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HomeMy WebLinkAboutMinutes Fire Pension 011413PALM BEACH GARDENS FIREFIGHTERS’ PENSION FUND MINUTES OF MEETING HELD January 14, 2013 A meeting of the Board of Trustees was called to order at 10:02 AM. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES OTHERS Rick Rhodes, Chair Audrey Ross, Administrator Tom Murphy, Secretary Pedro Herrera, Attorney (arrived 10:13AM) Donna Wisneski Troy Brown, Investment Consultant Mark Joyce PUBLIC COMMENTS N/A MINUTES The Board reviewed the minutes of the regular meeting held on November 5, 2012. A motion was made by Donna Wisneski to approve the minutes of the November 5, 2012 regular meeting as amended. The motion was seconded by Tom Murphy and carried 4-0. INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (TROY BROWN) Mr. Brown reviewed the funds performance and allocation as of December 31, 2012. The preliminary return for quarter is 1.20% versus .82%. He reviewed each manager performance during the quarter and noted that all performed well with the exception of ICC Capital. ICC is a very volatile manager and 20% of the total portfolio is allocated to them. Mr. Brown reported that the Plan just received an overdraft notice from Regions Bank so they took the cash that ICC had available to cover it. Going forward Mr. Brown stated that if the board decided to open an index fund account to manage the cash flow, then this type of situation would probably not occur again. He reviewed the reasons as to why an index fund would be beneficial to add into the portfolio. It is getting harder to add value in the equity space, so by indexing a part of the portfolio it would also lower some of the plans volatility and risk. Also with active management you have your periods of ups and downs, but with the index fund it will always be inline with the market. The Trustees discussed the index fund and the purposes it serves. They stated that they would like to wait until the next meeting when all the Trustees are present to make a decision. The Trustees had a lengthy discussion on the recent overdraft that took place. Mr. Brown stated that the overdraft was due to the timing of the City’s contributions being deposited and all the payments going out. Also with the holiday on January 1, 2013 and the banks being closed, it delayed the posting of the City’s deposit as well. Mr. Brown commented that he will get with Ms. Ross to see if we need to increase the amount of money that is being held in the plans receipt and disbursement account (which is used for all benefit payments and plan expenses). He commented that he will follow up with a recommendation regarding this at the next meeting. 2 Mr. Brown updated the board on ICC’s transition with Munder, which is no longer going to happen for unknown reasons as this time. Mr. Brown also stated that he does not have any recommendation regarding ICC at this meeting, although he may in the future. It is too early in the month to know their January performance numbers, but their long term track record does reflect that they have added value to the return of the Plan over the long term, but it has not been a straight upward move. Lastly Mr. Brown noted that Dana Advisors underperformed for the quarter ending December 31, 2012 as well, but he has not spoken to anyone over at Dana yet because it is too early in the month. ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA) Mr. Herrera explained that the 1streading of the pension Ordinance was scheduled for the second week in January 2013 and the City had asked him to be present for the reading, in which the Chair did approved. A couple of days after the invite, Mr. Herrera stated that he was told the Ordinance was going to be taken off the City Council agenda because it was still being reviewed by their legal department. He commented that he has not received an update from the City since he was notified the Ordinance reading was canceled, but with the board’s permission he stated that he would like to attend the 1st reading for whenever it is rescheduled. The Board of Trustees authorized Mr. Herrera to attend the City Council meeting for reading of the 1st pension Ordinance, when scheduled. Mr. Herrera updated the board on the IRS determination letter status. He explained that they did recently receive communication back from the IRS stating that they are requiring additional information in order to proceed. Mr. Herrera’s office is in the process of gathering all the information and submitting it back to the IRS. He noted that the IRS has already indicated that there will be no fines implemented on the Plan because they did receive the Plan’s original information by the deadline. Mr. Herrera commented that he will update the board as more information becomes available. Mr. Herrera explained that Foster & Foster has received their first calculation as new Actuary and first calculation under the new Plan provision as well. Foster & Foster had some questions on how the additional lump sum payment (of accrued sick and vacation time as of September 13, 2012) should be calculated into the member’s final average salary. Foster gave two different scenarios of how a benefit could be calculated under the new plan provisions; either look at the base compensation alone and pick the five highest years of earnings and then add in the lump sum sick/vacation after OR first add the lump sum (sick/vacation) in at the Member’s termination date, and then choose the five highest years of earnings. The Trustees had a lengthy discussion on the different ways to calculate in the lump sum payment. They stated that it is not more beneficial to a member to calculate it one way or another, but the board just needs to be consistent on how they will be calculating benefits going forward. The Trustees agreed that they will continue with the same practice as the have in the past and will add in the lump sum at the end, after the members 5 years of FAS is already found. A motion was made by Donna Wisneski to approve the method of calculating in the lump sum of sick and vacation time at the end of a benefit calculation, after the 5 year FAS has already been calculated. The motion was seconded by Tom Murphy and carried 4-0. 