06-13-2016CITY OF EDGEWATER
FIREFIGHTERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, June 13, 2016, at 5:OOPM
TRUSTEES PRESENT: Dominick Fede
Justin Nickels
Scott Hopkins
TRUSTEES ABSENT: None
OTHERS PRESENT: Ferrell Jenne, Foster & Foster
Doug Lozen, Foster & Foster
Ken Harrison, Sugarman & Susskind
John Thinnes, The Bogdahn Group
David Kelly, Bowen Hanes & Company
Call to Order Dominick Fede called the meeting to order at 5:03PM.
2. Roll Call As reflected above.
3. Public Comments None.
4. Approval of Minutes
The minutes from the March 14, 2016, quarterly meeting were approved upon motion by
Scott Hopkins and second by Justin Nickels, motion carried 3-0.
5. New Business
a. Resignation of trustee Gary Butt.
i. Dominick Fede informed the board that Gary Butt resigned last month.
Dominick commented there are some individuals that are interested on
sitting on the pension board and he will give them the board application
to complete.
Discussion of adding a COLA to the Plan.
i. Dominick Fede commented that the membership is asking about adding
a COLA to the plan.
ii. Ken Harrison commented that adding a COLA is typically expensive.
iii. Dominick suggested a COLA to start after the first full year of retirement
at CPI.
iv. Doug Lozen suggested giving the board some examples of standard
COLA language as a starting point and then they can discuss the
specifics.
v. Justin Nickels asked if they could put a threshold in that eliminates the
COLA if the plan falls below a certain funding status. Doug Lozen
confirmed that could be done.
vi. Ken Harrison suggested a COLA based on CPI, not to exceed 3.0%. Ken
also reminded the board that there will need to be parameters when the
COLA starts and stops.
vii. Board discussed Doug Lozen doing a COLA analysis based on future
normal retirees. The board discussed scenarios of lifetime 2.0% or 3.0%
COLA with 1 year deferred, lifetime 2.0% or 3.0% COLA with 5 years
deferred, and 2.0% or 3.0% COLA until the attainment of age 67
beginning 1 year after retirement.
The board authorized Foster & Foster to do a COLA analysis for a fee not -to -exceed $1,500
upon motion by Scott Hopkins and second by Justin Nickels, motion carried 3-0.
c. Discussion of adding Finance Department to the list of Salem Trust authorized
online statement recipients.
L Ferrell Jenne explained that Steve Bays from the City requested that
Bridgette King be added to the Salem Trust online statement recipient
list. Ferrell commented that Bridgette King is the City's new Assistant
Finance Director.
The board voted to add Bridgette King to the list of Salem Trust authorized online
statement recipients upon motion by Justin Nickels and second by Scott Hopkins, motion
carried 3-0.
Old Business None.
7. Reports
a. Bowen, Hanes & Company, David Kelly, Investment Manager.
i. Quarterly update as of March 31, 2015 and update as of June 8, 2016.
1.
David Kelly briefly reviewed the market environment during the
quarter.
2.
David Kelly advised the board that the total portfolio return was
approximately 9.9% as of June 8, 2016.
3.
David Kelly briefly reviewed common stocks held and their
associated performance.
4.
Market value of assets as of September 30, 2015, were
$9,697,867.45 and by March 31, 2016, were $10,421,531.83.
5.
Fiscal year-to-date through March 31, 2016 had a total portfolio
return of 7.4%.
6.
David Kelly reviewed the fixed income portfolio for the January 31,
2016 — June 8, 2016 period.
b. The Bogdahn Group, John Thinnes, Investment Consultant.
i. Quarterly update as of March 31, 2015.
1. John Thinnes reviewed the S&P 500 annualized total return
performance over 2,145 trading days (10/9/07-4/18/16).
2. John Thinnes advised the board that the fund was just under 10.7M
as of June 12, 2016.
