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HomeMy WebLinkAbout2011-12-14 - Agendas - Final Lioneld Jordan Chairman Pete Reagan Position 2 Retired Sondra E.Smith Secretary Dennis Mullens Position 3 Retired Marion Doss Position I Retired PV1 Ron Wood Position 4 Retired Faye . ile ARKANSAS Special Firemen's Pension and Relief Fund Board of Trustees Meeting Agenda December 14, 2011 A special meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees will be held at 9:30 AM on December 14, 2011 in Room 219 of the City Administration Building. New Business: Review Investment Management Agreement and Investment Policy Statement— Garrison Financial 041 , 11 GARRISON F I N A N C I A L INVESTMENT MANAGEMENT AGREEMENT City of Fayetteville Firemen's Pension and Relief Fund GARRISON FINANCIAL,LLC 605 West Dickson Street,Suite 201 Fayetteville,Arkansas 72701 (479)587-1045 Telephone (888)442-7637 Toll Free (479)587-1257 Facsimile www.garrisonfinancial.com INVESTMENT MANAGEMENT AGREEMENT BETWEEN CITY OF FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND AND GARRISON FINANCIAL This Investment Management Agreement between City of Fayetteville Firemen's Pension and Relief Fund (the "Client")and Garrison Asset Management,LLC(the "Investment Advisor") is effective as of the I st day of January, 2012. WHEREAS, the Client is desirous of appointing the Investment Advisor as investment manager with respect to the investment of certain assets of the Client;and WHEREAS, the Investment Advisor is willing to accept the duties and the responsibilities of an investment manager set forth herein with respect to such assets; NOW,THEREFORE,in consideration of the premises and mutual considerations provided in this Agreement, and intending to be legally bound,the Client and the Investment Advisor agree as follows: 1. Appointmen . The Investment Advisor is hereby appointed to act as an investment manager with respect to the assets of the Client specified in Schedule A attached hereto and the proceeds of the investments thereof and accretions and addition thereto (collectively, the "Assets"), and the Investment Advisor will furnish continuously an investment program with respect to the Assets. The cash, securities, and other investments making up the Assets are sometimes referred to collectively herein as the "Account." The Client may add additional Assets to the Account. The Client may remove any of the Assets from the Account at any time. Upon removal of Assets, the Investment Advisor shall have no further obligation to provide the investment management services contemplated by this Agreement with respect to such Assets. The Client hereby instructs the Investment Advisor to have all of the Assets held by Charles Schwab & Company, Inc. (Custodian), for the investment accounts of City of Fayetteville Firemen's Pension and Relief Fund. Notwithstanding any provision of this Agreement, the Investment Advisor shall not be liable for any error,mistake, or unlawful act committed by the Custodian or for any loss suffered by the Client as a result of the custodianship of any of the Assets by a Bank or any other person,except if and only to the extent that any such error,mistake,act,or loss is a direct result and proximate result of misfeasance, bad faith, or gross negligence on the part of the Investment Advisor in the performance of its obligations and duties under this Agreement, and the Client shall otherwise look only to such Custodian for legal or equitable relief in connection therewith. 2. Fees. The Client will pay the Investment Advisor, as compensation for its services under this Agreement, fees determined in accordance with Schedule B, which is attached to this Agreement. The Client may elect to have the fees directly deducted from the account. The Client can indicate billing preference on the custodial application. Please be advised that it is the responsibility of the client to verify the accuracy of each billing. The custodian will not determine whether the fee is properly calculated. In the event fees are deducted directly from the INVESTMENT MANAGEMENT AGREEMENT Page 2 of 9 GARRisoN I INA N C I At. Initial client account, the custodian will be furnished with the dollar amount of the fee and the specific account where the deduction will be made. 3. Authority of the Investment Advisor. Subject to the provisions of Section 5 of this Agreement, the Investment Advisor shall have the discretionary authority to manage and control the Assets, including the power to acquire and dispose of investments of the assets. Except as the Client may otherwise from time to time specify in writing to the Investment Advisor,the Investment Advisor shall not be required,when exercising its authority under this Section 3,to consult with or obtain the consent of the Client. 