Minutes of the Meeting of the Board of Trustees

PENSION FUND OF THE ALBANY AREA

TRUCKING AND ALLIED INDUSTRIES LOCAL 294

Held on
June 28. 1994

at the

Desmond Americana
Albany, New York

Trustees present were: Messrs. Howard Bennett. John Kearny and

Dave McComb - Union Trustees

Messrs. Frank A. Clemente and Carlo G.

Rosetti - Employer Trustees

Also present were : Bruce Bramley, Esq. and William

Pozefsky, Esq., Fund Counsel; Mrs.
Lynne Magliocca, Fund Manager; Ms.
Linda Roberrs of the Fund Office; Mr.
Darrin Owens of The Segal Company,
Fund Actua ries and Consultants; M r.
Stanley B. Eisenberg. CPA. Fund Auditor;
Messrs. Martin D. Sass and Harvey Rosen
of MD Sass Associates, lnc., Fund
Investment Manager; and M r. Philip
DelJocono of Segal Advisors, lnc.: Messrs
Christopher Keating and Michael Katafiaz
of Manni ng and Napier Ad visors. Inc.:
Messrs. Eugene VeseJl and Brad Goldman
of Oppenheimer Capital; and Messrs.
Kenneth H. Singer and Robert T. Smith of
Wright Investors' Service .

l. INVESTMENT MANAGER SEARCH

M r. Dellocono of Segal Advisors reviewed with the Trustees the potential

candidates to serve as Investment Managers for the Pension Fund. It was noted that
these rnvestment Managers were invited to this meeting to make presentations
regarding their investment style, and to report on the type of portfolio they would
implement as Investment Mangers for the Fund. The Trustees reviewed the
investment management fees paid currently to MD Sass Associates. no ti ng that

GOVERNMENT
EXH IBIT

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firm's fees were 1.0% on the firs: $10 million invested, . 75 % on the next $10
million invested. and .50 % on any assets invested over $20 million . Ir was
indicated that based on the current investible assets of the Fund. M 0 Sass
Associates were expected to charge appraxi rnately $375,000 in Investment fees at a
rate of .625 % . At this point of the meeting, each lnvestrneru Manager was invited
into the meeting to make a presentation regarding their firm.

A. Manning and Napier Advisors, Inc . - Messrs. Christopher Keating and Michael
Katafiaz of Manning and Napier Advisors, Inc. entered the meeting and
reviewed with the Trustees their presentation regarding balanced management
of the Pension Fund portfol io. M r. Keating reviewed with the Trustees in
great detai I his fi rm' s investment strategy and thei r approach to investi ng in
equity and fixed income securities . He reviewed in detail the asset allocation
held by his firm over the past 10 years and described the philosophy of
Manning and Napier Advisors. Mr. Keating indicated that his firm would
charge investment management fees of .6% on the first $10 million invested
and any additional monies invested would have a lower fee which would be
negotiated at the time of the assignment.

B. Oppenhei mer Capita) - Messrs. Eugene Vesell and Brad Goldman of

Oppenheimer Capital entered the meeting and reviewed wirh the Trustees their
firm's proposal to invest a portion of the assets of the Pension Fund. The
representati ves of Oppenhei mer Capi Lal rev iewed in great detai1 the investment
philosophy held at Oppenheimer Capital and specifically reviewed the ream
concept utilized by (heir firm in choosing investments . They also reviewed
with (he Trustees their history of investment returns for the equity portfolios
and fixed income portfolios as well as the balanced portfolios they currently
managed for thei r cl ients. Regardi ng the question of investment management
fees, the representati yes of Oppenheimer Capital indicated that thei r fees would
be .75 % for the fi rst $15 mill ion invested and .50 % for any invesunents over
$15 million .

