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10-05-1999 ` r vil vat EDGEWATER POLICE PENSION BOARD WORKSHOP MEETING October 5, 1999 Minutes CALL TO ORDER: The Police Pension Board workshop was called to order in the City Hall Conference Room, Tuesday, October 5, 1999 at 4:40 p.m. ROLL CALL: Bret Teitelbaum Present Jeanne Delnigro Present Ruth Garvey Present Larry Loeffler Present Gary McElroy Absent Also present were: Jack Ascherl, Consulting Agent of Record, Robert A. Sugarman, Attorney at Law/Board Attorney, Donna Looney, Acting Finance Director and Deborah Sigler, Personnel Director. The purpose of this workshop is to discuss with Board Attorney Sugarman the pension laws, state statutes, etc. and if the Plan is in compliance. Attorney Sugarman commented on the statute and explained that the changes which cost money don't have to be made immediately, but additional funds received have to be applied to changes. The law is specific regarding which changes should be made first. He added that the proposed amendments to the plan are in compliance with the requirements of the statute. Mr. Ascherl explained that all the changes that will cost money can be made with the funds received in this year, which is approximately $11,000.00. Attorney Sugarman proceeded to review each item that should be addressed as additional premium tax revenues become available, as stated in his letter dated September 9, 1999: 1. The normal form of benefit provided in the plan is a straight life annutiy. The minimum benefit required under the amendments Chapter 185 for a normal benefit is a ten (10) year certain and life thereafter. 2. The reference concerning period of military duty should be adjusted to refer to the Uniform Service Employment and Reemployment Rights Act codified as 38 U.S.C. Sec. 4301 -4333. 3. Reference to Benefit Entitlements or Qualified Joint and Survivor Beneficiaries should be changed to reflect specific levels provided in the amendment to Chapter 185. 4. Eligibility for participation in the plan should be changed to employment as police officer. The ninety (90) day waiting period would be out. 5. Employee contributions should be changed to reflect that such contributions must be deposited in the plan each pay period. The City may authorize the Div. Of Retirement to make direct payment of the premium tax monies to the Board. 6. The investment options should be adjusted. The board may now invest up to 50% in securities with a limitation of not exceeding 10% in foreign securities. 7. The plan should be changed to reflect that the entitlements due the participant will be available to any beneficiary and the relationship of a spouse should not include any specific period of time to become entitled to the benefit. 8. Lump sum distribution should be adjusted to reflect that any monthly retirement income entitlement of less than $100.00 with single sum value of less than $2,500.00 would be available at the board's discretion. 9. Disability benefits should reflect other presumptive diseases beyond heart disease and limitation of failing to maintain minimum physical standard conditions to be eligible for such disability benefits should be removed from current plan. 10. The termination of plan should be adjusted to reflect compliance with Sec. 185.361 of the Florida Statutes. 11. Administration of the plan should reflect the board secretary duties as it relates to specific records being required, and reimbursement for expenses and per diem should reflect as provided by Florida law. There was discussion as to who should prepare these changes for Council to approve. The consensus was that Principal could prepare a customized plan which would not cost as much for the board, however, Attorney Sugarman commented he could get this done faster. There was also discussion concerning how disability is determined by the board. Attorney Sugarman explained the entire process to the membership: A participant files an application for disability certification. Board accepts the application as eligible to apply. The application is sent to the Board's attorney to gather all medical records, workers comp records, personnel records, etc. And a medical examiner would be assigned, probably someone out of the immediate area. Board receives a package from the attorney who attends the hearing. If the disability is denied the applicant can appeal. Mr. Ascherl and Attorney Sugarman explained that Social Security was the previous mechanism for determining disabilities and the requirements are different. They also agreed that obvious disabilities can be decided by the board without going through the entire procedure. w `rf Mrs. Delnigro questioned the date a disability begins. She also questioned the answer she received from Mr. Ascherl concerning Mr. Westfall's disability benefits. Mr. Ascherl answered that his answer to her was; to do anything other than what the plan provides, the plan has to be changed. Attorney Sugarman agreed with this and added that he would review the circumstances and the benefit distributions to determine whether the handling of Mr. Westfall's case was within the parameters of the plan. Sgt. Teitelbaum questioned the advisability of Principal submitting an actuarial prepared by them on themselves? Attorney Sugarman explained this is acceptable; Principle can bundle the services required. At this time Attorney Sugarman drew a very detailed explanation of how an actuarial is prepared and all the services that are needed, showing what is meant by the term "bundling" the services. He added he would not recommend changing the current system. Sgt. Teitelbaum also asked about the need for fiduciary liability coverage for the board members. Attorney Sugarman agreed this is a necessity. Sgt. Teitelbaum agreed to get information from the City explaining their intentions concerning purchasing such coverage. Mr. Ascherl stated that he was asked to bring some information to the board regarding the International Equity exposure and the Domestic Equity exposure. He reviewed the information as prepared by Mr. Jeff Vowerk, Assistant Analyst, Pension Investment Services. (See attached) The members discussed holding their next meeting during the first week in December. ADJOURNMENT Mr. Leoffier made a motion to adjourn. Mrs. Garvey seconded the motion. Meeting adjourned 6:25 p.m. Minutes submitted by: D. Sigler vow rrI Principal Financial Principal Life Group Insurance Company September 3, 1999 Principal Financial Advisors, Inc. DEBORAH B. SIGLER CITY OF EDGEWATER P. O. BOX 100 EDGEWATER, FL 32132 -0100 Re: City of Edgewater, Florida Police Defined Benefit Plan Contract 4 -28312 Dear Ms. Sigler, I have been informed by Mark Cusumano of the Principal's Orlando Group Office that your organization has received approval to increase International Equity exposure to 10% and Domestic Equity exposure to 40% with a 50% cap on equity stock accounts. He indicated that before you make the decision to formally increase the limits, you would like to have an idea of the impact of this change on your current targets. If the limits are changed as described above, your plan targets would change as follows: Account Name Current Target Revised Target General Account 20.0% 20.0% Bond and Mortgage 30.0% 25.0% U.S. Stock 9.8% 8.1% Large Co Value 10.5% 8.8% Large Co Growth 6.8% 5.6% Small Co Value 2.2% 1.9% Small Co Growth 0.7% 0.6% Real Estate 20.0% 20.0% International Stock 0.0% 10.0% Please note that your domestic equity exposure would be changed from 30% to 25 %. However, International Equity would be increased to 10 %. We would continue to monitor plan targets and evaluate that target in light of any benefit needs of the plan. Should you decide to change the restrictions, please complete the revised service agreement and return to me in the attached postage paid envelope. The service agreement will be necessary to formalize the changed restrictions. Also, please let me know if these changes will apply to the General Employees plan at some point in the future. Home Office: Des Moines, Iowa 50392 -34801 (515) 247 -6840 PG 559 -1 MIHC �r w Principal Financial Principal Life Group Insurance Company Principal Financial Advisors, Inc. Please do not hesitate to contact me with any questions. I can be reached at 1- 800 -543- 4015, x74896. Thank you. Sincerely, Y Jeff Vowerk Assistant Analyst Pension Investment Services CC: Group Office - Orlando Mark Cusumano Home Office: Des Moines, Iowa 50392 -34801 (515) 247 -6840 PG 559 -1 MIHC