Volunteer Firefighter Relief Fund Committee

To: Members of the Volunteer Firefighter Relief Fund Committee From: Richard Benoit, Chairman of the Volunteer Firefighters’ Relief Fund Subject: Regular Meeting #134 Meeting Date: Tuesday, February 17, 2015 Meeting Time: 5:00 p.m. Meeting Location: Room 209, City Hall Agenda Items: 1. Call to Order 2. Review of September 30, 2014 investment results by Art Meizner from Hooker & Holcombe Investment Advisors (attached) 3. Review of minutes from the Regular Meeting on November 17, 2014 (available on the website) 4. Treasurer’s report for the quarter ended December 31, 2014 (attached) 5. Election of officers for 2015 6. Refund requests – None 7. Approval of bills a. Hooker & Holcombe $3,550 8. New Members a. Taftville – Justin Harley 9. New Applications for Benefits – None 10. Update on the codification of Volunteer Firefighter Relief Fund plan into the City of Norwich Code of Ordinances. 11. Adjournment Please notify Richard Benoit (860) 886-1774 or Brigid Marks (860) 823-3786 if you are unable to attend the meeting.  City of Norwich FirefightersCity of Norwich FirefightersCity of Norwich FirefightersCity of Norwich Firefighters p Quarterly Performance Report For City of Norwich Volunteer Firefighters Relief Fund City of Norwich Firefighters December 31, 2014 65 LaSalle Rd. West Hartford, CT 06107 860-521-8400 www.hhconsultants.com Rodger K. Metzger, CFA Arthur J. Meizner, CFA, CAIA, CFP®, AIF® John N. Fuller, CFA, AIF® Jonathan S. Gruber, AAMS®, AIF® rmetzger@hhconsultants.com ameizner@hhconsultants.com jfuller@hhconsultants.com jgruber@hhconsultants.com  Market Commentary Market Commentary 2014‐Q4 • The fourth quarter was an extension of the markets confounding as many investors as possible. After the S&P 500 finished Q3 at around 2,000 with many investors anticipating a post-election and Santa Claus rally, Domestic Equities rolled over in mid-September and fell 9 – 10% in less than 1 month. Then, with some strategists calling for the start of a bear market, the market rocketed back before the elections and moved to a post-election high of 2075. Finally in December, the market a) fell 100 points in 10 days, b) rallied 120 points in the next 13 days and c) settled in at just over 2050. The S&P 500 finished the year up 13.7% after a Q4 return of 5%. MidCap had similar returns for the quarter and year, helped by REIT exposure. SmallCap rallied hard, up almost 10% for the quarter, but ended 2014 up less than 5%. Sector returns were quite varied. Health Care and Technology led the pack with both up over 20%. Energy, reflecting the swoon in Oil prices, was down 8% for 2014 (after a double digit decline in Q4). Valuations are a mixed bag. Bears point to the CAPE (Cyclically Adjusted Price Earnings Ratio) which is almost 20% above the 10 year high. Bulls point to the Forward P/E ratio, which is only 3% above the 25 year average (and well below the danger area). • Fixed Income ended the year with Bonds less than 5 years yielding more and Bonds of 5+ years yielding less. The Barclay’s Aggregate added 2% in Q4 and wound up 2014 with a 5.97% return. Municipals were the big winner, up 8.7% for the year. The strength of the dollar was a big headwind for Global and Foreign Bonds, with Emerging Market Debt, Global Sovereign, and Global High Yield all negative for Q4 and 2014. The year was focused on forecasting the expected actions of the Federal Reserve. The dual mandate was a mixed bag, with unemployment down to 