C. Wright Investors ' Service - Messrs Kenneth H. Singer and Robert T. Smith of
Wright Investors' Service entered the meeting and reviewed with the Trustees
their firm's investment proposal to invest a portion of the assets of the Pension
Fund. The representatives of Wright Investors' Service reviewed in great
detail their investment management style and specifically noted their experience
with Taft Hanley Funds. The representatives also reviewed with the Trustees
the history of their investment results and discussed the potential investment
philosophy which would be utilized for [he Pension Fund should they be hired
as investment managers. The representatives of Write Investors' Service
i ndicated that thei r i nvestment fees wou ld be .65 % for all assets invested with
their company.
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A Iter each presentation, the representatives of each investment Ii rm were thanked

for their presentation and excused from the remainder of the meeting.

At this poi nt of the meeting, Mr. Dellocono reviewed with the Trustees in great
detail the di ffereru investment management Styles of each proposed investment
manager, as well as summarized the results of the May 19, 1994 meeting of the
Trustees regarding the i nvestrnent manager search. Mr. Dellocono reviewed in
detail the May, 1994 report regarding the I nvestrnent Manager search prepared by
Segal Advisors. The Trustees discussed the investment styles of the various
managers as well as the past performance records. The Trustees also reviewed the
fiduciary responsibility of the Trustees to prudently invest the assets of the Pension
Fund. After discussion,

MOTION was made, seconded and

unanimously adopted \0 alloca te 33% of
the assets of the Pension Fund to Wright
Investors' Service and 33% of the Pension
Fund 's assets to Oppenhei mer Capital
pending fees to be negotiated and a
contractual relationship LO be entered into
with these managers .

It was indicated that tile Trustees had made this decision based on the
complimentary investment styles of these managers when compared to MD Sass
Associates. The Trustees also expressed their desire to request that Many Sass of
MD Sass Associates prepare a similar presentation as the investment managers at
todays meeting regarding the abilities of MD Sass Associates at a future meeting of
the Board.

II. CALL TO ORDER

The meeting was called to order at 6.45 p.m.

III. REVIEW OF PRIOR MINUTES

The Trustees reviewed the minutes of the Board of Trustees meeting held on March
24, 1994, copies of which had been previously distributed to all Trustees and
interested parties. It was reponed that there were several changes which needed to
be implemented 10 Counsel's Report from the minutes of the meeting held on March
24, 1994, and it was indicated that Mr. Owens would incorporate those changes and
issue a revised copy of the minutes for to the next Board of Trustees meeting. The
Trustees reviewed the changes recommended by Fund Counsel, after which a
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MOTION was made, seconded and

unanimously adopted to accept the minutes
of the Board of Trustees meeting held on
March 24 , 1994, as corrected by Fund
Counsel.

IV. FUND MANAGER'S REPORT

A. Mrs. MagJiocca reviewed with the Trustees the Fund's general disbursement
account for the period March l. 1994 through May 3 L 1994, the office
expense account disbursements for the same period, the Pension Fund
disbursements as of May J 1, 1994 and the disbursements and reimbursements
for 1994 conferences.

B. Mrs. Magliocca reviewed with the Trustees the proposal for the Fund Office to
obr.ain a new copier and fax machine . She i ndicatcd that {he Fund Office had
reviewed many di fferent brands and had chosen the Canon brand cop ier and
fax machine. Mrs. Magliocca next reviewed with the Trustees two proposals
received regarding computer hardware and software. The Trustees authorized
a subcomrninee of Mr. Rosetti, Mr . Kearny and Mr. McComb to work with
the Fund Office regarding the purchase of computer hardware and software.
After which , a

MOTION was made, seconded and

unanimously adopted to purchase the
computer for the Fund Office once the
proposals had been reviewed by the
subcommittee .

A further,

MOTION was made, seconded and

unanimously adopted to approve the Fund
Manager's report.

V. PARTICIPANT SEMINAR

Mr. Bennett read a letter from Ms. Donna Burroughs of The Segal Company
regarding the presentation of an educational seminar to the participants of the
Pension Fund to be held on September l O, 1994. A copy of this letter is attached
to and made a pan of the minutes of this meeting . After review, a
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>,

MOTION was made, seconded and

unanimously adopted to approve the
presentation of an education seminar to the
partic ipants of the Pension Fund and to
authorize The Segal Company to prepare
and present such a presentation .

