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03-08-2021CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD QUARTERLY MEETING MINUTES City Hall Council Chambers Monday, March 8, 2021 at 1 :30pm TRUSTEES PRESENT: Aaron Soliz Myles Lawler Charles Geiger TRUSTEES ABSENT: Joe Mahoney OTHERS PRESENT: Ken Harrison, Sugarman & Susskind (via phone) Doug Lozen, F osier & F osier Michelle Rodriguez, Foster & Foster John Thinnes, AndCo Consulting 1. Call to Order -Aaron Soltz called the meeting to order at 1 :30pm. 2. Roll Call -As reflected above. 3. Public Comment -None. 4. Approval of Minutes a. December 14, 2020 Quarterly Meeting Minutes The December 14, 2020, quarterly meeting minutes were approved, upon motion by Charles Geiger and second by Myles Lawler; motion carried 3-0. 5. 6. 7. New Business a. Member Elected Trustee Term Expiration i. Michelle Rodriguez informed the Board Aaron Soltz's member elected seat had expired. Aaron commented he would like to continue to serve on the Board. Michelle informed the Board she would send an email to the members to accept nominations and conduct an election if necessary. Old Business -None. Reports a. AndCo Consulting, John Thinnes, Investment Consultant i. Quarterly report as of December 31, 2020 1. John Thinnes reviewed the market environment over the last quarter and commented the plan portfolio was at an all-time high. 2. John reviewed the individual asset allocation and commented the real estate market should get back to normal soon and was expected to return approximately 1.2%. 3. The market value of assets as of December 31, 2020, was $13,324,196. 4. The total fund gross returns for the quarter ending December 31, 2020, were 9.30%, slightly underperforrning the policy benchmark of 9.51%. The 1-, 3-, 5-, 7-, and 10-year trailing returns were 16.18%, 10.35%, 10.40%, 8.49% and 8.98%, respectively. Since inception (10/1/00), the return was 5.96%, slightly underperforming the benchmark of 6.00%. 1 The Board voted to approve the quarterly report as presented, upon motion by Myles Lawler and second by Charles Geiger; motion carried 3-0. b. Foster & Foster, Doug Lozen, Plan Actuary i. October 1, 2020 Actuarial Valuation Report 1. Doug reviewed the various assumption changes included in the report and commented the plan losses were offset by the 8.45% investment return beating their assumption rate of 7.50%. Doug added he would like for the plan to work towards lowering their rate assumption in the coming years. 2. Doug reviewed the history of the plan's funding status and commented it had been steadily increasing since 2011. Doug added since inception, the plan has increased its market values by approximately $7 million. 3. Aaron Soltz asked why they should lower the rate assumption if it would increase the City's required funding. Doug commented many factors were involved; however, the current trend of lowering assumption rates was largely driven by the State's decision to lower their rate. Doug commented they were currently at 7.0% and were expected to continue to lower because pension and financial professionals believed the current market conditions were not sustainable long term. Doug commented the State recently required local defined benefit plans to use their mortality table and although it is unlikely, there was possibility the legislature could require plans to use the States assumed rate of return. Doug added ii would be much better if they started to lower the rate slowly over time rather than suddenly lowering from 7.50% to the much lower rate used by the State. The Board voted to approve the October 1, 2020 Actuarial Valuation Report as presented, upon motion by Aaron Soltz and second by Myles Lawler; motion carried 3-0. 4. John Thinnes commented he agreed with the actuary's recommendation of keeping the rate assumption at 7.4% for now and start to lower it in the next few years. The Board voted the Declaration of Returns for the Plan shall be 7.4% for the next year, the next several years, and the long-term thereafter net of investment related expenses, upon motion by Charles Geiger and second by Myles Lawler; motion carried 3-0. 5. Doug commented he would like to perform an actuarial study to determine the impact of lowering the assumption rate. Doug commented the cost of the study would not exceed $500. The Board voted to approve the study as proposed by the actuary, upon motion by Aaron Soliz and second by Charles Geiger; motion carried 3-0. c. Sugarman & Susskind, Ken Harrison, Plan Attorney i. E-Verify Registration Requirements 1. Ken Harrison reviewed a new law and commented it required all public employers to register employees, contractors, and sub- contractors with the E-Verify system. Ken advised the Board it had been determined that public pension plans were included. Ken explained this system was run by the federal government and served to verify the immigration status of prospective employees. Michelle Rodriguez commented Foster & Foster was currently working to implement this system. ii. Accrued Benefit Purchase 1. Ken reviewed the proposed language that allowed for an increased multiplier. II would need to go through collective 2 8. bargaining and then have the actuary provide an impact statement. Aaron commented they would like to proceed and need to add in the details. The Board agreed by consensus to table the discussion until the next meeting. iii. Legislative Update 1. Ken commented a bill had been introduced to the State legislature that would change the State retirement plan to default to the defined contribution plan which would result in making new hires actively request to participate in the defined benefit plan. Ken commented this bill had been introduced in the past and his firm was monitoring its progress. Consent Agenda a. Payment Ratification i. Warrants #81 and #82 b. Invoices for payment approval i. None c. Fund activity report for December 8, 2020 through March 1, 2021 The Board approved the consent agenda as presented, upon motion by Charles Geiger and second by Myles Lawler; motion carried 3-0. 9. 10 . 11. 12. Staff Reports, Discussion, and Action -None. Trustee Reports, Discussion, and Action -None. Adjournment -The meeting adjourned at 2:20pm. Next Meeting -Monday, June 14, 2021, at 1 :30pm. Respectfully submitted by: Aaron Saltz, Secretary Date Approved by the Pension Board: IJ(,f;.D:1-( 7 3 ---=;