Loading...
12-11-2008 u u '-' General Employees' Pension Board of Trustees Minutes - Regular Meeting December II, 2008 Page I of5 CITY OF EDGEWATER GENERAL EMPLOYEES' PENSION BOARD Regular Meeting MINUTES Thursday, December 11,2008 CALL TO ORDER! ROLL CALLIDETERMINATION OF A QUORUM The Edgewater General Employees' Pension Board held its quarterly (regular) meeting on Monday, December II, 2008 in the Development Services Conference Room at the City of Edgewater, Florida. Members Present: Members Absent: Plan Attorney: Board Administrator: Consultants: Principal: Principal: City Staff: John Brackin Brenda Dewees Bobby Laramore Jonathan McKinney Tim Sopko Tyna Hilton Harriet Rhodes H. Lee Dehner Sheila Hutcheson Lisa Spanraft, The Bogdahn Group Allen Smith Tonya Niday, Peggy Dvorak (by telephone) Donna Looney, Personnel Director Vice-Chairman Dewees called the meeting to order at I :30 p.m. Members indicated their presence; there was a quorum, with five members present. The other attendees introduced themselves. APPROVAL OF MINUTES - Quarterly Meeting - September 15, 2008 Member McKinney made a motion to approve the minutes of the September 15, 2008 quarterly meeting; Member Laramore seconded the motion, which passed unanimously. NEW BUSINESS Principal (Allen Smith) . Retirement calculation issue - Liz McBride (continued from September 15,2008 meeting) Mr. Smith asked for input from Ms. McBride with respect to her claim. She asked Ken Hooper to speak on her behalf; Mr. Hooper recounted the issue that had been addressed at the September 15 meeting and reiterated that it was Ms. McBride's position that her retirement calculation should have included the compensation outlined in the appeal. Tonya Niday said this pay could be included but it might have a cost impact, depending on how many retirees it might affect. Principal said they would address the current plan document language as to compensation: the average of an employee's compensation years (which means the one year period ending on September 30) and which provides the highest three of the last ten years. The Plan includes only compensation years that end on the September 30 prior to the year in which retirement occurs. Attorney Dehner said that this is the current plan provision; is consistent with previous v General Employees' Pension Board of Trustees Minutes - Regular Meeting December II, 2008 Page 2 of5 calculations on other retirees; and said the plan could be amended, but the Board would need to obtain the cost for an amendment. Mr. Hooper asked about the average compensation definition, noting that the monthly compensation definition showed as though the member was employed for the entire year. Ms. Niday disagreed as to what monthly compensation refers to and said the term average compensation is what applies to the retirement calculation. Mr. Hooper said that the member contribution had been taken on the compensation so it should apply; Principal responded that the time was added to Ms. McBride's service credit, so the contribution was appropriate. Ms. Niday continued by stating that the plan refers to the year ending September 30 of the year before the partial year in which a member retires. Attorney Dehner advised that since Principal wrote the Plan Document, they should interpret its intent; Mr. Hooper stated that he believes the Board can interpret it. Mr. Dehner said that this provision has been consistently applied as Principal has said, but Mr. Hooper noted that the email from Principal said Ms. McBride's benefit would be recalculated. Ms. Niday responded that the benefit was recalculated and increased in July 2007 (to add the service credit, but not the compensation), but she also said she didn't understand this to refer to the severance pay; rather, she thought it related only to the service credit. The Attorney said the interpretation was correct but the email created a different impression. Member Dewees commented about Principal's communication to Ms. McBride, stating that she felt that Ms. McBride was misled by the communications to her from Principal. u The Board discussed what the cost impact would be to make this change to the plan. Attorney Dehner said the Board could have the cost calculated for all affected retirees, retroactive to a certain point, and that the Board would need to address the interpretation of the emails as part of this appeal. Mr. Dehner continued with a discussion of equitable estoppel, explaining it as an individual acting in reliance on the information given and taking certain actions he/she would not otherwise have taken. Member Brackin asked Ms. McBride if she had made her decision