DATE: May 21, 2015
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
SUBJECT:
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Consideration of DRAFT Contract 2015-0136, an Agreement with Forest Investment Associates for Management of Pension Funds (06/09/15 WS)
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Purpose
The purpose of this memorandum is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning an agreement with a timber manager for an investment of a portion of the City of Franklin's Employee Pension Plan assets
Background
On May 18, the City of Franklin Pension Committee approved unanimously the addition of a new timber resource manager to the list of existing Pension Plan managers. This would be the third timber manager selected by the Committee. The two existing partnerships are closed to new contributions and expire in less than six years. The new manager would fill the gap between the 5% target allocation for timber resources and the 3.6% investment level as of March 31.
Financial Impact
The financial impact would be a $1.5 million commitment over three years to fund a small position in a limited partnership that invests in timber properties. Funding would come from new contributions and earnings from current assets.
Recommendation
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Staff recommends approval of the Subscription Agreement, subject to final approval of the City Attorney, the Pension Plan counsel, and the City Administrator, and granting authorization to the Mayor and City Administrator to execute the Agreement.