4. Limitation of Liability of the Investment Advisor. The Investment Advisor shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Client in connection with the matters to which this Agreement relates except a loss resulting from willful misfeasance,bad faith, or gross negligence on the part of the Investment Advisor in the performance of its obligations and duties under this Agreement. The Investment Advisor does not guarantee the future performance of the Client's account or any specific level of performance, the success or accuracy of any investment decision/determination or strategy that the Investment Advisor may use, or the success of Investment Advisor's overall management of Client's account. The Client understands that investment decisions made for the Client's account are subject to various market, currency, economic, political and business risks. The Client understands that at any given point in time the value of an investment may be worth more or less than the original purchase price. Except as may otherwise be provided by law, the Investment Advisor will not be liable to the Client for(a) any loss that Client may suffer by reason of any investment decision made or other action taken or omitted in good faith by the Investment Advisor with that degree of care, skill, prudence, and diligence under the circumstances that a prudent person acting in a fiduciary capacity would use,(b)any loss arising from the Investment Advisor's adherence to the Client's instructions,or(c)any act or failure to act by a custodian, any broker or dealer to which the Investment Advisor directs transactions for the Client's account,or by any other third party. Notwithstanding the limitations listed in Section 4,the client is not waiving any rights under the federal securities laws. 5. Investment Limitations and Guidelines. The Investment Advisor shall manage the Assets in accordance with the investment objectives,policies, and restrictions set out from time to time in Schedule C,which is attached to this Agreement. The Client may, from time to time, revise, supplement, or otherwise modify the guidelines set out in Schedule C by specifying such revision,supplement,or amendment in writing to the Investment Advisor;provided,however,that no such revision,supplement,or modification shall be effective until written notice thereof is received by the Investment Advisor. 6. Brokerage. (a) The Investment Advisor may place orders both as to sales and purchases of investments of the Assets through any broker or dealer it chooses. In selecting a broker or dealer for any transaction or series of transactions,the Investment Advisor may consider a number of factors including,for example,net price, reputation,financial strength and stability,efficiency of the Investment Advisor's execution,block trading and block positioning capabilities, willingness to execute related or unrelated difficult transactions, and other matters ordinarily involved in the receipt of brokerage services generally. The Investment Advisor shall not be deemed to have acted unlawfully or to have breached any duty created by this Agreement solely by reason of its having caused the Client to pay a broker or dealer that provides brokerage or research services to the Investment Advisor an amount of commission for effecting a portfolio transaction in excess of the amount of commission another broker or dealer would have charged for effecting a portfolio transaction, if the Investment Advisor determines reasonably in good faith that the amount of such commission is reasonable in relation to the value of the brokerage or research services provided by such executing broker or dealer viewed in terms of a particular transaction or the Investment Advisor's overall responsibilities to the Client or its other discretionary client accounts. (b) The Client agrees that the Investment Advisor may aggregate sale and purchase orders of securities held in the Account with similar orders being made simultaneously for other accounts managed by the Investment Advisor or for accounts of the affiliates of the Investment Advisor if, in the Investment Advisor's judgement, such aggregation shall result in an overall economic benefit to the Account based on an evaluation that the Account is INVESTMENT MANAGEMENT AGREEMENT owl Page 3 of 9 GARRisoN I INA N C I At. Initial benefited by relatively better purchase or sale prices, lower