5.8% (below the 50 yr average of 6.1%) but Headline CPI (1.3%) below the target of 2%. This gave the Fed the option of dragging its feet on when (and by how much) the rate increase would occur. Bonds also benefited from investors selling German Bunds and buying Treasuries to take advantage of the spread in returns. Alternatively, High Yield had a rough quarter because of the large Energy weight. • International Stocks continued to suffer from expectations of a global slowdown (except for the US) and a strong dollar. EAFE and Emerging Markets were down in both Q4 and for 2014. EAFE returns by country were a lot closer than Emerging Market country returns. The large EAFE countries (UK, France, Germany, and Japan) returned between -3.7% and -9.8% USD. Emerging Market large countries ranged from +23.9% (India) to -45.9% (Russia) USD. Europe remains a challenged area with unemployment from 11 – 12%, although inflation is less than 1%. EAFE valuations are still reasonable vs. the US. UK, France, Germany and Japan are all cheaper looking at Forward Price/Earnings, Price/ Book, and Price/ Cash Flow. Not surprisingly, Emerging Market is a mixed bag with Brazil, Russia and China cheaper than the US, and India more expensive. • Specialty Investments had a checkered year, with REIT’s leading all Asset classes (+28%) for the 4th out of 5 years and Commodities at the bottom (-17%) for the 3rd year in a row. Economic weakness in Emerging Markets, the attempted shift from a producer driven to consumer driven economy by China, the challenging supply and demand issues for Oil all point to continued challenges for Commodities. REIT’s, although valuations are extreme, may continue perform okay because of demand for yield and a continuing recovery in the US. 2 1  Domestic Equities 2014‐Q4 Returns & Valuations By Style Outlook: • Most of the Wall Street strategists are forecasting an S&P 500 return for 2015 in the mid-to-high single digits. • Oil recovery is expected to be sluggish due to ever increasing supply (thanks to the US) which is more than compensating for the slower global demand. This minimizes concerns that a weak oil price is forecasting a global recession. • Both individual and institutional investors have below average exposures to equities, a good historical contrarian indicator. Individual reduction in equity exposure may be more a function of demographics and subdued investor exuberance. • Although the bull market has run longer (70 months) than average (57 months), it is still shorter than 1990 (110 months), 1949 (83 months), and 1974 (75 months). • The S&P 500 peaks an average of 29 months after the first Fed Funds Rate Hike. • The ratio (Oct 2014) of Unemployed to Job Openings is 1.9, down from 7 in 2009. Quarterly Review: • US stocks had a strong quarter as the US elections were competed, the IMF reinforced expectations of US economic strength, and mutual fund managers chased strong index performance until year-end. • S&P 500 Composite Index returned 4.9% for the quarter, 13.7% for 2014. NASDAQ was up 5.4% for the quarter, 13.4% for 2014. • Strength was even across the board (Value vs. Growth) with Small Cap doubling up Large Cap. • Utilities led the sectors for the quarter (+13.2%), followed by Consumer Discretionary (+8.7%) and Consumer Staples (+8.2%). • Energy (-10.7%), Telecom (-4.2%) and Materials (-1.8%) were the only losers for the quarter. These are 3 of the 4 smallest sectors in the S&P 500. • S&P 500 Earnings per Share for Q4 2014 is forecast to be a record $30.50 per share. • The reported S&P 500 Operating Profits for Q3 2014 were greater than 10% (in record territory). • The current P/E ratio for Large, Mid and Small growth indices are all below 3 the 20 year average. 