04-18-2000
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Edgewater Firefighters' Pension Fund
Tuesday, April 18, 2000
6:02 p.m.
Call to Order: A Regular Meeting of the Edgewater Firefighters' Pension Board was
called to order on Tuesday, April 18, 2000 by Chairman Jollie at 6:02 p.m. in the
Training Room at Fire Station #57. Members present were: Chairman Jim Jollie,
Secretary Jill Klem, and Mr. Gary Butt. Ms, Laura Reilly was absent. Also present were
Mr. Ward Foster (Foster & Foster, Inc.), Ms. Donna Looney (Personnel), Mr. Jon
Williams (Finance Department), and Ms. Lisa R. Miller, Recording Secretary.
Minutes: The Minutes from the February 24, 2000 Regular Meeting were submitted for
approval. Mr. Butt moved to approve the minutes as submitted. Secretary Klem
seconded. Motion CARRIED 3 to O.
Mr. Foster had not arrived at this time for his report under Old Business so the Board
moved on to complete New Business items until his arrival.
New Business: Annual Report: There was discussion regarding the Annual Report to the
State and that it would be signed and forwarded on to the State Division of Retirement.
It was noted that Sun Trust did not have up to date signature cards for the Board members
on file. The Board would provide them as soon as possible.
New Membership Applications: There was discussion regarding the applications to the
Board to replace the vacancy created by Patricia Richards. It was noted that this position
was a Council appointed position. The Board is made up of two members of the plan
appointed by the membership, two members are appointed by Council, and the fifth
member is appointed by the other four Board members. The applications were reviewed
and Secretary Klem moved to select Mr. Marty Tse as the Board recommendation to
Council for a new term to replace Ms. Richards. Mr. Butt seconded. Motion CARRIED 3
to O.
Old Business Changes to Ordinance per State Division of Retirement: There was
discussion regarding some small wording changes to the recent ordinance that was being
required by the State Division of Retirement. It was noted the changes had been
forwarded to the legal department and it would be approximately a month before they
could get to it.
Fiducimy Liability Insurance: Chairman Jollie stated he had checked with the legal
department and the Board is not covered by the City for fiduciary liability. He noted
legal's standpoint on the issue was that it almost never happens. There was discussion
regarding fiduciary liability. It was noted the Police Pension Plan was also checking into
it and Chairman Jollie stated he would check with them to see what information they had
gathered.
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Edgewater Firefighters' Pension Fund
Minutes 04/18/00
Page 2
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Mr. Foster had not arrived by this time so the Board took a recess at 6:21 p.m. Meeting
resumed at 6:58 p.m.
Annual Actuarial Valuation: Mr. Ward Foster from Foster & Foster, Inc. presented the
October 1, 1999 Annual Actuarial Valuation to the Board. Mr. Foster stated that they
were comparing the funding requirements for the current benefits with the funding
requirements from the May 11, 1999 letter that set forth the funding requirements for the
benefit improvements that were adopted in September of 1999. He noted the investment
return for the year ending September 30, 1999 was 9.7% net of investment related
expenses. The investment return needs to meet or exceed the 7.5% anticipated return after
all the expenses are paid. There was discussion regarding the State contribution of
$53,744. He discussed the amendments to Chapter 175 and noted that it required a
minimum benefit provision for Local Ordinance Plans. Mr. Foster stated any increase of
State monies need to be used for additional benefits over and above those benefits that
are provided to the City's general employees. He noted the fund currently meets or
exceeds the minimum benefits. Mr. Foster stated for the purposes of determining
incremental increases in State money they freeze the amount of money collected in 1997
that was received in 1998. As State money increases that increased amount will be used
to increase benefits. The State money that was received by this plan in 1998 was $38,700.
