03-09-2020 CITY OF EDGEWATER
GENERAL EMPLOYEES' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, March 09, 2020, at 10:30AM
TRUSTEES PRESENT: Brenda DeWees
Bridgette King
Tyna Hilton
Dilena Tally
TRUSTEES ABSENT: Tim Sopko
OTHERS PRESENT: Bonni Jensen, Klausner, Kaufman, Jensen & Levinson
Frank Wan, Burgess, Chambers &Associates
Michelle Rodriguez, Foster& Foster
Doug Lozen, Foster& Foster
Chris Matthewson, Retiree of the Plan
1. Call to Order—Brenda DeWees called the meeting to order at 10:32am.
2. Roll Call —As reflected above.
3. Public Comments
a. Chris Matthewson asked why his sick and annual leave was not included in the
calculation of his benefit when he retired. Chris commented he heard a recent
retiree had his sick and annual leave included. Michelle Rodriguez commented
she would look into the issue and asked Chris for his contact information so she
could call him in the few days with an answer.
4. Approval of Minutes
The minutes from the December 09, 2019, quarterlv meetinq were approved, upon motion bv
Bridqette Kinq and second bv Tvna Hilton; motion carried 4-0.
5. New Business
a. New Union Representative Trustee
i. Dilena Tally was introduced as the new Union Representative Trustee.
6. Old Business— None.
7. Reports
a. Burgess, Chambers &Associates, Frank Wan, Investment Consultant
i. Quarterly Report as of December 31, 2019
1. Frank Wan reviewed the market environment for the last quarter
and commented the oil industry was very volatile. Frank reviewed
how news of the recent COVID-19 virus was affecting the market.
2. The market value of the plan as of December 31, 2019, was
$12,758,818.
3. The fund's total gross returns for the quarter were 4.5%, slightly
underperforming the benchmark's return of 4.8%. Trailing total
fund gross returns for the 1, 3, and 5-year periods were 18.9%,
9.0% and 6.2% respectively.
4. Frank Wan reviewed the fund's performance and commented
because the plan was closed the investments were conservative.
Frank reviewed the real estate funds in the plan and recommended
moving from a mutual fund to a collective investment trust in order
to save fees.
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The Board voted to move into the collective investment trust as recommended bv the
investment consultant, upon motion bv Tvna Hilton and second bv Bridqette Kinq; motion
carried 4-0.
5. Frank Wan commented they did not want to move away from
bonds in the current market volatility and they should wait until the
market had settled down.
The Board voted to authorize the execution of the investment documents between meetinqs,
upon motion bv Bridqette Kinq and second bv Tvna Hilton; motion carried 4-0.
b. Foster& Foster, Doug Lozen, Plan Actuary
i. October 01, 2019 Actuarial Valuation Report
1. Doug Lozen advised the Board there was not a lot of change to the
report from last year. Doug reviewed the role of the actuary for the
Board and commented this plan was closed with only one active
employee left. Doug explained that mortality tables and the plan's
rate assumption play a big role in calculating the financial health of
the plan. Doug commented the plan's 6.75% assumption rate was
reasonable. Doug commented the required contributions changed
less than $6,000 from last year. Doug explained the unfunded
liability of $19.2 million represented how much would need to be
distributed if all benefits were paid immediately and added this
amount would actually be paid over a long period of time.
2. Bonni Jensen reviewed the statistical data and number of active
employees in the plan.
3. Bonni Jensen asked if the plan would experience a negative
impact if the State changed the required mortality tables again and
Doug Lozen stated he did not think so since this was a closed
plan.
4. Bonni Jensen asked if the experience gains would negatively affect
the plan and Doug Lozen stated not at this time, however the
Board should think about lowering the assumption rate sometime
in the next five years. Frank Wan agreed with Doug's
recommendation.
The Board approved the October 1, 2019, valuation report as presented, upon motion bv
Tvna Hilton and second bv Bridqette Kinq; motion carried 4-0.
The Board voted the declaration of returns for the plan shall be 6.75% for the next vear, the
next several vears, and the lonq-term thereafter net of investment related expenses, upon
motion bv Bridqette Kinq and second bv Dilena Tallv; motion carried 4-0.
c. Klausner, Kaufman, Jensen and Levinson, Bonni Jensen, Plan Attorney
i. Educational Session
1. Bonni Jensen provided the Board with an educational handout that
outlined the fiduciary responsibilities of the trustees. Bonni
reviewed the information and asked if anyone had any questions,
and no one did.
2. Bonni Jensen reviewed a proposed bill that related to fiduciary
standards and would require five hours of governance training per
term. Bonni added the State was looking into governance training
and the FPPTA was also following the issue. Bonni commented
the one concern with the proposed legislation was the fiduciary
standard was set as a relationship to the Board instead of the plan
members.
ii. Updated Summary Plan Description
1. Bonni Jensen presented the Board with an updated Summary Plan
Description. Michelle Rodriguez suggested the contact information
be changed to her information.
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The Board voted to approve the Summarv Plan Description with chanqes, upon motion bv
Bridqette Kinq and second bv Tvna Hilton; motion carried 4-0.
iii. Salem Trust Service Report
1. Bonni Jensen reviewed the service report provided by Salem
Trust.
iv. Secure Act& IRS Limits Memo
1. Bonni Jensen reviewed the memo and commented the IRS had
increased the Minimum Required Distribution age to 72. Bonnie
commented she made a provisional update on the plan Ordinance
to reflect this change.
v. Notary Memo
1. Bonni Jensen reviewed the changes in the notary law and
commented the plan's benefit processing forms needed to be
updated to reflect the new language. Bonni reviewed the extensive
requirements for becoming an online notary.
vi. IRS Mileage Rate 2020
1. Bonni Jensen advised the Board the IRS mileage rate was
reduced by .5 cents.
vii. Brenda DeWees asked Bonni to explain the proposed Ordinance changes.
Bonni commented she added a part that would allow in service
distributions and she made a change in the small amount distribution
provision. Bonni also added Section 10.12 regarding IRS compliance, but
noticed it needed to be underlined since it was an addition to the
Ordinance. Bonni commented her office would make the change before
sending it to the administrator.
The Board voted to accept the Ordinance with the stated chanqes, upon motion bv Tvna
Hilton and second bv Bridqette Kinq; motion carried 4-0.
8. Consent Aqenda
a. Ratification of Warrants
i. Warrant#57, #58 and #59
b. New invoices for payment approval
i. None
c. Fund Activity Report for December 03, 2019 through March 02, 2020
The Board voted to approve the consent aqenda as presented, upon motion bv Bridqette
Kinq and second bv Dilena Tallv; motion carried 4-0.
9. Staff Reports, Discussion, and Action
a. Foster& Foster, Michelle Rodriguez, Plan Administrator
i. Foster& Foster Cybersecurity Update
1. Michelle Rodriguez reviewed a memo prepared by CEO Brad
Heinrichs regarding the measures taken by Foster & Foster to
protect their client's data.
10. Trustee Reports, Discussion, and Action - None.
9. Adiournment—The meeting adjourned at 12:09am.
10. Next Meetinq —June 08, 2020, at 10:30am.
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RespectfulVy submitted by: Approved by:
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Michel{e Rodr guez, Plan�d�ii iistrr} ator rende Dewees, Chair
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Date Approved by#he Pension Board: �;��r, ' '��� �C-��
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