UPDATED/ see more info/Fiduciary Review presented at Township Study Session Meeting

Hi All,
UPDATE:  2/10/12- 9:20 am     Bloomfield Township has copied a lot of financial pages from the meeting onto their website at this link.....  Click board of trustees/then board packet/then 2012/ then Feb. 13.  It will come up as a pdf file.   Some of this financial data is in the board packet for the Mon., Feb. 13, 2012 trustee meeting @ 7pm. The Board  has not scheduled a review of this study session meeting as an agenda item, however, you will have 3 minutes to speak to the board during "public comment" if you would like to address the fiduciary review, budget, or other items of concern. 

Please do read my blog as it does contain more information.  Thank you.  Marcia

The fiduciary review study session was held in the conference room at the Township hall on Thursday, Feb. 9, 2011.  The meeting was not video recorded.  Some township employees, trustees, and the owners and representatives of the Gregory J. Schwartz & Co., Inc. (investment managers and advisors)  were present.  Minutes of the meeting will be posted and archived after board approval at the next regularly scheduled meeting.  An (*) after the meeting date indicates a study session.

The below report is what I gathered from a booklet prepared and presented at the meeting by others and from my minutes and conversations with others after the meeting.  I also put some information gathered from google about the definition of certain government plans.  The exact township plans and specific details are not known as they are not posted on the website. It was difficult to reduce the financial and investment information into this blog.  Hopefully, it is accurately presented.  I will correct any errors to all if notified.  The "headings" are from the booklet given as a handout at the meeting.


Market Update

• The Gregory J. Schwartz & Co. was well represented at the meeting.  They presented the information along with information from Dan Devine and Ray Perkins from the township. Several elected officials and trustees asked questions.  The 78 page report was given to each participant at the conference table to follow.  A copy is available upon request.

Short-term Fixed Income Portfolio

• beginning date of this portfolio is 1/21/2003 with $2,500,000
• 11 Funds in portfolio
• 2004, 2008, 2009, (2) in 2010 and (2) in 2011 more "inflows" for a total $33,500,000 more
• (4) in 2010  "outflows" for a total of  $8,000,000  distribution
• portfolio value as of 5/31/11  =  $29,995,237
• (4) in 2011 "outflows" for a total $9,500,000 distribution
• portfolio value as of 12/31/11  =  $20,766,512
• 1 contribution in 2012 to date to the portfolio totaling $16,000,000
• portfolio value as of 2/3/12 = $36,862,788 
• 2011 net return:  2.3%

Pension Equity Assets  

•  beginning balance 6/6/06  = $25,717,763
  
•  17 Funds allocated 
•  54.7 %  Large Cap Funds
•  21.1 %  Mid Cap Funds
•  13.3 % Small Cap Funds
•  10.9 % Foreign Funds
•  assets as of 12/31/2011  =  $11,499,869
•  assets as of 2/3/12 = $12,446,982
•  2007, 2008 and a 2011 additional "inflow" of $ 9,812,961
•  2006, 2007, 2008, 2009,  (2) in 2010, 2011   "outflows" of  $24,163,303
• Need to find out IF......  this the "defined benefits" pension where a $5 million per year is to be paid  to "amortize" ?? over a 20 year period ?  Forgot to ask.
•  2011 net return: 0.6%
• ACTION TAKEN AT THE MEETING:   Motion made/seconded and unanimously approved for the recommended reallocation of assets / Pro Forma   (see p.28 of booklet)  

 Township Asset & Investment Report

• a note mentions a Prudential representative to contact.  The Table of Contents of this report goes to page 33.  Only the first ten pages of this report were included in the 78 page booklet for review. 

• Asset classes:  Guaranteed Deposit
• Market Value 11/30/11  $107,316,095.83 
• Receipts:
• Deposit:  Employer contribution 12/06/11  =    $   284,131.00
• Deposit:  Employer contribution  12/06/11  =    $1,400,000.00
• Deposit:  Employee contributions 12/07/11 =    $    55,692.51
• Total Receipts:  $1,739,823.51
• Disbursements
• Benefit payments: Guaranteed  12/01/11  =         (333,901.04)
• Benefit payments: Guaranteed  12/01/11  =         (276,559.55)
• Benefit payments:  Non-Guaranteed  12/01/11 =   (59,562.79)
• Total Benefit payments:                                        (670,023.38)
• Adjustments: Contract expense charge:                    (2,688.07)
• Adjustments:  Elective Service charge:                        (630.82)
• Total Adjustments:                                                     (3,318.89)
•  
• Total Disbursements:               (673,342.27) 
• Net Investment Income:            485,154.65
• Market Value 12/31/11  =  $108,867,731.72

• 'Unit of Account' Concept (Applicable to Prudential Retirement Pooled Investment Vehicles)   see p. 36 of the booklet provided at the meeting

457 (b) Deferred Compensation Plan

• How does a governmental 457(b) plan work?
  Employees set aside money for retirement on a pretax basis through a salary deferral agreement with their employer. Under this arrangement, the employee agrees to take a reduction in salary. The money reduced is directed into an investment company offered by the employer. The 457(b) contributions grow tax free until withdrawal at retirement or termination of employment.
• need to see the contract and details
• No Township assets in the plan
• 51 Funds in the plan for the employees to choose from
• assets as of 1/31/12 = $7,410,570
• Great-West Funds managed by Schwartz & Co.
• ING Funds managed by Mike ?  This investment manager (not Schwartz & Co) was not present.
• Competition between two managers have eliminated charges and penalties
• emphasis by Schwartz & Co. is on education of the employee to make good retirement investment choices/provided at no cost to employee 
• Per Great West Retirement Services, fee information can be found within contract held by Bloomfield Township for each respective fund.
   

401(a) Defined Contribution Plan

• Definition of '401(a) Plan'
  A money-purchase retirement savings plan that is set up by an employer. The 401(a) plan allows for contributions by the employee, the employer, or both. Contribution amounts, whether dollar-based or percentage-based, eligibility, and vesting schedule are all determined by the sponsoring employer.
• 21 Funds available in the plan
• assets as of 1/31/12 = $1,142,322
• Details of the plan are not on the twp. website, below is what I was told:
• inception of plan began in 2005
• 10 %  employer contribution for non-union employees
• 14 %  employer contribution for union employees
• employee % contribution - I did not get the information

529 College Savings Plan

• 14 different investment choices in the plan
• 24 individual accounts at this time
• assets as of 1/31/12 = $320,915
• 100% employee funded
• employees have access to information and services of Schwartz & Co.
• no costs, no sales, no loads, group rates

Appendix includes:

Government Account Statement
Jan. 1, 2012 - Jan. 31, 2012
ending balance  1/31/12   =    $12,070,848.96
The investment objective for this account is:  Growth

Corporate Account Statement
Jan. 1, 2012  - Jan. 31, 2012
ending balance 1/31/12  =  $36,852,002.59
The investment objective for this account is: Preservation of Principal/Income

Please contact the township treasurer, Dan Devine  or Finance Director, Ray Perkins for more clarification or corrections.  Let me know if corrections need to be made on my blog.