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09-17-2012 CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD OF TRUSTEES QUARTERLY MEETING CITY HALL CONFERENCE ROOM 104 N. Riverside Drive, Edgewater, Florida 32132 AGENDA Monday, September 17, 2012- 1:30 P.M. Pursuant to Chapter 286,F.S., if an individual decides to appeal any decision made with respect to any matter considered at a meeting or hearing, that individual will need a record of the proceedings and will need to insure that a verbatim record of the proceedings is made.In accordance with the Americans with Disabilities Act,persons needing assistance to participate in any of these proceedings should contact City Clerk Bonnie Wenzel,386-424-2400 Ext#1101,prior to the meeting. L CALL TO ORDER/ROLL CALL/DETERMINATION OF A QUORUM - Welcome new Trustee David Arcieri ELECTION of OFFICERS II. APPROVAL OF MINUTES- Quarterly Meeting -June 11, 2012 III. NEW BUSINESS 1. Consideration of Rules Manual 2. Administrative Budget Report 3. Determination of Plan's funding basis for Valuation: fixed dollar amount or percentage of payroll IV. OLD BUSINESS V. REPORTS (ATTORNEY/CONSULTANTS) 1. The Bogdahn Group, Performance Consultant • Quarterly report -June 30, 2012 2. Lee Delmer, Plan Attorney • Status Report -Issues with Principal • Avoidance of benefit overpayments • Interpretation of extra benefits law- 1999 (City of Naples opinion) 3. Sheila Hutcheson, Plan Administrator • Council Appointed trustee McCauley's term ends on Oct. 6, 2012 VL PROCESSED DISBURSEMENTS/RETURN OF CONTRIBUTIONS and DEPOSITS • DISBURSEMENTS 1. Christiansen&Delmer, professional legal fees - $67.60, $1,215.47, $67.60 2. Sheila Hutcheson, plan administration fees - $4,500.00 ($1500/month); mileage expense - $11.10 3. The Bogdahn Group, performance consultant fees, 2nd quarter, 2012 -$3,625.00 4. Jeff Leuenberger, commencement of normal retirement for terminated, vested member as of August 1, 2012 (joint and 100%survivor option) 5. Brandi Southerland, refund of after-tax member contribution (non-vested former member) - $322.81 DEPOSITS 2011 Premium Tax Distribution- $122,039.14 (20 10 amount- $125,638.65) VII. STAFF and TRUSTEES' REPORTS,DISCUSSION,AND ACTION VIII. REQUESTS FROM THE PUBLIC/EMPLOYEES PRESENT IX. ADJOURNMENT CITY OF EDGEWATER POLICE OFFICERS'PENSION BOARD OF TRUSTEES QUARTERLY MEETING CITY HALL CONFERENCE ROOM 104 N.Riverside Drive,Edgewater,Florida 32132 AGENDA Monday,September 17,2012- 1:30 P.M. Pursuant to Chapter 286,F.S., if an individual decides to appeal any decision made with respect to any matter considered at a meeting or hearing,that individual will need a record of the proceedings and will need to insure that a verbatim record of the proceedings is made.In accordance with the Americans with Disabilities Act,persons needing assistance to participate in any of these proceedings should contact City Clerk Bonnie Wenzel,386-424-2400 Ext#1101,prior to the meeting. I. CALL TO ORDER/ROLL CALL/DETERMINATION OF A QUORUM - Welcome new Trustee David Arcieri ELECTION of OFFICERS II. APPROVAL OF MINUTES-Quarterly Meeting-June 11, 2012 III. NEW BUSINESS 1. Consideration of Rules Manual 2. Administrative Budget Report 3. Determination of Plan's funding basis for Valuation: fixed dollar amount or percentage of payroll IV. OLD BUSINESS V. REPORTS(ATTORNEY/CONSULTANTS) 1. The Bogdahn Group,Performance Consultant • Quarterly report-June 30,2012 2. Lee Dehner, Plan Attorney • Status Report-Issues with Principal • Avoidance of benefit overpayments • Interpretation of extra benefits law- 1999(City of Naples opinion) 3. Sheila Hutcheson,Plan Administrator • Council Appointed trustee McCauley's term ends on Oct. 6,2012 VI. PROCESSED DISBURSEMENTS/RETURN OF CONTRIBUTIONS and DEPOSITS • DISBURSEMENTS 1. Christiansen&Dehner,professional legal fees-$67.60,$1,215.47,$67.60 2. Sheila Hutcheson, plan administration fees - $4,500.00 ($1500/month); mileage expense-$11.10 3. The Bogdahn Group,performance consultant fees,2nd quarter,2012 -$3,625.00 4. Jeff Leuenberger, commencement of normal retirement for terminated, vested member as of August 1,2012(joint and 100% survivor option) 5. Brandi Southerland, refund of after-tax member contribution (non-vested former member)-$322.81 DEPOSITS 2011 Premium Tax Distribution-$122,039.14(2010 amount- $125,638.65) VII. STAFF and TRUSTEES'REPORTS,DISCUSSION,AND ACTION VIII. REQUESTS FROM THE PUBLIC/EMPLOYEES PRESENT IX. ADJOURNMENT EDGEWATER POLICE PENSION TRUST Sept. 17, 2012 Report ADMISTRATIVE EXPENSE BUDGET FISCAL YEAR OCTOBER 1. 2011 TO SEPTEMBER 30 2012 DESCRIPTION BUDGET ACTUAL CURRENT YEAR TO UNEXPENDED MONTH/QTR DATE BALANCE PLAN ADMINISTRATOR* 17,100.00 4,511.10 17,261.84 (161.84) LEGAL 11,500.00 1,350.67 7,109.37 4,390.63 PERFORMANCE MONITORING 14,500.00 3,625.00 14,500.00 - ACTUARIAL SERVICES ANNUAL 20,500.00 - 20,156.00 344.00 ACTUARIAL SERVICES SPECIAL 30,000.00 - - 30,000.00 INSURANCE 2,800.00 - 2,418.37 381.63 DUES 600.00 - 600.00 - CONTINUING EDUCATION 3,000.00 - 1,244.36 1,755.64 TOTAL 100,000.00 9,486.77 63,289.94 36,710.06 *amended to include rate increase on Jan. 1, 2012 rwn: liran Kuies Manual for Pension Meeting on June 11 -Edgewater... http://mail.aol.com/36451-111/ao1-6/en-us/mail/PrintMessage.asp. From: Sheila Hutcheson<shutch9750 @aol.com> To: ferdheeb<ferdheeb @cfl.rr.com>;jtarr<jtarr @cityofedgewater.org>;darcieri<darcieri @cityofedgewater.org>; Ileaf1 <Ileafl @att.net>;vincentmccauley7<vincentmccauley7 @gmail.com> Cc: kristin<kristin @cdpension.com>; lee<lee @cdpension.com> Subject: Fwd: Draft Rules Manual for Pension Meeting on June 11 -Edgewater Police Date: Mon,Jun 18,2012 12:14 pm Attachments: Edgewater Police_-_DRAFT_Rules_Manual-_City_Attorney_Recommendations_6-15-12.pdf(213K) Dear Trustees and Lee, Please see annotated Rules Manual (from City Atty. Aaron Wolfe and City Manager Tracey Barlow) along with his and my emails below. The Board had requested at our June 11 meeting that this item be discussed at our Sept. 17 meeting since we had only 3 members present at the June meeting. Since those of you who were at the June meeting already have the Rules Manual, I will just copy and bring the annotated pages to you at our Sept. 17 meeting (to save excess copying). Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728 (facsimile) shutch9750a,aol.corn Original Message From: Sheila Hutcheson <shutch9750(a�aol.com> To: ttbarlow <ttbarlowACITYOFEDGEWATER.ORG> Sent: Mon, Jun 18, 2012 9:00 am Subject: Re: Draft Rules Manual for Pension Meeting on June 11 Thanks, Tracey. I will send all of this along to the Trustees and Lee and we will discuss at the Sept. meeting. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728 (facsimile) shutch9750 @aol.corn Original Message From: TT Barlow <ttbarlow(c�CITYOFEDGEWATER.ORG> To: 'Sheila Hutcheson' <shutch9750Cc�aol.com> Sent: Mon, Jun 18, 2012 8:09 am Subject: RE: Draft Rules Manual for Pension Meeting on June 11 Shelia, of 3 6/18/2012 12:14 PM twa: Uran Kutes Manual for tension Meeting on June 11 -t,agewater... nttp://mail.aol.com36401-111/aol-6/en-us/mail/PrmtMessage.asp: Fifth Trustee—I understand the longevity of the present verbiage but I think the thought was by chance legislation was successful in amending, as they have most recently attempted,whereas the fifth member is selected by the City Council. Travel—I agree that the majority of the previous Board member had declined and would prefer to reference the F.S. 112 travel provisions, but since those members are no longer on the Board I thought it would be an opportunity for fresh eyes to reconsider. There are only 2 opportunities,the city policy or F.S. chapter 112. Considering the city is less stringent than 112 and ALL of the other boards reference city policy,it would be much simpler to audit if they were to adopt such as well. Performance Monitor—I concur. Contribution rates—That deletion was only because we couldn't fmd any reference in any of the ordinances that made such reference as was alluded to in the statement(11.4) Tracey T. Barlow City Manager City of Edgewater From: Sheila Hutcheson[mailto:shutch9750@aol.com] Sent: Sunday,June 17,2012 6:42 PM To: TT Barlow Subject: Re: Draft Rules Manual for Pension Meeting on June 11 Bonnie called me and she modified her email to say that is for numbering/formatting and not a requirement that every item be included on the Pension Boards' agendas. So, that part is okay. She said our agendas' content is fine, she wanted a uniform format/numbering. I did tell her that if we have further discussions on the settlement issues,neither Board records and that the Police Board does not record any of its meetings. So, I won't put that header on the agendas about recordings. I will submit the annotated copy of the Rules to the Trustees and Lee before the Sept. meeting when this is discussed. Under the fifth trustee, in my opinion, I think it is better to keep the explanation in the manual rather than just referring to the statute, which has remained unchanged for about thirty plus years. If we don't describe it,they may not know the requirements and I generally favor handbooks that provide the information without the need to go to another document, especially one that may not be easily readable like the statutes. Also, on travel, so far,this Board has declined to adopt the City's procedures, so they may not agree to that. It is a statutory requirement to have a performance monitor, not discretionary, so I am not sure if the word "may" is appropriate. Under the contribution rates, it refers to the Board, I think, because FL Statutes requires that the City contribute the amount certified by the Actuary as necessary for actuarial soundness and the Valuation is submitted to the Board for their approval and then notification to the City of the funding requirements. