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6
MIN
UTESOF
Til
E
PA
CE
INDUSTRYNION-MANAGEMENT
PENSlON
FUND
BOARDOF
TR
STEES
l \ 1 E I
~
T I N G
April
29-
May
1,
2001
PRE
SEi'lT:
Labor
Trustees
Boyd
Young,
Chairman
Gary
B.
Cook
Roge
r
He
iser
Donald
L.
Langham
ALSO
PR
ESENT:
Ma
nage
me
ntTrustees
Gayle
Sparapani,
Se
cr
et
ary
SusanStau
duh
ar
Maria
F.
Wieck,
Administrative
Manager
DOll
Wilk
es,
Director,
Pensions
and
IusuranceRichard
E.
Nikodym,FinancialOfficer
Darrin
Owens,
The
Segal
Company
Virginia
IVcGinley,
Th
eSe
gal
Company
Barry
S.
Slevin,
Slevin
&
Hart.,
P.C.
Th
e
mee
ting
was
heldinSanAntonio,
Texas.
Minutes.
Uponamotion
duly
mad
eandseconded,it
\V
a
unanimousy
RESOLVE
D,
thattheminutesoftheOctober5,2000oardofTrustees'
meeting.withtheadditionofidentificationoftheBlueRidgeparticipating
facilities,areapproved.
Chairman
.TheChairmannotedthatin
the
pasthehadexpressedhisc
onc
ernaboutthegrowth
of
theFund.
r
-I
e
reviewed
wit
htheBoard
the
new
participatingg
ro
upsandnumb
er
ofparticipantsand
complimen
te
dthe
Fund
OfficeandMr.Wilkesontheireffortsandtheresultsthusfar.Henoted
thattheBoardneededtocontinuetoexplorewaysto
increase
participation.
GOVERNMENT
EXHIBITGE
-20
Counsel.
Mr.
Slevinreviewedwiththe
Board
counse
l's
April
21,200]
report.Inthecontext
of
tilediscussionregardingthepossiblecreation
of
a40I(h)accountfor
retiree
healthbenefits,it
was
agreedthattheTrustees
would
beprovidedwithfinancialinformationrelatingtotheprojected
value
of
futurebenefits
of
the
Potlatch
groupundercon
sideration,
whilecounselgoesforward
with
aprivateletterrulingrequest.Upon
a
motionduly
mad
eandseconded,itwasunanimously
RESOLVED,
thatcounsel'sreportisacceptedandthe
Board
adopt
sthe
recommend
ationstherein.
The
Boardadjournedand
resumedthemeetingonthefollowingday.
Independent
Fiducial'"
Services.Frank
LillyandEdPatchettattendedthemeetingonbeha
lf
of
lF
S.Mr.Lillydirectedthe
Trustees'attentiontothemeetingpresentationbookandhighlightedtheagendaitemsheand
Mr
.
Pat
chett
intendedto
cover
atthemeeting.
Mr.
LillysaidIFS
would
firstpresentitsExecutive
Summary
"Flash"
Perform
anceReportsthrough
Mar
ch
200I
si
nc
einformationwasavailable
and
woul
dalsohighlightpe
rf
or
man
ceforthe
per
iodended-ebnuu
)'
2001.
First,
Mr
.LillythenreviewedtheFlashPerfo
rmance
ReportfortheFundthroughMarch
31
,2001,
noting
thatthetotal
Fund's
equity
man
agersintotalweredown-5
.3%
duringthe
month
of
March,aperiodof
very
highvolatilityintheequitymarkets.
By
com
parison,the
Fund'sequirypolicyb
enchm
ark,theWilshire5000Index,de
clined
6.7%
o
ver
thesameperiod.
Mr.Lilly
note
dthatall
of
theFund'sequitymanagerspostednegativeret
urn
soverthemonth.
Mr
.
LillythensaidtheFund'sfixedincomemanagerspe
rforme
dwell
over
the
mont
hofMarch,
consistentwiththe
per
formanceoftheFu
nd's
fixedincomepolicybenchmark.Hethen
indicatedthathi.discussionwouldfocusontheone-yearperiodended
Mar
ch.
For
theone-yearendedMarch,M
r.
LillysaidtheFund'sequity
mana
gerpo.eda
-10.2%
return.comparedtoa
-24.8%
returnfortheWilshire5000Index.Mr.Lillysaidingeneral,all
of
theFund'sequity
mana
gers
per
formedwellrelativetotheirassignedbench
mark
s,butthatequity
retu
rns
acrossmanyequitystylesweresharplynegativefortheone-yearperiod.Mr.
Lilly
reportedthat
Hig
hlandCapitalreturned
-6
.3%fortheperiod
compared
to
its
benchm
ark,theS&P
500
Index
,whichreturned
-21.7%.
Mr.
