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Home My WebLink AboutCombined 1945/1977 Pension Funds Augusta Richmond GA DOCUMENTNAME:~'G\oed \~l\'5(\CTllpeDS\CXl ~\"d'S DOCUMENT TYPE: YEAR:~19 BOX NUMBER: 08 FILE NUMBER: \ Q Cf\ \ NUMBER OF PAGES: '1 . ", '. . q/~3 ~ 11/ f#?J( CONSULTING SERVICES GROUP Services designed to meet the complex needs of the fiduciary investor. RICHMOND COUNTY COMBINED 1945/1977 PENSION FUNDS -- I Presented by Edwin M. May, Jr. Charles A. May The Robinson-Humphrey Co., Inc. September 23, 1996 ;. . , , PERFORMANCE REVIEW June 3D, 1996 - September 20, 1996 Cash Portfolio Bond Portfolio Equity Portfolio Beginning Balance 6/30/1996 $ 3,584,247 $ 5,009,867 $ 7,658,731 Current Value 9(2.0/1996 $ 3,617,966 $ 5,103,553 $ 8,050,791 Gain/Loss $ 33,719 $ 392,060 $ 93,686 Rate of Return 0.9% 1.8% 5.1% Comparative Indices (30-Jun-96 thru 20-Sep-96) Donoghue MM Fund LB Government Bond Standard & Poor 500 Composite* 0.9% -0.5% 2,4% -= ili~~~t~~~~~~~~~*~~~~~~~~~~~~~~ml~~~~~lt~~l~~~t . ~~~~~~~~~~~~ffl~~~t~~:.::~~~~' ~~~~~~tQ:!~: ~1.r~t1@114tl~1g1;;1;!lill ~mmi.fulli,.,...>..,.,.":::,,,,Aili:,,~':W,,, , M'\F:ld;:4WrTi'lhWh'l~ 1II>'.'."ill.'.'m":;;w."ww'~' <<', ,:;:-',,,l,:::':;W ~'~"""" :;;" W '.'.<'.'.............w" 'l<:::,::::'~., ~l' '" '"'::.i~w ~ ~lh#ttl)~ ' 3~m9 "=.~,li:,,,, ill ",',',w,,,",',' "'''''T''''ill@ w,>:::,~~'".".'w,',''''''w ~~'11\~i~;~ .l;rt1!~~!mt);m@ ~mmL4Kkill :;;'llii:<,,,:;;,,,<.Xt WGlV@MtWmwmmWmt "'I~.,..~~'",dli:,lli:ill~:..,,<~ ~~11JII~II~ljf;i~~~ili ",:;;"""w,,,lillPi"l':,,,,,",:;;,,,,,,ll':W . [l100~~~J~~~~~1~t~~*~~~~~1~1t~~~Jili '"r~m"",',:;;l+3'~'':;:::'',w,w'ffl::'''lll::''' ttttj1~~tiili~t~twi'm%kft~~ * Composite Index is comprised of the Donoghue MM Fund Index, LB Government Bond Index, and S&P 500 Index, with the weighting of each individual index consistant with the asset mix of your portfolio. (This Composite Index is used for comparison purposes only.) The information furnished above has been obtained from what we consider to be reliable sources but no guarantee is made with respect to accuracy. .' . 7 Statement of Investment Policy Objectives and Guidelines RICHMOND COUNTY 1977 and 1945 PENSION FUNDS STATEMENT OF PURPOSE The purpose of the Richmond County 1977 and 1945 Pension Funds is to provide pension benefits to qualified participants and their beneficiaries. In general, the purpose of this document is to outline a philosophy and attitude which will guide the investment management of the assets towards the desired results. It is intended to be sufficiently specific to be meaningful, yet flexible enough to be practical. GENERAL INVESTMENT PRINCIPLES 1. Investments shall be made solely in the interest of the beneficiaries of the Fund. 2. The Fund shall be invested with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the investment of a fund oflike character and with like arms. 3. Investment of the Fund shall be so diversified as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. 4. The Trustees may employ one or more investment managers of varying styles and philosophies to attain the Fund's objectives. 5. Cash is to be employed productively at all times, by investment in short term cash equivalents to provide safety, liquidity, and return. DELEGA nON OF AUTHORITY The Trustees can elect to delegate the investment management duties for all or some part of the fund to one or more professional investment manager(s) who shall be guided by the overall investment policy guidelines established by this policy statement. " . INVESTMENT OBJECTIVES In order to meet its needs, the investment strategy of the Richmond County 1977 and 1945 Pension Funds is to emphasize total return; that is, the aggregate return from capital appreciation and dividend and interest income. Specifically, the primary objective in the investment management for Fund assets shall be: Long-Term Growth of Capital - To emphasize long-term growth of principal while avoiding excessive risk. Short-term volatility will be tolerated in as much as it is consistent with the volatility of a comparable market index. Preservation of Capital - To minimize the probability of loss of principal over the investment horizon. Emphasis is placed on minimizing return volatility rather than maximizing total return. Income and Growth - To achieve a balanced return of current income and modest growth of principal. The absolute return should exceed the actuarial assumption which is currently 8%. The investment objectives above relate to the aggregate Fund. They are not meant to be imposed on each investment account (if more than one account is used). The goal of each investment manager, over the investment horizon, shall be to: 1. Meet or exceed the market index, or blended market index, selected and agreed upon by the Trustees that most closely corresponds to the style of investment management. ~ Equity Manager--approximate the S&P 500 Stock Index ~ Bond Manager-approximate the LB Gov/Corp. Bond Index 2. Display an overall level of risk in the portfolio which is consistent with the risk associated with the benchmark specified above. Risk will be measured by the standard deviation of quarterly returns. Specific investment goals and constraints for each investment manager, if any, shall be incorporated as part