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FMTF07-15-08 • BOARD OF TF;USTEES.. ~ Florida Municipal. Trust Fund F~etirement Plan and Trust for the Firefighters and Police Officers Longwood City Commission Chambers , 175 West Warren Avenue Longwood, F°lorida r: REGULAR.1VIlEETING . MINUTES July 15, 2008 7:00 p.m. Present: Marc McLarnon, Chair Robert Redditt, Vice Chair Matthew Jammes, Secretary . Jack Smythers, Member H. Lee. Dehner, Board Attorney , Linda F. Goff, Recording Secretary Absent Shane Smith, Member 1. Call to Order. Chair McLarnon called the meeting to order at 7:02 p.m. and was followed by the Pledge of Allegiance. ~ 2. Approval of Minutes • April 15, 2008 Regular Meeting April 16, 2008 Special Education. Meeting Member Smythers moved to approve the Minutes of April 15, 2008 Regular IVleeting as presented. Seconded by Vice Chair Redditt and carried by a unanimous roll call vote .with Member Smith absent. Vice Chair Redditt moved to approve the Minutes of April 1.6, 2008 Special .Education Meeting as pre<,>ented. Seconded by Secretary Jammes and carried by a unanimous voice vote with Member Sinith absent. 3. Review of Agenda Packet Material. A. Plan Account Statements. The Plan Account Statements for.February, March, April,. and May 200.8 were. reviewed. . Secretary Jammes questioned the ,Apri125th reimbursement for Unum Insuraiiee payment fo:r November,•, December,,and.January on the April Statement. He said he would like fo know.how many people are being covered under that policy. Chair McLarnon asked Secretary Jammes if he knew the specifies of the policy• Pension 7-15-08/1 Secretary Jammes~said'it was a life insurance policy that covers Members ~ at the Police and'Fire Dep"artments:"He stated lie would like to know how many personnel were covered under that policy. He said his question is whether it is for all Police and Fire or just for the League of Cities Plan Members. Chair McLarnon said the April Statement was a reimbursement so it appears the fund may be paying it, but it was being reimbursed so it was a cost neutral. Secretary Jammes inquired which account was it being paid out of, and how many individuals it covers. He said there were several Statements that show the payment of the Unum Life Irisurance and the April Statement shows the reimbw•sement. Also, was the money reimbursed with interest it would have earned? He stated this was one reason he had asked Mr. Shamoun for line by line accounting of payments and which funds they are coming from. B. Investment Performance Review. Chair McLarnon sad'in comparison with where the market is today, the funds are not that bad. Secretary Jarrimes said he would yield to people who have had more ' experience. - Chair McLarnon said with the fund being 40% iri cash, it is fairly well secured.. He stated because they were a Defined Plan, whether the fund does tremendously well or not is irrelevant because the pension is totally defined. He said the funds were fairly well diversified and there was only one that was significantly lagging.' ' - 4. Other Business. ~ ~ ~ ~ - A. Review of Operating Rules and Procedures. . Mr. Definer said the Operating Rules' and Procedures distributed incorporate items that have resulted from prior discussions and documents provided by~the City regarding timing in terms of Election Procedures. He stated there was one outstanding item with respect to Section 5.3, Processing of Payments. He said Mr. Shamoun indicated at the last ' meeting they have procedures;they follow. He sixggested Mr. Shamoun be coritaeted' and' provide the procedures the' League;of Cities follow so they can be incorporated in this document. - ' 5. Board Attorney Report. Mr. Definer said he had reviewed all of the documents in connection with the five year vesting. He stated there was often times confusion about the distinction Pension 7-15-08/2 between years. of service required for ve:~ting purposes and' years of service required for eligibility for retirement ber.~efit purposes. He•said in this Plan the eligibility for normal retirement. was, upon the attainment of age 50 with ten years of service or 25 years of service, irrespective of age. He stated this was to be distinguished from the vesting, requreme>nt which; is five years. He said the 50 with ten years or the 25 years aiid out,. was what one has to attain to immediately • .retire and receive a benefit, The signific~uice of the reduction of the five years for vesting purposes is if someone terminates service, and if they have fi e or more .years they .are .eligible to draw a benefit in the future :at their, normal retirement date. However, when the Plan was amended to reduce vesting to five years, it provided that the member,could begin to draw at the otherwise normal retirement date;. but it is based on actual years of service. He advised they currently have a situation where they could have someone terminate after: five years, and.they would,have a vested interest in the Plan; but there is no provision in the Plan to state when they can start to draw the benefit. •He said this was probably an oversight and was something that could be remedied. He stated the Plan: will need to be amended. He recommended to ask Mr. Shamoun have the actuary do cost estimates on different amendments to the: Plan which would identify. a date when a vested person that has less. than ten years, but. more than five years would be able to start. to draw benefits.. , , Secretary Janunes said he brought the previous,minutesfiom January 15th where they discussed this matter. He stated Ms. Rogers had referred to this as . "housekeeping changes." He said this was an oversight. on the City's part when they made this change and the fund. shou d not have to pay for the actuarial review. He inquired if the Board could determine what fund that expense would be paid from. Mr. Dehner responded in the affirmative. Chair McLanion said this was