Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pension Investments topic
No spam. Unsubscribe anytime.
Atlantic Beach pension boards approve targeted equity sales to fund retiree payments
Summary
Trustees on the Atlantic Beach Police Employees and General Employees Pension Boards voted Nov. 13 to raise cash by selling specified equity holdings and to route earned income into a deposit-and-disbursement account so quarterly retiree payments are met as the general plan moves into distribution mode.
Trustees of the Atlantic Beach Police Employees and General Employees Pension Boards voted Nov. 13 to approve a plan to raise cash for retiree payments by selling selected equity holdings and directing earned portfolio income into the plan's deposit-and-disbursement (D&D) account.
The action followed a presentation from the plan's investment presenter (speaker 5), who described strong recent returns but warned that elevated price-to-earnings ratios increase the risk of future market corrections. Committee member (speaker 2) told trustees the general plan has moved into distribution mode and that distributions to retirees currently exceed contributions, creating a shortfall the city has been reimbursing.
Why it matters: With more money flowing out than in for the general plan, the board approved operational changes to ensure retiree payments are funded without disrupting long-term portfolio objectives. The trustees approved the recommendation that dividends and other earned income be transferred into the D&D account when received, with quarterly redemptions of specific equity positions to supply any remaining cash needs.
Details of the approved approach: Speaker 2 explained the plan will shift dividend distributions into the D&D account rather than reinvest them and will redeem assets on a regular basis to cover the gap between income and retiree disbursements. To create immediate liquidity, the board endorsed a recommendation to sell portions of several equity holdings identified in the trustee presentation. The presenter and trustees described the sales as targeted reductions in positions that have appreciated, not a wholesale reallocation of the entire portfolio.
Speaker 2 listed the planned redemptions as: $155,000 in JPMorgan equity income, $165,000 in Pioneer holdings, $125,000 in a Boston value manager, $75,000 in Riverbridge, and $78,000 in Fortis. The board also agreed to hold a reserve (the presenter said $300,000 in the D&D account was proposed) and to flow dividends to that account so that at each quarter's end the plan can meet retiree obligations without emergency sales.
Trustee discussion and vote: Trustees asked clarifying questions about benchmarks, private-equity comparisons and the mechanics of the cash flows. After discussion, Committee member (speaker 2) moved to accept the recommendation, a motion that was seconded and approved by voice vote.
What the presenters reported about performance: The investment presenter said the general plan returned about 4% for the quarter and about 8.96% for the fiscal year and described portfolio adjustments made to reduce S&P concentration and add private/alternative managers intended to provide downside protection in volatile markets.
Next steps: Staff will implement the quarterly process of transferring earned income to the D&D account, execute the approved redemptions to raise near-term cash, and report updated values and any manager-watch developments at the next quarter's meeting. The board also noted the actuary will provide a longer-term cash-flow projection at an upcoming meeting that may prompt future adjustments to allocations or assumptions.
The board approved the measure during the Nov. 13 meeting and did not record individual roll-call tallies in the transcript; the voice vote was recorded as passed.
