12-16-2013CITY OF EDGEWATER FIREFIGHTERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday December 16, 2013 at 6:OOPM
TRUSTEES PRESENT: Dominick Fede
Justin Nickels
Scott Hopkins
Gary Butt (arrived at 6:05PM)
TRUSTEES ABSENT: Barbara Scott
OTHERS PRESENT: Ken Harrison, Board Attorney
Ferrell Jenne, Plan Administrator
Jack Evatt, Investment Consultant
John McKinney, Finance Director
1. Call to Order Dominick Fede called the meeting to order at 6:OOPM
2. Roll Call As reflected above.
3. No Public Comment
4. Approval of Minutes
The minutes from the September 16, 2013 quarterly meeting were approved upon motion
by Scott Hopkins and second by Justin Nickels, motion carried 3-0.
NOTE: Gary Butt arrived at 6:05PM.
New Business
2014 meeting dates were approved as stated on the agenda, time to remain at 6:00PM
upon motion made by Scott Hopkins and second by Justin Nickels, motion carried 4-0.
a. Ken Harrison asks the Board if their intent is to have him attend meetings.
Dominick Fede advises Mr. Harrison that they would like him to attend as
needed.
i. Ken Harrison recommends that he attends at least an annual meeting, in
conjunction with the actuarial valuation report.
ii. Ken Harrison also recommends that he is put on a retainer if the Board
wishes him to attend meetings frequently.
6. Reports
a. Sugarman & Susskind, Ken Harrison
i. Presentation of draft Plan Document
1. Ken Harrison states that there is no official copy of the plan. The
former Chairman was working off of the SPD. Mr. Harrison also
advises that he followed the format of the Edgewater General
and Police Pension Plans.
2. Ken Harrison also advises the Board that no Ordinances have
been passed other than the amendments to Chapter 175.
3. Ken Harrison advises the Board to review the draft document
and provide him feedback. He also advises the Board to get
feedback from the City attorney and the actuary.
4. Ken Harrison will prepare a retainer contract to be presented at
the next quarterly meeting so the Board can compare fees.
A special meeting at 5.00pm on March 17, 2014 is approved upon motion made by Justin
Nickels and second by Gary Butt, motion carried 4-0.
The Bogdahn Group, Jack Evatt
i. Quarterly
report as of September 30, 2013
1.
Net earnings for the quarter were 5.22%, beating the policy
benchmark of 4.90% by 0.32% points.
2.
Fiscal year to date returns were 10.59%, underperforming the
policy benchmark of 12.41 % by 1.82% points.
3.
Since inception, the fund is at 4.55%, underperforming the policy
benchmark of 6.12% by 1.57% points.
4.
Ken Harrison states his concern that no product history is shown
prior to it being introduced to the Board.
a. Jack Evatt replies that the product doesn't really have a
history, it was all in one pot.
5.
Ken Harrison advises the Board to look at their investment policy
statement, he feels that the portfolio is very risky and that the
Board is out of policy at least twice a year which is not allowable.
6.
Jack Evatt advises the Board that Investment Performance
Review information for the third quarter is preliminary data due to
the errors contained in the data provided by Salem Trust that
were not corrected by the time the report was produced. This is
also noted on the front cover of the report.
7. Disbursements
Items 2 through 4 on disbursements were approved as stated on the agenda upon motion
made by Justin Nickels and second by Gary Butt motion carried 4-0. The Board wishes to
further review item 1.
a. Dominick Fede asks for item 1 (Sugarman invoice) be furthered discussed. Ken Harrison
advises their Firm's invoice is the number of hours spent multiplied their hourly rate.
Item 1 on the disbursements was approved upon further discussion by the Board upon
motion made by Justin Nickels and second by Gary Butt, motion carried 4-0.
Staff Reports, Discussion, and Action
a. Ferrell Jenne, Plan Administrator
i. Made the Board aware of Salem Trust letters discounting services 10%
for second and third quarters due to problems in their transition process.
1. Ken Harrison advises the Board to invite Salem Trust to the next
quarterly meeting to explain the situation.
2. Dominick Fede directs Ferrell Jenne to ask Salem Trust to attend
the next quarterly meeting
ii. Board was updated on RMLO letter from the State.
1. Ken Harrison advises Ferrell Jenne to get a copy of the
document destruction schedule from the City.
Ken Harrison, Board Attorney
i. 415 Limits
1. Advises the Board that IRS came out with 415 limits, which limits
the amount of pension that can be paid to any individual by a
governmental plan. The maximum for 2013 was $205,000 and is
adjusted every year by CPI.
2. This is not the rule yet; IRS is discussing this and asking for
comments.
ii. IRS Determination letter
1. Send an application to IRS and they determine if the Plan is
qualified or not. If qualified, the Plan can take advantage of the
pre-tax contributions.
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a. Prior to 4 years ago, a Plan could send in an application
once and be good for the life of the Plan. Since then, the
IRS has implemented a 5 year cycle.
2. The time has come to do a new determination letter.
a. Board has the decision to do it now or wait 2 years. Ken
Harrison advises that the current IRS user fee is $2,500
and the fee for his firm to bring the Plan into compliance
with all IRS codes is $8,500.
b. Board decides to wait 2 years and concentrate on the
Plan Document being updated and in compliance.
Adjournment The meeting adjourned at 7:30PM
10. Next Meeting Monday, March 17, 2014 at 5:OOPM
PAVectfully su mitted by: Approved by:
Derr 11 Jenne, Pla Administrator Dominick Fede, Chairman
Date Approved By the Pension Board:
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