03-20-2017CITY OF EDGEWATER
POLICE OFFICERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, March 20, 2017 at 1:30PM
TRUSTEES PRESENT: David Arcieri
Lawrence Leaf
Larry Brinson
Alexander Penalta
TRUSTEES ABSENT: Timothy Webb
OTHERS PRESENT: Ken Harrison, Sugarman & Susskind
Dustin Watkins, Sugarman & Susskind
Ferrell Jenne, Foster & Foster
Jack Evatt, AndCo Consulting
Doug Lozen, Foster & Foster
Call to Order — Alexander Penalta called the meeting to order at 1:32pm.
2. Roll Call — As reflected above.
Public Comment — None.
Note: David Arcieri arrived at 1:33pm
4. Approval of Minutes
The minutes from the December 12, 2016 quarterly meeting, February 17, 2017, informal
disability hearing for Martha Miles, and February 17, 2017 informal disability hearing for
John Tarr were approved upon motion by Larry Brinson and second by David Arden,
motion carried 4-0.
5. New Business
a. Review and discussion of proposed Ordinance regarding in -line -of -duty injury
insurance benefit.
i. Ken Harrison reviewed the proposed Ordinance and commented that the
member must be vested in order to be eligible for the insurance benefit.
Dustin Watkins commented that the funding comes 100% from the City.
ii. Ken Harrison explained that an actuarial impact/no impact letter would
need to be prepared once the proposed Ordinance was approved by the
board. The proposed Ordinance and actuarial statement would then go
to Council for first reading.
iii. Dustin Watkins verified that the insurance benefit would be retro back to
January 1, 1995. Ken Harrison commented that the City had been
covering the insurance expenses and would like an Ordinance to solidify
the policy.
The board voted to approve the proposed Ordinance as presented and authorized Foster &
Foster to prepare the actuarial statement to be sent to the City for first reading, upon
motion by Lawrence Leaf and second by Larry Brinson, motion carried 4-0.
Old Business — None.
7. Reports
a. AndCo Consulting, Jack Evatt, Investment Consultant.
i. Quarterly update as of December 31, 2016.
I . Jack Evatt introduced the new firm name and logo. Jack
commented that the philosophy behind the name change was to
always put clients first.
2. Jack Evatt gave a brief overview of the market environment
during the quarter.
3. Market value of the fund as of December 31, 2016, was
$8,545,488.
4. Jack Evatt reviewed the total fund financial reconciliation.
5. Gross returns for the quarter were 0.51 %, underperforming the
policy benchmark of 0.53%. Trailing gross returns for the 1, 3,
and 5 year periods were 5.88%, 4.52%, and 8.51 %. Since
inception (10/1/2000) gross returns were 4.62%, slightly
underperforming the policy benchmark of 4.78%. Jack Evatt
commented the fund was almost completely indexed.
6. Jack Evatt advised that through February, the total fund portfolio
was at 4.52%, up 30BPS from the benchmark.
7. Jack Evatt reviewed the compliance checklist, commenting that
the portfolio was in the 50th percentile of its peer group.
Note: Doug Lozen arrived at 1:55pm
8. Jack Evatt reviewed the healthcare allocation and new
regulations. Jack Evatt commented the allocation was
approximately 12%.
The board approved the AndlCo Consulting December 31, 2016 quarterly report as
presented upon motion by David Arcieri and second by Larry Brinson, motion carried 4-0.
9. Jack Evatt commented no rebalancing was needed and does not
recommend making any changes at this time.
b. Foster & Foster, Doug Lozen, Actuary.
i. October 1, 2016, actuarial valuation report.
1.
Doug Lozen reviewed the changes from the prior year, including
the use of the FRS mortality tables and State Monies.
2.
The total required contribution from the City for Fiscal Year
ending September 30, 2018, is 51.7%, up from 48.2% for Fiscal
Year 2017.
3.
Doug Lozen commented that experience during the last 12
months had been less favorable than expected, due to
unfavorable turnover experience, a 6.71% investment return,
(falling short of the 7.50% assumption), and no retiree mortality.
These losses are partially offset by average increases in
pensionable earning that were lower than the assumed rate.
4.
Doug Lozen explained the increased funding requirement was
primarily the result of the use of State Monies (which now goes
to a Share Plan versus being used to reduce the City's funding
requirement as in the past) and the FRS mortality tables.
5.
Doug Lozen advised that the board would need to set
administration rules on how to allocate the Share Monies.
6.
David Arcieri asked about setting up a health insurance subsidy
with the State Monies instead of the funded Share Plan. Doug
Lozen commented this was an option, but it would need to go
through the collective bargaining units. Doug commented he
could revise the valuation report if a different Mutual Consent
was reached on the use of State Monies. Ken Harrison
confirmed that his understanding was that all State Monies go to
the share plan.
7.
Doug Lozen advised the funded ratio was 66.5%, remaining
unchanged from the prior year.
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3. Doug Lozen reminded the board that the two recently granted
ILOD disability benefits would be realized in the October 1, 2017,
valuation report. Doug reviewed the disability assumption
currently being used.
9. Doug Lozen reminded the board they use a 4-year smoothing
technique.
10. Alexander Penalta asked about the administration expenses.
Doug Lozen commented expenses had risen due to additional
reporting required. Ken Harrison commented that fees are less
than 1 % of total assets, which was in line with other plans
around the State.
The board approved the October 1, 2016, valuation report as presented upon motion by
David Arcieri and second by Larry Brinson, motion carried 4-0.
The board voted the declaration of returns for the plan shall be 7.50% for the next year, the
next several years, and the long-term thereafter net of investment related expenses, upon
motion by David Arcieri and second by Alexander Penalta, motion carried 4-0.
Sugarman & Susskind, Ken Harrison, Attorney
i. Legislative and IRS determination letter update.
1. SB 632 — Dustin Watkins explained this Bill defines the long
range rate of return and puts collars on the investment
assumption.
2. Ken Harrison explained there was another proposed Bill that
would close the FRS DB plan to new hires.
3. Ken Harrison commented that the IRS determination letter is still
under review.
ii. Jack Evatt reviewed the Investment Policy Statement (IPS) and
commented the current policy has been in place since 2010.
iii. Ken Harrison commented that all Chapter legal requirements have been
met in the IPS.
iv. Jack Evatt reviewed the changes to the asset targets and ranges.
The board approved the Investment Policy Statement as presented upon motion by David
Arcieri and second by Lawrence Leaf, motion carried 4-0.
8. Consent Agenda
The board approved the consent agenda as presented upon motion made by David Arcieri
and second by Larry Brinson, motion carried 4-0.
9. Staff Reports, Discussion, and Action
a. Educational opportunities.
i. Ferrell Jenne reminded the board that the Division of Retirement
conference will be held May 31, 2017-June 2, 2017. Ferrell also advised
that the FPPTA will be holding their annual conference in Orlando from
June 25, 2017-June 28, 2017.
10. Trustee Reports, Discussion, and Action — None.
11. Adjournment — The meeting adjourned at 2:43pm.
12. Next Meeting — Monday, June 19, 2017, 1:30PM.
pectfully ubmitted by: Approved by:
II Je e, P n Administrator Alexander Penalta, Chairman
Appro d y the Pension Board:g.l�' 1 �� 113
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