commission expenses, and beneficial timing of transactions,or a combination of such factors. (c) The Investment Advisor will allocate aggregated transactions(block trades) in a manner that is fair and equitable to each client of the Investment Advisor. An internal allocation report will detail the list of participating accounts and will show the allocation between each account. Orders that are partially filled will be allocated to each client account in a computer generated, random fashion that is fair and equitable as determined by the Investment Advisor's Block Trade Allocation Policy. (d) The Investment Advisor will not at any time have custody of, or access to, Client Assets. The Investment Advisor may direct that distributions be made to the Client or to other accounts maintained by the Client. 7. Other Activities of the Investment Advisor. In addition to the investment management services to be performed by it under this Agreement, the Investment Advisor or any of its affiliates may engage in any other business and may render investment and advisory services to any other person, even if such other person may have investment policies similar to those required to be followed by the Investment Advisor with respect to the Assets. The Investment Advisor may, at any time,buy or sell securities of the same kind or class that are purchased or sold with respect to the Account. 8. Reports. The Investment Advisor agrees to furnish the Client with quarterly statements of the Account, in a format reasonably acceptable to the Client and the Investment Advisor (including e-mail and other electronic means), and such other reports and information as the Investment Advisor customarily makes available to other clients. Clients will also receive periodic reports directly from their custodian. Reports sent electronically by the Advisor are deemed delivered upon successful transmission by the Advisor. Client is required to notify Advisor immediately if they do not receive a quarterly report. 9. Proxy Voting. Unless otherwise requested in writing by the Client, the Investment Advisor shall not take any action with respect to the voting of proxies solicited by any person with respect to any investment of the Assets. The Investment Advisor will advise the Client on the issues presented in such proxies if so requested by the Client. 10. Block Tradim. Block trades are allocated in a fair and impartial manner. Partially executed block trades are allocated based on a randomly generated computer list. Company and personal accounts included in block trades are excluded for the purpose of allocation in the event of a partial fill. In the event the block trade is executed at varying prices,an average price will be calculated and each account will receive the average price. 11. Termination. The Investment Advisor may terminate this Agreement on thirty (30) days notice to the Client. The Client may terminate the Investment Advisor's appointment as an investment manager with respect to all or part of the assets immediately upon delivery of notice of termination to the Investment Advisor as provided in Section I above. 12. No Assi2nment. Neither the Investment Advisor nor the Client may assign this Agreement or delegate its responsibilities hereunder without the written consent of the other party. 13. Communications. Any notice, instruction, request, consent, demand, or other communication required or contemplated by this Agreement to be in writing shall be given or made or communicated in person to, or by United States first class mail,postage prepaid,addressed as follows: If to the Client: City of Fayetteville Firemen's Pension and Relief Fund Attn: 113 W. Mountain Fayetteville,Arkansas 72701 INVESTMENT MANAGEMENT AGREEMENT Page 4 of 9 GARRisoN I INA N C I At. Initial If to the Investment Advisor: Garrison Financial 605 West Dickson Street, Suite 201 Fayetteville,Arkansas 72701 provided that each party shall, by written notice, promptly inform the other party of any change of address. Communication may also be conducted by e-mail or other electronic means. All written,but non-electronic,notices to either party shall be effective upon receipt. All electronic notices to the Advisor shall be effective upon receipt and all electronic notices to the Client shall be effective upon successful transmission by the Advisor. The Client shall notify the Investment Advisor, in writing, of the people who are authorized to act on behalf of the Client under this Agreement. 