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HomeMy WebLinkAboutMinutes Police Pension 032318City of Palm Beach Gardens Po/ice Officers' Pension Fund Minutes of the Meeting Held March 23, 2018 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 9:06 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 Jay Spencer, Chairman Brad Seidensticker, Secretary Allan Owens, Trustee Greg Mull, Trustee Marc Glass, Trustee OTHERS PRESENT Audrey Ross (Resource Centers) Bonni Jensen (KKJ&L) Alisa Train (Cherry Bekaert) John McCann (AndCo. Consulting) Richelle Hayes (American Realty) Pete Strong (GRS) 9/30/2017 AUDITED FINANCIAL STATEMENT REPORT Cherry Bekaert — Presented by Alisa Train Mr. Train introduced herself and stated that a clean unmodified opinion was issued in regards to the Plan's September 30, 2017 audited financial statements. She commented that no material weaknesses were identified while performing the audit and no reportable noncompliance or findings either. Also there were no issues with management or any service providers either. Ms. Train stated that the City had prepaid their contributions in one lump sum payment in the beginning of the fiscal year which saved them interest. The Plan ended the fiscal year with $90,176,684 in assets compared to $82,113,694 the prior year. The Plan had a great investment year as that lead to most of the gain. The employee contributions slightly increased this year due to more active members contributing to the pension Plan, which is a gain for the Plan. Also benefit payments increased due to more retirees. Overall Ms. Train stated that the Plan did well and had about a 30 basis point gain altogether. MOTION: Mr. Glass made a motion to approve the September 30, 2017 Actuarial Valuation Report as presented. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. Ms. Train presented the Board with the September 30, 2017 audit representation letter. This letter explains the audit process and also concluded that there were no findings or material weaknesses that were found while performing the audit. MOTION: Mr. Glass made a motion to approve the September 30, 2017 audit representation letter as presented. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. Minutes 3-23-18.doc Page 1 of 4 9/30/2017 ACTUARIAL VALUATION REPORT GRS — Presented by Pete Strong Mr. Strong stated that he was here today to present the results of the September 30, 2017 Actuarial Valuation report. For the fiscal year ending September 30, 2019 the total City costs increase as a dollar amount, but the percentage of payroll slightly decreased. He explained that the employee payroll increased this year by 11% due to all the new hires and with the decrease in the Plan's assumed rate of return, it lead to the slight increase in dollar amount to the City. Mr. Strong noted that a lot of members exited the DROP during the fiscal year, which were large salaries and then they were replaced with lower salary employees. The State money also slightly decreased this year. The Plan lowered their assumed rate of return to 6.7% and still have 2 more years of lowering until they reach their goal of 6.5%. The cost impact of that change this year was $128,626. Also the Plan changed to level dollar change this year but that did not have a cost impact. Mr. Strong discussed the Plan's unfunded liability schedule and the amount of time it is amortized over. Currently the Plan's unfunded liabilities are set at 20 years but he would recommend lowering all the time periods to 15 years as it will save the City and the Plan money in the long run. This change would cost about $221,265, but it would also save $2.8M in payments over the long run. The Trustees had a lengthy discussion about lowering the Plan's unfunded liability amortization schedule to 15 years for all time bases. MOTION: Mr. Owens made a motion to reset the Plan's unfunded liability amortization schedule to 15 years for all time bases. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 5-0. Mr. Strong stated that the City's new payment for the next fiscal year now with the approved change above will be around $3.2M compared to the $2.9M previously reported. As of September 30, 2017 the Plan's funded ratio increased to 75.4% from 73.4% from the prior year. Mr. Strong noted that this Board is always ahead of the game in looking to save money and have a very strong Plan. The Plan had a net gain this year of $1M which offset the other changes that were already implemented. He discussed the State money that came in this year and the amount that will be split 50/50 between the City and the Share accounts is $148,973, as that is the additional money received in this year over the frozen amount. He commented that a COLA will not be paid out this year and discussed future payouts of this benefit because when they recognize all the negative experience then at that point a COLA could be funded. Overall Mr. Strong stated that this fund is doing very well and