~tency, and safety to the total fund portfolio. As a result, the Investment Manager shall produce a positive rate of return during any 36-month period while meeting or exceeding the return of the Shearson Lehman Government/Corporate Bond Index. COMMUNICATIONS Valuations of current holdings at market value and a summary of trade transactions shall be sent to the Trustees on a 'monthly basis. The Investment Manager for the City of Sanford Firefighters' Retirement System shall generate quarterly investment reports for management purposes. The reports shall include data on investments held, returns earned, and any other information necessary for clarification of the results. Upon reasonable notice, the investment Manager shall provide any information relevant to the Fund as requested by the Board of Trustees. PERFORMANCE MEASUREMENT The Investment Manager's performance shall be evaluated on a quarterly basis in terms of achieving the goals as outlined in this statement. In addition, the equity investments selected by the Investment Manager will be evaluated for risk. In the equity portfolio, risk evaluation will include variability and volatility of returns, security diversification, portfolio price earnings ratio, portfolio dividend yield, average market capitalization, and average debt to capital. In the fixed-income portfolio, consideration will be given to average quality and maturity. STATEMENT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES (Cont.) POLICY REVIEW It is the intention of this Board to review this Statement of Investment Policy Guidelines and Objectives at least annually. As the above are changed or expanded, thisdQcument will be amended. No amendment to this document shall be made except by the consent of the Board of Trustees.