based on Principal's positive response to her question regarding the benefit calculation and she said she had. Attorney Dehner then said that if the Board wants to pursue this issue, it should be conducted as a formal hearing process with Ms. McBride presenting her estoppel issue and Principal presenting its position. Principal asked that information be sent detailing the pay-out that Ms. McBride received, specifYing the severance portion, unused leave, etc., to determine if the pay-out is included in the Plan Document as compensation. The Attorney concurred that this information should be provided to Principal. Mr. Dehner continued by stating that he will recommend a hearing procedure, as outlined in Rule 14 of the draft Rules Manual. The Board concurred with this recommendation. Ms. McBride then asked the Board for a formal hearing. Member Laramore made a motion to adopt the claims procedure outlined in Rule 14 and to defer consideration of the remainder of the Rules Manual to a later date; Member Sopko seconded the motion, which passed unanimously. Ms Niday again stated that Principal requests an accurate description of the severance pay and other documents related to this issue; the documents will be sent. When Ms. McBride submits her written request for a hearing, the initial hearing should be held within ninety (90) days of that date, unless an extension is approved. v Member Dewees asked if there should be a cost study authorized/completed before the hearing; Member Sopko said the issue is fairness, not cost, with which Member Brackin agreed. The Attorney recommended that a cost study be considered later as cost is not an element of the estoppel decision. v General Employees' Pension Board of Trustees Minutes - Regular Meeting December II, 2008 Page 3 of5 . Plan Restatement Ms. Niday opened by discussing that there were three optional changes not included in the Plan: . accrual vs. cash basis in relation to compensation earned by not paid. The Plan is accurately written on a cash basis, reflecting the City's practice, so this change does not need to be included. . unused sick/vacation leave payment. The Plan has been silent in this regard, so Ms. Niday asked what the City's practice is. Donna Looney advised that the City has always added the cashed in sick/vacation leave if cashed in by September 30. Ms. Niday continued that Principal just wanted to define the City's practice and this clarified the definition of compensation. . including additional compensation on disability. This has not been the practice and the Attorney advised that the Police Plan also did not include this. The Board agreed not to include this item. Member Brackin made a motion to include the payment of cashed in sick/vacation leave; to exclude additional compensation on disability; and to add the use of a "rolling" twelve months earnings for the computation of final average compensation; Member Laramore seconded the motion, which passed unanimously. '-' Ms. Niday reported that an updated Summary Plan Description (SPD) would be prepared for issuance to Plan members after the Plan Restatement is completed. . Status of Principal's actions to comply with the Pension Protection Act of2006 Ms. Niday reported the following changes in this regard: adding the joint and 75% survivor option, allowing a non-spousal beneficiary the ability to roll money out of the plan (death benefit), etc., as well as IRS 4 15 changes. Ms. Niday continued by advising that the Cycle C filing for a determination of qualification has a deadline of January 31, 2009, but also said the filing in Cycle E is later (20 II). However, there are benefits to filing in Cycle C, so it is recommended that this be accomplished in Cycle C. Principal will mail the qualification package to the Plan Administrator, including the Employee Notice that has to be issued by January 2 1,2009. Member Dewees asked about the military service change in the Plan Document and was advised that it is included. . vep filing (..; Discussion of the VCP filing opened with Personnel Director Donna Looney stating that all she has is her letter to Ms. Niday in this regard and it is not known where this stands or if it has been filed with the IRS. Ms. Looney said that she would check internally to see if the VCP has been filed by the City by reviewing records to see if a check had been issued to the IRS in the relevant time frame (Principal was asked to advise Ms. Looney after the meeting what the fee would have been to the IRS along with the VCP if it was filed). Attorney Dehner also asked what would happen if it is determined that the VCP wasn't submitted and what would be