is very strong. In 24 years this Plan went from $2.4M to $68M and he stated that this pension board had a big role in that. MOTION: Mr. Glass made a motion to approve the Plan's September 30, 2017 Actuarial Valuation report as amended. SECOND: Mr. Seidensticker seconded the motion. CARRIED: The motion carried unanimously 5-0. The Trustees had a brief discussion on buyback calculations. Each member receives a 1 time free buyback calculation throughout their career. Currently there are a couple of members that have received their buyback numbers back from the Actuary and are now asking for other calculations to be completed in regards to breaking down Minutes 3-23-18.doc Page 2 of 4 their numbers by years, pay periods, or whatever the case may be. Ms. Ross stated that she needs direction from the Board as to whether these members need to pay the additional cost for the additional information, or if this is considered part of their first free buyback calculation. The Trustees had a lengthy discussion and stated that the members need to pay for any additional calculations they want over and beyond the initial calculation they are provided with from the Actuary. INVESTMENT MANAGER REPORT American Realty — Presented by Richelle Hayes Ms. Hayes welcomed herself back and stated that there have been no firm changes other than an office relocation from Glendale to LA. For the quarter the Plan is up 1.45% versus the index at 1.85% and for the one year they are up 6.88% versus 6.66%. The Plan's assets have increased to $8.7M and they discussed their peer ranking which has seems to be a little lower lately because they have been selling out of old buildings and buying newer ones. They currently have 68 properties in their portfolio with a 93.5% occupancy rate. Their leverage remains low at 19.5%. Overall this fund remains to do well. INVESTMENT CONSULTANT REPORT AndCo. Consulting — Presented by John McCann Mr. McCann reviewed the Plan's asset allocation and stated that he is recommending the Plan increase their real estate allocation to 10%. For the quarter ending December 30, 2017 they were up 4.21% and for the one year they are up 15.37%. He briefly reviewed the manager's performance and noted that all did well. Mr. McCann stated that he has the Plan's investment policy guideline with him today and if the Board approves it, then it would allow them to invest in up to 10% in real estate by taking some from the fixed income side. The Trustees had a lengthy discussion on the reallocation. MOTION: Mr. Seidensticker made a motion to approve the revised investment policy guidelines as presented increasing the real estate allocation to 10% by taking it from fixed income. SECOND: Mr. Owens seconded the motion. CARRIED: The motion carried unanimously 5-0. MOTION: Mr. Glass made a motion to set the Plan's assumed rate of return for this year, next year, and the long term thereafter to 6.7% per the recommendation of the Plan's consultant. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. ATTORNEY REPORT KKJ&L - Presented by Bonni Jensen Ms. Jensen stated that the IRS mileage rate increased effective January 1, 2018 to $0545. Ms. Jensen briefly reviewed the pending PTSD Bill which deals with workers comp. She stated that she will keep the Board updated on this as more information becomes available. Minutes 3-23-18.doc Page 3 of 4 Ms. Jensen presented the Board with a draft of the RFP she will be sending out regarding bookkeeping/CPA services for the Plan's financial statements. She will have the results back at the next meeting for the Board to review. ADMINISTRATOR REPORT N/A MINUTES MOTION: Mr. Seidensticker made a motion to approve the minutes from the December 7, 2017 regular meeting. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. DISBURSEMENTS APPROVALS MOTION: Mr. Glass made a motion to approve the disbursements. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. BENEFIT APPROVALS MOTION: Mr. Mull made a motion to approve the benefit approval list dated March 23, 2018 with the exception of Tiffany Glass's application for retirement. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 5-0. MOTION: Mr. Seidensticker made a motion to approve the application to for retirement for Tiffany Glass. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 4-0 (Mr. Glass did not vote, form on file). FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through January 2018. The board received and filed the financial statements through January 2018. OTHER BUSINESS MOTION: Mr. Mull made a motion to reappoint Mr. Spencer as the Fifth Trustee. SECOND: Mr. Owens seconded the motion. CARRIED: The motion carried unanimously 5-0. PUBLIC COMMENTS N/A Minutes 3-23-18.doc Page 4 of 4 AJOURN There being no further business, the Trustees officially adjourned the meeting at 11:20AM. The next meeting is scheduled for Monday June 11, 2018 at 9AM. Respectfully submitted, Brad Seidensticker, Secretary Minutes 3-23-18.doc Page 5 of 4