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03-23-1994 • (itg of Ebgttuater POST OFFICE BOX 100 EDGEWATER,FLORIDA 32032 1P.4 Minutes *ALI*i Police Pension Board Meeting March 23 , 1994 A meeting of the Board of Trustees of the City of Edgewater Police Retirement Plan was called to order by Chairman Larry Westfall at 2 : 10 P.M. , in the Squad Room of the Edgewater Police Department . ROLL CALL: Members present were Larry Westfall , Ruth Garvey, Ruth O 'Rourke, Gary Conroy and John Borzner. Also present was Christi Robbins , Recording Secretary. APPROVAL OF MINUTES : Ruth Garvey made a motion to accept the Minutes of the November 15 , 1993 , meeting as written. Second was made by Ruth O ' Rourke . Motion carried 5 - 0 . OLD BUSINESS: The Plan was signed by the Board Chairman and Secretary and sent to Principal Mutual . The Plan was returned to the City, stating that Principal does not recognize the Board ' s authority; as per discussions with the City Manager, Mr. McMahon . As a result , a meeting was arranged with the City Manager , City Attorney, Principal Representative Jack Ascherl , Board Attorney Robert Sugarman and the Board Chairman . The City contends the police plan is a "local law" plan and the Board contends the police plan is a "Chapter" plan . The City has failed to provide any local ordinance or law which establishes local control , therefore Mr . Sugarman asserts that the Edgewater Police Retirement Plan is governed by Florida State Statute , Chapter 185; which dictates the Board ' s authority. It was agreed that both the City and Board Representatives would sign the Plan document . Other differences are outlined in the attached letter . The Board was presented with a copy of the Annual Report To The Division of Retirement For The City Of Edgewater 2 Municipal Police Officers ' Fund . This is a report that is compiled by the City for the State of Florida . Larry Westfall told the Board that he was provided a copy of the report barely a week before the deadline for return. This report required the signature of the Board Chairman and Secretary before being submitted . Upon inspection by the Board , many items were questioned . Some of these include "date of entry" versus "date of employment" . This appears to be contradictory to what Mr . Ascherl has told members, in the past , about vesting and compensation. Also , questioned was why some officers were entered in the Plan exactly three ( 3 ) months from date of hire, and others were four (4 ) months from date of hire . Ruth Garvey made a motion to have Mr . Borzner contact Fred Munoz and Karen Rickelman, Finance Department , to explain the discrepancies on the "Police Officers ' Statistical Exhibit" forms of the Annual Report . Second was made by Ruth O ' Rourke and motion carried 5 - 0 . NEW BUSINESS: Mr . Borzner ' s term on the Board of Trustees expired on March 2 , 1994 . Ruth Garvey made a motion to send recommendation to the City Council to re-appoint John Borzner to the Board of Trustees; seconded by Gary Conroy. Motion carried 4 - 0 , with Mr . Borzner abstaining . Ruth O ' Rourke made a motion to direct the Finance Department to pay all current invoices due to Robert Sugarman. Gary Conroy seconded the motion and it carried 5 - 0 . MISCELLANEOUS: The next meeting of the Board is scheduled for Wednes , May 25 , 1994 , at 4 : 00 P.M. , at the Edgewater Police Department. ADJOURNMENT: There being no further business before the Board , Ruth Garvey made a motion to adjourn; seconded by Ruth O ' Rourke. Meeting adjourned at 3 :49 P.M. a } SUGARMAN & SUSSKIND PROFESSIONAL ASSOCIATION ATTORNEYS AT LAW ROBERT A.SUGARMAN 5959 BWE LAGOON DRIVE HOWARD S.SUSSKIND SUITE 1 50 ALICE WEISMAN MIAMI,FLORIDA 33126 RICHARD M.WEINER (305)264-2121 M.JANE LAWHON BAOWARD 763-2566 February 7, 1994 1-800-329-2122 FAX(305)264-5456 Board of Trustees Edgewater Police Retirement Board Pension Plan P.O. Box 100 Edgewater, FL 32132 Re: Meeting on Restated Pension Plan Dear Trustees: On Wednesday, January 26, 1994, Chairman Westfall and I met with City Attorney Krista Storey, City Manager George McMahon and your pension consultant Jack Ascheral to discuss the changes which we had recommended and originally agreed with the Principal to the Principal's restated pension plan. As you recall, although the Principal had agreed to these changes, they then rescinded their agreement and insisted that all changes had to be approved by the City. Thus, at the City's request, we went back to a letter which I wrote in October of 1992 in order to discuss whether these changes would be accepted by the City. At the meeting, we emphasized that we were seeking to minimize the cost of operating the plan, free ourselves of unnecessary governmental requirements and regulations and make the plan easier to administer. We were able to agree upon some issues and remain at odds over others. Here is the results of the meeting. Definition of Compensation and Exclusion of Leased Employees. Since the $200,000 limits on compensation and the inclusion of