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01-20-2009 i u u '-.J Police Pension Board of Trustees Minutes - Special Meeting January 20, 2009 Page 1 of3 j," ~t. CITY OF EDGEW A TER POLICE OFFICERS' PENSION BOARD OF TRUSTEES SPECIAL MEETING POLICE DEPARTMENT SERGEANT'S OFFICE Edgewater, Florida Tuesday, January 20, 2009 - 4:00 P.M. MINUTES CALL TO ORDER! ROLL CALL/DETERMINATION OF A QUORUM The Edgewater Police Officers' Pension Board held a special meeting on Tuesday, January 20, 2009 in the Sergeant's Office of the Edgewater Police Department. Members Present: Ferd Heeb Gary Conroy Dan Blazi Lawrence Leaf Jeanne DelNigro Sheila Hutcheson Tonya Niday, Joe Mengel (by telephone) Donna Looney, Personnel Director Tracey Barlow, City Manager Phil Niebieski, Police Officer Members Absent: Plan Administrator: Principal: City Staff: Chairman Blazi called the meeting to order at 4:08 p.m. Members indicated their presence; there was a quorum, with four members present. Discussion/consideration of issues related to VCP filing and filing for determination of qualified status of the pension plan. The Chairman opened by mentioning that he had learned a lot at the recent NAPO conference, including information regarding IRS filing requirements, and provided a brief overview. Ms. Hutcheson then summarized the telephone calls she had received from Ms. Niday on January IS and January 16 regarding some additional reporting needs (VCP and a 415 amendment). These discussions necessitated the special meeting, because the Board would have to authorize the fees of $225.00/hour by Principal for completion of the VCP documents. The Plan Administrator also outlined her concerns regarding the accuracy of the information provided by Principal, specifYing errors in the documents sent to date, and later asked Principal to advise of the disadvantages of deferring the filing for a determination of qualified status to Cycle E in 20 II. Chairman Blazi discussed concerns about waiting for the later cycle and Principal also noted (later when they joined the meeting by telephone) that the IRS is taking a more favorable view of plans filing under Cycle C (by January 31, 2009). Chairman Blazi said that, due to all of the continuing issues/problems with Principal, it was his opinion that the contract should be terminated and then the Board could deal with the consequences of the separation. but he stated that he would defer that discussion till a meeting attended by Attorney Dehner. At this point, Chairman Blazi placed the telephone call to Principal (5:00 p.m.) to discuss the issues Police Pension Board of Trustees Minutes - Special Meeting January 20, 2009 Page 2 of3 '-> with Tonya Niday and Joe Mengel and opened by stating that he had summarized the background of the reason for the conference call and asked Ms. Niday to comment. She said that because the 1997 plan restatement had been signed several days later than required, Principal had notified the Board in September, 2006 of the need to file the YCP, but no action had been taken in this regard. Ms. Niday stated that there could be an adverse finding if the qualification package was filed (without the YCP completed) and the reviewing IRS official noted that the YCP had not been filed. The IRS could then assess a fine against the plan. Filing the YCP now in conjunction with the filing for qualification would avoid this liability. She also confirmed that the qualification submittal could be delayed to Cycle E, but that the IRS prefers that it be done now in Cycle C and that the 415 amendment needed to be prepared/submitted. Member Heeb made a motion to authorize Principal to prepare the VCP filing at a cost of $225.00/hour and to prepare the 415 amendment by end of the current week; Member Leafseconded the motion, which passed unanimously, upon a roll call vote. The Plan Administrator asked what to do if the information to be sent by Principal this week creates concerns as to its accuracy: would the Board then consider deferring the qualification filing? It was the Board's consensus to submit to the IRS all of the documents provided by Principal, and if problems arose with the information, it would be Principal's responsibility to deal with the issues. Discussion: Request for refund of member contribution by terminated, vested member Brian Mallard ~ Member Conroy outlined the background of this issue noting that when Diana Floyd retired (entered DROP), Principal had prepared a retirement calculation showing alternative benefits based upon whether or not there was a withdrawal of member contributions. Chairman Blazi and Plan Administrator Sheila Hutcheson reported that they had discussed this matter with Foster & Foster and Attorney Dehner on January 19,2009, as to the interpretation of the plan document in this regard. The Attorney had said that he would need to review the document in order to determine whether or not the refund requested by Mr. Mallard would result in the forfeiture of any future retirement benefits; then Mr. Mallard would be able to make an informed decision regarding the refund. This issue also affects Officer Phil Niebieski. When he entered DROP (as of January I, 2009), Foster and Foster (F&F) said they didn't think the plan provided this option, so it became necessary to obtain an interpretation by the Attorney on this matter as well. Chairman Blazi said there are different interpretations to the relevant section of the plan document. Personnel Director Donna Looney said the same provision is in the General Plan. Discussion among the Board members continued, with Member Conroy stating that this may be a loophole, and Member Heeb saying that the Board would not be able to make a decision until the Attorney's review of the plan provisions in this regard. Officer Niebieski said he would not be able to recoup the money over the future years if he is unable to withdraw his member contribution. The Board told him that this issue will be decided by the Board after receipt of the Attorney's interpretation. Chairman Blazi stated that if the Attorney says that the provision for a withdrawal of contributions and maintenance of a retirement benefit is legal, then the Board could consider an amendment to the plan to clearly provide the option. Q Member Heeb made a motion to defer action until the Attorney has reviewed the document; Member Conroy seconded the motion, which passed unanimously, upon a roll call vote. # ~ '-> Q o Police Pension Board of Trustees Minutes - Special Meeting January 20, 2009 Page 3 of3 STAFF REPORTS, DISCUSSION, AND ACTION - None TRUSTEES' REPORTS, DISCUSSION, AND ACTION Member Heeb mentioned that, after the last meeting on December 11, 2008, he had concerns about his vote to authorize attendance by a Board member at the conference in Las Vegas. He felt that he should have voted against the motion and wished to have the minutes reflect his concerns about the expenditure based on the downturn of the returns of the plan. Mr. Heeb stated that his objection did not, in any way, abrogate his support for training/schools for trustees; rather, it was based on concern for costs to the plan in the current environment of negative performance by the fund. Member Conroy also said that he almost voted against the motion because of the need to make cuts, but decided to support the motion, since the conference wasn't very costly. Chairman Blazi, who had attended the conference, reported that his meal costs paid by the plan were minimal and there were no lodging costs, as he had a free hotel room. The Chairman continued with a review of some of the information he received and said he would provide further information at the next quarterly meeting. Member Heeb distributed the latest investment returns report. REQUESTS FROM THE PUBLICIEMPLOYEES PRESENT - None ADJOURNMENT Member Leaf made a motion to adjourn the meeting; Member Heeb seconded the motion, which passed unanimously. The meeting was adjourned at 5:45 p.m. Respectfully Submitted: Approved: ~~ ~~~ DanBI . Chai an Sheila Hutcheson Plan Administrator