VI. INVESTMENT MANAGER'S REPORT

Mr. Martin Sass of MD Sass Associates entered the meeting and presented his
fi rrn s i nvest men l report for the period end i ng June 22, 1994 . M r. Sass fi rst
reviewed with the Trustees the results of the investment portfolio since inception in
February of 1980, reporting rha: the Fund had an investment return of 11.1 %. He
also reviewed the results of the most recent period, May I, 1994 through June 22,
1994, reporting that the i nvestrnent portfolio had a return of .4 %. He next
reviewed with the Trustees the diversification of the Fund, noti ng that
approximately 48 % of portfolio is invested in equ ity securities. 43 % is invested in
fixed income securities and 9% is invested in cash equivalents . Mr. Sass next
reviewed in detail various holdings within the Funds and reviewed his projections
for the economy. At this time Mr. Bennett informed Mr. Sass about the investment
manager search and discussed the transfer of 1/3 the assets of invested by his
company 10 each new manager. The Trustees indicated that the target date for
transfer would be August 1, 1994. It was also indicated that Mr. Sass will prepare
a presentation for the Board of Trustees for the next meeting regarding his firm's
investment strategy . The Trustees also requested that M r. Dellocono 0 f Segal
Advisors assist them with drafting formal investment guidelines for the Fund. After
wh ich, a

MOTION was made. seconded and

unanimously adopted to accept the report
of the Investment Manager.

VII. CONSULTANTS REPORT

M r. Owens reviewed with the Trustees as number of items which may summarized
as follows:

A. Mr. Owens reviewed with the Trustees [he Actuarial Valuation and Review of
the Pension Fund as of August I. 1993. copies of which had been distributed
in advance of the meeting. Mr. Owens reviewed with the Trustees the results
of the valuation regardi ng active and inactive participants. pensioners and
beneficiaries, income. expenses and fund development . and actuarial
,; ~.; experience. He next reviewed with the Trustees the projections of the
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scheduled actuarial COSt, reponing that projected employer comributions of

$2.3 million are expected to exceed the scheduled actuarial costs of sl ightly
more (han $2.1 mill ion by $164,000, or 7. I % of the contributions. He
reviewed with the Trustees several other calculations performed by his firm
and indicated that the contributions for the year beginni ng August l , 1993 are
expected to be fully deductible .

B. Mr. Owens reviewed with the Trustees a June 28, 1994 memorandum from his
office regarding the calculation of benefit improvements, which The Segal
Company is intending to prepare based on the August I. 1993 Valuation. It
was indicated that these benefit irnprovernerus would be calculated for
presentation to the Trustees at the next meeting of the Board . A copy of this
memorandum is attached to and made a pan of the minutes of this meeting.

C. M r. Owens reponed that the Schedule B to Form 5500 had been distributed to
the Fund Accouutaru and all interested parties in April of 1994. He indicated
that the credit balance according (he government's minimum funding standards
had increased from approximately $14.8 million as of 1992 to approximately
$15.9 million as of July Jl, 1993.

D. Mr. Owens reviewed with the Trustees a June 16, 1994 memorandum from his
office regarding a pensioner affidavit which can be mailed to pensioners each
year to determine whether each pensioner is personally receiving and endorsing
his or her pension check. A copy of this memorandum is attached and made a
pan of the minutes of this meeting. It was indicated by Fund Counsel that this
letter should incorporate a definition of disqual i Fying employment and it was
reponed that Fund Counsel will prepare a revised draft of this affidavit for
distribution by the Fund Office.

