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HomeMy WebLinkAboutMinutes Fire Pension 011310PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD January 13, 2010 A special meeting of the Board of Trustees was called to order at 9:00 A.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Tom Murphy (9:20 A.M.) Rick Rhodes Ed Morej on Donna Wisneski Roy 011iff (9:15 A.M.) OTHERS Margie Adcock, Administrator Ken Harrison, Attorney (via teleconference) Peter Bergel, Fire Chief Allan Owens, Finance Director DISCUSSION ON REQUEST BY THE UNION FOR AN ACTUARIAL STUDY It was noted that the Union made a request for an actuarial study on the impact of the fire services merging with Palm Beach County Fire Rescue. Mr. Morejon stated that he asked Chief Bergel to appear before the Board to discuss the current proposal. Chief Bergel appeared before the Board. He stated that the City was entertaining a proposal by Palm Beach County Fire Rescue (PBCFR) to provide fire services. He stated that the parties are proceeding in these discussions. He stated that he was advised that a study needed to be done in order to get a true cost proposal. He advised that the City has no problem with the study being done. However, the City is not willing to incur any cost for the study due to the fact that they are just entertaining a proposal from PBCFR. He stated that the City was approached to look at a merger and he thinks it is smart to look at the possibility of a merger. He noted that the City is scheduled to meet again in February with PBCFR with an outline of their proposal. Chief Bergel departed the meeting. Ken Harrison appeared via teleconference. Mr. Morejon stated that he called a special meeting today because he received a request from Mike Mayo, President of the Union, to have an impact study done on a potential merger of fire services with the County. Mr. Harrison stated that there was no problem with the request. He noted that the Florida Statutes have certain requirements if there is going to be a merger, such as the costs associated with a merger. He stated that this is an issue that has been discussed around the State in the past year and a half. He stated that if the City terminates the Plan there is a liability that flows to them because everyone becomes vested at the time of termination and the employer has to fund the present value of that going forward. He stated that it is reasonable to request that such a study be done. The only question he had was that the letter requested a poll be done by the Fund. He stated that he was not sure why such a poll would not be done by the Union. It would make more sense for the Union to do the poll. Mr. Harrison noted that in some instances 2 he has seen a fund authorize the actuary to do the study but with the union paying for the study. He stated that if there were serious consideration of such a merger, the study would need to be done anyway. Roy 011iff entered the meeting. There was discussion on Participant education related to the poll. Mr. Harrison stated that the Statute requires a vote. There was concern expressed that the Participants understand what they are voting on so that they can make an informed decision. It was noted that if the City were seriously considering this, then the Board would have the Actuary and Attorney discuss the issues with the Participants. The Board cannot mandate that Participants attend educational sessions, but such sessions can be made available. However, it was noted that there is no obligation to do anything prior to a vote. Tom Murphy entered the meeting. There was discussion that the study is dependent on the poll, so it should be as accurate as possible. Mr. Harrison stated that the study is nothing more than an estimate. A survey might help make it more accurate. The Board asked if it would be appropriate to provide some broad education before the poll. Mr. Harrison stated that it would be appropriate. Ken Harrison departed the meeting. Allan Owens appeared before the Board. He stated that about a year and a half ago the City engaged Bolton Partners to do an actuarial study. He stated that Bolton came back with recommendations of projections and assumptions of future costs based on different rates of return. He noted that the cost of the study was split with the City. There was a lengthy discussion. Mr. Rhodes stated that he was fine with providing some broad basic education. He thought the Union should do the polling as long as they are given the information needed for the poll in order to find out what the actuarial cost would be of a merger. He also felt that if the Union was requesting the study then the Union should pay 50% of the cost, especially since the Board required the City to pay 50% when the City requested a study. Mr. Morejon noted that there was interest on all sides. The City is interested, the Union is interested and the firefighters voted to move forward. Everyone feels it is worthwhile to get the cost of a merger from PBCFR, and the cost will depend, in part, on the pension part. Roy 011iff departed the meeting. There was further discussion on educating the Participants. A motion was made, seconded and carried 4 -0 to allow the Union to conduct a straw poll but that such poll be reviewed and authorized by Ed Morejon prior to the poll, with Participants being given an informational packet at least one week prior to the poll and be advised that it is just an informal straw poll. A motion was made, seconded and carried 4 -0 to authorize an actuarial study following the scope of the Union's letter requesting the study, not to 3 exceed $10,000 to be split with the Union, as long as the Union agrees beforehand that they will split the cost so the Fund cost would not exceed $5,000. OTHER BUSINESS Mr. Murphy discussed the DROP investments and stated that he thought that the Board needed to look at a self - directed plan to set up for DROP investments. There was a lengthy discussion. It was noted that the DROP Participants currently have a choice of keeping the money commingled with the Plan or in a stable value investment. Mr. Murphy stated that he thought the Participants should be given an option to take risk if they wanted to earn more if there was no cost to the Plan. Roy 011iff re- entered the meeting. The Board decided to have further discussion on the possibility of self - directed DROP investments at the next meeting when the Investment Monitor would be in attendance. There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary