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12-22-1992 '-' .."" (ttity of iEbgrwatrr POST OFFICE BOX 100 EDGEWATER. FLORIDA 32032 MINUTES A meeting of the Board of Trustees of the City of Edgewater Police Retirement Plan was called to order by Chairman Larry Westfall at 1:43 P.M., in the Squad Room of the Edgewater Police Department. ROLL CALL: Members present were Larry Westfall, Ruth Garvey, Gary Conroy, Ruth O'Rourke and John Borzner. Also present were Robert Sugarman, Board Attorney, and Christi Robbins, Recording Secretary. APPROVAL OF MINUTES: Gary Conroy made a motion to approve the Minutes of the November 16, 1992, meeting. Second was by Ruth O'Rourke. Motion carried 5 - O. OLD BUSINESS: Mr. Sugarman discussed recommended changes to the Pension Plan, written by Principal Mutual, dated July 14, 1992 (see attached). John Borzner made a motion to accept two changes: l)to define "compensation year" to end December 31, and, 2)to include the spousal consent provision. The motion also dictated Mr. Sugarman correspond directly with Principal Mutual to make other necessary changes to the Plan to bring it into compliance with Florida State Statute. Gary Conroy seconded the motion. Motion carried 5 - O. The "Actuarial Valuation" was not discussed. NEW BUSINESS: Larry Westfall briefly discussed Portfolio Manaqement Services "Value Analysis". Larry Westfall brought to Mr. Sugarman's attention that Members hired by the City as police officers before the inception of the Plan were not paid into the Plan, by the City, from their first day of employment. Those employees are not vested for their total years of employment with the City. Mr. Sugarman advised he would address this in his letter to Principal. .... ...." 2 Ruth Garvey indicated a desire to resign as Secretary for the Board. Ruth O'Rourke made a motion to accept Ruth Garvey's resignation of the position of Secretary. Gary Conroy made the second. Motion carried 5 - O. Gary Conroy then made a motion to elect John Borzner to the position of Board Secretary/Vice-Chairman. Ruth O'Rourke seconded the motion. Motion carried 5 - O. Ruth Garvey made a motion that the Board pay the outstanding attorney fee for services rendered. Ruth O'Rourke made the second. Motion carried 5 - O. The "Annual Report" was discussed and Mr. Sugarman suggested the Chairman turn the document over to the City for completion. Ruth O'Rourke made a motion that the Chairman forward the "Annual Report" for completion and then have it returned to the Board for signatures of the Chairman and Secretary. Motion second was by Ruth Garvey. Motion carried 5 - O. MISCELLANEOUS: A meeting was scheduled for January 19, 1993, at 1:30 P.M., in the Squad Room of the Edgewater Police Department. ADJOURNMENT: With no further business before the Board, Gary Conroy made a motion to adjourn, seconded by Ruth Garvey. Meeting adjourned at 2:58 P.M. .... .."""t Board of Trustees Edgewater Police Retirement Board October 16, 1992 Page Three Section 1.02. Definition of "Severance From Service Date" (Page 11). Subsection (b), which provides for automatic severance after a one year absence of service, should be deleted. Because of the dangers of your profession, an employee could be out of disability for more than one year recovering from an injury. The employee should not automatically sever from participation in the pension plan just because his or her injury takes more than one year to heal. Subsection (b) should be deleted. Section 1.02. Defini tion of "Totall V and Permanently Disabled' (Paqe 12). This definition requires that a participant be disabled from any gainful employment iri order to receive a disability pension. This conflicts with the definition of disability in Section 185.18 which requires only that the participant be unable to render useful and efficient service as a police officer. The definition and requirements of disability set forth in section 185.18 should replace the current definition. . Section 1.02. Definition of "Years of Service" (Paqe 13). The Period of Service - Service Spanning Rule should be deleted. It is not needed. Section 2.01(a) (Page 14) provides that the person must be at least eighteen years of age and an employee for at least three months in order to be a participant. Section 185 requires that police officers begin participation of the pension plan on their first day of full-time service. Section 2.01(a) (1) should be deleted. If the City hires police officers below the age of eighteen, then they need to be included in the plan and Section 2.01 (a) (2) should be deleted. If someone must be at least eighteen to be a police officer, then Section 2.01(a) (2) is unnecessary. Therefore, in either case it should be deleted. Section 2.01(c) (Paqe 14). The second subsection requires that participants agree in writing to participate in the plan. Section 185 does not provide for such an agreement although it does give new employees one year to opt out of the plan. Section 3.01 (Paqe 16) states that employer contributions "shall meet or exceed the minimum of funding standards of the code". This should be revised to read as follows: '-' ...", Board of Trustees Edgewater Police Retirement Board October 16, 1992 Page Four The amount of Employer Contributions shall meet or exceed the minimum funding standards of the Code, Part VII of Chapter 112, Florida statutes and Chapter 185, Florida statutes. The second section of section 3.01 states that "the amount and time of Employer Contributions shall be determined based on actuarial evaluations...." The timing of employer contributions, which must be at least quarterly, is determined by Chapter 185. Therefore, this should be reworded as follows: "The amount and time of Employer Contributions shall be determined based on actuarial evaluations and applicable law as to the amounts required to fund benefits under this Plan." Section 4.04. Earlv Retirement Deduction Factor (Page 26). The plan proposes an early retirement reduction factor of 6.67% per year. This is too much because Section 185.16(4) (b) states that the maximum early retirement reduction factor can only be three percent per year. This section should' be amended accordingly. Section 4.06. Benefit Continuation Upon Re-Emplovrnent (Page ~. This section provides that a pension recipient who is rehired by the City after going on pension will continue to receive the pension in addition to his or her pay from the City. This is an unusual provision because pension benefits usually stop when a retiree is re-employed. We suggest that Section 4.06 be changed to provide that the monthly retirement benefit received by a participant be suspended if the participant is rehired by the City as a police officer. Section 5.03. Disabilitv Benefits (Page 34). The draft provides a single disability benefit of 25% of average compensation. This conflicts with Chapter 185 which requires a service-connected disability benefit minimum of 42%. Section 5.03 should be completely rewritten to comport with Chapter 185. Section 6.01. Inclusion of Tax Advice in Plan (Paqe 36). The last paragraph on page 36 together with the top of page 37 sets forth the federal income tax consequences of certain pension benefit payments. This does not belong in the plan. Neither the Board of Trustees nor the City should be giving federal income tax advice to participants. These provisions should be deleted from Section 6.01. ..... ..., Board of Trustees Edgewater Police Retirement Board October 16, 1992 Page Five section 6.05. Spousal Notice. Subsections (a) and (b) require the Board, as Plan Administrator, to furnish written explanations of the optional forms of retirement benefits not only to the participant, but to the participant's spouse. This is not required by Chapter 185 and the spousal consent provisions of the Internal Revenue Code do not apply to governmental plans. There is nothing prohibiting you from doing this if you want to. However, it is extra administrative work. You should consider whether you want to get involved with spousal notifications. Article VII. Reversion of Assets to Employer Upon Termination. The last paragraph provides that should the plan terminate, after all liabilities are paid the assets remaining will be paid to the employer. This confl icts with Section 185.37. This should be reworded to provide that any termination will be in accordance with Chapter 185. section 9.07. Qualified Domestic Relation Orders (Paqe 52). The last sentence of this section provides that benefits can be paid to a former spouse pursuant to a qualified domestic relations order. As mentioned above, qualified domestic relations orders do not apply to governmental plans. The only type of order which we must honor are income deduction orders. We suggest that the last section of Section 9.07 be deleted and replaced with the language of.Section 185.25. Section 9.08. Applicability of Federal Law (Paqe 53). This provision provides that the plan will be construed under federal law. However, there are more state laws than federal laws which apply to your plan. We therefore recommend that the first sentence of Section 9.08 be replaced to read as follows: "The validity of the Plan or any of its provisions is determined under and construed according to Florida law. Siqnature Paqe (Page 55). The Principal proposes that the plan be signed by the city. The signature page should be changed to be signed by the Chairman and the Secretary of the Board of Trustees of the Edgewater Police Retirement Board. We recommend that the draft pension plan provided by The Principal be changed in accordance with our above suggestions. You may wish to forward a copy of this letter to Joan Way, The ...... ...., Board of Trustees Edgewater Police Retirement Board October 16, 1992 Page six Principal's pension administration specialist, since she invited Mr. Munoz to mark the changes in the plan which the city desired. You might also ask Ms. Way to contact me if she has any questions about my suggestions or wishes to discuss further how we can amend this draft to bring it into compliance with Chapter 185. RAS/cf UGARMAN 'v: