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HomeMy WebLinkAboutMinutes Fire Pension 020619CITY OF PALM BEACH GARDENS FIREFIGHTERS' PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES City Hall, Council Chambers 10500 North Military Trail Palm Beach Gardens, FL 33410 Wednesday, February 6, 2019, at 1:OOPM TRUSTEES PRESENT: Ed Morejon Rick Rhodes Jon Currier Marty Cohen Tom Murphy TRUSTEES ABSENT: None OTHERS PRESENT: Pedro Herrera, Sugarman & Susskind John Thinnes, AndCo Ferrell Jenne, Foster & Foster Michelle Rodriguez, Foster & Foster Braeleen Scott, Foster & Foster Allen Owens, City of Palm Beach Gardens James Jaconette (via phone), Robbins, Geller, Rudman & Dowd 1. Call to Order— Ed Morejon called the meeting to order at 1:01 pm. 2. Roll Call — As reflected above 3. Public Comments — None 4. Approval of Minutes The board approved the November 7 2018 quarterly meeting minutes as presented upon motion by Rick Rhodes and second by Tom Murphy motion carried 5-0 5. Reports a. AndCo Consulting, John Thinnes, Investment Consultant i. Quarterly report as of December 31, 2018 1. John Thinnes commented this last quarter was the worst quarter since the recession. However, the portfolio experienced a 4.4% gain in January. 2. John Thinnes reviewed a letter of thanks from AndCo's President, Mike Welker. The letter mentions a client survey project and John informed the board a third -party company may contact the board to participate in the survey. AndCo was looking forward to receiving this anonymous feedback to help them understand where they could better serve their clients. 3. John Thinnes reviewed the flattening of the Treasury Yield Curve and the process of raising funds when cash was needed for benefit payments. The board discussed how the process might affect the DROP distribution policy. 4. The market value of assets as of December 31, 2018, were $98,837,544. Quarterly total fund gross returns as of December 31, 2018 were -7.98%, slightly overperforming the benchmark of -8.01 %. The total fund trailing gross returns for the 1, 3, and 5 -year periods were -3.52°/x, 6.68% and 6.14% respectively. Since inception (5/1/98), total fund gross returns were 5.88%, slightly overperforming the benchmark of 5.66%. 5. John Thinnes reviewed the plan's self-directed DROP fund with ICMA. John commented he would bring a list of available funds for the board to review. b. Sugarman & Susskind, Pedro Herrera, Board Attorney i. Legislative Update 1. Pedro Herrera reviewed a bill that was introduced that would include certain types of cancers that firefighters could apply for benefits under Workers' Compensation. Pedro commented the bill would not be retroactive and contained exclusions. ii. Annual Report Update 1. Pedro Herrera reviewed the progress that was being made in negotiating the shortfall to the 175 Share Plan assets with City officials. The City agreed with using plan assets to make up for the shortfall in the Share Plan retroactive to the fiscal year ended September 30, 2015. Pedro commented this will increase the unfunded liability. The total amount of State Monies that would have come in was approximately $336,931.00. The actuary needs to determine individual share allocations based on that amount and then determined gains and losses for each individual. The actuary quoted an 8 to 10 -week turnaround time with the cost not to exceed $5,OOO.AIIen Owens commented that he was in agreement with Pedro Herrera's assessment of the situation. 2. The board discussed which quarterly returns the actuary should use for calculating the individual member balances. Pedro Herrera commented the actuary would use the returns of the most recent quarter. late individual 175 share plan balances with an 8 to turnaround time with the cost n Jon Currier, motion passed 5-0. Share Plan based on the m motion by Rick Rhode by Tom Murphy, motion passed 5-0. 3. Ed Morejon asked which categories the City includes when reporting salaries for the annual report. Allen Owens advised he was not comfortable including employer contributions of FICA, Medicare and pension contributions, and wanted to know if the board would require the City to go back and report retroactively the added categories. Pedro Herrera commented that there was no statutory definition, but the goal was to capture as much state money as possible for the plan. Pedro stated the state monies have a minimum distribution amount based upon the calendar year payroll that is reports. Pedro commented the discrepancies in the past few years was different because a class of employees was left out. Ed asked if it would be possible for the City to expand the reported payroll categories moving forward. Ferrell Jenne confirmed Foster & Foster should receive the payroll numbers directly from the City as outside sources may not be accurate. Ferrell explained when Foster & Foster is preparing the Annual Report, they will audit the calendar year payroll information from year to year. Foster & Foster will reach out to the City if the reported payroll figures have changed significantly from the prior year. Rick Rhodes commented that the board should assume what the City had reported was correct. The board agreed, effective with the 2019 Annual Report it was the board's intent to capture all applicable calendar year payroll figures for the State Annual Report upon motion by Rick Rhodes and second by Jon Currier, motion passed 5-0 2 4. Jon Currier asked Pedro Herrera to compose a letter to the membership updating them on the progress of the Share Plan reconciliation. Pedro agreed to compose the letter. The board directed the plan attorney to work with the administrator in composing and distributing a letter to the active members that contained an update on the progress of the 175 Share Plan reconciliation, upon motion by Tom Murphy and second by Jon Currier, motion passed 5-0. Note: Jon Currier left at 2:13pm iii. Century Link Litigation 1. The board participated in a conference call with representatives of Robbins, Geller, Rudman and Dowd, LLP. James Jaconette reviewed the memo from the law firm detailing the CenturyLink litigation. James stated the plan has suffered a loss of approximately $10,000. Robbins Geller was asking to represent the board in filing an objection to a settlement that was accepted in Federal Court by one of the smaller law firms. Pending the outcome of that filing, Robbins Geller would like to represent the board and file a complaint against CenturyLink. Pedro Herrera confirmed the engagement letter stipulates the board would incur no fees up front. The board agreed to engage the services of Robbins Geller Rudman and Dowd LLP as a class representative in the filing of an obiection to a settlement in the CenturyLink Inc securities litigation case, upon motion by Tom Murphy and second by Marty Cohen motion passed 4-0. iv. DROP Administrative Rules 1. The board discussed the current content of the DROP Administrative Rules, including the time period the administrator had to process a DROP distribution, the rules for monthly distributions, and an annual open enrollment period. Braeleen Scott commented it was more efficient for the actuary and administrator to administer plans with open enrollment periods. 