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Punta Gorda pension board approves $300,000 transfer to core‑plus bonds, moves toward a cash allocation
Summary
Trustees directed a $300,000 transfer into the Baird Core Plus bond fund to reduce an elevated cash position, authorized the custodian to raise cash as needed, and discussed options for international equity exposure and private real estate liquidity.
PUNTA GORDA, Fla. — The Punta Gorda Firefighters’ Pension Board voted to transfer $300,000 into the Baird Core Plus bond fund and discussed adding a standing short-term cash allocation and passive international equity exposure as part of portfolio housekeeping.
Investment representative Jack (Investment representative, Carey) told trustees the portfolio held roughly $800,000 in cash and suggested a target cash allocation around 2 percent (about $500,000 at current assets). "If we're looking at, say, a 2% allocation, that's 500,000. So I think we need to make a contribution to the Baird Core Plus Bond portfolio of 300,000 to just take that cash level down to sort of that future target level," Jack said. Trustees moved and seconded a $300,000 transfer; the motion carried unanimously.
The board discussed a standing letter of instruction to Salem Trust, the plan custodian, to permit Salem to raise cash intra-quarter for benefit payments or other ordinary expenses without convening a special meeting. The board asked for a process that allows the custodian to execute transactions and then have the trustees ratify them at the next meeting.
Jack and other trustees also discussed a policy-level option to maintain a formal cash allocation in the investment policy statement and rebalance diligently. "A 2% allocation is 500,000, so that gives us plenty of cushion in there," Jack said; trustees asked the investment consultant to draft an IPS revision that shows a proposed cash allocation for the next meeting.
Trustees also reviewed manager-specific issues raised in the investment report. The board was counseled to stay invested with InterContinental Real Estate, a private real‑estate fund with limited liquidity, given long-term returns and the difficulty and likely discount of forced secondary sales. Jack said the fund has quarterly liquidity at best now and that the plan would be unlikely to receive money from the fund for about a year if it entered the redemption queue. Trustees did not direct a redemption.
On international equity, trustees noted underperformance by American Funds EuroPacific Growth and discussed moving a portion to passive international exposure such as Vanguard Total International Index. Jack recommended splitting the allocation (roughly half active/half passive) and said he would return with options at the next meeting. Trustees did not take an immediate allocation vote beyond the $300,000 bond transfer.
The board directed staff and the investment consultant to provide an updated IPS showing a proposed cash allocation and to return to the next meeting with international passive options and implementation details.