LillysaidICCCapitalperfo
rme
dverywellduring
this
volatile
period,returning
9.1
%
compared
toitsbench
mar
k,the
Wilshire
5000
Index,which
returned
-24.5%.
Shields/Alli
ance
returned5.6%overthe
one-
yearperiod,
com
paredtoitsbenchmark,theS&PBarra
Value
index,whichdeclined1.0%.Finally,1r.LillysaidWright
Investorsreturned
-25.5%
[or
the
one-y
ear
period
somewhat
behindits
S&
P500Index
benchmark.
WitJ1
regardtothe
Fund's
fixedincomemanagers,
Me
Lillysaidperformancewassharplypositive,
perfo
rmingasonewouldhopeduringa
per
iod
ofhi
gbequiry
mark
etvolatility.
Asagroup,the
fixed
in
com
emanagersreturned12.3%for[heone-yearperi
od
,
comp
aredtoa
12.5%
returnfortheFund'sfixedincomepolicyindex,theLehmanAggregateIndex.Mr.Lilly
reportedthatthe
Ban
kof
New
Yorkand
Weaver
Bark'dalereturned11.4%and
12.YYo
respectively,overtheone-yearperiod,somewhatbelowthe
Lehm
anAggregateIndexreturn.
Mr.LillysaidthatHighlandCapitalandSecurityAsset
Ma
nagementbothoutperformedthe
LehmanAggregateIndexreturning12.8%and13.6%,respectively,
over
theon-yearperiod.
Next,Mr.LillyhighlightedtheFlashP
erf
ormanceReportthroughFebruary
2001.
indicatingtheFund'equitycompositereturned5.2%forthe
one-year
period,wellaheadofthe
Fund'sEquityPolicyIndex,theWilshire5000Index,whichdeclined14.5%.Mr.Lillyalso
reportedthattheFund'sfixedincome
comp
ositereturned13.6%fortheone-yearperiodas
comparedtotheFund'sFixedIncomePolicyIndex,theLehmanAggregateIndex,which
returned
13.4%.
1\1
r.
Lillysaidall
of
theFund'sinvestment
manag
erspe
rf
ormedeither
consistentwithorahead
of
theirrespectiveperformancebenchmarksovertheone-yearperiod
ended-cbruary2001.
The
reafter,
Mr
.
Patchettreviewed
lFS'
PerformanceReportwhichcontainedpeer
universecomparisons,fortheperiodendedDecember
31,
2000
.Mr.Patchettsaidsuchuniverse
informationisnormallyavailableaftersixweeksfollowingeachcalendarquarterendandwas
notyetavailabIeforthefirstquarter
f
200
1.
Mr.PatchettdirectedtheTrustees'attentiontothatportionofthereportthatcompared
theFund'sperformancetothatofothermultiernployerdefinedbenefitplansandreportedthathe
FW1drankedatorabovetheuniversemedianoverthepastyear,andonanannualizedasis
goingbacksixyears.Mr.PatchettalsosaidperformancewasaheadoftheFund
Polic
yIndexfor
theyearandonanannualizedbasisforthepastthreeyears.Ascomparedtotheuniverse
of
cor
poratedefinedbenefitplans,
Mr.
PatchettreportedtheFundrankedwithinthetopquartile
ovrthepastyearand
was
ataboutthemedian
0
11
anannualizedbasisoverthepastfouryears.
Mr.Patchettthen
reported
thattheFund'sequitycomposite,consisting
of
allequity
managersasagroup,rankedabovemedian
over
thepastyearascomparedtotheuniverseofall
otherequityportfolios.Onanannualizedbasisoverthepastsixyears.Mr.Patchellsaid
performancewasaheadoftheequitypolicyindexandatabouttheuniversemedian.
WithregardtotheFund'sfixedincome
compos
ite,
consis
tingofalloftheFund'sfixed
incomemanagers,Mr.PatchettsaidperformancewasaheadoftheLehmanAggregatepolicy
indexoverthepastyearandabovetheuniversemedian.Onanannualizedbasis
over
thepastthreeandfiveyears,Mr.Patchettsaidpe
rf
ormancewasgenerallyconsistentwiththepolicy
indexbutranked
somew
hatbelow
me
dian.Next,Mr.Patchettreportedontheriskandreturnrankings,peeruniversecomparisons
andportfoliocharacteristicsfortileFundsequitymanagers.Mr.Patchettsaid
Hig
hlandCapital
demons
tratedfavorablerisk/ret
urn
characteristicstorthefive-yearperiodendedDecember
31,
2000whileShields/Alliancewasclosetotheuniversemedian.Mr.PatchettsaidWright
Inve
stor
sdemonstratedaboutmedianret
urn
volatilityforthefive-yearperiodwithbelowmedian
performance.Mr.PatchettsaidtheFun
d'
sotherequitymanagersdidnotyethaveafiveyear
performancehistorywiththeFundandwerenotincludedintherisk/returnanalysis.
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