3. Total fund market value as of December 31, 2015, was $10,391,044
and as of March 31, 2015 was $10,511,330.
4. John Thinnes commented here was not a need for rebalancing at
this time, all allocations were in line with the IPS.
5. Net earnings for the quarter were 0.88%, underperforming the
policy benchmark of 1.79% by -0.91 %. Trailing returns for the 1, 3,
and 5 year periods were; -3.95%, 6.41 %, and 5.94%. Since
inception (12/1/01) earnings were 4.81%.
6. John Thinnes commented that fiscal year-to-date, the plan is
ranking number one when compared to its peers.
7. John Thinnes reviewed the compliance checklist.
ii. Fee memo dated June 13, 2016.
1. John Thinnes explained that the current retainer fee is $14,500 and
had been in place since July 2010. John asked the board to
consider a $2,000 retainer increase with a three year guarantee.
The board voted to increase the retainer fee to $16.500 effective July 1. 2016 with a three
year fee guarantee upon motion by Scott Hopkins and second by Justin Nickels, motion
carried 3-0.
2. Ken Harrison commented that he will draft a new agreement with
Bogdahn to reflect the change in the retainer fee.
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Sugarman & Susskind, Ken Harrison, Attorney.
i. Legislative/legal update.
1. Ken Harrison reviewed the IRS memo regarding normal retirement
age and in-service distributions. Ken explained "safe harbor" normal
retirement ages that the IRS considers to be reasonable.
2. Ken Harrison reminded the board to file their Form 1s prior to July
1 st to avoid fines.
3. Ken Harrison explained that an election will be held at the upcoming
FPPTA conference and recommended the board to authorize the
representative attending the conference to pick up the ballot and
vote as they see fit. Ken briefly reviewed each candidate.
The board voted to allow Dominick Fede to cast a vote on behalf of the board if he attends
the FPPTA conference upon motion by Justin Nickels and second by Scott Hopkins,
motion carried 3-0.
8. Consent Agenda
a. Ferrell Jenne briefly reviewed the retiree activity spreadsheet and payment
warrants with the board.
The board voted to approve the consent agenda as presented upon motion by Scott
Hopkins and second by Justin Nickels, motion carried 3-0.
9. Staff Reports. Discussion, and Action
a. Update on Ordinance 2016-0-33.
i. Ferrell Jenne informed the board that the Ordinance was adopted at the
June 6, 2016 Council meeting and has been sent to the State.
b. Update on State Annual Report.
i. Ferrell Jenne informed the board that the Annual Report was approved
by the State on May 20, 2016.
c. Update of the Summary Plan Description (SPD).
i. Ferrell Jenne commented that the SPD needs to be updated.
The board authorized Foster & Foster to update the SPD upon motion by Justin Nickels
and second by Scott Hopkins, motion carried 3-0.
10. Trustee Reports. Discussion, and Action
a. Justin Nickels asked about SB1128. Doug Lozen commented the amounts are
what accruals were locked in as of the effective date. Justin commented that he
was concerned about forced cash -outs. Doug commented that if those cash -ins
happened after the effective date, they're not pensionable. City needs to issue a
policy regarding forced cash -outs that occurred before October 1, 2012 and if
those cash out come off the October 1, 2012 balance. Doug Lozen suggested
getting a letter from the City so there is a clear understanding.
The board authorized Ken Harrison to draft a letter to the City regarding their
interpretation of forced cash -ins upon motion by Justin Nickels and second by Scott
Hopkins, motion carried 3-0.
b. Board discussed the buyback financing and directed Ferrell Jenne to reach out to
the City to see what they need to set-up to be able to start the paycheck
deductions and deposits into the Salem Trust account.
11. Adjournment The meeting adjourned at 6:33PM.
12. Next Meeting September 19, 2016, at 5:OOPM.
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R
71;' Mttedby:
Ferr II Jenn PI n Administrator
Date Approved By the Pension Board
Approved by:
ominick Fede, Chairman