2  International Equities 2014‐Q4 Outlook: • IMF forecasts global growth for 2015 of 3.8% while World Bank expects 3% growth. • European and Japanese economies should benefit from lower oil prices by stimulating consumer spending. • Expect substantial Quantitative Easing by the European and Japanese Central Banks in efforts to counter deflationary pressures. • With reforms being implemented by the Modi government, growth in India is expected to surpass that of China by 2017. • China’s challenge will be defusing the credit buildup in the face of slowing growth. Quarterly Review: • Due to the strengthening dollar, US investors saw a disappointing year in International Markets with the MSCI EAFE index down 4.5% USD and MSCI Emerging Markets index down 1.8% USD. • Investors fared much better in local markets with the MSCI EAFE index up 6.4% and MSCI Emerging Markets index up 5.6% for 2014 in local currency. • Russian Markets were down 46% for the year in USD due primarily to devaluation of the Ruble. • Real GDP growth was sluggish throughout the year for most economies, Developed and Developing. • Deflationary pressures remained a concern, particularly in parts of Europe. 4 3  Fixed Income Yields & Returns Fixed Income 2014‐Q4 Outlook: • The majority of strategists are forecasting 10 year treasury rates to rise toward, but not above 3%, with the first Fed hike to occur between June 2015 and year-end. • High Yield may provide investors an opportunity to generate substantial returns due to an overcorrection relative to treasury yields. • We anticipate continued dollar strength as a headwind for non-dollar bond purchases. • Multi-sector funds are beginning to replace Core Intermediate Term bond funds in Pension plans. • Strategic Income funds were a disappointment in 2014 due to shortened duration which was in the weaker part of the curve. This has kept investors from shifting assets to Strategic Income. Quarterly Review: • The Treasury Yield Curve shifted down and flattened. • High Yield 10 year yields widened out (6.13 to 6.61%) partially due to high energy exposure. • Both High Yield spreads and the default rates increased but both remained below the historical average. • Unemployment continued to drop but Inflation stayed under control which offers conflicting signals as the Fed considers their first rate increase. • Global sovereign debt yields continued to drop, with Germany (0.58%) and Japan (0.36%) at extremely low levels. • The spread between Emerging Market Sovereign Debt and US Treasuries is generally lower than average, with the exception of the heavy commodity 5 exporters (Russia, Brazil). 4  Specialty 2014‐Q4 • Emerging hedge fund managers, defined as those with track records of less than 24 months, outperformed the broad-based HFRI Fund Weighted Composite Index. • Hedge fund liquidations increased over the prior quarter with 200 hedge funds liquidating. • Hedge fund performance dispersion narrowed, as the performance of both the top and bottom deciles of HFRI constituents converged. Definition of the Quarter: The Credit Suisse Long/Short Equity Hedge Fund Index measures the aggregate performance of long/short equity funds. Long/short equity funds typically invest in both long and short sides of equity markets, generally focusing on diversifying or hedging across particular sectors, regions or market capitalizations. Managers typically have the flexibility to shift from value to growth; small to medium to large capitalization stocks; and net long to net short. Managers can also trade equity futures and options as well as equity related securities and debt or build portfolios that are more concentrated than traditional long-only equity funds. • Commodities - Crude oil saw a significant move lower, with much of its losses coming after the OPEC meeting on Thanksgiving morning. In agriculture, the soybean complex came under pressure, while corn posted flat returns and wheat gained. Industrial metals losses were led by copper on weak Chinese economic data. • REITs continued their strong 2014 performance in the fourth quarter, as stronger demand for real estate continued to outpace new supply. Every sector within U.S. REITS saw positive gains for the quarter, with Healthcare and Mall REITs seeing the strongest performance. However, expect REIT prices to move inversely with changes in long-term government bond yields, and we expect REITs to generally underperform in a rising interest rate environment. 6 5 ~ HOOKER & HOLCOMBE Asset Class Returns ~ Investment Advisors, Inc. 2014‐Q4 10-yrs. '05- '14 2005 2006 2007 2008 2009 2010 20'11 2012 2013 2014 4014 Cum. Ann. 7 6  Portfolio Overview Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Asset Allocation Components of Change CQ Last 1 Year Last 3 Years Last 5 Years BEGINNING VALUE $2,091,903 $2,011,579 $1,527,483 $1,415,714 Net Contributions $18,000 $35,798 $146,668 $112,168 Capital Appreciation ($61,881) ($17,773) $273,295 $368,944 Income $85,117 $110,264 $203,564 $268,738 Management Fees ($2,693) ($7,968) ($15,697) ($27,145) Other Expenses $335 ($1,119) ($4,532) ($7,638) Current Current Category Percentage Value ENDING VALUE $2,130,781 $2,130,781 $2,130,781 $2,130,781 Large Cap 23.8% $507,567 INVESTMENT GAIN $20,878 $83,404 $456,630 $602,900 Mid/Small Cap 6.0% $128,440 International 17.9% $381,271 Portfolio Returns Intermediate Bond 45.3% $965,021 Short Term Bond/Cash 5.0% $106,981 CQ Last 1 Year Last 3 Years Last 5 Years Specialty/Alts 1.9% $41,502 Your Portfolio 1.0% 4.1% 5.2% 3.1% Total Portfolio Value 100.0% $2,130,781 S&P 500 Index 4.4% 11.4% 17.9% 13.0% Russell 2000 9.7% 4.9% 19.2% 15.5% Portfolio Value Vs Cumulative Net Investment MSCI EAFE (3.6%) (4.9%) 11.1% 5.3% Barclays Cap Global (1.8%) (0.8%) (1.1%) 1.7% $2,000,000.00 Aggr Bond $1,000,000.00 All returns are TWR, net of fees. Returns for greater than 1 year are annualized. $0.00 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 Portfolio Value Cumulative Net Investment All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 2 7  Portfolio Overview Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Components of Change Asset Allocation CQ Last 1 Year Last 3 Years Current Current BEGINNING VALUE $2,091,903 $2,011,579 $1,527,483 Category Percentage Value Large Cap 23.8% $507,567 Net Contributions $18,000 $35,798 $146,668 Mid/Small Cap 6.0% $128,440 Capital Appreciation ($61,881) ($17,773) $273,295 International 17.9% $381,271 Income $85,117 $110,264 $203,564 Intermediate Bond 45.3% $965,021 Management Fees ($2,693) ($7,968) ($15,697) Short Term Bond/Cash 5.0% $106,981 Other Expenses $335 ($1,119) ($4,532) Specialty/Alts 1.9% $41,502 ENDING VALUE $2,130,781 $2,130,781 $2,130,781 Total Portfolio Value 100.0% $2,130,781 INVESTMENT GAIN $20,878 $83,404 $456,630 Portfolio Returns Portfolio Returns CQ Last 1 Year Last 3 Years 20.0% Your Portfolio 1.0% 4.1% 5.2% 15.0% S&P 500 Index 4.4% 11.4% 17.9% Russell 2000 9.7% 4.9% 19.2% 10.0% MSCI EAFE (3.6%) (4.9%) 11.1% Barclays Cap Global (1.8%) (0.8%) (1.1%) 5.0% Aggr Bond All returns are TWR, net of fees. Returns for greater than 1 year are annualized. 