Loading...
06-23-2008 u u o Police Pension Board of Trustees Minutes - Meeting June 23, 2008 Page 1 of 4 CITY OF EDGEW A TER POLICE OFFICERS' PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES Monday, June 23, 2008 CALL TO ORDER! ROLL CALLIDETERMINA TION OJl' A QUORUM The Edgewater Police Officers' Pension Board held its quarterly meeting on Monday, June 23,2008 in the Conference Room at Edgewater City Hall, 104 N. Riverside Drive, Edgewater, Florida. Members Present: Ferd Heeb Gary Conroy Dan Blazi Lawrence Leaf Jeanne DelNigro H. Lee Dehner Sheila Hutcheson Lisa Spanraft, CF A, The Bogdahn Group William Bennett, Police Chief Donna Looney, Personnel Director Members Absent: Plan Attorney: Plan Administrator: Consultants: City Staff: Chairman Blazi called the meeting to order at II :31 a.m. Members indicated their presence; there was a quorum, with four members present. APPROVAL OF MINUTES None NEW BUSINESS Plan Administration Services Member Ferd Heeb made a presentation regarding the Plan Administration services of Sheila Hutcheson. Mr. Heeb summarized the search for a Plan Administrator by a committee comprised of a representative from each Board. The search committee considered three candidates, all of whom were qualified. One candidate withdrew from consideration and the committee's recommendation was to retain Sheila Hutcheson. Mr. Heeb advised that a draft contract for plan administration had been prepared by Attorney Dehner for the Board's consideration~ the draft contract was presented to the Board for their review and action. Mr. Heeb continued by noting that the hire of an Administrator would assist in the transition of the pension plan from The Principal Group. Chairman Blazi asked if the monthly fee was fixed regardless of what the other Boards decide and Ms. Hutcheson advised that it was. Mr. Blazi was advised by Attorney Dehner, in response to his question, that he agreed with the contract terms. Mr. Heeb next addressed correspondence from the City Manager noting several contract change recommendations~ it was the consensus that the proposed changes were acceptable with the exception of a set contract period (which could be contrary to the Board's fiduciary responsibility) and inclusion of provision for services that might be engaged by the City (this would be a separate City issue, and would not need to be referenced in the contract). ~ o o Police Pension Board of Trustees Minutes - Meeting June 23,2008 Page 2 of4 Member Heeb made a motion to approve the contract with the changes noted above, with an effective date of June 23, 2008; Member Conroy seconded the motion, which passed unanimously upon a roll call vote. Attorney Dehner advised that he would prepare and send the contract for execution. Procedure for Meetings -Tape Recordings The next item of discussion was whether or not to tape record the Board's meeting. The Attorney advised that tape recording is not required and stated that well prepared minutes would be in the Board's better interest. Member Heeb made a motion that Board meetings would not be tape recorded; Member Conroy seconded the motion, which passed unanimously upon a roll call vote. Benefit Improvements Chairman Blazi discussed that Member Conroy had reviewed and studied the Valuation from Principal with respect to the State moneys and asked that the Board consider a benefit improvement using the available funds. He continued by reporting that he has been approached by the union as to use of the funds for benefit improvements. Member Heeb agreed and mentioned that the Fire Pension Plan had adopted a share plan. Member Conroy reported that he had discussed a share plan with Foster & Foster and the Actuary favors this approach, which the Police Officers like as a means to help defray health insurance costs. Member Conroy asked for the Board's authorization to work with Foster & Foster in this regard to obtain an impact statement. The Attorney advised that plan members would have to approve the usage of the state moneys and discussed the mechanics of a share plan, noting the need to educate the members prior to a vote on the benefit. Discussion continued that members also have an interest in the following benefit improvements: . increase of the benefit multiplier to 3.5%; . buy-back of "air time" (the Attorney advised that F.S., Chapter 185 does not allow this type of buy-back); and . COLA's and alternatives for duration of the COLA's. Member Conroy made a motion for the Board to authorize him to work with Foster & Foster on impact studies for the benefit improvements requested by the Union; Member Heeb seconded the motion, which passed unanimously upon a roll call vote. OLD BUSINESS Contract with Foster & Foster Attorney Dehner addressed the Board with regard to the proposed contract with Actuary Foster & Foster. Chairman Blazi summarized that Mr. Dehner had been working with Foster & Foster on a contract which the Board had previously authorized. The Attorney said that when he had sent the contract to Foster & Foster, the firm responded with a counter-proposal that included a provision for an increased payment based upon the negotiation of the separation from Principal. Mr. Dehner continued with a discussion of the steps that would be involved in this process, the first of which would be to convince Principal to agree to release the monies for current retirees if the retirees signed an authorization in this regard. He noted that the provision for a payment based on the negotiation was unusual and would be difficult to quantify (as to which party was responsible). Q Q