12-14-2015CITY OF EDGEWATER
POLICE OFFICERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday December 14, 2015 at 1:30PM
TRUSTEES PRESENT: John Tarr
David Arcieri
Lawrence Leaf
Larry Brinson
TRUSTEES ABSENT: None
OTHERS PRESENT: Ken Harrison, Sugarman Susskind
Ferrell Jenne, Foster & Foster
Jack Evatt, The Bogdahn Group
Brian Bizzell, Salem Trust
Mark Rhein, Salem Trust
Mindy Johnson, Salem Trust
Gary Connroy, City Council
Call to Order John Tarr called the meeting to order at 1:30PM.
2. Roll Call - As reflected above.
3. Public Comment - None.
4. Approval of Minutes
The minutes from the September 14 2015 quarterly meeting were approved upon motion
by Lawrence Leaf and second by Larry Brinson, motion carried 4-0.
The minutes from the September 23 2015 special meeting were approved after changing
the limitation reference from 100 to 180 regarding the Chief opt -out upon motion by David
Arcieri and second by Lawrence Leaf, motion carried 4-0.
5. New Business
a. Larry Brinson, term expiration.
i. Larry Brinson's term as a Council appointed trustee expired November 6,
2015. Larry commented he would like to serve another term.
The board voted to recommend to Council to reappoint Larry Brinson to the board upon
motion by David Arcieri and second by Lawrence Leaf, motion carried 4-0.
b. Actual expenses as of September 30, 2015.
i. Ferrell Jenne stated the actual expenses were prepared in conjunction
with Senate Bill 172. This report needs to be sent to the City for
information purposes and made available to members.
The board voted to approve the actual expenses as of September 30 2015 upon motion
by Larry Brinson and second by Lawrence Leaf, motion carried 4-0.
FPPTA membership.
i. Ferrell Jenne reviewed the fees with the board, $600 annual board
membership fee, $450 fee per trustee to attend schools/conferences.
The board voted to approve the payment of the 2016 FPPTA membership upon motion by
Lawrence Leaf and second by David Arcieri, motion carried 4-0.
d. Form 1, Financial Statement of Interest.
i. Ken Harrison reminded the trustees to file their financial disclosure form
by July 1, 2016 to avoid fines.
Note: Salem Trust was moved up on the agenda.
Reports
a. Salem Trust, Mark Rhein, Brian Bizzell, Mindy Johnson, Board Custodian.
i. Mark Rhein reviewed the conversion process their firm went through,
Mark stated they had received an unmodified audit opinion for the 2015
SSAE 16 report, the highest opinion given.
ii. Mark introduced Mindy Johnson and reviewed her experience. Mark
asked the board's permission to change the relationship manager from
Brian Bizzell to Mindy Johnson. Lawrence Leaf asked why a change was
being made. Mark Rhein commented the change would allow the board
to have a Salem Trust representative at more meetings since Mindy had
other clients in the area.
By consensus the board approved a change to the Salem Trust relationship manager.
New Business (cost.)
a. Discussion of plan restatement.
i. Ken Harrison discussed options regarding amendments not previously
adopted by Council. Ken advised the restatement could be submitted as
is or the amendments not previously approved by Council could be taken
out.
By consensus the board approved sending the plan restatement including amendments
not previously adopted by council for a first reading.
ii. Ken discussed the DROP net -of -fees provision. Gary Connroy
commented that Principle had implemented procedures contrary to the
plan and had started paying at a fixed rate. The City Manager brought
the issue to Principle's attention and notified them that the DROP
accounts should reflect the earnings of the plan, not a fixed rate.
iii. Ken Harrison made a recommendation to move the document forward
and make any additional changes after the board has one document to
work from.
iv. The board discussed the plan document and changes from the
September 23, 2015 special meeting.
v. Ken Harrison reviewed the added provisions never adopted by Council
and commented that the board had been acting as if they had been
adopted. Ken further reviewed all items that were added or removed
from the draft plan restatement.
vi. Ken discussed "financial gain," in conjunction with the opt -out provision
for the Chief. The IRS states there can be no financial gain by opting out
of the plan. David Arcieri stated he thought the opt -out would save the
plan money since employee contributions based on the Chief's salary
wouldn't have to be made. David Arcieri proposed a 24 month window
for the Chief to opt -out. Ken Harrison stated none of his plans offered an
open-ended opt -out. Larry Brinson commented he would like an opt -out
window of one year from the adoption date of the Ordinance. David
Arcieri stated he preferred a longer window but would vote with the
majority.
By consensus the board agreed to a one year window from the adoption date of the
Ordinance for the Chief to opt -out of the plan.
vii. The board discussed section 3.02, letter C, of the Ordinance.
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By consensus the board agreed to remove letter C from section 3.02 of the Ordinance and
include wording that all contributions are deposited with the plan's custodian.
viii. Jack Evatt reviewed #5, letter G, section 3.02 and recommended
changing the language to investment grade language, stating the draft
plan restatement doesn't align with the current IPS. Ken Harrison stated
he would work with Jack to comply with the current IPS.
ix. Jack Evatt reviewed #7, letter G, section 3.02, and recommended
striking the "30% at cost" language.
x. Ken Harrison reviewed section 6.05 and recommended removing it since
it didn't apply to the plan.
xi. The board asked for the removal of all references to "group contract."
Discussion of replenishment.
i. The board discussed replenishment in conjunction with Senate Bill 1128.
ii. Ken Harrison reviewed the definition of salary according to statutes
which specify what can be used to calculate pensionable pay. As of July
11, 2011, unless a contract was in place, members are limited to 300
hours of overtime unless they had a bank of unused time. No vacation or
sick time could be used after that date for pensionable salary.
iii. Ferrell Jenne commented the General Plan was allowing for
replenishment. Ken Harrison asked to see the proposed Ordinance
drafted by Lee Dehner so he could review.
8. Old Business
a. Update on IRS Determination Letter.
i. Ken Harrison stated the IRS Determination Letter had been filed with the
IRS.
9. Reports (cont.)
a. The Bogdahn Group, Jack Evatt, Investment Consultant.
i. Quarterly report as of September 30, 2015.
1. Jack Evatt gave a brief overview of the market environment
during the quarter.
2. Market value of the fund at the beginning of the quarter was
$8,505,073 and by the end of the quarter was $8,157,072.
3. Gross earnings for the quarter were -5.01 %, underperforming the
policy benchmark of -4.64% by-0.37%. Fiscal year—to-date
gross earnings were 0.40%, outperforming the benchmark of
-0.74% by 1.14%. Since inception (10/1/2000) earnings were
4.46%, meeting the policy benchmark.
4. Jack reviewed the four year smoothing technique and stated the
0.08% returns from October 1, 2010-September 30, 2011, would
drop off.
5. Jack Evatt reviewed the compliance checklist.
Sugarman & Susskind, Ken Harrison, Attorney.
i. Legislative update.
1. Ken Harrison commented the State Legislature was meeting in
January 2016, earlier than usual.
2. All pre -filed bills were for FRS. Nothing was filed for Local Law
plans.
10. Consent Agenda
The consent agenda was approved as presented upon motion by Larry Brinson and
second by Lawrence Leaf, motion carried 4-0.
11. Staff Reports, Discussion, and Action
a. New plan administration phone line.
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i. Ferrell Jenne informed the board that a new dedicated TPA phone line
had been established.
b. Payment of invoices in between meetings.
i. Ferrell Jenne asked the board to consider allowing the payment of
contractual vendor invoices in-between quarterly meetings. Ken Harrison
commented that this is common practice and all paid invoices would be
ratified at each quarterly meeting.
The board voted to allow the payment of contractual vendor invoices in-between meetings
upon motion by Larry Brinson and second by David Arcieri, motion carried 4-0.
c. Trustee James Morey's attendance.
i. Ferrell Jenne informed the board that James Morey had missed the last
six board meetings and received a resignation email from Mr. Morey.
The board voted to recommend that Council appoint a new board member upon motion by
Larry Brinson and second by Lawrence Leaf, motion carried 4-0.
12. Adiournment The meeting adjourned at 2:50PM.
13. Next Meeting Monday, March 14, 2016, at 1:OOPM.
pectf Ily unfitted by: /ved by:
6JI Jenne, PlanAAdministrator John Tarr, Chairman
Date Approved By the Pension Board: MATCH 0 o :)-CAc,
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