certainly an item for discussion with the City. He stated the actuary should have been involved when this item was amended. He declared they need to determine who would have been responsible at that point in time. He suggested turning this over to 1V[r. Shamoun to get this matter corrected. Mr. Dehner advised the Ordinance needs to be amended to provide a date when a vested, terminated person with less than i:en ,years can-start to -draw :a benefit. .Secretary Jammes, said the paperwork the: City has been providing states. vested at five years. He said there was one officer that left after five years under the advisement that when she turns 50, she will be able to withdraw her retirement. He inquired who would be responsible for taking, care of this matter. with Mr. Shamoun. Chair McLarnon said he will., contact Mr; Shamoun and coordinate getting this matter moving. He inquired if the vesting; was a graduated scale or 100% at five years:. Pension 7-15-08/3 Mr. Dehner sad`the vesting was 1°00% at •five'years. ~1VIr~Dehrier saidall of the ~ documents, the Ordinance, Adoption Agreement, and Summary Plan Description need to reflect when the person cari begin to draw°. • • ' Mr. Dehner said the Florida League of Cities prepared all the Plan documents up • : to this time, and it was part of their contract. He suggested they check with Mr. • Shamoun to see 'if they were working' on amendments to' the •Plan with compliance with the Federal 'Pension Profection Act: He stated their •Office was in the process of doing this`in conjunction with the Internal Revenue Service for other plans. Once that is done then the Board should discuss•whether or riot they want to file • • with'the Internal Revenue Service for a Favorable Determination Letter. He ` advised that public plans were•not required to have a Favorable Determination .Letter. However, this should be discussed. He said the potential benefit of the Favorable Determination Letter was, sfiould they be notified of an audit and they show•this letter that will probably ~be the end of it. He advised with the Favorable 'Deterrriination Letterwas a process where'the InternalReveriue Service reviewed the Plan and gives their stamp of approval. He stated they would not want to do this' letter until all compliance amendments are made. He reported on the State Legislation and said House Bill 171-and the Companion. Senate Bill once again didn't make it to the floor before adjournment. They are working on a-similar Bill for pre-filing this year and he will keep the Board posted on these Legislations. He reported one Bill did pass that "will impact plans. If is an amendment to Section 112.3173• of the Florida Statutes which provides for forfeiture of pension benefits if certain specified offenses are committed. 6. Member Comments. ~ ~ ~ ~ ' Chair McLarnon asked Secretary Jammes if he had an opportunity to check the numbers being reported by the City to the Pension Board and whether they included overtime. Secretary Jammes 'said he had not had an opportunity •to look into this, but he will work on this matter for this• quarter.: Chair McLarnon said they had held multiple discussions on DROP and PLOP benefits. He stated he would like to• move forward with verbiage for- vesting and •get this one item handled, then move on to optional items. ` ' . Secretary Jammes said each day they wait on military buybacks and prior service was taking money out of the pockets of the officers--and firefighters. He stated he • -would like the Board to keep ~in mind that each year they wait; it wily cost the Plan Member more money"to~purchase that time. ~ • Chair McLarnon said they have discussed DROPS and PLOPS. He inquired, based on the difference they have~learned, which they would prefer. ' . ~ Secretary Jammes suggested, since they are cost neutral to the City, why not offer both and let the Plan Members choose. Pension 7-1'S-08/4 Mr. Definer advised if the Board arrives to the point of directing. language, there are several decisions that would need to be made. They would need to determine what percentages to offer for a PLOP. If they do both the DROP and PLOP, do they desire to allow the two to be used together. He said they would need to discuss specifics. He stated buybacks were another issue and he reviewed specifics that would need to be discussed and determined. Secretary Jamrnes inquired, since they have already had information provided, if there was any way the Board could say to go ahead and adopt the military buyback and have the rates based on the date of adoption. Mr. Definer explained the calculation would be based on the established date from when the application is filed.. He advised, once the Board has provided preliminary direction to him, he would provide a draft to the Board and it would then go in Ordinance form for adoption by the City. Mr. Definer said he would provide the ;Board information on buybacks, PLOP, and DROP provisions. Secretary Jamrnes said he would like to Have a motion for a Special Meeting next inontli so they can review military buyback and get these items drafted. Chair McLarnon suggested they wait and get the information from Mr. Delmer so they have the opportunity to review the nnaterials. If needed, they will coordinate through the Recording Secretary for a Special Meeting. Otherwise, the next Regular Meeting is in October. 7. Public Participation. None. Mr. Definer reminded the Board Members the Financial Disclosures were to be filed by July 1St. He said it was his understanding Shaale Smith may be resigning from the Board, so in addition to having :filed the Financial Disclosure he will also need to file the Final Disclosure within 60 days of stepping down. The new Trustee will need to file a Form 1 within 30 days of appointment. 8. Adjournment. Chair McLa.rnon adjourned the meeting at 7:53 p~m. r f f Marc c a~nan~- air ATTEST: Linda F. Goff, Recordm Secretary Pension 7-15•~OS/5