The most significant portion of the meeting revolved around the proposed adjustments to the pension plan’s assumed rate of return. Doug, the presenter, highlighted the necessity of considering a reduction from the current 7.4% to a more conservative 7%. This suggestion was based on the average pension plan assumption across the state, which hovers around 7%, and the Florida Retirement System’s rate of 6.7%. Doug proposed a glide path approach.

Doug emphasized that while the city typically resists higher contributions, a reduction in the assumption rate was necessary to maintain the pension fund’s target, especially considering market performance. He provided specific figures, noting that lowering the assumption to 7% would result in an additional funding impact of approximately 4.78% of payroll annually for the police department. Board members expressed concerns about the city’s reaction to this increased financial obligation. Doug reassured them that estimates were based on the previous year’s figures, providing a buffer to mitigate the financial impact on the city.

Confusion arose during the discussion due to some members reviewing outdated documents. Doug confirmed he would resend the correct materials to ensure clarity. Despite interruptions, the board collectively agreed on the importance of making informed decisions regarding financial assumptions to ensure the pension plan’s viability.

The meeting then transitioned to a detailed review of the market’s performance and its implications for the pension funds. The quarterly review revealed a 4.3% positive return for the S&P 500, driven primarily by a small segment of technology stocks dubbed “The Magnificent 7.” However, only 27% of companies within the S&P outperformed the index, with the fixed income segment experiencing slight gains due to inflation concerns and a slight uptick in interest rates.

During the asset allocation review, the fire fund’s market value was reported just below $18 million, with the police fund showing a similar figure. Both funds had a 10-year return of approximately 6.8%, comfortably within their target ranges, with no immediate need for rebalancing.

The board also examined individual fund performances, noting declines in international equity and fixed income sectors. The europacific and growth-focused manager sides were down around half a percent, while the DFA value side saw similar declines. The fixed income realm showed slight gains, with the Dodge and Cox fund and Pimco Global Bond fund both reporting positive returns due to effective positioning strategies.

A notable discussion point was ASB’s strategy to liquidate all office and retail properties by the end of 2025. As of June 30, ASB had 15 properties worth $550 million marketed, with nine under contract. Successful sales would allow for quicker access to funds, facilitating further investment opportunities.

The board also navigated through updates on portfolio management, considering the replacement of Allspring Growth Strategy with Mainstay Winslow due to upcoming retirements and management changes at ClearBridge and MFS. The board discussed the implications of these transitions on performance and overall portfolio stability. A motion to replace Allspring Growth with Mainstay Winslow was made, seconded, and accepted.

In administrative matters, the board addressed a pending disability application for a police officer. The officer’s independent medical examination was scheduled for August 7, with the physician’s report expected within ten days to two weeks. To expedite the process and minimize costs, the board considered scheduling a special meeting for the disability application hearing, given a member’s unavailability from September 29 to December 12.

Legislative updates included the anticipation of new developments in the upcoming session after Thanksgiving, particularly a pending bill related to the Florida Retirement System and the reimplementation of a cost-of-living adjustment for certain members.

The board also discussed the necessity of updating summary plan descriptions, collective bargaining agreements, and service providers. Financial disclosure forms, with a submission deadline of July 1, were also highlighted, emphasizing compliance to avoid state-imposed fines.