of this statement of investment policy. Each manager shall receive a written statement outlining his specific goals and constraints as they differ from those objectives of the entire Fund. Page 2 MARKET ABILITY OF ASSETS The Trustees require that all of Fund assets be invested in liquid securities, defined as securities that can be transacted quickly and efficiently for the Fund, with minimal impact on market price. The use of derivative securities or other synthetic products whose prices are subject to potentially high volatility and whose returns are speculative or leveraged, or whose marketability may be limited, is prohibited. INVESTMENT GUIDELINES Allowable Assets 1. Cash Equivalents ~ Treasury Bills ~ Money Market Funds ~ STIF Funds ~ Commercial Paper ~ Banker's Acceptances ~ Repurchase Agreements ~ Certificates of Deposit 2. Fixed Income Securities ~ U.S. Government and Agency Securities ~ Corporate Notes and Bonds ~ Mortgage Backed Bonds ~ Preferred Stock ~ Planned Amortization Class Collateralized Mortgage Obligations (pAC CMOs) or other "early tranche" CMOs 3. Equity Securities ~ Common Stocks ~ Convertible Notes and Bonds ~ Convertible Preferred Stock ~ American Depository Receipts (ADRs) of Non-U.S. Companies 4. Mutual Funds ~ Mutual Funds which invest in securities as allowed in this statement. Page 3 Asset Allocation Guidelines Investment management of the assets of the Richmond County Board of Commission 1977 and 1945 Pension Funds shall be in accordance with the following asset allocation guidelines: 1. Aggregate Fund Asset Allocation Guidelines (at market value) Asset Class Equities Fixed Income Cash and Equivalents Minimum 20% 20% 0% Maximum 50% 60% 20% Preferred 45% 50% 5% 2. The Trustees may employ investment managers whose investment disciplines require investment outside the established asset allocation guidelines. However, taken as a component of the aggregate Fund, such disciplines must fit within the overall asset allocation guidelines established n this statement. Such investment managers will receive written direction from the Trustees regarding specific objectives and guidelines. DIVERSIFICATION AND RISK PARAMETERS The Trustees recognize that virtually all investments entail some degree of risk, and also understand that defining risk for the fund's assets is not a precise science. However, to establish a general risk tolerance for the fund, the Trustees have determined that high quality investments providing an opportunity for modest growth of capital are essential. While the fund as a whole should project a generally conservative identity, limited use of more aggressive investments is permissible for diversification purposes. However, in order to achieve a prudent level of portfolio diversification, the securities of anyone company should not exceed 5% of the total fund, and no more than 20% of the total fund should be invested in anyone industry. Guidelines for Fixed Income Investments and Cash Equivalents 1. Fund assets may be invested only in investment grade bonds rated A or better by both Standard and Poors and Moody rating agencies. 2. Fixed income maturity restrictions are as follows: · Maximum maturity for any single security is 30 years. · Weighted average portfolio maturity may not exceed 15 years. 3. Money Market Funds selected shall contain securities whose credit rating at the absolute minimum would be rated investment grade by Standard and Poors, and/or Moody's. Page 4 '. Guidelines For Equity Investments To the extent the fund holds equity securities, risk is to be measured in terms of volatility relative to the S&P 500 Stock Index. The Trustees desire that the average volatility of the fund's equity portfolio should approximate being equal to that of the S&P 500. INVESTMENT COMMITTEE An Investment Committee shall be created to monitor performance and investment results as well as oversee the implementation of the Investment Policy Statement. This Investment Committee shall consist of the following members: Mayor->>hairman, Chairman Finance Committee, Comptroller and City/County Manager. ~ rj,t) 7.UJtJ INVESTMENT MANAGER PERFORMANCE REVIEW AND EVALUATION Performance reports generated by the Investment Consultant shall be compiled at least quarterly and communicated to the Trustees for review. The investment performance of total portfolios, as well as asset class components, will be measured against commonly accepted performance benchmarks. Investment managers shall be reviewed quarterly regarding performance, personnel, strategy, research capabilities, organizational and business matters, and other qualitative factors that may impact their ability to achieve the desired investment results. All internal controls, investment procedures, records, reports, and documentation shall be reviewed annually by an independent auditor. INVESTMENT POLICY REVIEW To assure continued relevance of the guidelines, objectives, financial status and capital markets expectations as established in this statement of investment policy, the Trustees plans to review investment policy at least annually. This statement of investment policy is adopted by the Finance Committee of the Augusta- Richmond County Commission for the Richmond County 1977 and 1945 Pension Funds. day of October , 1996 Page 5