He added between the frozen $38,700 and the $53,700 received in 1999 the benefit
improvement that was made in September of 1999 cost at least $15,000 to implement so
the fund used the incremental increase of $15,000 to fund additional benefits. He stated
that now the frozen amount to figure incremental increases would no longer be the
$38,700 it would be the $53,700. Mr. Foster stated it would stay at that level for
purposes of figuring the City's contribution amount until additional benefit improvements
are made. He stated even if next year's State contribution was $63,700 the City would
still have to figure their contribution on the $53,700 until there was an increase in
additional benefits. Mr. Foster noted the Board needed to prioritize the additional
improved benefits to the plan they would be interested in pursuing for future State
money. He stated it was Foster & Foster's responsibility to advise the Board about
funding issues as it relates to complying with the statutes. There was discussion regarding
the possibility of adding health insurance to the plan. Mr. Foster stated they could add a
supplement to the formula benefit that would be there for the purpose of helping to pay
for the cost of medical insurance premiums after retirement. He added with the 20 and
out plan there are about 8 to 10 different payment options. One option is called the Social
Security option that pays a higher monthly amount between retirement and the age you
can collect Social Security and then reverts to a lower amount when Social Security
benefits take effect. He states it is a payment plan that is the actuarial equivalent to the
flat dollar amount paid for life with the ten year guarantee. There was discussion
regarding investment returns. Mr. Foster stated that when you establish a good history of
investment returns, then the Board should lower the salary increase assumption of which
is now 7.5% and increase our investment assumption to 8%. He added that of the 160
plans they administer this is the only one at a 7.5% investment assumption, all others are
at 8 or 8.25%.
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Edgcwater Firefighters' Pension Fund
Minutes 04/18/00
Page 3
Mr. Foster discussed a letter from Mr. Charles Slavin, Division of Retirement, in which
the State accepted the 97/98 valuation reports. When the first draft of the ordinance
changes went through a letter of "no impact" was sent with it However, when the
second draft with the benefit improvements was prepared only the study went with it Mr.
Foster stated Mr. Slavin wrote that the study did not meet the requirements of an actuarial
impact statement so Foster & Foster prepared a formal actuarial impact statement Mr.
Foster stated he would send a copy to Mr. Slavin and Ms. Shoemaker to make it official.
Mr. Foster stated he had with him the new individual member statements for the
membership that reflected the 20 year retirement and other changes that had been made in
the ordinance. There was discussion regarding what changes in the benefits they could do
to use the increased amount in State money.
There was discussion regarding whether the changes that were made to the plan covered
just those members that were employed at the time or did it covered those members who
had already retired from service. Mr. Foster stated it had not gone retroactive for all
members past and present There was discussion regarding how Mr. Vola would be
informed of what his benefits are. Mr. Foster stated on termination a notification of
benefits form should have been sent to the person. They have to hold on to that and bring
it back at normal retirement to the Board and all options would be calculated at that time.
Mr. Foster stated it's the Board's responsibility to notify the person of the benefits and
the amount of payment and the dates the benefits are payable. It is the person's
responsibility to come back to the Board and apply. The Board does not have to keep
track of the people. It was questioned whether this paperwork was sent to Mr. Vola and
Mr. Foster stated he would check on it There would be a formal notification of benefits
for the person sent to the Board with the options that are payable. The Board would sent
the notification to the person with a letter saying they are entitled to receive this benefit
on or after such and such a date. It is up to that person to come back at that time to the
Board. The Board should keep copies so that who ever is here at that time will be aware
of what's going on. There was discussion regarding additional benefits and the process of
the previous ordinance change.
Ms. Klem moved to approve the 10/01/99 actuarial valuation as submitted by Foster and
Foster, Inc. Mr. Butt seconded. Motion CARRIED 3-0. There was discussion regarding a
summary plan. Mr. Foster stated a copy of the summary plan needed to be given to
everyone currently active in the plan every two years whether there were any changes or
not Mr. Butt moved to have Foster & Foster, Inc. draft a new summary plan for the
Board's review. Secretary Klem seconded. Motion CARRIED 3-0.
Mr. Foster stated Foster & Foster, Inc. need a new list of the current Board members.
There was no more business to come before the Board at this time.
Mr. Butt moved to adjourn. Secretary Klem seconded. Meeting adjourned at 7:50 p.m.
Minutes respectfully submitted by:
Lisa R. Miller
Recording Secretary