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728 (facsimile) shutch9750 @aol.com of 3 6/18/2012 12:14 PM Fwd: Dratt Kules Manual tor Pension Meeting on June 1 l -Edgewater... http://mail.aol.com/36451-111/aol-6/en-us/mail/PrintMessage.asp: On 6/17/2012 5:38 PM, TT Barlow wrote: Shelia, Attached is a marked-up copy of the Draft Rules Manual for the Police Pension Board. These comments are based on a review provided by the City Attorney and myself. Can you please share our recommendations with the remainder of the Police Pension Board and Mr. Dehner. I also did receive your message regarding the future agenda formats and plan to discuss with Bonnie either Monday or Tuesday. Although we are transitioning to Granicus in an effort to enhance our transparency,I recognize that there will have to be some minor variations on formats as each board is unique in itself. Tracey T. Barlow City Manager City of Edgewater From: Sheila Hutcheson[mailto:shutch9750(a,aol.com] Sent: Sunday,June 03,2012 8:59 PM To: John Tarr;lleafl(a,att.net;ferdheebna,cfl.n.com;vincentmccauley7@grnail.com;Dave Arcieri;TT Barlow Subject: Draft Rules Manual for Pension Meeting on June 11 Attached is the draft Rules Manual that will be discussed at our June 11 meeting. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims,FL 32754 321-267-3082 321-267-4728(facsimile) shutch9750 @aol.com of 3 6/18/2012 12:14 PM RULE 1 BOARD OF TRUSTEES 1 4 DEFINITION OF FUNCTIONS The Board of Trustees shall act as the named fiduciary of the Fund as defined by Florida law. The Board shall have the exclusive authority to operate,maintain and interpret the provisions of the state laws and local ordinances establishing and executing the investment policy of the Fund. The Trustees shall be solely responsible for the selection and retention of professional advisors to the Fund including but not limited td investment managers,performance monitors,plan administrators, attorneys, accountants,actuaries, and clerical staff. 1.2 DEFINITION OF FIDUCIARY A fiduciary shall be defined as a person responsible for the discharge of his duties with respect to the Pension Plan solely in the interest of the participants and beneficiaries for the exclusive purpose of providing benefits to participants and their beneficiaries and defraying the reasonable expenses of administering the Plan. 1.3 SUMMARY Trustees shall be responsible for the investment and reinvestment of the assets of the Fund; for determining all claims for retirement benefits; for exercising the sole and exclusive adminis- tration of and the proper operation of the Plan; to perform such actuarial and accounting functions as are required by law;to prepare and distribute a Summary Plan Description as provided in§112.66, Florida Statutes,to the Members of the Fund upon employment and every other year thereafter;and to fulfill all other such duties as may be required by law. 1.4 ESTABLISHMENT OF OFFICES The Board of Trustees shall elect a Chairman and Secretary every two years. The officers shall be Trustees of the Board. The Chairman shall be responsible for the conduct of all meetings of the Board and shall have voting rights the same as any other Trustee of the Board. The Chairman shall perform such other duties as the Trustees may assign. The Secretary shall be responsible for the keeping of minutes of the transactions of the Board and shall be the official custodian of records of the Board. The Secretary,together with the Chairman, shall execute all official contracts of the Board. -1- 1.5 CONFLICTS OF INTEREST AND GIFTS A Conflicts of interest in voting shall be governed by the provisions of Section 112.3143;Florida Statutes, the Code of Ethics for Public Officials. Notwithstanding any other provision of law,no Trustee shall vote or participate in a determination of any matter in which that Trustee shall receive a special private gain except in the case of employee Trustees voting on benefits applicable to all Members of the Plan. B. No Trustee(or his or her spouse or minor child)shall,at any time, solicit or accept any gift(including but not limit to;food,beverages and transportation),loan,reward,promise of future employment, favor, service,-{compensation, payment, or thing of value when the Trustee understands, knows or should have known that it was given to influence a vote or other action in which the Trustee was expected to participate in his official capacity. Gifts provided directly or indirectly by a state, regional or national organization which promotes the exchange of ideas between, or the professional development of, members of that organization or staff of a governmental agency that is a member of that organization, are permitted. 1.6 PER DIEM AND REIMBURSEMENT All Trustees shall be entitled to receive a per diem allowance and reimbursement for reasonable expenses incurred in conducting the business of the Fund. The Board Shall c3tabli3h - -- -- : -- in accordance with policies of the City of Edgewater. 1.7 ELECTION PROCEDURES The Board of Trustees shall consist of five persons,two of whom shall be Police Officers, two of whom shall be legal residents of the City appointed by the City Council and the fifth Trustee shall be a person selected by the other four Trustees and appointed as a ministerial act by the City Council. A. Police Officer Trustees. The Police Officer Trustees shall be elected from among the Members of the Fund in the Police Department. Elections shall be by a Majority vote. If no candidate receives a majority vote, a run-off election between the two top vote recipients shall be held at the earliest practical date. Elections shall be every year,with one seat elected in alternating years in the November preceding the expiration of the second year of the term. Trustees shall take office December 1st. Employees shall be permitted to nominate themselves for office and elections -2- may be conducted by mail-in ballot. The election shall be conducted by placement of a ballot box in the Police Department Headquarters for a period of 72 hours beginning on a date to be selected by the Board Ballots shall be counted by the Board and the winners certified by the Board. B. Resident Trustees. The two resident Trustees shall be legal residents of the City and shall be appointed for two year terms in alternating years by the City Council in October or November. Resident Trustees shall take office on December 1st. C. Fifth Trustee. The fifth Trustee of the Board shall be chosen in accordance with Section 185.05(1 (a) lorida Statues(2011) The name of the person selected by a majority of the other Trustees shall be certified to the City ministeri . 1.8 SUCCESSION OF PERSONS TO VACANT POSITIONS Vacancies on the Board of Trustees of employee members shall be filled by special election to be conducted in the same manner as any other election. Vacancies among the resident Trustees shall be filled by the City Council. The person selected to fill a vacancy shall fulfill only the remain- ing term of the vacant office. In the event of a vacancy in the fifth Trustee of the Board,the Board shall appoint a successor in the same manner as the initial selection. 1.9 EDUCATION REQUIREMENTS Each Trustee is required to attend a seminar or conference regarding Trustee duties and responsibilities and matters relating to the investment program of the Plan at least once each term. Trustees are encouraged to attend seminars or conferences more frequently in order to remain informed regarding pension issues. New Trustees are encouraged to attend within the first six months of their term. 1.10 DISCLOSURE OF FINANCIAL INTERESTS Trustees must file a statement of financial interests(Form 1)with the supervisor of elections of the county in which they permanently reside within 30 days from the date of appointment and no later than July 1 of each year thereafter. -3- 5.4 REVIEW OF CUSTODIAL STATEMENTS A. Custodial reports should be monitored by the Board or its designee for disclosure of all asset inflows such as City and Member contributions, state excise tax payments, if applicable, miscellaneous citizen donations,and investment income. All errors,including those involving the misclassifications of Plan revenues,e.g.,recording Member contributions as City contributions,must be corrected. B. Custodial reports should also be monitored for all asset outflows. Asset outflows must be properly approved and verified on audit. Expenses shall be approved as provided in Rule 5.2 and Retirements and Returns of Contributions in accordance with Rule 5.3. Letters of authorization for the expenditure of funds must be issued by the Board and copies must be maintained in orderly files. 5.5 ROLLOVERS TO AND FROM THE FUND The Fund will accept and transfer eligible cash rollover distributions to and from the Fund as permitted by local, State and Federal law. The Board may adopt appropriate forms to facilitate such rollovers. 5.6 DEFERRED RETIREMENT OPTION PLAN RULES AND PROCESSING The Board of Trustees shall establish recommend to the City Council for consideration of adoption the procedure to begin participation for Members who are eligible to participate in the Deferred Retirement Option Plan(DROP), including the adoption of an Application/Agreement to be completed and executed by the Member prior to DROP participation. The Application/Agreement shall inform the Member of the ramifications of DROP participation and shall require the Member to acknowledge such ramifications and also acknowledge that the Member has had the opportunity to seek independent legal/ financial advice prior to DROP participation. RULE 6 INSURANCE 6.1 FIDUCIARY INSURANCE The Trustees are authorized by law to purchase fiduciary insurance to insure members of the Board for errors and omissions at the expense of the Fund, but the Fund shall not pay to waive -10- recourse against Trustees. A rider waiving recourse may be purchased and paid for by the City or by a Trustee. 