14. Modification of Agreement. This Agreement may be amended only by a written instrument signed by the Client and the Investment Advisor; provide , however, that Schedule C may be amended, supplemented, or otherwise modified at any time or from time to time by this Client by written notice to the Investment Advisor. 15. Governing Laws. This Agreement shall be construed in accordance with the laws of The State of Arkansas(other than conflicts of law rules),except to the extent superseded by federal law. IN WITNESS WHEREOF,the Client and the Investment Advisor have executed this Agreement as of the day and year written above. Mayor Lioneld Jordan Sondra Smith,City Clerk Marion Doss,Board Member Dennis Mullens,Board Member Pete Reagan,Board Member Ron Wood,Board Member INVESTMENT MANAGEMENT AGREEMENT Page 5 of 9 GARRisoN I INA N C I At. Initial ACKNOWLEDGE OF RECEIPT OF FORM ADV PART 11 & CLIENT CUSTODY NOTIFICATION REQUIREMENTS. Client hereby acknowledges receipt of ADV Part 11 as of the day and year written above. The Investment Advisory Act of 1940 requires that information in this contract be delivered to the Client at least 48 hours prior to contract initiation or that the Client be permitted to terminate the contract within five business days without penalty. Rule 206(4)-2 (the "Rule") of the Investment Advisors Act of 1940, as amended , requires us to notify you that by engaging us to manage your assets under this contract that you have also opened a custodial account with the custodian of your choosing for the safekeeping of your assets. We are required under the Rule to have a reasonable belief, after"due inquiry",that your chosen custodian will send client statements directly to you. After due inquiry, we have determined that the custodian does, in fact, send client statements directly to you because they also send a copy of those statements to us. YOU ARE URGED TO COMPARE THE CLIENT STATEMENTS YOU RECEIVE FROM YOUR CHOSEN CUSTODIAN TO THE CLIENT STATEMENTS YOU RECEIVE FROM US AND NOTIFY US IMMEDIATELY OF ANY DISCREPANCIES. Mayor Lioneld Jordan Sondra Smith,City Clerk Marion Doss,Board Member Dennis Mullens,Board Member Pete Reagan,Board Member Ron Wood,Board Member GARRISON ASSET MANAGEMENT,LLC Name and Address of Safekeepint!Institution: Charles Schwab&Company,Inc. 101 Montgomery Street By: San Francisco,CA 94104 INVESTMENT MANAGEMENT AGREEMENT Page 6 of 9 GARRisoN I INA N C I At. Initial SCHEDULE A TO THE INVESTMENT MANAGEMENT AGREEMENT BETWEEN CITY OF FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND AND GARRISON ASSET MANAGEMENT,LLC Assets of the Account To be determined following transfer of accounts. lNVESTMENT MANAGEMENT AGREEMENT Page 7 of 9 GARRisoN I INA N C I At. Initial SCHEDULEB TO THE INVESTMENT MANAGEMENT AGREEMENT BETWEEN CITY OF FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND AND GARRISON ASSET MANAGEMENT,LLC In consideration of the services performed by the Investment Advisor under this agreement,the Client agrees to pay the Investment Advisor a management fee determined as follows: 0.50%(50bps)of the market value of assets under management Asset management fees are calculated based on the average market value over the billing cycle. Fees are calculated quarterly on an annual basis according to the schedule above and are paid quarterly in arrears. Fees for partial billing periods are prorated based on the actual number of days assets are under management. Client understands that Assets of the Account invested in shares of mutual funds or other investment companies ("Funds") will be included in calculating the value of the Assets for purposes of computing Investment Advisor's fees and the same Assets will also be subject to additional advisory and other fees and expenses, as set forth in the prospectuses of those funds,paid by the funds but ultimately borne by the Client. INVESTMENT MANAGEMENT AGREEMENT owl Page 8 of 9 GARRisoN I INA N C I At. Initial SCHEDULE C TO THE INVESTMENT MANAGEMENT AGREEMENT BETWEEN CITY OF FAYETTEVILLE FIREMEN'S PENSION AND RELIEF FUND AND GARRISON ASSET MANAGEMENT,LLC Investment Policies and Guidelines. See Investment Policy Statement. INVESTMENT MANAGEMENT AGREEMENT Page 9 of 9 GARRisoN I INA N C I At. Initial 001�1, GARRISON F I N A N C I A L Investment Policy Statement City of Fayetteville Firemen's Pension and Relief Fund January 1, 2012 Garrison Financial 605 W. Dickson Street, Suite 201 Fayetteville, Arkansas 72701 ON i GARRISON INVESTMENT POLICY SUMMARY City of Fayetteville Firemen's Pension and Relief Fund January 1, 2012 Type of Assets Pension Fund Custodian Charles Schwab & Company Tax ID Current Assets Approximately $4,900,000 Investment Time Horizon Greater than 5 years