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HomeMy WebLinkAboutMinutes Fire Pension 050218PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD MAY 2, 20x8 A meeting of the Board of Trustees was called to order at 1:06PM in the Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Ed Morejon, Chairman Jon Currier, Secretary Marty Cohen Tom Murphy PUBLIC COMMENTS NIA OTHERS Audrey Ross, Administrator John Thinnes, Investment Consultant Pedro Herrera, Attorney Eric Leventhal & Liedhe Carpio Auditors Doug Lozen, Actuary Sean O'Brien, City of PBG Finance Department MINUTES The Board reviewed the minutes of the regular meeting held on February 7, 2018. A motion was made by Marty Cohen to approve the minutes of the February 7, 2018 re alar meetinjz as amended. The motion was seconded by Jon Currier and carried 4-0. 9/30/2017 AUDITED FINANCIAL STATEMENTS: KSDT ERIC LEVENTHAL & LIEDHE CARPIOI Mr. Leventhal reported that an unmodified clean opinion was issued in regards to the September 30, 2017 audited financial statements. As of September 30, 2017 the Plan had $94,459,444 in assets compared to the beginning of the fiscal year at $81,344,787, which was a net gain of $13,114,657. He reviewed the breakdown of admin expenses and stated that the administrative fees increased this year due to prior fees being charged in this fiscal year for prior fiscal years as well as their firm taping over the DROP and Share accounting as well. The Trustees briefly discussed the policies and procedures that are in place to make sure the billing does not fall behind again. Mr. Morejon discussed the funding footnote regarding the Share accounts. He stated that the 2% of salary is reflected correctly, but there is a cap of 4.8% that should be added into this language as well. Mr. Leventhal stated that he will revise that section to add the cap. He noted this change will not impact the financial statements. In addition, the investment footnote language needs to be revised to reflect a 5% allocation (from 3%) to the Templeton fund. Mr. Leventhal again noted that this change will not have any impact on the financial statements.. Mr. Cohen discussed the footnote regarding the DROP and Share assets. He explained that these assets are included in the Plan's total assets, but his argument for the past couple of years is that the DROP and Share assets should not be included in the Plan's assets because those monies belong to and are reserved for individual members. The Trustees had a lengthy discussion on this because the argument is that the DROP and Share monies are considered Plan assets until they are withdrawn. Mr. Leventhal explained that for auditing and financial statement purposes, he is following the GASB rules and regulation and this is how they like it reported. Last year Mr. Leventhal 2 provided a side letter along with the financial statements explaining Mr. Cohen's concern regarding the DROP and Share assets. He can provide such letter again this year per the Board's request if that will satisfy Mr. Cohen's concern. Mr. Cohen concurred. A motion was made by Tom Murphy to approve the September 30, 2017 audited financial statements with the two non -material chan1jes as discussed. The motion was seconded by Jon Currier and carried 4-0. A motion was made by Tom Murphy to direct KSTD to draft the same side letter as last year retarding the DROP and Share assets per Mr. Cohen's recommendation. The motion was seconded by Jon Currier and carried 4-0. A motion was made by Tom Murphy to avorove the September 30 2017 audit representation letter as presented. The motion was seconded by ,Ion Currier and carried 4-0. 9/30/2017 ACTUARIAL VALUATION REPORT: FOSTER & FOSTER(DOUG LOZEN Mr. Lozen presented the September 30, 2017 actuarial valuation report and stated that the City had a slight shortfall this year of $26K. This is for informational purposes only for the Board as the City will need to make the contribution as soon as possible and prior to the Annual report being approved. Mr. O'Brien stated that the City will mare that contribution right away. The City mares their contribution based off the percentage of payroll at the beginning of the year so Mr. Lozen stated that he will help the City come up with a more accurate dollar amount next year so that a shortfall does not occur again, or at least a smaller amount. For the fiscal year ending September 30, 2019 the City is required to contribute 57.26% of payroll versus 52.24% last year. Mr. Lozen reviewed some of the Plan's changes such as the assumed rate of return decreased this year from 7.45% to 7.25% and the mortality table changed, which lead to an increase in payroll this year. The Board had a lengthy discussion on the State money, which seems to be decreasing each year. The Plan's funded ratio remains steady at 79.4% and Mr. Lozen stated that he thinks maybe next year the Board should consider doing an another assumption study. A motion was made by Marty Cohen to approve the September 30, 2017 Actuarial Valuation Report as present2d. The motion was seconded by Jon Currier and carried 4-0. INVESTMENT MONITOR REPORT: ANDCO