64 TRAVEL COVERAGE The fund may purchase, at its expense, life and accidental death and dismemberment insurance for each Trustee who shall travel outside of Volusia County for the purpose of Board related business. RULE 7 RELATIONS WITH THE CITY 7.1 AUTHORITY OF'THE BOARD The Board of Trustees is an independent entity established by state law,city charter and local ordinance. The Board of Trustees shall not be considered a component part of nor subordinate to the City of Edgewater government. The Board shall have exclusive control of the operation of the Fund; however,no change to the retirement ordinance may be made except by action of the State Legislature or the City Council. 7.2 CONTRACTUAL SERVICES In the selection of contractual services, the Board shall pay particular attention to the existence of conflicts of interest when contractors are to be employed by the Board for services similar to services which the contractor also provides to the City of Edgewater. 7.3 USE OF THE CITY FINANCE DEPARTMENT The Board shall may be authorized by the City to utilize the services of the City for the performance of banking functions of the Board. The City shall have no discretionary authority with regard to the utilization or direction of funds of the Board. The precise duties of the City shall be reduced to writing,the same as any other contract for services entered into by the Board. 7.4 USE OF INDEPENDENT CUSTODIANS The Board shall be authorized to use the services of any duly qualified custodian in lieu of the City Finance Department for the performance of banking functions of the Board. The custodian shall be duly licensed, insured and bonded and shall meet all of the depository requirements of Chapter 280,Florida Statutes. -11- RULE 8 ORDINANCE CHANGES 8,4 ,NORM OF ORDINANCE No ordinance change affecting the Pension Fund shall be presented for a vote to the City Council unless first reviewed and approved by a majority of the Trustees in accordance with the existing law governing the Fund. The Trustees may make rcommendations to the City Council regarding proposed ordinances affecting the Pension Fund. All proposed ordinances shall be reviewed by the General Counsel to the Fund who shall pass on the form and correctness of the ordinance. All proposed ordinance changes carrying an economic benefit shall be reviewed by the actuary to determine the cost as required by law. 8.2 COLLECTIVE BARGAINING The Board of Trustees acknowledges that it is neither an employee organization nor an employer as defined by Chapter 447,Part II,Florida Statutes. Therefore,the Board shall not engage in collective bargaining on behalf of the City of Edgewater or on behalf of any employee organiza- tion. The Board shall make itself available as a resource to labor organizations and the City for all matters relating to pension and retirement, if any. 8.3 APPEARANCE AT CITY COUNCIL MEETINGS The Board of Trustees shall,through one of its members,its designee or its General Counsel, be present at all City Council meetings where a discussion of matters of interest to the Board shall occur. The Board shall, prior to said meeting, designate an official spokesperson on behalf of the Fund. 8.4 ACTUARIAL IMPACT STUDIES No benefit change shall occur without an actuarial impact study as required by state law. All such actuarial impact studies shall be at the expense of the Fund. RULE 9 JUDICIAL PROCEEDINGS 9.1 PROCESS All process issued by federal or state courts to the City of Edgewater concerning the Pension Fund or to the City of Edgewater Police Officers'Retirement Plan shall immediately upon receipt be forwarded to the General Counsel for the Fund who shall respond thereto. -12- In the event the Board elects to consider retaining a new manager,monitor,custodian or other professional, prospective applicants, including those applicants who had previously provided information to the Board,may be contacted and provided with a Request for Proposal. The Board or a committee appointed by the Board may conduct the initial screening of applicants by reviewing the proposals received in response to the Requests for Proposals. The Board may then schedule personal presentations by a "short-list" of qualified applicants. The Board may also decide to retain managers,monitors,custodians and other professionals by utilizing any other method which-the Board deems to be prudent under the circumstances.but in no case shall any services be procured without the compliance of the City purchasing policy. 10.9 DIVESTITURE No divestiture of any asset of the Fund shall be made for any reason other than fulfillment of the fiduciary obligations of the Fund. 10.10 PROXY VOTING The Trustees shall be responsible for exercising allproxies on equities held by the Fund. The Trustees shall comply on a voluntary basis with the statdar°.*s of the Employee Retirement Income Security Act of 1974 in the voting of proxies. The Board shall,by contract or other written agree- ment, give all investment managers proxy voting responsibility and the Trustees shall monitor the voting of the managers. The Trustees (along with the United States Department of Labor) do not consider the following practices by investment management firms with proxy voting responsibility to be consist- ent with their fiduciary responsibility: A. Declining to vote proxies; B. Voting proxies exclusively for management without analysis of the underlying issues; C. Permitting negligent or inaccurate record-keeping regarding proxy voting; D. Accepting directions from other parties; E. Permitting the absence of policies or procedures to assure the proper exercise of this fiduciary responsibility. Any significant proxy items and the vote by an investment manager shall be reported in writing to the Trustees. Records of all proxy votes shall be maintained and made available to the -16- Trustees or any agents acting in their behalf. All such records shall be maintained in accordance with the$lorida Public Records Act. It lhalirbe the primary responsibility of investment managers acting on behalf of the Board to vote all proxies to enhance the value of the Fund assets. All tender offers shall be treated in the same manner with regard to record-keeping and asset enhancement. 10.11 DECLARATION OF EXPECTED ANNUAL RATE OF RETURN For each actuarial valuation,the Board shall seek the advice of its investment professionals and the actuary and then the Biardhall determine the total expected annual rate of investment return for the current year,for each°of the next several years and for the long term thereafter. This determination must be filed promptly with the Department of Management Services,with the City and with the Board's actuary. 10.12 INVESTMENT REPORTS TO THE CITY The Board shall prepare annual fiscal year end reports for submission to the City Council, which shall include the investments in the portfolio by clads or type,book value,income earned and market value as of the end of the fiscal year. RULE 11 ACTUARIAL SERVICES 11.1 SELECTION The Board of Trustees shall retain at all times the services of an enrolled actuary. An enrolled actuary shall mean an actuary who is enrolled under Subtitle C of Title III of the Employment Retirement Income Security Act of 1974 and who is a member of the Society of Actuaries or the American Academy of Actuaries. Competitive bidding shall not be required in the selection of actuaries. Services shall be procured in accordance to the City purchasing policy. 11.2 CONFLICTS OF INTEREST In order to avoid conflicts of interest in the delivery of actuarial services,the Board shall not retain actuaries who are employed by the City of Edgewater,unless the Board is determined to be the client by a separate engagement letter or contract. -17- 11.3 REPORTING The actuary shall report to the Board on not less than an annual basis so that the Board may establish the adequacy of employer and employee contribution rates. Valuations shall be done at least every three years. No proposed change in retirement benefits shall be made without an actuarial determination of the cost impact of the change. All actuarial reports shall be in accordance with the provisions of Section 112.63, Florida Statutes. 11.4 SETTING CONTRIBUTION RATES -- : : •-- - -- -.- -:. . ..- :` -.'e -- •- . The City contribution rate shall be established following an analysis of the adequacy of employee contributions, contributions from the State of Florida Insurance Rebate Program and investment earnings of the Fund. The amount of the City contribution shall be certified in writing to the City Council in accordance with the provisions of local ordinance. 11.5 CREDITED SERVICE For purposes of actuarial calculations involving=-edited service, fractional parts of years shall be defined as completed months. 