Liquidity Cash & Equivalent balance will remain adequate to support short-term needs as instructed by the account holder. Risk Tolerance Moderately Conservative Return Objective Growth and Income Asset Allocation percent fixed income and percent equity with a maximum variance of ___percent. Cash holdings will be adequate to meet short-term liquidity needs. Fixed Income All fixed income securities must have a rating of investment grade Quality Constraints by Moodys and S&P. Representative Benchmarks Fixed Income Barclays Intermediate Govt./Corp. Equity S&P 500 The Trustees of the City of Fayetteville Firemen's Pension and Relief Fund investment portfolio ("Portfolio") are charged with the responsibility of investing the assets of the Portfolio in accordance with A.C.A §24-11-216, §24-2-610 — §24-2-619, and §24-10-402(a)(2)(E), all of which are incorporated into this Investment Policy Statement by reference and included as an attachment hereto. K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page 2 of 8 12/14/118:53 AM ON i GARRISON INTRODUCTION The purpose of this Investment Policy Statement (IPS) is to establish a clear understanding between City of Fayetteville Firemen's Pension and Relief Fund ("Investor") and Garrison Financial ("Advisor") as to the investment goals and objectives and management policies applicable to the City of Fayetteville Firemen's Pension and Relief Fund investment portfolio ("Portfolio"). This Investment Policy Statement will: >- establish reasonable expectations, objectives and guidelines in the investment of the Portfolio's assets. A, create the framework for a well-diversified asset mix that can be expected to generate acceptable long-term returns at a level of risk suitable to the Investor, including: describing an appropriate risk posture for the investment of the Investor's Portfolio; specifying the target asset allocation policy; establishing investment guidelines regarding permissible securities and diversification of assets; specifying the criteria for evaluating the performance of the Portfolio's assets >- define the responsibilities of the Investor and the Advisor encourage effective communication between the Advisor and the Investor This IPS is not a contract. This investment policy has not been reviewed by any legal counsel and the Advisor and Investor use it at their own discretion. This IPS is intended to be a summary of the procedures that provide guidance for the Investor and the Advisor. The investment policies described in this IPS should be dynamic. These policies should reflect the Investor's current status and philosophy regarding the investment of the Portfolio. These policies will be reviewed and revised periodically to ensure they adequately reflect any changes related to the Portfolio, to the Investor or the capital markets. It is understood that there can be no guarantee about the attainment of the goals or investment objectives outlined herein. OBJECTIVES The investment goals for the portfolio shall be to achieve the maximum total return while seeking to minimize total risk, with specific attention to capital preservation, capital appreciation and inflation protection. The primary return objective of the portfolio is to provide growth of the assets over the investment time horizon. Garrison Financial assumes the fiduciary responsibility of investment portfolio management and seeks to establish and maintain a portfolio that meets these objectives. Investments will be made for the sole interest and exclusive purpose of providing benefits to the account beneficiary. These assets will be invested with the prudent care, expertise, and diligence consistent with the return objective and risk tolerance of the portfolio. K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page 3 of 8 12/14/118:53 AM ON i GARRISON TIME HORIZON The investment guidelines are based upon an investment horizon of more than five years, so that interim fluctuations should be viewed with appropriate perspective. Capital values do fluctuate over shorter periods and the Investor should recognize that the possibility of capital loss does exist. However, historical asset class return data suggest that the risk or principal loss over a holding period of at least three to five years can be minimized with the long-term time horizon employed under this Investment Policy Statement. RISK TOLERANCE Investment theory and historical capital market return data suggest that, over long periods of time, there is a relationship between the level or risk assumed and the level of return that can be expected in an investment program. In