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HomeMy WebLinkAboutMinutes Fire Pension 042623CITY 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, April 26, 2023, at 1:OOPM TRUSTEES PRESENT: Rick Rhodes Eric Bruns Jon Currier Mike Zingaro TRUSTEES ABSENT: Thomas Topor OTHERS PRESENT: Siera Feketa, Foster & Foster John Thinnes, AndCo Consulting Pedro Herrera, Sugarman and Susskind 1. Call to Order — Rick Rhodes called the meeting to order at 1:05PM. Rick commented they were going to move things on the agenda as the firefighters may have to leave as they were on shift. 2. Roll Call — As reflected above. Consent Agenda a. Payment ratification i. Warrants #59, #60 b. Payment approval i. None C. Fund activity report for January 19, 2023 — April 19, 2023 The Board approved the Consent Agenda as presented upon motion by Jon Currier and second by Mike Zingaro; motion carried 3 0 4. Reports a. Mauldin & Jenkins, Alison Wester, Board Auditor i. September 30, 2022 audit report 1. Siera Feketa commented the auditor would not be presenting the audit as it was not yet complete and she had a meeting conflict. Siera requested the Board approve the release of the draft audit to the city. Rick Rhodes commented it would still be presented to the Board at the next meeting. 2. Mike Zingaro asked if there would be any reason to not release the audit to the city. Pedro Herrera reviewed commenting no, they would send the draft and the final to the city. The Board voted to release draft audit to City and come back to the Board fora roval at the next meeting, upon motion by Jon Currier and second by Mike Zinaaro motion carried 3 0 5. Public Comments — None. 6. Approval of Minutes a. January 25, 2023, quarterly meeting The Board approved the January 25 2023 quarterly meeting minutes with revisions upon motion by Mike Zingaro and second by Jon Currier motion carried 3 0 7. New Business a. Distribution of share plan balances to beneficiaries i. Siera Feketa commented Julie Wolnewitz was entitled to Brian Wolnewitz's share plan balance and wanted to confirm if she could leave these funds in the plan like any other participant. Siera commented she reached out to Pedro Herrera and he believes based on the plain language of the plan she would need to take those funds out of the plan, but suggested she add it to the agenda. Pedro briefly reviewed the language in the Ordinance. Pedro commented in his reading of the Ordinance it appears beneficiaries should take the funds from the plan but he wanted to discuss it with the Board. Rick Rhodes asked if it was a tax issue to leave the money in the fund. Pedro commented he doesn't think it would have any tax implications for the plan, but not sure about the tax implications for the beneficiary. Rick asked if it was an issue because she was earning interest on those funds and he does not want it to compromise anything for the plan. ii. Jon Currier asked if she could rollover the funds. Pedro Herrera commented she could. Jon commented so it would still be qualified funds. Pedro Commented that was correct, but since she was the beneficiary and would be earning interest, he does not know if there was a tax issue. The Board discussed the language in the Ordinance with Pedro. Pedro commented they do not like to keep beneficiary's funds in the plan generally speaking. iii. Mike Zingaro asked if she has reached out for the funds. Siera Feketa commented she did not, but they had it on their radar to distribute and before they made the distribution she wanted to confirm if it was necessary. iv. Pedro Herrera further discussed the language commenting it just says it shall be paid, but does not specifically require it. Pedro commented no matter the decision they should memorialize somehow in the Ordinance. Siera Feketa commented or they could put language in the policy to memorialize the decision. v. The Board discussed and agreed to pay out the funds and not allow beneficiaries to keep share plan monies in the plan. Pedro Herrera commented he would update the share plan policy to memorialize the Board's decision. 8. Old Business — None. Note: Eric Bruns arrived at 1:20PM. Reports (continued) a. AndCo Consulting, John Thinnes, Investment Consultant i. Quarterly report through March 31, 2023 1. John Thinnes gave a brief update on the market environment for the quarter. 2. John Thinnes discussed his outlook on the market. 3. John Thinnes reviewed the schedule of investable assets. 4. John Thinnes reviewed the asset allocation. John gave an update on Mavik commenting the capital was called today so they would be reflected in the next report. 5. The preliminary Market Value of Assets as of March 31, 2023 was $135,654,757. 6. The total fund preliminary gross returns for the quarter were 4.54%, slightly underperforming the benchmark of 4.99%. The total fund trailing gross returns for the 1, 3, 5, 7, and 10-year periods were -5.31 %, 10.37%, 6.05%, 7.60% and 7.83% respectively. Since inception (May 1, 1998), total fund gross returns were 6.25%, on target with the benchmark of 6.25%. 7. John Thinnes discussed the performance of the managers. 8. Rick Rhodes asked about the compliance checklist. John Thinnes gave a run through of the checklist and the performance of the plan. John commented when he finalizes the report he would make sure the checklist was in there and send it to Siera Feketa and the Board. Sugarman and Susskind, Pedro Herrera, Board Attorney i. Secure Act 2.0 Special Report 1. Pedro Herrera briefly reviewed the Secure 2.0 Act and the changes to the Required Minimum Distribution (RMD) age. Pedro commented they would need to update the Ordinance to change it to the new RMD age even though it would not have much of an impact as they usually take their funds before that age. Pedro commented from an actuarial perspective there would be no impact. 2 2. Pedro Herrera commented it also changed to the provisions for the pre -payment penalty. Pedro commented if you were under age 50.5 for public safety you get a 10% penalty for early distributions. Pedro commented another exemption was added so there was no penalty if you have 25 years of service regardless of age. Jon Currier asked if this was in effect now. Pedro commented it was. Jon and Mike Zingaro commented they were getting several questions. Pedro and the Board discussed the questions they were getting from the members. 