11.6 ACTUARIAL STUDIES FOR INDIVIDUAL PLAN MEMBERS No greater than six(6)months prior to the members Normal Retirement Date or their planned retirement date post their eligible retirement date,each vested Plan Member shall be entitled, at the Fund's expense,to receive two actuarial studies to estimate his or her retirement benefits. Any additional studies shall be provided only at the Member's expense. Berfit calculations for terminated vested persons shall be performed by the actuary immediately upon termination. RULE 12 ACCOUNTING SERVICES 12.1 AUDITS The Fund shall cause to be made not less than on an annual basis an audit of the assets and liabilities of the Fund. Financial reporting should be made in accordance with generally accepted accounting standards. A. All postings from the custodial statements to the Plan's working trial balance should be in accordance with the Board's general and/or specific authorizations. -18- b r` 4 DEPARTMENT ENT OP MANAGRKENT R[cz Scan SERVICES Scow STSwexT Governor Interim Secretary May 29, 2012 MEMORANDUM TO: Florida Local Government Retirement Systems or Plans FROM: Division of Retirement Bureau of Local Retirement Systems SUBJECT: Local Retirement Plans Minimum Funding Basis: Percentage of Payroll Versus Fixed-Dollar Contributions The Division of Retirement performs actuarial reviews of Florida's local government retirement plans to ensure that they are being funded in an actuarially sound manner in accordance with Part VII of Chapter 112, Florida Statutes. The provisions of section 112.61, Florida Statutes, require in part that, "...such retirement systems or plans be managed, administered, operated, and funded in such a manner as to maximize the protection of public employee retirement benefits"and "...it is the intent of this act to prohibit the use of any procedure, methodology, or assumptions the effect of which is to transfer to future taxpayers any portion of the costs which may reasonably have been expected to be paid by the current taxpayers." In 2009, in an effort to ensure compliance with these provisions, the division began requiring that local retirement plan contributions must minimally equal the amount of contributions determined using the percentage-of-payroll method. This was intended to eliminate recurring actuarial losses due to payroll growth underestimation. However, economic conditions since then have led to substantial changes in the allocation of local government resources and the causes of the prior actuarial losses attributable to this issue have largely abated. With several years of experience accumulated to evaluate the effectiveness of the percentage-of-payroll contribution requirement, the division has determined that use of this method is not required for compliance with Part VII of Chapter 112, Florida Statutes. Accordingly, effective immediately, local governments should confer with the retirement board actuary to select and maintain a contribution method (percentage of payroll or fixed dollar contributions)that best fits the funding requirements of the plan and satisfies the legislative intent found in section 112.61, Florida Statutes. The division will continue to monitor all plans for compliance with these provisions. If you have any questions or wish to discuss further, please contact our office and speak to Doug Beckendorf, Joe Edmonds, or Keith Brinkman at(877) 738-5622 or(850)488-2784. SS:kb Please direct all correspondence to: Division of Retirement Bureau of Local Retirement Systems PO Box 9000 Tallahassee,Florida 32315-9000 Toll Free:877.738.5622/Tel:850.488.2784/Fax:850.921.2161 www.frs.MyFlorida.com rFOSTER & FOSTER ACTUARIES AND CONSULTANTS To: All Foster&Foster Clients Re: Approach to Develop Funding Requirements As you may be aware,the Florida Division of Retirement recently released a memorandum which allows pension boards the choice to continue funding as a percentage of payroll or to revert back to the"old" system of funding as a dollar amount. As you may recall,prior to 2008,actuaries for Florida public plans were required to develop funding requirements as a dollar amount. In 2008,the Division of Retirement began requiring all plans to develop costs as a percentage of payroll. In the 1990's and early 2000's,populations of many Florida cities and districts increased at high rates. The Division of Retirement became concerned that the dollar amounts being developed for public pension plans were not sufficient to cover the plan's costs for the upcoming year.So,for example,while the October 1,2007 actuarial valuation may have sufficiently accounted for the costs in 2007,the Division reasoned,it did not cover the costs of the huge influx of new hires added to the system by the time the contributions were made in 2009. Obviously times have changed,and the Division has allowed Boards to make an election to move back to the prior Dollar-Funding Method. The long-term actuarial impact of changing from the Percentage-of-Payroll Method to the Dollar- Funding Method is negligible. Depending upon when it is implemented,however,there could be a short-term increase or decrease in sponsor funding requirements. Why Make a Change? 1. The Dollar-Funding method eliminates confusion by providing cities/districts with a precise amount to budget for the upcoming year. The current approach requires sponsors to predict payroll for the upcoming year and multiply by a percentage to get a budgeted amount. 2. The Dollar-Funding method produces less over or under funding on an annual basis. Using the Percentage-of-Payroll approach,the total required contribution dollar amounts are not known until the last payroll period of the fiscal year. Hence,most sponsors inadvertently contribute more or less than the required amount on an annual basis. Why Keep Things the Same? 1. The Percentage-of-Payroll Method is already in place and plan sponsors have grown accustomed to it. Changing back to a prior system may only create more confusion. 2. If payroll does not increase from the time of the actuarial valuation and the upcoming fiscal year,the Percentage-of-Payroll Method will likely generate lower contribution requirements. 13420 Parker Commons Blvd.,Suite 104 Fort Myers,FL 33912•(239)433-5500•Fax(239)481-0634•www.foster-foster.com Board Action Item Please place this issue on the agenda to be addressed at the next Board meeting. Specifically,the Board needs to make the following decisions: 1) Does the Board wish to change from the Percentage-of-Payroll Method to the Dollar-Funding Method? 2) If so,when will this change take place? If the Board wishes for this change to be immediate and impact 2012 funding,then we will need to revise the 2010 and 2011 actuarial valuations to implement the change. If the Board wishes to make this effective for fiscal 2013,then we will only need to revise the 2011 actuarial valuation. If the effective date is not until fiscal 2014,then no revisions will be necessary. If the Board wishes to get a comparative summary of the 2012 and scheduled 2013 requirements under each approach to aid in making this decision,we would be happy to provide it. Finally, if the Board would like for us to attend the next meeting to discuss this topic,please let us know. If no Board action is taken on this item,we will continue under the Percentage-of-Payroll Method until further notice. Thank you for your continued business,support,and confidence. Best Regards, Foste & Oster,Inc. Bradley R. Heinrichs, FSA, EA, MAAA CEO 1\G.rU11UU1g1v1GL11VU101 Vd1UtlL1U11S 11L1IJ://111d11.dO1.GU111/JOYUL-11L/aU1-U/G11-US/111d11/1"l Uluviessdgc.dspc From:TT Barlow<ttbarlow@CITYOFEDGEWATER.ORG> To:'Sheila Hutcheson'<shutch9750 @aol.com> Subject:RE:Funding Method for Valuations Date:Tue,Sep 11,2012 3:06 pm Shelia, As a follow-up—Fixed for General : d%of payroll for open. ior Also, If I referenced joint meeting for October 24th I meant September 24th is the Council meeting.The October meeting is October 15th Tracey T.Barlow City Manager City of Edgewater From:Sheila Hutcheson[mailto:shutch975Ot aol.coml Sent:Saturday,September 08,2012 9:34 AM To:TT Barlow Subject:Funding Method for Valuations Tracey, At the Sept.17 pension meetings,the Boards will make a determination of each Plan's funding basis for future valuation:fixed dollar amount or percentage of payroll,as required by the Div.of Retirement in the attached memo(also attached is Foster and Foster's memo). The Boards have asked that I obtain the City's input in this regard for consideration as they make their decisions. Will you attend the meetings? If not,please advise as to the City's preference. Thanks. Sheila Hutchison Pension Plan Administrator 3860 Grantline Road Mims,FL 32754 321-267-3082 321-267-4728(facsimile) shutch9750@aol.com To signup for Edgewater's E-newsletters click htto://www.citvofedgewater.org/index.php/newsletter-signup To Like us on Facebook click https://www.facebook.com/pages/City-of-Edgewater-Florida/156640071072841 To visit our website click htto://www.citvofedgewater.orq/ l of 1 9/11/2012 3:09 PM Law Offices Christiansen & Dehner, RA. 63 Sarasota Center Blvd. Suite 107 Sarasota,Florida 34240 • 941-377-2200 • Fax 9.11.377-4848 MEMORANDUM TO: All Pension Board Clients FROM: Christiansen & Dehner, P.A. DATE: June 21, 2012 RE: Avoidance of Benefit Overpayments This memorandum is being sent to recommend that your plan insure that you have instituted procedures to discover and correct benefit payments that are no longer payable or those that should be reduced. Recent and past situations have occurred wherein payments have been or are being made to retirees/beneficiaries who are no longer eligible to receive them. This can occur due to the death of the member,the death of the member's beneficiary or joint pensioner,or a required change in the pension benefit. It is extremely important that the plan's custodian be made aware of all benefit 'stop dates' and 'change dates' for each person receiving a benefit from the plan. For example. this would include stopping the benefit paid to a beneficiary receiving the remainder oft 10-year certain benefit after 120 payments have been made,changing the benefit of a member receiving a 'social security' optional form of benefit where a reduction in that member's benefit must be made upon attainment of social security eligibility date. or stopping the benefit upon the death of a member or his beneficiary. Please perform an internal audit of all benefits currently being paid from your plan and coordinate with and provide your plan's custodian with the retirement benefit 'stop date' or'change date' for each current retiree,beneficiary or joint annuitant receiving a benefit fi•oni the plan and do the same for all future retirees. ifapplicable. Request that the custodian confirm, in writing,that the list of stop and change dates have been received by the custodian. Make sure you receive from the custodian and look closely at the monthly pension payment check registers to confirm proper payments. in addition,send and receive back from each current benefit recipient. pension form PF- 1 1, Confirmation of Receipt of Retirement Benefits,on an annual basis. This provides affirmative notification to the Board that the retiree is still living and enjoying the benefit to which he or she is entitled. Also confirm that your custodian is comparing your benefit recipient list to a data base of social security deaths or other similar data base to assure that the benefits of deceased recipients are stopped. Please feel lice to contact us if you have any questions. 