general, higher risk(e.g. volatility of return) is associated with higher return. Given this relationship between risk and return, a fundamental step in determining the investment policy for the Portfolio is the detennination of an appropriate risk tolerance. There are two primary factors that affect the Investor's risk tolerance: Financial ability to accept risk within the investment program, and ; Willingness to accept return volatility. Taking these two factors into account, the Investor rates his or her own risk tolerance as moderately conservative. The Investor recognizes that higher returns involve some volatility and has indicated a willingness to tolerate fluctuations in this portfolio. ASSET ALLOCATION Academic research suggests that the decision to allocate total assets among various asset classes will far outweigh security selection and other decisions that import portfolio performance. After reviewing the long-term performance and risk characteristics of various asset classes and balancing the risk and rewards of market behavior, an asset allocation policy of ercent fixed income and - percent equity with a maximum variance of percent, is selected to achieve the objectives of the Investor's Portfolios. No guarantees can be given about future performance. This Investment Policy Statement shall not be construed as offering such a guarantee, and at any point in time an investment may be worth less than the original purchase price. K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page 4 of 8 12/14/118:53 AM ON i GARRISON Updated Allocations From time to time, it may be desirable to amend the basic allocation policy or calculations. When such changes are made, updates will be attached to this Investment Policy Statement as an Appendix and will be considered part of this Investment Policy Statement. LIQUIDITY and MARKETABILITY The Investor will provide the Advisor instruction as to the cash balance needed to provide for short-term needs. Additional cash reserves may be held as dictated for investment or operational reasons. All assets held in the portfolio will be readily marketable. Securities will be listed on a principal securities exchange or traded in the over the counter(OTC)market. DIVERSIFICATION Investment of the Investor's funds shall be limited to individual marketable securities or packaged products (for example, mutual funds or unit investment trust) in the following categories: Permitted Asset Classes Fixed Income: Cash and cash equivalents Domestic Bonds Mortgages Preferred Stock Equities: U.S. Equities Non-U.S. Equities Convertible Preferred Stock Permitted Security Types Individual Stocks Individual Bonds Individual Preferred Stocks Mutual Funds— Stock, Preferred Stock, Bond and Money Market Funds Closed-end funds Unit Investment Trusts Covered Call Options Investments in Limited Partnerships Bank certificates of deposit American Depository Receipts K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page 5 of 8 12/14/118:53 AM Am i GARRISON Prohibited Asset Classes and/or Security Types Precious metals Venture Capital Short sales Purchases of Letter Stock, Private Placements, or direct payments. Commodities Transactions Puts, calls, straddles, or other option strategies, except as permitted above. Other Investment Considerations Equity holdings in any one company should not exceed more than five (5%) percent of the market value of the portfolio. The industry sector weightings should not generally exceed twenty-five (25%) percent of the market value of the portfolio. Variance from policy guidelines may occur when (i) the portfolio is less than $200,000, (ii) the portfolio is part of a consolidated portfolio, which meets guidelines, or (iii) the Investor has specifically requested or acknowledged variance. CLIENT COMMUNICATION AND REVIEW PROCEDURES Reports Garrison Financial shall provide the Investor with a report each quarter that provides detailed information concerning portfolio holdings, transactions, capital gains information and a comprehensive performance report. Additional information will be included as needed. The Investor will be provided a monthly statement from the custodian. Meetings and Communication Between Investor and Advisor Garrison Financial shall meet with the client as necessary to review and explain the Portfolio's investment results and any related issues. Garrison Financial shall also be available for telephone communication, via e-mail and over the internet at www.gaffisonassetmanagement.com as needed. Any material event that affects the ownership of Garrison Financial or the management