E. M r. Bennett read 10 the Trustees a letter dated June 27, 1994 from a
participant. Mr. Jack R. Parker. regarding the possibility of transferring
pension credits from th i s Fu nd to the New York State Tea rnsters Con Ference
Pension and Retirement Fund. Mr. Owens discussed with the Trustees the
actuarial impact of such a transfer of pension credits on the Pension Fund and
further indicated that an agreement would need to be reached between the
Local 294 Pension Fund and the Upstate Pension Fu nd inch is regard. M r.
Bramley also discussed in detail with the Trustees the issues regarding
collective bargaining agreements and contributions made by employers roto
each pension fund . It was indicated that the Trustees would continue [0
monitor this issue and discuss it at a future meeting of the Board.

F. Mr. Owens next reviewed with the Trustees the proposed Segal Company
retainer agreement for the period beginning August I, 1994. The Consultant
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reviewed in great detai I rhe number of services performed by The Segal

Company regarding the Pension Fund, and indicated that the time necessary La
perform the appropriate services had exceeded the current retainer of $39,000
per year. In this regard, the Consultant indicated that his finn was proposing
an increase in the annual retainer to $45,000 per year for the period August 1.
1994 through July 31 , 1995 and $48.000 for the period August I, 1995
through July 31, 1996. After much discussion, a

MOTION was made, seconded and

unanimously adopted to approve the
increase in the retainer agreement for The
Segal Company as requested with a
provision to be added concerning a 90 day
termi nat ion clause with the fees
appropriately prorated to the end of the
termination date.

Mr. Owens thanked the Trustees for their consideration of this retainer increase and
indicated that he looked forward to the continued association with the Fund .

A further

MOTION was made, seconded and

unanimously adopted [0 accept the report
of the Fund Consultant.

VIII. FUND COUNSEL'S REPORT

Fund Counsel reviewed with the Trustees the report on delinquent companies as of
June 28, 1994 and as distributed by the Fund Manager. It was indicated that a copy
of this listing would be auached 10 and made a part of the minutes of this meeting.
Fund Counsel next reviewed with the Trustees the lawsuit regarding Masaro Detroit
Diese I Company conce rni ng thei r deli nquency . A fter wh ich a

MOTION was made. seconded and

unanimously adopted to accept the report
of Fund Counsel.

IX. AUDITOR'S REPORT

Mr. Eisenberg reported to the Trustees that his office has not received [he final
Internal Revenue Service audit regarding the Brewery Workers' Pension Fund. It
was indicated that Mr. Bramley will organize a meeting between Mr. Eisenberg and
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the representatives of Coopers & Lybrand to discuss this issue and discuss the issue
of the Brewery Workers' merger.

Mr. Eisenberg indicated that the vacation time for the Fund Office was reviewed
and finalized. He further indicated [hat a sick time policy should be developed for
the Fund Office staff. Mr. Bramley reviewed with tbe Trustees the situation in the
Fund Office regarding the employees . It was indicated that the Trustees will
develop guidelines and a subcommittee will prepare and review such guidel ines.
The Trustees further indicated their desire to move the Fund Office to the Union
Hall when the lease expires.

AL this time a discussion was held regarding the reviewing and monitoring of the
new investment managers. Mr. Del1ocono indicated LO the Trustees that he could
present a proposal for investment rnonitori ng by Segal Advisors for review by the
Trustees.

Mr. Eisenberg next reviewed with the Trustees the current status of his auditing of
the Fund Office and reviewed the various items which he reviews as Fund Auditor.
After Which. a

MOT[ON was made, seconded and

unanimously adopted to accept the report
of the Fund Auditor.

X. OTHER BUSINESS

[1 was indicated that Mr. Dellocono would work with Fund Counsel and the Fund
Office regarding the negotiation of an agreement with Oppenheimer Capital and
Wright Investors' Serv ices for adoption by the Trustees and execution of the f nal
documenrs in the near future.

Xl. NEXT MEETING

It was indicated that the next meeting of the Board of Trustees will be held on
September 8 1994 at 4:30 p.m.
0

XII. ADJOURNMENT

There being no further business to come before the Board, the meeting was
adjourned at 9 o'clock p.m.

001 TEMI>4/11 1121.11 ~DnUI 0')101/0).1