leased employees do not apply to the City, we wanted them omitted. This matter is under study by the City. Definition of Compensation Year. We wanted the year used in measuring pensions to coincide with the calendar year, to make it easier for our members to figure what their pensions will be. The City has told us it has the computer capability of pulling up any twelve month period. Therefore, this matter is not as important to us as it was. Elimination of References to Employee Retirement Income Security Act. The Principal, through Jack Ascheral, said that if ERISA is ever extended to apply to governmental pensions, our plan would then be ready. I encouraged them to eliminate all Board of Trustees Edgewater Police Retirement Board Pension Plan February 7, 1994 Page 2 references to ERISA since it will only encourage disgruntled beneficiaries to sue us under ERISA. The City is taking this under advisement but I believe will agree with our position. Definition of Disabled. We are seeking a definition of disabled which would entitled an employee to a disability pension if he or she was disabled from police work, not any gainful employment. The City has resisted this change. We believe the change is required by Chapter 185 because we believe that yours is a_"chapter plan". The City steadfastly contends that the pension plan is a "local law" plan, although it cannot point to any local ordinance or law which established the plan. This is a major difference between us which hopefully will be resolved through collective bargaining between the City and its police union. - Elimination of Service Standing Rule. We ask that this definition be eliminated since it is essentially meaningless. The City is studying it. Opt in or Opt out. We ask that employees automatically be enrolled in the plan and only opt out if they choose not to participate. The City and Principal contended that they wanted employees to continue to enroll in the Plan and the City is willing to assume the responsibility of enrolling them. As long as the City is willing to undertake the work to make sure that each new employee receives an application to enroll in the plan, this is agreeable to us. Early Retirement Reduction Factor. We want to limit the early retirement reduction factor, to 3% per year. The plan proposes an early retirement reduction factor of 6.67% per year. This again depends upon whether we are a local or chapter plan. Hopefully, this matter can be resolved in collective bargaining. Benefit Continuation upon Reemployment. We want pensions to stop when people come back to work for the police department since they are no longer retired. The City apparently wants to be able to continue to pay employees pensions while they are working. We are waiting to hear from the City on this. Age 70.5 Rule. The plan provides, and the City wants, to require employees to begin receiving their pensions at age 70.5, even if they are still working. Under federal law, we can delay paying a pension to an employee of this age until after the employee retires from City police employment. We are in disagreement over this. Amount of Disability Benefits. The plan provides a disability benefit of 25%; Board of Trustees Edgewater Police Retirement Board Pension Plan February 7, 1994 Page 3 Chapter 185 provides a service-connected disability benefit of 42%. City says that benefit. increases must be achieved through collective bargaining. We contend that we are a chapter plan and that the service-connected disability benefit must therefore be 42%. Hopefully this will be resolved through collective bargaining. Inclusion of Tax Advice in the Plan. The City has agreed that the tax advice contained in the plan should be eliminated. Qualified Domestic Relations Orders. I explained the amount of work which we would have to do in order to comply with qualified domestic relations orders, which can require the payment of a partial pension to a member's divorced spouse. Even though governmental plans such as yours are not required to comply with these orders, the City nevertheless wants to because Principal says that it can do so without any additional trouble or expense. Applicability of Federal Law. Because this is a Florida pension plan, we contend that Florida law should apply. Hopefully the City will agree with us that the plan should not be governed by federal law, which would make it much harder for the Board of Trustees to win suits challenging denial of benefits. Signature Page. We agreed that the pension document and the summary plan description (booklet) would be issued and signed by both the City and the Board of Trustees, thus ending any disagreement over which one of us should sign it. We expect to soon be hearing from the City on the matters of disagreement. Hopefully those matters that remain will be able to be resolved at collective bargaining between the union and the City so as to avoid any confrontation or litigation between your Board of Trustees and the City. Your truly, ROBERT A. ,SUGARMAN RAS/jd , Edge Water\Trustee.Pol