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HomeMy WebLinkAboutMinutes Police Pension 081106City of Palm Beach Gardens Police Officers' Pension Fund Minutes of the Meeting Held August 11, 2006 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 9 :00 AM by Chairman Jay Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North MIiitary Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT Jay Spencer, Chairman David Pierson, Secretary Jules Barone Brad Seidensticker Wayne Sidey MINUTES OTHERS PRESENT Scott Baur, Pension Resource Center, LLC Bonnie Lindberg, Pension Resource Center, LLC Allan Owens, City of Palm Beach Gardens Steve Palmquist, Gabriel, Roeder, Smith & Co. John Mccann, GRS Asset Consulting Bonni Jensen, Hanson, Perry, & Jensen, P.A. Tuesday Craig, City of Palm Beach Gardens Temp MOTION: Wayne Sidey motioned to approve the minutes of the Regular Meeting of February 9th, 2006 and the March 30th, 2006 Special Meeting. SECOND: David Pierson seconded. CARRIED: The motion carried unanimously. INDEPENDENT CONSULTANT REPORT; ALLAN OWENS, FINANCE DIRECTOR Mr. Owens provided a copy of the Analysis of Actuarial Assumptions and Funding of the City of Palm Beach Gardens Defined Benefit Plans -May 22, 2006 completed by Bolton Partners, Inc. Allan explained that there were concerns a year ago, mai nly with the Palm Beach Gardens Firefighters' Pension Fund and they had requested an independent review of the pension fund. Summary of Findings Bolton Partners, Inc. was retained by the City of Palm Beach Gardens to review the actuarial assumptions and funded status of the Palm Beach Gardens Firefighters' Pension Plan and of the Palm Beach Gardens Police Officers' Pension Plan. Our analysis Is based on review of the last three annual actuarial valuations of each plan, and reviews of each plan's investment policy and recent asset statements. Our recommendations, which are detailed in the following report, are: Police Officers' Plan : A. reduce the annual investment return assumption from 8.5% to 7 .5%, B. update the mortality assumption, from the 1983 GAM table to the RP 2000 table, C. reduce the salary growth assumption, D. reduce the amortization period for future benefit Improvements from 30 years to 15 years, E. reduce the retirement rate assumption While we are recommending a number of changes i n assumptions, we do not expect annual costs to the City to c hange dramatically. Minutes 8·11-0 6 Palm Be a ch Gard e ns Police Page 1 of 6 ACTUARIAL VALUATION REPORT: STEVE PALMQUIST. ACTUARY Mr. Palmquist stated the report was completed prior to the new ordinance in June. The funding does not include the new benefits, the FYE 9/30/07 required employer contribution percentage will need to have 6% added to the 29.54% on page 1 of the report. The impact statement was based on FY04 not FYOS, he will update to FYOS to include the new salary assumption. The required funding amount is $1,695,236 or 24.25% of covered payroll, with a total funding of $1,931,054 or 27.62% of covered payroll. The Plan continued to recognize prior losses that were responsible for 2.31 % rate increase from prior year and the change in assumptions are responsible for the 2.94% rate increase. Minutes of the Meeting Held-August 11, 2006, Mr. Palmquist reviewed smoothing of prior investment gains and losses. Experience losses also affected the funded ratio, now at 63.7%. The mark.et value of assets, as opposed to actuarial value, would increase the funding ratio slightly. The new 3Y2% multiplier and $12.50 supplemental monthly health Insurance benefits will also cause a decrease to the funding ratio. Brad Seidensticker and Bonni Jensen discussed payment of the new non-guaranteed COLA. Steve explained that the benefit would get calculated and paid on a portion of the assets in the Plan used to pay benefits to the retired members. Mr. Palmquist classified that the overall expected return assumption for the Plan would not change, since gains only in excess of 8.5% assumption would go to pay the benefit. The Plan must not only have excess returns for the prior year, but must also have excess return from inception of benefit. Mr. Palmquist