2. Rick Rhodes made a motion to accept the DROP administrative rules as presented. Rick made an amendment to the motion to include the following changes: delete #5 from section D, change 60 days to 30 days in section 2e put a period after 30 days, and determine the annual enrollment period to be in the month of November, with a January 1 distribution date. Marty Cohen suggested Ferrell Jenne and Michelle Rodriguez review and revise the DROP Administrative Rules, since they have experience with them. The board approved the DROP Administrative Rules with the discussed revisions upon motion by Rick Rhodes and second by Tom Murphy, motion passed 3-1 with Marty Cohen opposed 3. Ed Morejon commented there were old invoices that were not paid by PRC. Ed directed Foster & Foster to pay the overdue invoices. Ferrell Jenne advised the board copies of the invoices were in the Summary of Payments. Tom Murphy asked if the board was charged any late fees and Ferrell confirmed they were not. 6. New Business a. Share Plan Reconciliation Proposal i. This item was discussed in the Annual Report Update. Toby Bivens, Joint Annuitant i. Pedro Herrera stated Toby Bivens was awarded a disability retirement in 2009 and named his mother as his joint annuitant. In 2013, he filed an updated beneficiary form listing his wife as the sole primary beneficiary. His 3 benefit was never recalculated based on a joint annuitant change. Toby passed away in December 2018, and the administrator was directed to pay out his benefit to the original joint annuitant, his mother. Michelle Rodriguez confirmed that Toby Bivens did not have a 175 Share Plan balance. Pedro advised the board there was no action for them to take at this time. Rick Rhodes and Tom Murphy advised the administrator that the two deceased member payments were switched on the fund activity sheet. c. Portal demonstration i. Braeleen Scott gave a live demonstration of the Foster & Foster portal. Braeleen reviewed the tools of the portal, including the ability for members to run benefit calculations using live payroll feeds. Braeleen ran a sample benefit calculation and explained the different information fields that are found on the calculations. ii. Ed Morejon asked about the accuracy of the calculations. Braeleen Scott commented the calculations would use the most recent payroll feed available and the plan provisions are coded by the actuaries. Braeleen advised the board that one of the security benefits of the portal was they do not store participant data on the portal, but on Foster & Foster's server. Braeleen stated there would be a $10,000 set up fee and a $10,000 annual fee, with a 3 -month implementation date. The board discussed the advantages of providing the portal to the members. The board approved the purchase of the portal as presented by Foster & Foster, upon motion by Marty Cohen and second by Tom Murphy motion passed 4-0 d. Election of Officers and Trustee Terms i. Rick Rhodes advised the administrator that the board annually elected officers the first meeting of the year. The board advised the administrator to verify the trustee terms and to put the election of officers on the next quarterly meeting agenda. e. Rick Rhodes advised the board he closed out the Center State bank account and transferred the balance of the account to Salem Trust. 7. Old Business a. Gary Bussey L Michelle Rodriguez informed the board that Gary Bussey's beneficiary, Tracey Bussey, took full distribution of his DROP account and his 175 Share Plan balance through 9/30/17. 8. Consent Agenda a. Payment ratification L Warrant #10, #11 b. Payment approval i. None c. Fund activity report for 11/01/2018-01/30/2019 d. Tom Murphy asked about the charge for calculating Share Plan Balances for individual members. L The board agreed by consensus to not provide Share Plan balances outside the annual balances already being provided by the actuary. The board further clarified once the calculator was available on the portal, the board would only pay for a final benefit calculation. The board voted to approve the consent agenda as presented upon motion by Rick Rhodes and second by Tom Murphy, motion carried 4-0 9. Staff Reports. Discussion and Action a. Foster & Foster, Ferrell Jenne and Michelle Rodriguez, Plan Administrators i. PRC Transition 4 1. Ferrell Jenne informed the board PRC had not turned over all the executed meeting minutes and the board expenses through 9/30/18. ii. Fiduciary Liability renewal 1. Ferrell Jenne advised the board that the current fiduciary liability policy will expire on March 10, 2019. Ferrell advised they will work on getting the policy renewed. iii. Upcoming educational opportunities 1. Ferrell Jenne reviewed the upcoming educational opportunities iv. FPPTA guest fee registration 1. Ferrell Jenne reviewed the new guest registration policy and the $100 fee. V. PRC December invoice 1. Ferrell Jenne informed the board they received an invoice from PRC for the month of December and did not pay it because she had an email from Scott Bauer stating PRC would not charge a plan administration retainer fee for December. Ed Morejon commented he did not feel that the board should pay any final invoices to PRC until all documents were turned over. Pedro Herrera commented he could have PRC sign off on a document affirming they had turned over all documents to the new plan administrator. 2. The board discussed the possibility of auditing the accounts held by PRC on behalf of the board. 10. Trustee Reports, Discussion, and Action - None 11. Adiournment — The meeting adjourned at 4:22pm 12. Next Meeting — April 3, 2019, at 1:00pm, special meeting Respectfully submitted by: App Michelle Rodriguez, Plan Ad ini trator n, Chairman Too o CU I r;iv - Date Approved by the Pension Board: 5/1/2019 5