0.0% -5.0% CQ Last 1 Year Last 3 Years All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 3 8  Current vs. Target Allocation Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Current Allocation Target Allocation Current Target Percent Category Percentage Current Value Percentage Target Value Variance Dollar Variance Large Cap 23.82% $507,567.45 24.00% $511,387.52 0.18% $3,820.07 Mid/Small Cap 6.03% $128,439.97 6.00% $127,846.88 (0.03%) ($593.09) International 17.89% $381,270.82 18.00% $383,540.64 0.11% $2,269.82 Intermediate Bond 45.29% $965,020.51 45.00% $958,851.59 (0.29%) ($6,168.92) Short Term Bond/Cash 5.02% $106,980.88 5.00% $106,539.07 (0.02%) ($441.81) Specialty/Alts 1.95% $41,501.69 2.00% $42,615.63 0.05% $1,113.94 TOTAL $2,130,781.32 $2,130,781.32 All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 4 9  Portfolio Holdings Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Description Weight Quantity Price Current Value Portfolio Total 100.0% $2,130,781.32 City of Norwich Volunteer Firefighters' Relief Fund **4608 Large Cap 23.8% $507,567.45 Russell US Core Equity I 7.9% 4,427.160 $38.23 $169,250.33 Russell US Strategic Equity S 7.9% 13,498.290 $12.54 $169,268.56 Schwab S&P 500 Index 7.9% 5,256.485 $32.16 $169,048.56 Mid/Small Cap 6.0% $128,439.97 Russell US Small Cap Equity I 3.0% 2,138.956 $30.01 $64,190.07 Schwab Small Cap Index 3.0% 2,382.273 $26.97 $64,249.90 International 17.9% $381,270.82 Russell Emerging Markets S 4.0% 5,046.337 $16.97 $85,636.34 Russell Global Equity S 5.0% 9,418.450 $11.21 $105,580.82 Russell International Developed Mkts I 8.9% 5,539.308 $34.31 $190,053.66 Continued on Next Page All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 5 10  Portfolio Holdings Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Description Weight Quantity Price Current Value Intermediate Bond 45.3% $965,020.51 Loomis Sayles Global Bond Retail 2.0% 2,772.394 $15.47 $42,888.94 Neuberger Berman Strategic Income I 8.0% 15,404.318 $11.13 $171,450.06 PIMCO Income P 8.0% 13,892.746 $12.33 $171,297.56 PIMCO Unconstrained Bond P 4.0% 7,646.237 $11.18 $85,484.93 American Funds Capital World Bond R4 2.0% 2,160.981 $19.84 $42,873.86 Russell Investment Grade Bond I 4.0% 3,868.002 $22.19 $85,830.96 Russell Strategic Bond S 5.0% 9,665.631 $11.09 $107,191.85 Pioneer Strategic Income Y 8.1% 16,002.575 $10.73 $171,707.63 Western Asset Total Return Unc 4.0% 8,265.778 $10.44 $86,294.72 Short Term Bond/Cash 5.0% $106,980.88 Cash 1.0% $21,443.95 Russell Short Duration Bond S 4.0% 4,464.349 $19.16 $85,536.93 Continued on Next Page All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 6 11  Portfolio Holdings Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Description Weight Quantity Price Current Value Specialty/Alts 1.9% $41,501.69 PIMCO Commodity Real Ret Strat A 1.9% 9,432.202 $4.40 $41,501.69 Account Total for **4608 100.0% $2,130,781.32 All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 7 12  Norwich Volunteer Firefighters' Relief Fund 2014Q4 As of 12/31/2014 2 4 5 6 7 10 11 12 13 14 15 16 Weight Morningstar Morningstar Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Expense Name % Category Rating % - 3 Mo Rank - 3 Mo % - 1 Yr Rank - 1 Yr % - 3 Yr Rank - 3 Yr % - 5 Yr Rank - 5 Yr Ratio Russell US Core Equity I 8 Large Blend ÙÙÙ 4.70 44 11.69 49 19.55 48 13.87 53 0.75 Russell US Strategic Equity S 8 Large Blend NA 4.59 48 11.70 49 NA NA NA NA 0.82 Schwab® S&P 500 Index 8 Large Blend ÙÙÙÙ 4.91 33 13.57 19 20.30 31 15.36 19 0.09 Large Blend Weighted Avg 24 Large Blend Avg 3.5 4.73 42 12.32 39 13.29 26 9.74 24 0.55 Russell 1000 TR USD Large Blend 4.88 13.24 20.62 15.64 S&P 500 TR USD S&P 500 4.93 13.69 20.41 15.45 US OE Large Blend Large Blend 4.19 10.96 19.00 13.88 1.14 Russell US Small Cap Equity I 3 Small Blend ÙÙÙ 9.81 17 4.11 56 19.62 31 15.77 32 0.92 Schwab Small Cap Index 3 Small Blend ÙÙÙ 9.74 20 4.97 43 19.24 37 16.02 29 0.17 Small Blend Weighted Avg 6 Small Blend Avg 3.0 9.78 19 4.54 50 19.43 34 15.90 31 0.55 Russell 2500 TR USD SMID Blend 6.77 7.07 19.97 16.36 Russell 2000 TR USD Small Blend 9.73 4.89 19.21 15.55 US OE Small Blend Small Blend 7.20 3.79 17.85 14.61 1.29 Russell International Developed Mkts I 9 Foreign Large Blend ÙÙÙ -3.85 60 -5.36 50 10.79 35 4.89 56 0.92 Russell Global Equity S 5 Global Equity ÙÙÙ 3.65 6 4.65 28 15.66 32 10.04 44 1.24 Foreign Weighted Avg 14 Foreign Blend Avg 3.0 -1.17 41 -1.79 42 12.53 34 6.73 52 1.03 MSCI EAFE NR USD Foreign Large Blend -3.57 -4.90 11.06 5.33 MSCI World PR USD World Stox 0.66 2.93 13.07 7.91 US OE Foreign Large Blend Foreign Large Blend -3.18 -4.98 10.22 5.04 1.32 US OE World Stock World Stox 0.52 2.79 14.11 9.54 1.40 Russell Emerging Markets S 4 Emerging Markets ÙÙÙÙ -5.40 60 -2.67 45 4.41 49 2.31 40 1.51 MSCI EM PR USD Emerging Markets -4.88 -4.63 1.43 -0.68 US OE Diversified Emerging Mkts Emerging Markets -4.99 -3.01 4.65 1.81 1.59 PIMCO Commodity Real Ret Strat A LW 2 Commodities ÙÙÙÙ -14.23 62 -18.55 61 -10.14 67 -3.81 26 1.19 Bloomberg Commodity TR USD Commodities -12.10 -17.01 -9.43 -5.53 US OE Commodities Broad Basket Commodities -13.24 -18.03 -9.63 -5.47 1.38 13  Norwich Volunteer Firefighters' Relief Fund 2014Q4 As of 12/31/2014 2 4 5 6 7 10 11 12 13 14 15 16 Weight Morningstar Morningstar Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Tot Ret Expense Name % Category Rating % - 3 Mo Rank - 3 Mo % - 1 Yr Rank - 1 Yr % - 3 Yr Rank - 3 Yr % - 5 Yr Rank - 5 Yr Ratio Russell Investment Grade Bond I 4 Intermediate-Term Bond ÙÙÙ 1.85 3 6.02 26 3.26 53 4.88 47 0.48 Russell Strategic Bond S 5 Intermediate-Term Bond ÙÙÙÙ 1.62 16 5.84 34 4.11 26 5.65 19 0.75 Int-Term Bond Weighted Avg 9 Int-Term Blend Avg 3.6 1.72 10 5.92 30 3.73 38 5.31 31 0.63 Barclays US Agg Interm TR USD Intermediate-Term Bond 1.20 4.12 2.19 3.72 US OE Intermediate-Term Bond Intermediate-Term Bond 1.11 5.18 3.38 4.78 0.89 Neuberger Berman Strategic Income I 8 Multisector Bond ÙÙÙÙ 0.15 30 4.45 29 5.66 38 6.70 34 0.70 PIMCO Income P 8 Multisector Bond ÙÙÙÙÙ -0.10 38 7.09 7 11.04 1 11.86 2 0.55 Pioneer Strategic Income Y 8 Multisector Bond ÙÙÙÙ -0.16 42 4.92 21 6.00 30 6.66 36 0.73 Multisector Bond Weighted Avg 24 Multisector Blend Avg 4.0 -0.04 37 5.49 19 7.56 23 8.41 24 0.66 Barclays US Agg Interm TR USD Intermediate-Term Bond 1.20 4.12 2.19 3.72 US OE Multisector Bond Multisector Bond -0.37 3.63 5.62 6.57 1.11 PIMCO Unconstrained Bond P 4 Nontraditional Bond ÙÙÙ 0.03 28 2.69 21 3.00 59 3.01 52 1.00 Western Asset Total Return Uncons I 4 Nontraditional Bond ÙÙÙ -0.89 54 2.60 23 3.73 42 4.26 34 0.87 Nontraditional Bond Weighted Avg 8 Nontraditional Blend Avg 3.0 -0.43 41 