then reviewed the age and service distribution for active members as of 10/1/05. He noted that the Plan had 8 members who are already eligible to retire along with 23 members within S years or less and 24 additional members are between 5 & 10 years from retirement. Steve reported that the Plan would receive $428,055. premium tax distribution money for current year, up from $411,047 . As part of the agreement for the new ordinance, the amount for Chapter 185 premium tax receipts will adjust from $235,818 to $411,047. Steve will provide his recommendations for assumption changes in response to the Bolton Partners report by the end of the week of August 215t, 2006. Due to the new ordinance, Steve will provide a supplemental report to the October 1, 2005 Actuarial Valuation Report to revise the City funding contributions for the next year. MOTION: Wayne Sidey moved to accept the Actuarial Valuation Report with a Supplemental Valuation Report to be provided by Gabriel, Roeder, Smith & Company. SECOND: Brad Seidensticker seconded. CARRIED: The motion carried unanimously. Allan Owens requested to receive the supplemental report via email from Steve. Minutes 8-11-06 Palm Beach Gardens Polic~ Page 2 of 6 INVESTMENT MANAGER REPORT: RHUMBLINE ADVISORS John Mccann read an email to the Board from Denise D'Entremont apologizing for not make the meeting, due to a missed flight following the alleged terrorist plot in Britain. INVESTMENT CONSUL TANT REPORT; JOHN MCCANN Mr. Mccann reported that the Fed did not increase interest rates again this time. John stated the market generally had a negative quarter except for International, which was up slightly due to changes in exchange rates. Mr. McCann reviewed compliance of Plan with the Investment Policy. Plan had $21,120,000 total assets as of June 30, 2006; allocated 52% to Equities, 46% to Fixed Income and 2% to Cash. The current quarter portfolio return is - 1.20% compared to -1.39 for the benchmark, 5.30% for one year compared to 5.51 % target. The Board inquired about the status of purchasing International Mutual Funds in t he amount of $1,000,000. Scott Baur stated that on June 30, 2006, The Pension Resource Center, LLC (PRC) was successful in purchasing ICAP in the amount of $200,000 and Vanguard (3 funds) in the amount of $600,000. T. Rowe Price International does not have a frame or reference for a Public Pension purchasing and refused the documentation that PRC provided. Scott asked the Board If they should just go with the ICAP and Vanguard International Mutual Funds. John Mccann recommended that they allocate the remaining $200,000 giving another $50,000 to each fund: ICAP, Vanguard International Value, Vanguard International Growth and Vanguard Global Equity. MOTION: Brad Seidensticker moved to accept recommendation by John Mccann to allocate the $200,000; $50,000 to each fund: ICAP, Vanguard International Value, Vanguard International Growth and Vanguard Global Equity. SECOND: David Pierson seconded. CARRIED: The motion carried unanimously. Bonni Jensen then raised rebalancing of the assets. John McCann recommended reducing ICC Fixed Income to 35% and to reallocate 5% from ICC to Rhumbline. Mr. Mccann will bring further recommendations at the next meeting. MOTION: Brad Seidensticker moved to accept the recommendation by John McCann to rebalance 5% from ICC Fixed Income to Rhumbline. SECOND: David Pierson seconded. CARRIED: The motion carried unanimously. M'nutes 8-L-06 Palm Beach Gardens Police Pa e ~ of :i Plan was up 3.24% FTYD, so it is not likely to reach the 8.5% assumption. Bonni Jensen requested John to include FTYD numbers in the report. Mr. Mccann said he would include the FYTD numbers in all future reports. Mr. Mccann provided the board with the revised Investment Policy Guidelines with the recent changes. John will provide Morningstar reports on International Mutual Funds with future reports. MOTION: Brad Seidensticker moved to accept the revised Investment Policy Guidelines with the recent changes. SECOND: David Pierson seconded. CARRIED: The motion carried unanimously. ATTORNEY REPORT: BON NI JENSEN Ms. Jensen presented the