1U.1V1Dl1L1U raylllclllAcpulL IIIC.f/f�+./1J CI J f J11C11a f UVl.UL1ICIIL /�.UJ I.Dallri UCalil rIUUIL JG11CU.. Subject:RE: Monthly Payment Report From: "Pietan, Beth"<Pietan.Beth @principal.com> Date:6/4/2012 11:01 AM 7'"—d -e To:Sheila Hutcheson <shutch9750 @aol.com> C y Ar Generall -work with the retiree's family if the benefit continues or we need to collect overpaid funds. I have made a notation for our` \ Gra : Island office to contact you should a death occur. Beth Pietan I CLIENT SERVICE MANAGER II I PH 515.247.6075 I FAX 866.704.3481 I THE PRINCIPAL FINANCIAL GROUP I RETIREMENT&INVESTOR SERVICES I P.O.BOX 9394 I DES MOINES,IA 50309 I z Principal Financial Group WE'LL GIVE YOU AN EDGE Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation,Des Moines,Iowa 50392-2080,(800)247-1737,member SIPC Princor and Principal are members of the Principal Financial Group. From:Sheila Hutcheson[mailto:shutch9750 @aol.com] Sent:Monday,June 04,2012 8:59 AM To:Pietan,Beth Subject:Re: Monthly Payment Report Excellent. I assume you notify us of the result only if a retiree death is found? Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728 (facsimile) shutch9750 @aol.com On 6/4/2012 9:27 AM,Pietan,Beth wrote: Hi Sheila: We now search the Social Security Administration site for retiree deaths on a monthly basis. Thanks. • Beth Pietan I CLIENT SERVICE MANAGER II I PH 515.247.6075 I FAX 866.704.3481 I THE PRINCIPAL FINANCIAL GROUP I RETIREMENT&INVESTOR SERVICES I P.O.BOX 9394 I DES MOINES,IA 50309 I z Principal Financial Group WE'LL GIVE YOU AN EDGE Insurance products and plan administrative services are provided by Principal Life Insurance Company. Securities are offered through Princor Financial Services Corporation,Des Moines,Iowa 50392-2080,(800)247-1737,member SIPC Princor and Principal are members of the Principal Financial Group. From:Sheila Hutcheson[mailto:shutch9750 @aol.coml Sent:Saturday,June 02,2012 3:30 PM To:Pietan,Beth Subject:Re:Monthly Payment Report Beth, Sorry to bother you again, but on this set of retiree information,the General has ss#'s(which I need)and Police does not. Could you re-send Police with SS#'s? Thanks. I cannot recall if we emailed/discussed the method and frequency of retiree death audits by Principal to ensure that retirees are all living. Is this done through SSA and is it quarterly,or what frequency? Thanks. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728(facsimile) shutch97500aol.com .of 3 8/8/2012 11:05 AM ptyUE nre MEMORANDUM To: Michael Sittig, Executive Director From: Kraig Conn, Legislative Counsel Subject: Department of Management Services Interpretation of Extra Benefits Law Passed in 1999 Date: August 17, 2012 As you are aware,the Florida League of Cities has been working closely with Governor Scott's office for the past year on numerous police and fire pension matters. We have brought to their attention various unfair determinations made by the Department of Management Services ("DMS")relating to police and fire pension plans in numerous cities, including,the City of Naples. On August 14, 2012,the DMS released a very positive letter to the City of Naples ("Naples Letter"), which addresses how the city may use insurance premium tax revenues for its police pension plan(attached). In the Naples Letter,the DMS acknowledges that its previous interpretation of the law on the use of insurance premium tax revenues "appears inaccurate." Naples Letter To fully understand the impact of the Naples Letter, a brief review of the DMS's prior interpretation of the law on the use of insurance premium tax revenues is beneficial. DMS Interpretation Prior to Naples Letter In summary, for a city to be eligible to receive insurance premium tax revenues for a police pension plan under Chapter 185,Florida Statutes(and a fire pension plan under Chapter 175, Florida Statutes), the plan had to provide the specified chapter minimum benefits and it had to preserve benefits in place on March 12, 1999. A city was permitted to use insurance premium tax revenues up to the"base-year"amount(amount received for 1997)for any police(or fire) pension costs, but was required to use any amount over the"base-year" amount only for "extra benefits" (benefits greater than those provided to general employees of the city and in addition to benefits existing as of March 12, 1999). This is no longer the case! 301 South Bronough Street•Suite 300•P.O.Box 1757•Tallahassee,FL 32302-1757•(850)222-9684•Fax(850)222-3806•www.flcities.com New Interpretation in Naples Letter The Naples Letter provides a substantially different,and beneficial, interpretation of the 1999 law. The interpretation in the Naples Letter follows the precise language in the statutes. While not stating this directly in the Letter,the DMS basically provides that insurance premium tax revenues are to be divided into three separate "pots." Pot 1: The amount of insurance premium tax revenues a city received for 1997(the "base-year"amount),which is to be used for any police(or fire)pension plan expense. Pot 2: The amount of insurance premium tax revenues in excess of the"base-year" amount("additional premium tax revenues"),which is to fund the chapter minimum benefits. If there are insufficient additional premium tax revenues to fund the chapter minimum benefits,the plan may provide a benefit level that falls below the minimum benefits level and also falls below the benefit levels provided on March 12, 1999. Pot 3: The amount of insurance premium tax revenues in excess of the additional premium tax revenues required to fund the chapter minimum benefits ("subsequent additional tax revenues"), which must be used to provide"extra benefits."Very few,if any, cities would be required to provide"extra benefits"under this interpretation. The Naples Letter will generate police and fire pension discussions throughout the state and it will likely lead to further interpretation questions to the DMS. As part of the League's Annual Conference in Hollywood,there will be a pension related workshop on Friday, August 24 between 11:15 a.m.—12:15 p.m. to review the Naples Letter. While the Naples Letter did not specifically address fire pension plans under Chapter 175, Florida Statutes, I assume the DMS will provide the same guidance as in the Naples Letter to a requesting city. Also,please note that police and fire pension benefits are typically covered under collective bargaining agreements, which can be negotiated at various times as provided under collective bargaining laws. DMS also released a very positive letter to the City of Largo on April 4, 2012,which clarifies the use of up to 300 hours of overtime for police and fire pension purposes(attached). Additionally, the DMS has provided favorable consideration to the cities of Winter Park and Dunedin regarding various police and fire pension matters. cc, RICK Soon' OEPARTMENr OF MANAGEMENT NICHOLS Governor SERVICES CRAIG J.Secretary ry August 14, 2012 The Honorable John F. Sorey III Mayor of the City of Naples 735 Eighth Street South Naples, Florida 34102-6796 Dear Mayor Sorey: Thank you for your letter of March 16, 2012, concerning the voluntary pension reform and potential loss of premium tax revenues for the City of Naples Police Officers' Retirement Plan. In light of the concerns outlined in your letter, the Department of Management Services (Department) reviewed the statutory provisions regarding the use of the premium tax revenues. Section 185.35(2), Florida Statutes, states: (2) The premium tax provided by this chapter shall in all cases be used in its entirety to provide extra benefits to police officers, or to police officers and firefighters if included. However, local law plans in effect on October 1, 1998, must comply with the minimum benefit provisions of this chapter only to the extent that additional premium tax revenues become available to incrementally fund the cost of such compliance as provided in s. 185.16(2). If a plan is in compliance with such minimum benefit provisions, as subsequent additional tax revenues become available, they shall be used to provide extra benefits. Local law plans created by special act before May 27, 1939, shall be deemed to comply with this chapter. For the purpose of this chapter, the term: (a) "Additional premium tax revenues" means revenues received by a municipality pursuant to s. 185.10 which exceed the amount received for calendar year 1997. (b) "Extra benefits" means benefits in addition to or greater than those provided to general employees of the municipality and in addition to those in existence for police officers on March 12, 1999. Previously, the Department had interpreted this law to mean that in order for Naples to receive any state premium tax revenues it must provide chapter minimum benefits and must preserve benefits in place on March 12, 1999. However, upon receiving your letter and reviewing the law again, this interpretation appears inaccurate. The law actually states that local law plans in effect on October 1, 1998, like the City of Naples Police Officers' Retirement Plan, "must comply with the minimum benefit provisions of this chapter only to the extent that additional premium tax revenues become available to incrementally fund the cost of such compliance." The phrase "only to the extent that" qualifies the law's requirement that local law plans "comply with the minimum benefit provisions" of chapter 185. Please direct all correspondence to: Division of Retirement Municipal Police Officers'&Firefighters'Trust Funds'Office PO Box 3010 Tallahassee,Florida 32315-3010 Toll Free:877.738.6737/Tel:850.922.0667/Fax:850.921.2161 www.frs.MyFlorida.com Honorable John F. Sorey III August 14, 2012 Page Two This qualification means that, for local law plans in effect on October 1, 1998, the law compels them to provide chapter minimum benefits only to the extent that such benefits can be funded with "additional premium tax revenues." Additional premium tax revenues are defined as revenues "which exceed the amount received for calendar year 1997." Thus, for local law plans in effect on October 1, 1998, the law states that chapter minimum benefits must be provided only to the extent that they can be funded with premium tax revenues received in excess of the amount received for calendar year 1997. Once there are sufficient "additional premium tax revenues" to fund the chapter minimum benefits, the law states that any "subsequent additional tax revenues" must be used to fund "extra benefits," as defined above. This subsequent additional tax revenue is the only amount earmarked for"extra benefits"for local law plans in effect on October 1, 1998. Because the City of Naples Police Officers' Retirement Plan was in effect on October 1, 1998, the law allows Naples to provide benefits below the chapter minimums and below those in effect on March 12, 1999, if there is insufficient "additional premium tax revenues" to fund chapter minimum benefits and insufficient "subsequent additional tax revenue" to fund extra benefits. If the City of Naples received enough additional premium tax revenues to provide chapter minimum benefits, or an incremental portion thereof, the law requires .Naples to use the revenues for such benefits. Once Naples has sufficient additional premium tax revenues to provide all chapter minimum benefits, any subsequent additional premium tax revenues must be used for extra benefits. Based on the proposed ordinance, it appears that there are three changes being proposed that require additional information. These changes include raising the normal retirement date to age 60 with eight or more years of service; raising the average final compensation to the highest eight years of service; and reducing benefits by 5% for each year the police officer retires prior to age 60 or 30 years of service. In order for the Department to determine if these proposed changes can be approved, the plan actuary must demonstrate that there are not enough "additional premium tax revenues"to fund the minimum chapter benefits. Thank you for your interest and concern in communicating with our office. If you have any questions, or if we can be of assistance in any way, please let me know. Sincerely, //1/ Keith E. Brinkman, Chief Bureau of Local Retirement Systems cc: Representative Denise Grimsley Representative Matt Hudson Representative Jeanette Nunez Representative Kathleen Passidomo Representative Trudi Williams Representative Will Weatherford Senator Larcenia Bullard Senator Garrett Richter Senator Don Gaetz Michael Sittig, Florida League of Cities Kraig Conn, Florida League of Cities Joseph Whitehead, Chairman W V• e_r�///LLlL 443 j1 JOHN F. SOREY Ill MAYOR March 16, 2012 The Honorable Rick Scott Governor Plaza Level 05, The Capitol 400 South Monroe Street Tallahassee, Florida 32399-0001 Subject: Voluntary Pension Reform and Loss of Premium Tax Revenue Paid by City of Naples Taxpayers Dear Goyerrio•Scott: A7;& As Mayor of the City of Naples, I am writing to tell you about how City of Naples taxpayers are being penalized for offering sustainable retirement benefits to City of Naples police officers and for reducing the future cost of police pensions. The City of Naples and Naples police officers represented by the Fraternal Order of Police, recently entered into a voluntary collective bargaining agreement reducing future pension benefits to levels similar to those earned by law enforcement officers who joined the Florida Retirement System (FRS) after July 1, 2011. This voluntary agreement between the City and our police officers is projected to save our taxpayers $34 million over the next 30 years. But because of an interpretation of the Florida Division of Retirement, the police pension changes will result in the loss of future premium tax revenues paid by City taxpayers — which currently amount to $553,720 per year. In essence, City taxpayers are being penalized for the City and police union taking responsible action to reduce future pension benefits and make the pension plan more sustainable. I am advised by our attorneys that the Division of Retirement's interpretation is not in state statute or rule, but is "non-rule policy" invented by the agency. Since this is an agency under your direction and control, I am asking that you have your staff review the Division's position, and take appropriate action to correct this situation. 735 EIGHTH STREET SOUTH•NAPLES.FLORIDA 34102-6'96 TELEPHONE(239)213.1000 FAX t 239)213 1010 CELL(239)24S-1550 EMAIL:Mrtyor.:NJpk-cgov.com The Honorable Rick Scott March 16, 2012 Page Two According to the Division of Retirement, if any pension benefit for police officers is reduced below the level in place on March 12, 1999, the plan will not be in compliance with Chapter 185, and the City will lose all future insurance premium tax funding. The premium taxes are taxes paid by City taxpayers on their casualty insurance premiums, which are refunded to the City to help pay for police pensions. But under the Division of Retirement's interpretation, City taxpayers will still be required to pay the premium tax, but the tax revenues will no longer be able to be used to help pay for police pensions— even though those pensions will continue to cost the City more than a million dollars every year. As a result, City taxpayers will be penalized by the loss of the premium tax funding even though the City, and our professional police officers, voluntarily agreed to reduce benefits to FRS levels that have been previously approved by the State Legislature and are now in effect for law enforcement officers throughout the State. The Legislature failed to correct this inequity during the legislative session by failing to approve SB 910 and similar legislation. The taxpayers of Naples urge you to exercise your leadership to right this wrong and allow cities and public safety employees reaching voluntary agreement on sustainable pension benefits to continue to use premium tax revenue paid by our residents, to fund our public safety pension plans. Thank you for considering the point of view of the taxpayers on this important public policy issue. We would be pleased to provide additional information concerning this situation at your request. Sincerely, John F. Sorey Ill Mayor cc: Representative Denise Grimsley Representative Matt Hudson Representative Jeanette Nunez Representative Kathleen Passidomo Representative Trudi Williams Senator Larcenia Bullard Senator Garrett Richter Senator Don Gaetz Representative Will Weatherford Michael Sittig, Florida League of Cities Kraig Conn, Florida League of Cities DEPARTMF'NT OF MANAGEMENT RICE SCo7T SERVICES SCOTT STEWART Governor Interim Secretary April 4, 2012 Mr. Kimball R. Adams Finance Director City of Largo Post Office Box 296 Largo, Florida 33779-0296 Re: City of Largo Police Officers'and Firefighters' Pension Plan Dear Mr. Adams: The department has completed its review regarding the City of Largo's Ordinance 2012-20, which uses the accumulated and future increases in Chapter 185 premium tax money to fund a supplemental "Share Plan"for the police officers. Chapter 2011-216, Laws of Florida, amended the definition of the terms "Compensation" or"Salary" found in section 185.02(4), Florida Statutes. Among the changes was the elimination of the required minimum benefit of at least 300 hours of overtime for inclusion in the benefit calculation for service credit earned after the "effective date." For service earned on or after the"effective date,"the new law sets parameters for the amount of overtime that may be included in retirement-benefit calculations—a minimum of 0 and a maximum of 300. Plan sponsors must specify the precise number of hours that will be permitted within these parameters. Hence, local law plans, and chapter plans operating with collective bargaining agreements,should specify the amount of earned overtime hours that may be included when calculating retirement benefits. This amount may be anywhere from 0 to 300 hours. The "effective date"for noncollectively bargained groups is July 1,2011, and for collectively bargained groups is the date of entry into the next collectively bargained agreement on or after July 1, 2011. Therefore, based on the amended statutory language, the