2.64 22 3.37 51 3.63 43 0.94 Barclays US Agg Interm TR USD Intermediate-Term Bond 1.20 4.12 2.19 3.72 US OE Nontraditional Bond Nontraditional Bond -0.97 1.24 3.28 3.38 1.39 Russell Short Duration Bond S 4 Short Duration Bond ÙÙÙ -0.04 57 0.93 50 2.10 32 2.52 35 0.60 Barclays US Treasury 1-3 Yr TR USD Short Duration Bond 0.19 0.63 0.48 1.07 US OE Short-Term Bond Short Duration Bond -0.05 1.07 1.70 2.31 0.86 American Funds Capital World Bond R4 2 World Bond ÙÙÙ -1.04 41 1.68 46 2.00 54 3.13 53 0.87 Loomis Sayles Global Bond Retail 2 World Bond ÙÙÙ -1.41 56 0.10 67 1.54 60 3.13 53 0.98 World Bond Weighted Avg 4 World Bond Blend Avg 3.0 -1.22 49 0.89 57 1.77 57 3.13 53 0.93 Citi WGBI NonUSD USD World Bond -2.91 -2.68 -1.94 0.85 US OE World Bond World Bond -1.15 1.72 2.56 3.61 1.07 New Portfolio Investment Summary ÙÙÙÙ 1.08 4.61 10.07 8.53 0.75 Portfolio Peer Universe Portfolio Peer Universe 0.55 3.42 9.14 7.44 14  Disclaimers Period Ending: 12/31/2014 Portfolio Inception Date: 1/31/2008 City of Norwich Volunteer Firefighters' Relief Fund Terms & Disclaimers Report Terms Beginning/Ending Values The total value of all investments in your portfolio at the beginning and ending of the time period. The value includes cash and money market fund amounts and accrued income. If your custodian(s) does not include accrued income on statements, then the values on this report might not match the account values on your monthly custodial statement(s). Net Contributions The net amount of all capital flows to and from your portfolio during the time period. Capital flows include deposits and withdrawals of cash and receipts and transfers of securities. Capital Appreciation The change in value attributed to the increase in the value of the overall portfolio investments, excluding additions and withdrawals to the portfolio. This change in value typically results from changes in the unit price of your investments, dividends and interest payments. Income The total of all interest and dividend income earned in your portfolio during the time period. Management Fees The total of all management fees paid to your advisor during the time period. Other Expenses The total of all non- management fee expenses incurred by your portfolio during the time period. These expenses could include (but are not limited to) foreign taxes paid, trustee fees, federal withholding expenses, and margin expenses. Brokerage fees and other fees on individual transactions are not included. Investment Gain The total dollar amount gained by your portfolio during the time period. The value is the sum of capital appreciation, income, expenses and any change in the value of accrued income during the time period. Time Weighted (net) The percentage rate of return earned by your portfolio during the time period. The return reflects the aggregate performance of your portfolio’s underlying investments due to income received and price changes during the time period. The return is unaffected by decisions to deposit or withdraw cash and securities and is useful to compare against the return of market indexes during the same time period. Disclaimers Sources of data for this report include holdings, transactions and prices from the custodian/trustee for your plan as applicable. Information contained in this report is not audited and has been obtained from sources believed to be reliable but the accuracy of the information cannot be guaranteed. We recommend that you verify the figures provided in this report against those provided in the trust report. All returns are TWR, gross of fees. Returns for greater than 1 year are annualized. This data is gathered from what is believed to be reliable sources, but we cannot guarantee its accuracy. Please use your brokerage statements as an accurate reflection of your portfolio. 