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HomeMy WebLinkAboutMinutes Police Pension 042817 - Special Meeting Minutes 4-28-17(SM).doc Page 1 of 4 City of Palm Beach Gardens Police Officers’ Pension Fund Minutes of the Special Meeting Held April 28, 2017 The special meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers’ Pension Fund was called to order at 9:11 AM by Jay Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT OTHERS PRESENT Jay Spencer, Chairman Audrey Ross (Resource Centers) Marc Glass, Trustee Bonni Jensen (KKJ&L) Brad Seidensticker, Trustee Pete Strong (GRS) Greg Mull, Trustee Neal Renuart (Cherry Bekaert) R. Anderson (PBG Police Officer/Union Rep) Randy Buntin (PBG Police Officer/ Union Rep) Greg Allen (PBG Police Officer/Union Rep) Dorian Hawkins (PBG Police Officer/Union Rep) Allan Owens (City of PBG Finance Director) SEPTEMBER 30, 2016 AUDITED FINANCIAL STATEMENTS Presented by Neal Renuart Mr. Renuart introduced himself to the Board and stated that he is taking over servicing for this Plan since Mr. Burdick retired from Cherry Bekaert last year. He stated that an unmodified clean opinion was issued in regards to the September 30, 2016 audited financial statements. He reviewed the Plan’s internal controls and procedures in which there were no deficiencies or reportable compliance issues. He also reviewed the new additional disclosures that were added in this year due to the State mandate. He reminded the Trustees that the new disclosures do not affect the Plan’s actual numbers or funding methods. For the fiscal year ending September 30, 2016 the Fund ended with $82,113,694 in assets which are up from $74,092,896 last year. Therefore the Plan had an $8M investment gain this year net of fees. The total employer contributions slightly decreased as the employee contributions slightly increased. The Plan’s total benefit payments increases as well as the admin expenses, but the admin expenses still remain relatively low compared to the Plan size. MOTION: Mr. Glass made a motion to approve the September 30, 2016 Audited Financial Statements as presented. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 4-0. SEPTEMBER 30, 2016 ACTUARIAL VALUATION REPORT Presented by Pete Strong Mr. Strong stated that the Plan had an overall increase in covered payroll for the fiscal year ending September 30, 2016, which ultimately lead to increased contributions. The City is required to contribute $2.8M or 47.23% of covered payroll for the fiscal year beginning October 1, 2017. The current active DROP payroll is at 29.58% and he also reviewed the State money base amounts. Any State money Minutes 4-28-17(SM).doc Page 2 of 4 over the base amount will be split 50/50 between the City and the members. This Plan had a net actuarial gain this year of $420,988 due to investment returns above the assumed rate of return and salary increases being lower than expected. Mr. Strong reviewed the Plan’s funded ratio which is currently at 73.4% (71.8% without including the DROP assets). He also commented that the City made an additional contribution during the fiscal year which went to the Plan’s unfunded liability. As of September 30, 2016 there were 86 active members in the Plan and 68 retirees. Mr. Strong reviewed the Plan’s current unfunded liability which is around $23M with 15 years left to pay it off. Lastly he discussed the cumulative gains and losses over the years which determines if a COLA benefit would ever be payable. Once the accumulative loss of $7.7M is recognized, then a COLA benefit would be payable but it would take a lot of gains and years to offset the total loss. MOTION: Mr. Glass made a motion to approve the September 30, Actuarial Valuation Report as presented. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 4-0. Ms. Strong stated that the City contributes their portion in one lump sum payment at the beginning of each fiscal year to avoid paying interest and it betters the Plan by paying down the unfunded liability. MOTION: Mr. Mull made a motion to set the Plan’s assumed rate of return at 6.8% for this year, next year, and the long term thereafter per the recommendation of the Plan’s investment consultant. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 4-0. STATE MONEY DISCUSSION The Trustees invited the Union Reps to attend today’s meeting to discuss setting up and funding the Share accounts that were recently put into place. Ms. Jensen reviewed the historical makeup of the Chapter 185 money and the current supplemental benefit that is in place of $12.50 per year of service. Up until this year the additional Chapter 185 money was set towards this benefit and ultimately this benefit would increase. In 2013 and 2014 the City and the Union agreed to give the City the State money to help pay for the offset in increasing employer contributions. Now during this current CBA, the Union and the City did not reach an agreement in regards to the State money so the default provision will be put into place with the City to receive 50% of the State money, and then the members will get the other 50% of the State money. At this point an agreement has to be reached between the members on how this Share accounts money will be used; to create individual share accounts or continue to fund the supplemental benefit that is already in place. The Board and the Union reps had a very lengthy conversation on the State money, the Share accounts, who would be affected and who would not be. Ultimately it is up to the membership to vote on this now because for this current CBA the default option is already in place until they mutually agree to something different in a future CBA. Ms. Jensen recommended that the pension board give authorization to the Union reps to use GRS for any studies that they may need to in regards to this situation and to also work with her firm as well. It was also noted that the Board would pay for any GRS studies that are requested. Ms. Jensen reminded the Trustees that this is an urgent and we need to get a move on this situation very quickly. Minutes 4-28-17(SM).doc Page 3 of 4 BENEFIT APPROVALS MOTION: Mr. Mull made a motion to accept the application for distribution from DROP account for Ralph Kranchick. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 4-0. OTHER BUSINESS N/A PUBLIC COMMENTS N/A AJOURN There being no further business, the Trustees officially adjourned the meeting at 12:16PM. The next meeting is scheduled for Wednesday May 31, 2017 at 9AM. Respectfully submitted, _____________________________ Brad Seidensticker, Secretary