plan changes specified in Ordinance No. 2012-20 are deemed to comply with the provisions of Chapter 185, Florida Statutes, Please direct all correspondence to: Division of Retirement Municipal Police Officers'&Firefighters'Trust Funds'Office PO Box 3010 Tallahassee,Florida 32315-3010 Toll Free:877.738.6737/Tel:850.922.0667/Fax:850.921.2161 www.frs.M yF iori da.com April 4, 2012 Mr. Kimball R. Adams Page two Thank you for your cooperation and assistance in this matter. If you have any questions or if this office can be of assistance, please let me know. Sincerely, Patricia F. Shoemaker Benefits Administrator Municipal Police Officers'and Firefighters' Retirement Trust Fund cc: Honorable Patricia S. Gerard, Mayor Alan Zimmet, City Attorney Karl Gracy, Chair, Board of Trustees Robert D. Klausner, Plan Attorney Stephen H. Palmquist, Plan Actuary Keith E. Brinkman, Bureau Chief, Local Retirement System Tommy Wright, Attorney, Department of Management Services ragewaterr►ans-Attorneysinvoices nup:iiman.aol.convJO.SU1-11 iiaoi-oIen usimauirrinuviessage.asp) From: Sheila Hutcheson<shutch9750 @aol.com> To: fredricks.jill<fredricks.jill@principal.com>; pietan.beth<pietan.beth @principal.com> Subject: Edgewater Plans-Attorney's invoices Date: Fri,Jun 8, 2012 11:58 am Attachments: May_2012__General.pdf(10K), May_31,_2012=_Police.pdf(10K) Attached are invoices for payment, as follows: Christiansen& Dehner, P.A. - $236.60- General Christiansen& Dehner, P..$�67.60 Please mail the checks to the address on the statement. Thank you for your prompt processing of these invoices. Please contact me if you have any questions or need any additional information. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728 (facsimile) shutch9750 @aol.corn of 1 6/8/2012 11:58 AM Christiansen & Dehner, P. A. 63 Sarasota Center Boulevard Suite 107 Sarasota, FL 34240- 941-377-2200 941-377-4848 Phone Fax May 31,2012 City of Edgewater Police Officer's Retirement Plan Attn: Sheila Hutcheson 3860 Grantline Road Mims, FL 32754 Invoice Number In Reference To: City of Edgewater Police Officer's 0719 21219 Retirement Plan Professional Services Hours Amount 5/16/2012 Telephone conference with Milberg and City Attorney. 0.20 67.60 For professional services rendered 0.20 $67.60 Previous balance $202.80 Accounts receivable transactions 5/21/2012 Payment-thank you. Check No. 16772333 ($202.80) Total payments and adjustments ($202.80) Balance due $67.60 ** Please note that the"Balance Due"figure at the end of this bill reflects both"Total New Charges-Current Period"and any previous balances due. In most cases, if the previous balance(s)have already been approved for payment but not yet received in our office,you should be paying only the "Total New Charges-for services and/or expenses". Thank you. Please indicate account number(s)with payment. (Please Deduct any payments not reflected in Balance due) Gagewaterruns-Hrtorneysmvoices http://mail.aol.com/36418-211/aol-6/en-us/matl/PrmtMessage.aspx From:Sheila Hutcheson<shutch9750 @aol.com> To:DeWitt.PauI<DeWitt.Paul @principal.com>;wait.leanne<wait.leanne @principal.com> Subject:Edgewater Plans-Attorneys Invoices Date:Tue,Jul 10,2012 8:22 pm Attachments:June_2012_ General.pdf(12K),June_2012__Police.pdf(12K) Attached are invoices for payment,as follows: Christiansen&Dehner,P.A.- $978.87-General Christiansen&Dehner,P. $1,215.47-Police—) Please mail the checks to the address on the statements. Thank you for your prompt processing of these invoices. Please contact me if you have any questions or need any additional information Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims,FL 32754 321-267-3082 321-267-4728(facsimile) sh utch9750(rD,aol.com of 1 7/10/2012 8:22 PM Christiansen & Dehner, P. A. 63 Sarasota Center Boulevard Suite 107 Sarasota, FL 34240- 941-377-2200 941-377-4848 Phone Fax June 30, 2012 City of Edgewater Police Officer's Retirement Plan Attn: Sheila Hutcheson 3860 Grantline Road Mims, FL 32754 Invoice Number In Reference To: City of Edgewater Police Officer's 0719 21373 Retirement Plan Professional Services Hours Amount 6/8/2012 Telephone conference with Milberg and City Attorney. 0.20 67.60 6/11/2012 Preparation and attendance at Board Meeting. 1.50 507.00 Telephone conference with S. Hutcheson. 0.10 33.80 Travel Time 2.70 456.30 6/21/2012 Preparation of memorandum on avoidance of benefit overpayments. 0.10 33.80 For professional services rendered 4.60 $1,098.50 Additional Charges : Qty 6/11/2012 Car Expense 1 71.50 Hotel Charge 1 27.47 Food Expense 1 18.00 Total additional charges $116.97 Total amount of this bill 1,215. Previous balance $67.60 Accounts receivable transactions 6/19/2012 Payment-thank you. Check No. 16797923 ($67.60) Total payments and adjustments ($67.60) From:Sheila Hutcheson<shutch9750@aol.com> To:DeWitt.Paul<DeWitt.Paul @principal.com>;wait.leanne<wait.leanne @principal.com> Subject:Edgewater Plans-Attorney's invoices Date:Sat,Aug 18,2012 2:37 pm Attachments:July_2012__Police.pdf(10K),July_2012= General.pdf(10K) Paul,Leanne, Attached are invoices for payment,as follows: Christiansen&Dehner,P.A.- $67.60 - Christiansen&Dehner,P. .- $67.60-Police Please mail the checks to the address on the statement. Thank you for your prompt processing of these invoices. Please contact me if you have any questions or need any additional information. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims,FL 32754 321-267-3082 321-267-4728(facsimile) sh u tch 97 50(cD a ol.co m of 1 8/18/2012 2:38 PM Christiansen & Dehner, P. A. 63 Sarasota Center Boulevard Suite 107 Sarasota, FL 34240- 941-377-2200 941-377-4848 Phone Fax July 31, 2012 City of Edgewater Police Officer's Retirement Plan Attn: Sheila Hutcheson 3860 Grantline Road Mims, FL 32754 Invoice Number In Reference To: City of Edgewater Police Officer's 0719 21541 Retirement Plan Professional Services Hours Amount 7/30/2012 Review e-mail and telephone conference with Milberg. 0.20 67.60 For professional services rendered 0.20 $67.60 Previous balance $1,215.47 Accounts receivable transactions 7/28/2012 Payment-thank you. Check No. 16824613 ($1,215.47) Total payments and adjustments ($1,215.47) Balance due $67.60 ** Please note that the"Balance Due"figure at the end of this bill reflects both"Total New Charges-Current Period"and any previous balances due. In most cases, if the previous balance(s) have already been approved for payment but not yet received in our office,you should be paying only the "Total New Charges-for services and/or expenses". Thank you. Please indicate account number(s)with payment. (Please Deduct any payments not reflected in Balance due) SHEILA HUTCHESON 3860 GRANTLINE ROAD MIMS, FL 32754 321-298-6619 June 18, 2012 Bill to: The Principal P.O. Box 9394 Des Moines,IA 50306-9394 VIA EMAIL TO: TONYA NIDA Y Reference: City of Edgewater Police Pension Plan (Annuity Contract#: 4-28312) Statement for Plan Administration Expenses-quarter ending June 30, 2012 Description Amount Mileage(Board's share: June 11, 2012 meeting) $ 11.10 Total: $11.10 Please mail check in the amount of$1,511.10 (monthly fees plus quarterly expenses) to: MS. SHEILA HUTCHESON 3860 GRANTLINE ROAD MIMS, FL 32754 LLLSVVT0.M 1lalla L)U U41U1utvutcesforrayment http://mall.aol.com/36478-111/aol-6/en-us/mail/PrintMessage.asp: From: Sheila Hutcheson<shutch9750 @aol.com> To: fredricks.jill<fredricks.jill @ principal.com>;pietan.beth<pietan.beth @principal.com> Subject: Edgewater Plans-Bogdahn Invoices for Payment Date: Sat,Jun 23,2012 5:25 pm Attachments: June_30,_2012=_Police.pdf(158K),June_30,_2012General.pdf(160K) Jill, Beth, Attached are invoices for payment, as follows: The Bogdahn Group - $3,625.00 - General The Bogdahn Group - 5.00 - Police Please mail the checks to the following address: The Bogdahn Group 4901 Vineland Road,Suite 600 Orlando, FL 32811 Thank you for your prompt processing of these invoices. Please contact me if you have any questions or need any additional information. Sheila Hutcheson Pension Plan Administrator 3860 Grantline Road Mims, FL 32754 321-267-3082 321-267-4728(facsimile) shutch9750 @aol.com of 1 6/23/2012 5:25 PM THE L Invoice L. BOGDAHN GROUPDate Invoice# 6/22/2012 7715 4901 Vineland Rd Suite 600 Orlando,FL 32811 Bill To Edgewater Police Officers' Pension Plan email - Sheila Hutcheson Description Amount P- : ance va . '. and Consulting Services 3,625.00 4/1/2012-6/30/2012 J Balance Due c$3,625. Section 9 -Plan Sponsor Section—General Information&Basic Data Date employment ended or date of disability 5 / 9 / a oI Benefit Event: ,Termination of Employment ❑Retirement ❑Disability Hours-of-Service Show the hours-of-service the participant worked from the beginning of your plan's current computation period to date employment ended. 3J i)a o I a- si ci gaot 2- Current Plan Year Compensation$ 5,1� .41) Current Plan Year Contributions$ 3,9.9,31 If applicable, show amount of the participant's contributions made from the preceding plan anniversary date to termination date. Disability Benefit If the participant is disabled and your plan allows a disability benefit, complete this section and have the participant complete Section 1. If your plan requires qualification for a disability benefit under Title II of the Social Security Act,we MUST have a copy of the complete award letter from the Social Security Administration. ❑I certify this participant qualifies for a disability benefit. Benefit Check Issue check to: ,Participant ❑Plan Trustee ❑Financial Institution or Eligible Retirement Plan as directed by the participant ❑Other—attach explanation Mail check to: Participant ❑Plan Trustee ❑Financial Institution or Eligible Retirement Plan as directed by the participant ❑Employer ❑Other—attach explanation Complete when we do NOT perform plan recordkeeping services: Plan Entry Date: 3111 a DI aa" Normal Retirement Date: o W Monthly Income Amount$ IA/I t L 11))c Total contributions, if applicable, made by participant:Without Interest. 