3. Pedro Herrera commented there was another change that allows retirees to get a tax deduction for health insurance premiums that used to require that the payment would have to come from the pension fund. Pedro commented they could now get that deduction without the payment being deducted directly from the pension fund. 4. Mike Zingaro asked if it was done annually or biannually that they come and do a workshop for the members. Jon Currier commented it was done randomly and was just done last year. 5. Pedro Herrera commented some plans have a provision where they convert a benefit from disability to normal automatically once they meet normal retirement. Pedro commented generally the disability benefits were tax exempt. Pedro commented what was happening was when they were being converted they were losing the favorable tax treatment when it converted to a normal retirement even though they were still retired. Pedro commented this Secure Act addresses that so that it was still treated as a disability despite the plan converting it to a normal benefit. 6. Pedro Herrera briefly discussed the changes that apply to the defined contribution plans. 7. Mike Zingaro asked to send out the Special Report to the membership. Jon Currier asked who wrote it. Pedro Herrera commented his office wrote it. Mike commented he wants to highlight the three main items discussed before distributing. 8. Rick Rhodes discussed the firefighter cancer act. Rick Rhodes commented they could be eligible for it up to 10 years, but they have to stay on the city insurance. 9. Mike Zingaro commented he thinks most of their members stay on the city plan. Legislative update 1. Pedro Herrera commented the session was coming to an end. Pedro discussed House Bill 3 commenting they anticipate this would pass. Pedro discussed house Bill 3 commenting it states fiduciaries could only consider "pecuniary" factors. Pedro discussed what that means commenting it basically means just looking at the data and excludes looking at things like Economic, Social, and Governance ("ESG") and corporate governance. Pedro discussed the bill further. Pedro reviewed an example with another plan that have given considerations to things like clean energy which would not be prohibited. Pedro commented they have had several discussions with consultants on this so far and how they would handle this. Pedro commented they may amend the Investment Policy Statement (IPS) and reviewed the other discussions they have had on steps they could take to make it clear that they were trying to follow the law as best as they could. Pedro commented they were preparing a final report and would send that to them in the next month or two. Pedro commented they were not exactly sure how to deal with this yet, but practically speaking he does think they would need to take some steps moving forward. Mike Zingaro asked if they could still invest in these products as long as it was not for those reasons. Pedro commented they could but they have to be clear that they did not invest for the reasons excluded. 10. Staff Reports, Discussion and Action a. Foster & Foster, Siera Feketa, Plan Administrator i. Financial disclosure forms 1. Siera Feketa reviewed the requirement to file their financial disclosure forms. 2. Pedro Herrera commented there was another Bill that passed where elected officials need to provide more information on their financial disclosure form commenting he wants to confirm it just applies to elected officials. b. Discussion of disability affidavits i. Siera Feketa reviewed the disability affidavits commenting the Ordinance states they may be sent periodically. Siera commented they would bill hourly to send these out. Siera asked the Board if they wanted these sent out and if so, how often or if they wanted to discuss annually, and if they should be sent to all retirees or just those that have not met normal retirement. Siera reviewed the three retirees under normal retirement age and their most recent disability retiree. ii. The Board discussed the disability retirees commenting they do not think it was necessary this year. The Board discussed setting a policy where it was done every five years unless they think it needs to be done earlier for specific situations. iii. Jon Currier asked if the benefit was different if it was normal versus disability. Pedro Herrera briefly discussed commenting he thinks it was best to send all disability retirees anyway if they were going to do it. iv. Siera Feketa, Pedro Herrera, and the Board discussed the disability affidavits, the benefits of sending it out, and the process if someone has recovered. v. The Board further discussed setting a policy that was sent every five years to all disability retirees. vi. Mike Zingaro suggested bringing it up annually as an agenda item and send it to everyone who retired five years ago and everyone who had not completed one in the last five years. Siera Feketa commented she could bring it up annually and let them know the demographics each year for them to decide. The Board agreed with that method and agreed it did not need to be sent out this year. c. Upcoming educational opportunities i. FPPTA 39t" Annual Conference, June 25, 2023 through June 28, 2023, Orlando, FL. d. Siera Feketa commented the plan received a supplemental State Monies distribution on October 13, 2022 in the amount of $13,012.68. e. Siera Feketa asked Pedro Herrera to update the Board on vendors being able to attend the meetings by phone. Pedro commented the position of the city was that they would not allow remote participation and they would look at it on a case by case basis. Pedro commented it was only allowed if the voice was audible for the recording. Pedro commented they do not want to allow for remote participation for the meetings. Rick Rhodes asked how you get an exemption on a case by case basis. Pedro commented he thinks they would need to reach out to the City Attorney/City Clerk, but they did not get that specific. The Board discussed it being difficult if someone needs to make that request if there was an emergency that comes up. Rick asked if there was a policy on that or was just someone saying they do not like it. Pedro commented there was a preference for the City Council, but that does not necessarily extend to the Board. The Board briefly discussed the city extending the rules that apply to the City Council to the pension board. 11. Trustee's Reports Discussion and Action — None. 12. Adiournment — The meeting was adjourned at 2:13PM. 13. Next Meeting — July 26, 2023, at 1:OOPM, quarterly meeting. Respectfully submitted by: Appro JSiaeketa, Plan Administrator Jurrier, Secretary Date Approved by the Pension Board: 0