3 ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS) DISBURSEMENTS The Board reviewed the disbursements presented for approval by the Administrator. Ms. Wisneski had a question relating to the Attorneys invoice. She noted that the Plan was charged twice for review of September 30, 2012 audit engagement letter. Mr. Herrera explained that he did review the audit engagement letter twice. The Auditor had sent him the original engagement letter, in which Mr. Herrera reviewed and made some revisions. After the Auditor revised the letter he sent it back to Mr. Herrera to review again for final approval. A motion was made by Mark Joyce to approve the disbursements that were presented by the Administrator. The motion was seconded by Tom Murphy and carried 4-0. OLD BUSINESS Ms. Ross presented that board with the revised 2013 meeting dates. Ms. Ross followed up on the Trustee term expirations for Ms. Winseski and Mr. Murphy. She noted that she did confirm with the City that they do have on file the correct Trustee term dates for both (9/30/2015). Ms. Ross stated that as a follow up from last meeting she received a quote from her office regarding the DROP accounting as well as the quote from the Foster & Foster contract. She stated that PRC will update the DROP accounts on a quarterly basis, along with online access to members on a daily basis for a flat monthly fee of $500. Foster & Foster has stated in their contract that they will charge $75 per statement per quarter. The Trustees discussed and stated that it would make sense for the Actuary to do the DROP accounting since they are doing the Share accounting as well. A motion was made by Donna Wisneski to authorize Foster & Foster to perform the DROP accounting on a quarterly basis per their contact agreement effective January 1, 2013. The motion was seconded by Tom Murphy and carried 4-0. Mr. Murphy discussed the pending Ordinance that will be going up for 1st reading soon. He explained that part of this Ordinance (if passed) will allow the Plan to implement a self directed DROP account option in addition to the current options. This will be a great option that will be available to the members and is also cost neutral to the Plan. With that said he stated that the board should consider allowing the members to continue to keep their money in the DROP plan after they separate service. Mr. Murphy explained that now would be a great time to amend the pending Ordinance to add this language in. The Trustees discussed this idea and shared their thoughts. Mr. Herrera commented that the board would need to set the rules and regulations around this which would take more time to gather information. The Trustees asked Mr. Murphy to bring back more information regarding this and they tabled this item. A motion was made by Tom Murphy to authorize Mr. Herrera to amended the current Ordinance to allow participants to keep their monies in the DROP account after separation of service until required to take distributions under the IRS rule . 4 The motion was seconded by Mark Joyce and was tabled until more information is available. Mr. Murphy had a question regarding the buybacks and the recent pension changes. He explained that members can not buyback time to increase their retirement eligibility date, but they can buyback time to increase the dollar amount of their pension benefit. With that said the new changes now cap a member’s final average salary at 75%, so if a member previously bought back time under the old contract they might not get use of their buyback benefit now (depending on when the member bought back time and when their normal retirement eligibility date is). The Trustees had a lengthy discussion regarding this situation and if there are any members currently in this position and if they would be affected. Mr. Herrera commented that he would have to do some research regarding this and will bring back more information to the board at their next meeting. Ms. Ross presented the board with the draft copy of the September 30, 2012 audited Financial Statements. She noted that the Auditor will be attending the February 6, 2013 meeting to present them to the board. Ms. Wisneski commented that she read through the entire report and she was please to announce that she was very satisfied with the end result and that she had no other comments or revisions. Mr. Rhodes commented that we will have to table the selection of the Chair and Secretary till the next meeting when all the Trustees are present. He also noted that according to the Plans Board Officer election policy, we have to post the selection of the Chair and Secretary 30 days prior too the meeting. The Trustees discussed this clause and decided that it was not necessary to do this since no outside members can vote on the Chair or Secretary anyways; they are voted in by the Trustees. Mr. Herrera agreed and stated that he can just remove that section of the policy altogether. A motion was made by Tom Murphy to authorize Mr. Herrera to amend the Board of Trustees Election Policy to remove the language that states that the selection of the Chair and Secretary has to be posted 30 days prior. The motion was seconded by Mark Joyce and carried 4-0. A motion was made by Mark Joyce to approve and adopt the revised Board of Trustees Election Policy as stated above. The motion was seconded by Tom Murphy and carried 4-0. Ms. Ross reported to the Board the Summary Plan Description that was drafted in 2010 was never approved due to the pending Ordinance changes at that time. Now that most of the big Ordinance changes have past the Trustees can now decide if they want to update the SPD, or wait a little longer until the current pending Ordinance is passed. The Trustees discussed and noted that most of the changes in the upcoming Ordinance will not be included in the SPD anyways, so to go ahead and have Foster & Foster proceed with updating the SPD. Ms. Wisneski asked Ms. Ross if she could send out the minutes a week after the meeting so that the Trustees can stay up to date. Ms. Ross noted that two weeks after the meeting would be more practical on her end due to meeting date cycles. The Trustees concurred. 5 Lastly Mr. Joyce noted that he will post a copy of the meeting agenda at all the Fire Stations going forward. There being no further business, the meeting adjourned at 12:09PM. Respectfully submitted, Tom Murphy, Secretary