3okv�.$ ith Interest$ Section 10-Employer's or Plan Sponsor's Signature I certify the above information is true and correct. I authorize Principal Life Insurance Company to make a distribution to this participant according to the terms of our plan. Note: The law requires you to give participants a written description of their benefit choices. The attached Retirement Benefit Choices Information Booklet satisfies this requirement. The law also requires you to give participants a written description of rollover rules if the distribution is eligible to be rolled over. The "Special Tax Notice"on pages 29-39 satisfies this requirement. Print Name Title Ile f-Chtu.S�-tr�e. I PeAsoniud A�tntr�jS Ya�ot� Employer or Plan Sponsor Signature Contract Number X rfuJ - I 4- & '3-v a- Plan T ee Signature(if applicabl Date X 7 / / o / I2_ PG 525-13 I 17 I 1007 CITY OF EDGEWATER POLICE OFFICERS' RETIREMENT PLAN LUMP SUM DISTRIBUTION ELECTION FORM To be completed by Plan Member or Beneficiary(Transferor) with regard to the distribution to be received from the City of Edgewater Police Officers'Retirement Plan,(the"System"): Taxable Amount$ Non-taxable Amount$ 3 a a,11 Total Amount$ -3 aa,8'I I. Please initial option A,B or C below: 1:1( A. The System is directed to make full payment to me, less any applicable withholding described in the Special Tax Notice received with this election form. ❑ B. The System is directed to mail %of the taxable portion of my distribution to (Name of First Trustee or Plan) and %of the taxable portion of my distribution to (Name of Second Trustee or Plan)for deposit in accordance with the rollover provisions. Any non-taxable portion will be: paid directly to me. rolled over to the First/Second Trustee or Plan (to traditional IRA, Roth IRA or 401(a)plan) * ❑ C. The System is directed to mail$ of my distribution to (Name of Trustee or Plan)for deposit in accordance with the rollover provisions. The remainder of the taxable portion less any applicable withholding described in the Special Tax Notice received with this election form,plus the non-taxable portion,will be paid directly to me. * *For tax years prior to 1-1-20,you will be taxed on rollovers to a Roth IRA. To be eligible to rollover to a Roth IRA,your adjusted gross income cannot exceed$100,000 and you must not be married filing separately. NOTE: rviving sp. . e mg,elec any option the deceased member could have made. A non-spouse benefi • NOTE: ry ma/only r.it.ver . a regular IRA or Roth IRA and cannot rollover the payment himself. ' / .. w 40/, '(6/ ' t: a - of Member .r-:epe iciary p Social ec ��ty ' um•er— Printed Name of Meor Beneficiary Date The Agreement of Receiving Trustee or Plan below must be completed if Option B or C is selected. II. Acknowledgment where election completed prior to 30 days after receipt of Special Tax Notice: I acknowledge that I have had the opportunity to make an informed decision regarding my options,that I have been riven the c•:ace consider the decision whether to elect a direct rollover for at least 30 days a i- y receipt of the ecial tax notice and that I have been provided with information clearly indic y, I g that I hay- at leas days to make the decision,and I her-by w.ive the 30 day waiting period and`"1 ect an 'edi. di ' ution in accordance with my selecti,,n in I above. , i ii -- a - gn•'ture of Mem.er of Beneficiary Date PF-17 Page 1 of 2 09-19-08 Principal File Code-Principal Life Use Only Financial Home Office: I Principal Life I DB/DC Benefit Event Group Des Moines,IA 50306-0001 Insurance Company Notification Form for Combo Plans Instructions CTD 01306 Please complete this form when an employee terminates employment, retires or becomes disabled. Mail the completed form to your Client Service Associate,or fax it to us at(515)248-3194. In the event of an employee's death, DO NOT use this form. Instead please complete a Death Notification Form and send a certified copy of the death certificate to your Client Service Associate. Section 1 -Special Instructions Pennsylvania(PA)State Tax:If al!Elective Deferral contributions have been taxed by the state of Pennsylvania,check this box. 0 If a portion of the elective deferrals have been taxed by the state of Pennsylvania,record the dollar amount. Benefit Event: Please use the following reason codes for Benefit Event information. T= Termination R= Retirement D= Disability. Include copy of verification letter(award or benefit)from Social Security Admin. Marital Status: M=Married S=Single L=Spouse cannot be located QDRO: (Qualified Domestic Relations Order)Are you aware of ongoing QDRO proceedings that would delay this member's distribution? Please indicate in QDRO box and fill out the QDRO section on the back of this form.All checks will be issued to the member unless otherwise specified. Hours: (Only needed if your plan uses Hours Method for vesting or accrual service).Please indicate the number of hours worked from beginning of the vesting/accrual service period(usually the plan year)through the date of the benefit event. Section 2-Em•lo er or Plan S•onsor Si•nature The law requires members receive a written description of their benefit choices. Based on this notification, well provide this information to the member. Funds placed in a Personal Retirement Account (PRA)or vested deferred status remain in the plan and the plan/trustee retains ownership of the funds. This notification authorizes the member companies of the Principal Financial Group to make benefit payments. The authorization applies to members who have reached a benefit event and make a distribution election,and to distributions under the small amounts provision of the plan. This authorization remains in effect until the member's account is placed in a PRA or vested deferred status. For members with an outstanding loan balance,this form authorizes us to make the loan taxable. If the plan does not allow terminated members to continue to make payments,and the member does not repay the loan within the number of days required in your plan,we will produce a 1099R the following January and notify the IRS for you. If a member requests a distribution, the loan will be made taxable at that time,even if the repayment period has not expired. Employer or Plan Sponsor Signature Title '/Date L. )- (,Ina rte IPot�rrtnp1 ftdminiblva-k 1 Print pioyer or Plan Sponsor Name ( Et ltko� d. Plan T tee Signature( applicable) Date I Section 3-Employees'Information 1 Plan Sponsor CAI 61 Ect6p icJ-r�r DB Contract Number 4 --a'KZ L a- DC Contract Number Name Member ID# Member Phone# Address A Apt.No. City State Zip PA State Tax Benefit Event Date Benefit Event -eason Ho. Compensation ,.ia. 513 �i��r"" Defined Ii' W .�(j Add?Member Contributions: Hours Benefit: I `3O�'�1 ( -,Contribution: From: To: From: 5111 a o a To: 61113-01g-1 From:�l 1).11}2.Toss!912.o PG 1071-4 06/01 WireDetails Page 1 of 1 Item Details Transaction Details Originator Name: CITY OF EDGEWATER Address 1: 104 NORTH RIVERSIDE DR. Address 2: EDGEWATER,FL 32132 Originator's Account Number: 2631600073626 Beneficiary Name: Principal Life Ins.Co.Pension Acc Beneficiary's Account Number: Amount: 122039.14 Currency Code: USD USD Equivalent Amount: 122039.14 Exchange Rate(Outgoing): 1.00000000 Wire Sequence Number: 2012090600039761 Originator's Reference Number: 000000307 Sent Received Date: 09/06/2012 Value Date: 09/06/2012 Create Date: 09/06/2012 Post Date: 09/06/2012 Status: BOOK TRANSFER Wire Type Description: BOOK TRANSFER Originator to Beneficiary Information Originator to Beneficiary Info 1: Plan#4-28312,City of Edgewater- Originator to Beneficiary Info 2: 2011 Premium Tax Distribution Originator to Beneficiary Info 3: Edgewater Police Originator Bank Information Intermediary Bank Information — _ Beneficiary Bank Information Audit Information for Originated Wires Origination Channel: CEO WIRES Channel Tracking Reference Number: IN12090606201665 Originating Company ID: CITYO578 Originating User ID: TBROOKS Origination Timestamp: 09/06/2012 08:20 AM CT Approving User 1: SBAYSI I Approval Timestamp 1: 09/06/2012 09:28 AM CT :Clokt�A/indo Privacy,Security&Legal ©Copyright 2002-2012 Wells Fargo.All rights reserved. https://wellssuite.wellsfargo.com/sps/wreDetails.do?mn=getWireDetail&ind... 9/7/2012 STATE OF FLORIDA DEPARTMENT OF FINANCIAL SERVICES REMITTANCE ADVICE FLAIR ACCOUNT CODE 010 SITE DOCUMENT NUMBER OBJECT 72-202532002-72750300-00-31009500 720000 04 D3000080004 7100 08 16/ PAYMENT 08/DATE 013931 PAYMENT AMOUNT $ 122,039. 14 EDGEWATER, CITY OF AGENCY DOCUMENT NO POLICE PENSION FUND VB06084 PO BOX 100 EDGEWATER FL 32132-0100 PLEASE DIRECT QUESTIONS TO (850)''488-3053, DMS-DIVISION OF RETIREMENT VENDORS NOW CAN VIEW PAYMENT INFORMATION AT HTTP://FLAIR.DBF:STATE.FL,US INVOICE NUMBER AMOUNT POLICE $ 122,039.14 • Chi-c3000-30,.3c!D S e `�`4b, t e Pecy . 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A - r i fi- rwz" �. c,stls� yf Z''yp K� °5' F ry ; 7 .E s t T,- • - -'"tZ' .4 U rs- ,-;il.. { F f fr„�. nyyY � .��� ▪-ti ; EXPENSE jWA�iR�VST TO THE ra ar a, ,,.. • ORDER OF EDGEWATER. CITY OF < e p� h gtt V( ,..t> ru trs 174,wy ' y` r� 4-s-�- ..yy-L • 1 tl;. ,". ,, .,,f ,V,. 1DPVISV,,k•-A� TREASURY POLICE PENSION FUND sfi F .tc �`;°' ., # %:"TTAL,`AHHASSEE PO BOX 100 3 3 t i2t su,r i - of ,, s s s F �a t EDGEWATER FL 32.132 0100 ° k° ;r? r�{i�rlt�g Yy,gsvt - T _ }r1 t �3�d i"� 2"'ya't- �''x.�.t � .f '''''''S,'','„, tam,; 'i =gz'ws' 4 di /2 k y ,'. • . i /Ot re rFa^-4�J -4 TWATEE C-gEF FINANCIAL OFFICER 0 340L3931LI 0III ':