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