of the Portfolio must be reported immediately to the Investor. DUTIES AND RESPONSIBILITIES The Advisor Garrison Financial is expected to manage the portfolio in a manner consistent with this Investment Policy Statement and in accordance with State and Federal law and the Uniform Prudent Investor Act. Garrison Financial is an SEC Registered Investment Advisor under the Investment Advisers Act of 1940, as amended and shall act as the investment advisor and fiduciary to the Investor until the Investor decides otherwise. K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page 6 of 8 12/14/118:53 AM ON i GARRISON Garrison Financial shall be responsible for: 1. Designing, recommending and implementing an appropriate asset allocation plan consistent with the investment objectives, time horizon, guidelines and constraints outlined in this statement. 2. Recommending an appropriate custodian to safeguard the Investor's assets. 3. Advising the Investor about the selection of and the allocation of asset categories. 4. Identifying specific assets within each asset category. 5. Monitoring the performance of all selected assets. 6. Recommending changes to any of the above. 7. Periodically reviewing the suitability of the investments for the Investor, and being available to meet with the Investor as needed at the Investor's request. 8. Preparing and presenting appropriate reports. Garrison Asset Management will not take title to, nor have custody of, any of the Investor's assets. The Investor The Investor shall be responsible for directing Garrison Financial to make changes in the investment policy and to oversee and to approve recommendations with regards to policy, guidelines and objectives. The Investor will provide Garrison Financial with all relevant information on the financial conditions and risk tolerances and shall notify the Advisor promptly of any changes to this information. �=M Mayor Lioneld Jordan Sondra Smith, City Clerk Marion Doss, Board Member Dennis Mullins, Board Member Peter Reagan, Board Member Ron Wood, Board Member Garrison Financial Representative Date K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page 7 of 8 12/14/118:53 AM ON i GARRISON INVESTING PRIMARILY IN MUTUAL FUNDS & ETF'S Based on the desire of the Investor, and after having carefully considered the Investor's goals, objectives, risk tolerances and time horizon, the Investor has requested, and the Advisor is permitted to, invest an amount equal to the entire assets of the Portfolio in mutual fund shares or ETF's (in addition to the other Permitted Asset Classes & Security Types) consistent with this Investment Policy Statement. Investor understands that Portfolio assets invested in shares of mutual funds or other investment companies ("Funds") will be included in calculating the value of the Portfolio for purposes of computing Advisor's fees and the same assets will also be subject to additional advisory and other fees and expenses, as set forth in the prospectuses of those funds, paid by the funds but ultimately borne by the Investor. Mayor Lioneld Jordan Sondra Smith, City Clerk Marion Doss, Board Member Dennis Mullins, Board Member Peter Reagan, Board Member Ron Wood, Board Member K:\Fire Pension\Agendas\Agendas 2011\Garrison Investment Policy Statement.doc Page8 of8 12/14/118:53 AM Fayetteville Fireman's Pension and Relief Fund Meeting Date IoA Ll Adjourn Time Attendees: Subject: Subject: A Motion By: q a�, Motion By: Seconded: Seconded: Mayor Jordan Mayor Jordan Marion Doss Marion Doss Pete Reagan Pete Reagan Dennis Mullens Dennis Mullens Ronnie Wood Ronnie Wood Sondra Smith - Sondra Smith Subject: Subject: Motion By: Motion By: Seconded: Seconded: Mayor Jordan Mayor Jordan Marion Doss Marion Doss Pete Reagan Pete Reagan Dennis Mullens Dennis Mullens Ronnie Wood Ronnie Wood Sondra Smith Sondra Smith V 0 Fayetteville Fireman's Pension and Relief Fund Meeting Date A7? - Adjourn Time Attendees: I Demki ,5 M wQty�,a, Pe4t- kpaeftim Ota,-t, MAd&& MO/un% Um ?CAY\ to- Wf)40 I , (J 00^&Vp� 4 Yn*,2tK, , r,a hifen 0,41 LI varbye. Subject: Subject: Motion By: Motion By: Wo6d Seconded : Seconded: Mayor Jordan Mayor Jordan Marion Doss Marion Doss Pete Reagan Pete Reagan Dennis Mullens Dennis Mullens Ronnie Wood Ronnie Wood vo�� Sondra Smith Sondra Smith w000� 6ppro ve� JIA4 ,f4k rW� PC) I CT Subject: Subject: Faed I-Ileome 00t a Motion By: Ate. IC2aQ anA Motion By: V Seconded: Dcnrl ?s Seconded: L�SJI Mayor Jordan VOOO� Mayor Jordan LOO/ Marion Doss Marion Doss woo� Pete Reagan Pete Reagan Dennis Mullens Dennis Mullens Ronnie Wood Ronnie Wood Sondra Smith Sondra Smith