8 15 City of Norwich Volunteer Firefighters' Relief Fund Treasurer's Report For The Quarter Ended 12/31/2014 X:\Finance\Finance Public\Pension & OPEB Information\Volunteer Firefighter Relief Fund Info\Investment statements\[FY 2014-15 VFFRF cash & investments.xls]Dec Hooker & Checking Holcombe Total Beginning Balance 240,153.36 2,091,902.89 2,332,056.25 Receipts: Annual City Appropriation - - - East Great Plain - - - Laurel Hill 864.00 - 864.00 Occum - - - Taftville - - - Yantic - - - Interest Income 78.13 - 78.13 Realized Gains/(Losses) - 4,873.85 4,873.85 Unrealized Gains/(Losses) - (66,755.12) (66,755.12) Dividends - 85,117.40 85,117.40 - Total Receipts 942.13 23,236.13 24,178.26 Transfers Between Accounts (18,000.00) 18,000.00 - Disbursements: Refunds 155.14 - 155.14 Pensions Paid 65,262.00 - 65,262.00 Actuary Fees - - - Postage/ Other 133.35 - 133.35 Investment Fees - 2,357.70 2,357.70 Total Disbursements 65,550.49 2,357.70 67,908.19 Ending Balance 157,545.00 2,130,781.32 2,288,326.32 Note: The "Postage/Other" is the advertising cost for the VFFRF Plan revision ordinance The refund was for Joseph Crowley  HOOKER&HOLCOMBE,INC. Benefit Consultants and Actuaries 65 LaSalle Road I West Hartford, CT 06107-2397 I Founded in 1956 Confidential January 30, 2015 Brigid Marks Director of Human Resources City of Norwich City Hall Building Room #213 100 Broadway Norwich, CT 06360 Actuarial Services through December 2014: Volunteer Firefighters Relief Fund Tax-Exempt Services Completion of the GASB 27 and 67 accounting report for the fiscal year $ 1,800 ending June 30, 2014 (increase in fees related to new accounting standard). Cost estimate of the impact of two potential plan design changes. $ 1,750 Includes initial communication based on the 2012 valuation (email dated March 13, 2014) and fmal results based on 2014 valuation (email dated May 1, 2014) and all related consulting and communications. Taxable Services (N/A) 0 Total Tax-Exempt Services $ 3,550 A late charge of 1% per month, compounded, will be assessedfrom the date of this bill if the balance is not paid within 30 days. G:\Ciients\239 Nonvich\_:_Admin & Support\Bills\2015\Tanuary.docx Actuarial and Benefits Consulting Defined Contribution Plan Services Investment Advisory Services hhconsultants.com Defined Benefit Plan Services Postretirement Health Valuations I Internet Retirement Solutions 401(k). 403(b). ESOP Pension Portfolio Advisory \ DC Investment Oversight I p: (860) 521·8400 f: (860) 521·3742  Hooker & Holcof. ,, Inc. INVOICE 65 LaSalle Road West Hartford, CT 06107 Client Name: Norwich, City of Client Number: 239 Invoice Number: HOH001004 Invoice Date: 01/31/2015 Due Date: 03/02/2015 VOLUNTEER FIRE $3,550.00 Total New Charges: $3,550.00 Please detach this lower portion and return with payment Customer Name: Norwich, City of Please make checks payable to Client Number: 239 Hooker & Holcombe, Inc. and send to Due Date: 03/02/2015 Invoice#: HOH001004 Hooker & Holcombe, Inc. 65 LaSalle Road West Hartford, CT 06107 Current Amount Due: $3,550.00 Amount Enclosed: A late charge of 1% per month, compounded, will be assessed from the date of this bill if the balance is not paid within 30 days.