the best course of action in that case. Ms. Niday said that she would check as to the course of action to take if the VCP was not filed. She continued that the Board may have to use the Cycle E filing if it is not resolved as to whether or not the VCP has been filed. v General Employees' Pension Board of Trustees Minutes - Regular Meeting December II, 2008 Page 4 of 5 Contract renewal - The Bogdahn Group Lisa Spanraft advised the Board that The Bogdahn Group has decided to defer this item due to current market conditions and will address it at a later time. Approval of quarterly meeting dates - 2009 (all meetings begin at 1 :00 p.m.) March 16,2009 (Monday) June 10,2009 (Wednesday) September 14, 2009 (Monday) December 14, 2009 (Monday) It was the consensus of the Board to approve the 2009 meeting dates as outlined. OLD BUSINESS Consideration/approval of Rules Manual The Board had adopted the claims procedure (Rule 14 of the Manual) by previous action in this meeting and deferred consideration of the remainder of the Manual to a later time. v REPORTS (ATTORNEY/CONSULTANTS) The Bogdahn Group - Lisa Spanraft Ms. Spanraft opened her report by noting that the market has been negative almost across the board, with all indices down. The portfolio had a total fund return of negative 7.93 % for the quarter ending September 30, 2008 and a negative 15.68% for the fiscal year ending September 30, 2008. She then reviewed historical bear markets and the time frame for recovery from the "bottom" of the markets. In view of the market conditions, Member Dewees asked about action from the last meeting regarding direction to increase equity exposure and the Plan Administrator addressed this. She said that at the last meeting, there had been discussion with regard to requesting that Principal increase the exposure to equities, although it was not known if Principal would agree. Subsequent to the September 15, 2008 meeting, Ms. Spanraft recommended against this action, based on the downturn in the market; therefore, no action was taken. The Attorney then asked Ms. Spanraft about her recommendations for the near future and she advised the Board to maintain its investment policy. H. Lee Dehner, Attorney Mr. Dehner opened by reporting that the federal legislation allowing pre-tax status for public safety retiree insurance premiums might extend to other public retirees. He continued with an update on the status of Florida Rule 60T, which has been discussed at previous meetings. On October 21, 2008, there was a public hearing on the proposed changes to Rule 60T, which was well attended, with comments by all groups as to their opposition to the changes, due to cost. Director Suggs said the Division of ~ Retirement would further review the proposed changes based on the concerns of all the speakers. v ~ ~ General Employees' Pension Board of Trustees Minutes - Regular Meeting December II, 2008 Page 5 of5 Sheila Hutcheson, Board Administrator Ms. Hutcheson reported that Mr. Ascherl had requested that his correspondence be sent to the Board for this meeting and he also asked her to inquire as to whether or not the Board wanted him to attend the Board's meetings. The Board requested that the Administrator let Mr. Ascherl know that he would be contacted if there would be a need for him to attend future meetings. DISBURSEMENTSIRETURN OF CONTRIBUTIONS and DEPOSITS . DISBURSEMENTS I. Sheila Hutcheson, plan administration fees (September, October, November, 2008) -$2700.00 ($900/month); postage expense - $4.80 2. Christiansen & Dehner, professional legal fees, $145.00, $2046.07, $909.35 3. The Bogdahn Group, performance consultant fees, 3rd quarter, 2008 - $2500.00 4. U.S. Specialty Insurance Company (pension fiduciary insurance) - $3693.57 ($175.00 of the $3693.57 premium was paid from City, not pension assets, for waiver of recourse endorsement) . DEPOSITS None Member McKinney made a motion to approve the disbursements/return of contributions and deposits; Member Sopko seconded the motion, which passed unanimously. STAFF REPORTS, DISCUSSION, and ACTION None. TRUSTEES' REPORTS, DISCUSSION and ACTION Member Dewees asked if the contract with Foster and Foster (F&F) had been signed and was advised that it had been signed by F&F and Ms. Hutcheson had brought the contract for the Chairman's/Secretary's signatures. REQUESTS FROM THE PUBLICIEMPLOYEES PRESENT None. ADJOURNMENT Member McKinney made a motion for adjournment; Member Sopko seconded the motion, which passed unanimously. The Vice-Chairman adjourned the meeting at 3:44 p.m. Respectfully Submitted: Approved: ~~ cd~~~ 1)c~ Vto-- Chairman Sheila Hutcheson Plan Administrator