Addendum to the Agreement with GRS Asset Consulting, Inc. for an increase in the annual fee of $1,000 to monitor the International Mutual Funds. The Board approved the addendum at the Meeting held on February 9, 2006. Ms. Jensen reported that the ordinance passed on the second reading in June. Bonni provided the Buyback Policy for review, which the Board will consider at the next meeting. Ms. Jensen also had an updated Summary Plan Description to incorporate the changes to the last ordinance. MOTION: David Pierson moved to accept the updated Summ a ry P lan Description. SECOND: Brad Seidensticker seconded. CARRIED: The motion carried unanimously. The Board is not on the first distribution of Chapter 185 Premium Tax Distribution. Bonni gave the Board a memo on new required disclosure with regards to e-mail addresses being Public Records under Florida law. Ms. Jensen mentioned that the premium tax database goes into effect this year and the City must update the database by September. This Plan received more dollars than the prior year, and the amount cannot decrease for 3 years. Ms. Jensen received a letter from Sam Nasca and she requested direction to respond. Sam requested the Board to provide him, in writing, the list of criteria, which need to be addressed as part of the determination of the granting of disability benefits. The Board recommended Bonni to send him the Summary Plan Description. REPORTING OF PLAN FI NANCIALS: SCOTT BAUR Mr. Baur reported that there were no problems with the transition to report and that he his updating the General Ledger from Administrative Services, Inc. The Board was given Disbursements list in the amount of $31,657.57 for approval. I\ ·nut s ,-L -06 Pa!m Beach Gardens Polio Pa e 4 ot l MOTION: Wayne Sidey moved to approve the Di sbursements in the amount of $31,657.57. SECOND: Brad Seidensticker seconded. CARRIED: The motion carried unanimously. Scott Baur reviewed the recently approved payment of a supplemental pension benefit to current and future retired members of the plan. Each member receives $12.50 per year of completed services as an active member of the plan, effective October 1, 2004. Scott distributed the information for the member's retro payment along with the revised monthly benefit payment to the Board for their approval. MOTION: David Pierson moved to approve the retro payment and the revised monthly benefit payment for the supplemental p e nsi on benefit for the 21 retirees to receive $12.50 per year of completed service as an active member of the plan, e ffe ctive October 1, 2004. SECOND: Wayne Sidey seconded. CARRIED: The motion carried unanimously Scott Baur discussed the three pending buybacks and requested the Board to approve the calculations using the 3% multiplier versus the 3.5% multiplier based on the date of their application for Dennis Beath, Randy Buntin and Thomas Gitto. MOTION: Jules Barone moved to approve the buybacks for Dennis Beath, Randy Buntin and Thomas Gitto using the 3% multilplier. SECOND: Wayne Sidey seconded. CARRIED: The motion carried unanimously The Board directed Scott Baur to research Banks that will give interest on checking accounts and bring a letter of recommendation to the next meeting. OTHER BUSINESS: JAY SPENCER Chairman Spencer encourages everyone on the Board to attend the FPPTA being held in St. Petersburg from October 8 -11, 2006. He suggests that Brad Seidensticker and David Pierson attend. Mr. Spencer asked The Pension Resource Center, LLC to email the upcoming conference information to Brad Seidensticker and David Pierson. Chairman Spencer requested the Board to accept the buyback application from Michael Lawrence. MOTION: David Pierson moved to accept the updated Summary Plan Description and the buyback application from Michael Lawrence. SECOND: Brad Seidensticker seconded. CARRIED: The motion carried unanimously. Minutes 8-11-06 Palm Beach Gardens Police Page 5 of 6 SCHEDULE NEXT MEETING The next Meeting was not scheduled. ADJOURN The meeting was duly adjourned by Chairman Spencer at 11:30 a.m. Respectfully submitted, DAVID PIERSON, Secretary ,'nutes 8-L-06 Palm Beach Gardens Police Page 6 of 6