CONSULTING JOHN THINNEST Mr. Thinnes briefly reviewed the S&P500 chart, which reflects historical and recent market pullbacks. Mr. Thinnes reviewed the May 31, 2018 ICMA DROP review. He noted that all the investments are doing well and he does not have any recommendations at this time. He reminded the Board that initially they were provided with a very large list of investments to choose from and they narrowed it down to the investments on the 457 list, but they can always go outside that list as well. Mr. Thinnes stated that he will bring back more information to the next meeting regarding the ICMA list after he speaks with their rep. Mr. Thinnes reviewed the April 30, 2018 flash performance report. For the quarter to date they were slightly negative at -0.1 %, but for the fiscal year they are still up 3.9%. He explained that there was a recent market pullback, but all managers are doing well despite that. Mr. Thinnes briefly reviewed the March 31, 2018 quarterly report. International, equities, and fixed income all ended the quarter negative. The Plan's assets fell slightly - under $1 OOM, but the Plan is still very strong and doing well despite the volatile market place recently. He reviewed the Plan's asset allocations and noted that they are still within their allowable ranges so he does not have any recommendations at this time for rebalancing. For the quarter the Plan was slightly down at -0.19% but for the fiscal'year they remain positive at 3.93%. He briefly reviewed each manager's performance and noted that all the domestic and international equity managers outperformed their relative indexes with the exception of RBC. Mr. Thinnes explained that they are still keeping their eye on the Templeton Global Bond fund, but it is not on his firm's watch list either. Overall the fund is doing very well and Mr. Thinnes stated that he will be bringing back more information to a future meeting regarding increasing the international allocation. ATTORNEY REPORT: SUGERMAN & SUSSKIND PEDRO HERRERA Mr. Herrera stated that he started drafting the Share account policy per the Board's request but he had some questions regarding some of the exact rules and regulations they wanted in there. The Board had a very lengthy discussion on the Share accourits, how they are calculated, how often, etc. The Board directed PRC to switch back to quarterly statements effective October 1, 2018. Mr. Herrera confirmed that this does not require an Ordinance change. Mr. Herrera stated that the Legislative session has ended and there were no Bills that passed that directly affected Defined Benefit Pians. There was a Bill that passed relating to worker's comp and adding in PTSD. ADMINISTRATIVE REPORT: RESOURCE CENTERS AUDREY ROSS DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. Ms. Ross stated that there is an error as a Police invoice was added to this warrant by mistake and will be removed. A motion was made by Tom Murphy to approve the disbursements as revised. The motion was seconded by, Jon Currier and carried 4-0. FINANCIAL STATEMENTS The Trustees reviewed the interim financial statement as of March 2018. The financial statements were received and filed as of March 2018. Ms. Ross presented the Board with the service provider review list and noted that per the Plan's direction, the Auditors information is provided today. The Trustees had a discussion on Fosters & Fosters' s services as well as their fees. A motion was made by Marty Cohen to retain Foster & Foster as the Actuary. The motion was seconded by Tom Murphy and carried 4-0. The Board reviewed the Auditor's contract as well and noted that the audit process this year was delayed and as their diligence the Board should review options. A motion was made by Jon Currier to issue an RFP for auditing services. The motion was seconded by Tom Murphy and carried 4-0. Ms. Ross stated in between meetings the Plan's Fiduciary Liability insurance was renewed and therefore needs to be ratified by the Board today. She explained that she worked with Mr. Morejon in between meetings to renew the coverage as the premium actually decreased this year by $2,834 for a new premium amount of $9,446 for the same coverage. A motion was made by Tom Murphy to ratify the 2018/2019 Fiduciary Liabilitv Insurance renewal. The motion was seconded by Jon Currier and carried 4-0. The Trustees tabled the Summary Plan Description until the next meeting. OLD BUSINESS Mr. Herrera stated that they are still waiting on the claims to be filed in regards to the Bancorp South case. Mr. Cohen discussed adding in an alternative investment option to the Share accounts, similar to the DROP account options. Currently the way the Plan is written, to add in another Share account investment option it would require an Ordinance change and it may also be a CBA issue. INfr. Currier stated that he will bring this up with the Union. NEW BUSINESS The Board briefly discussed increasing the COLA benefit. This benefit would need to be negotiated and would require a cost study as well. There being no further business, the meeting adjourned at 4:48PM Respectfully submitted, on �Cr,4 etar