o Police Pension Board of Trustees Minutes - Meeting June 23, 2008 Page 3 of 4 Member Conroy made a motion to approve the contract as originally presented, without the counter- proposal from Foster & Foster; Member Heeb seconded the motion, which passed unanimously upon a roll call vote. Member Heeb then asked if the contract outlined the actuarial services at an hourly rate, which the Attorney confirmed, and he also asked about the retirees separating from Principal and the process. Mr. Dehner said this was a calculation that would be performed by Foster & Foster. REPORTS (A TIORNEY/CONSUL T ANTS) H. Lee Dehner, Attorney Attorney Dehner opened his report with a legislative update. He advised that all of the bills, which did not pass last year, were re-filed in this year's legislative session, and, again, did not pass. However, there was a change in the portion of the statute dealing with forfeiture of pension for certain felony convictions: convictions (for crimes committed after October 1,2008) as a result ofa felony against a minor result in forfeiture of pension. The Attorney stated that he has to depend on the City to be informed of such offenses so that he can determine if a hearing would need to be held. Mr. Dehner also reported that the non-taxable status of retiree insurance premiums other than directly through the City is still not allowed, but there may be a change in the federal regulations, which he will continue to monitor. With regard to federal legislation, the Attorney discussed The Pension Protection Act of 2006 and said it is unknown what Principal is doing in this regard, but that Christiansen and Dehner will include the required provisions in the plan restatement when the severance from Principal occurs. He continued by noting that the Board can decide at that time whether or not to apply for a Favorable Determination Letter from the Internal Revenue Service, even though currently it is not required for public sector plans. Mr. Dehner concluded his report with a reminder to the Board members that the annual Financial Disclosure Forms must be filed, no later than July 1,2008, with the Office of the Supervisor of Elections in the County in which each Trustee resides. Chairman Blazi asked the Attorney about not collecting benefits till age fifty-five (55); Mr. Dehner advised that this does not apply to monthly benefits, rather the provision relates to lump sum distributions, but that was reduced to age fifty (50). The Bogdahn Group, Performance Consultant - Lisa Span raft Ms. Spanraft began her report by noting that the quarter ending March 31, 2008 was negative for all stock indices, with positive returns only in the fixed income investments. She continued with a review of sector performance, all of which were negative. There was some good news with respect to the Treasury yield curve. Ms. Spanraft then discussed the asset allocation and sub-classifications. The total fund performance was negative 4.98% for the quarter, but better than many funds. The returns underperformed the benchmark, but outperformed the peer group. Next, she reviewed the investment returns by type and noted that the new reporting format shows the last six fiscal years' performance. The total plan assets (market value) were $7,379,000 as of March 31, 2008. Chairman BIazi asked if the economy is in a recession and Ms. Spanraft addressed the market conditions. He also asked if any changes in asset allocation are recommended at this time; she stated that, generally, it is The Bogdahn Group's position that there should be a greater investment in equities (buy now), but this is from a broad perspective and The Principal doesn't agree. Ms. Spanraft concluded her report by noting that u Q '-> .. ' i '" Police Pension Board of Trustees Minutes - Meeting June 23,2008 Page 4 of 4 there are bright spots and service jobs (manufacturing) are starting to rethink their overseas presence due to fuel costs. Plan Administrator's Report - Sheila Hutcheson Ms. Hutcheson reviewed her proposed format and procedure for minutes, agendas, processing of invoices, and discussed meeting dates. The Board concurred with the proposals. DISBURSEMENTS Christiansen & Dehner, professional legal fees, May 31, 2008 invoice - $1699.23 The Attorney's invoice, in the amount of$1699.23, was presented by Member Conroy. Member Heeb made motion to approve the payment of the Attorney's invoice in the amount of $1699.23. Member Leaf seconded the motion, which passed unanimously upon a roll call vote. TRUSTEES' REPORTS, DISCUSSION, AND ACTION Member Conroy reported that the Annual Report had been submitted to the State but is not yet approved. He next discussed the Board's fiduciary insurance, reporting that the premium quotation had lapsed and that he is updating the application for the coverage with the Florida League of Cities for signature and that he will obtain the CAFR (once accepted by the City) to accompany the application. Chairman Blazi mentioned GASB and the 2007 Valuation Report, discussing the net assets. STAFF REPORTS, DISCUSSION, AND ACTION Personnel Director Donna Looney was asked about Diana Floyd's retirement and she said that she would work on it after the meeting. Ms. Looney also is working with Helen Andrews, Foster and Foster, on some information. REQUESTS FROM THE PUBLICIEMPLOYEES PRESENT None ADJOURNMENT Member Heeb made a motion to adjourn the meeting; Member Conroy seconded the motion, which passed unanimously. The meeting was adjourned at 12:50 p.m. Respectfully Submitted: Approved: ~~ Dan Blazi Chairman Sheila Hutcheson Plan Administrator