Loading...
FMTF01-15-08 BOARD OF T]L2USTEES Florida 1Vlunicipal Trust Fund :Retirement Plan and Trust for the Firefighters and Police Officers Longwood City Commission Chambers 175 West Warren Avenue Longwood, Florida REGULAR METING MINUTES January 15, 2008 7:00 p.m. Present: Marc McLarnon, Chair Robert Redditt, Vice Chair Chris Kempf, Member Robert Redditt, Member Jack Smythers, Member H. Lee Delmer, Board Attorney Carol Rogers, Financial Services Director Linda F. Goff; Recording Secretary Absent: Matthew Jammes, Secretary L Call to Order. Chair Smythers called the meeting to order at 7:05 p.m. 2. Approval of Minutes -November 20,. 2007 Regular Meeting. Member McLarnon moved to approve the minutes as submitted. Seconded by Member Redditt and carried by a unanimous voice vote with Secretary Jammes absent. 3. Election of Officers. A. Chair. Chair Smythers opened the floor for nominations of Chair. Chair Smythers nominated Member :McLarnon. Nomination carried by a unanimous voice vote with Secretary Jammes absent. B. Vice Chair. Chair McLarnon opened the floor for nominations of Vice Chair. Chair McLarnon nominated Member Redditt. Nomination carried by a unanimous voice vote with Secretary Jammes absent. C. Secretary. Chair McLarnon opened the floor for nominations of Secretary. Pension 1-IS :?008/1 Chair McLarnon nominated Secretary Jammes. Nomination carried by a unanimous voice vote with Secretary Jammes absent. 4. Review of Agenda Packet 1Vlaterial. A. Plan Account Statements. The Plan Account Statement for October 2007 was reviewed. 5. ®ther Business A. Review of Rules and Procedures. Member Smythers inquired if this document was what was on file by other plans in Tallahassee. Mr. Delmer advised this document, unlike the Ordinances that must be adopted by the City, was the Board's document. He said the Board would adopt this document and it would be .amended from time to time. He stated it carulot be in conflict with any Ordinance provision. He said he would make it compliant with. the Ordinance that was provided by the City Clerk. It is the Board's document and is not filed with Tallahassee. Member Smythers inquired if this was what was supposedly in effect at this point. Mr. Delmer responded in the negative. This would be newly adopted by the Board. He said. the Board did not have a document as comprehensive as this text at this time. Chair McLarnon referenced Section ].0.12, Investment Reports to the City, as it pertains to the Board's responsibiliiy to prepare annual financial year end reports for the submission to the City.. He asked for clarification and said it • was his understanding it was not the Board that prepared these documents. Mr. Delmer advised they were prepared by the consultants retained by the Board and it was the Board's responsibility to see they are filed with the City. He said it was a statutory requirement that they are filed at least once a year. Ms. Rogers said she receives the annual statement once it is completed. She stated she had already responded to their auditor's requested conf rmation. She said we receive an annual report from them and the Board is also presented with the State report for review. In addition, the City's auditors report on this as a fiduciary fund in the annual statement. Member Smythers said the document mentions that each Trustee should ~ attend an educational program once per term. Mr. Delmer said this was referring to Section 1.9, Education Requirements. Pension 1-15=2008/2 He stated this rule reflects two things. The minimum statutory requirement is that the Trustee attends at least once a term, an educational conference. I-Ie said this could be something that is sponsored statewide. A lot of times Trustees cannot make these conferences so they could do something in-house to satisfy the requirement. He reiterated this was a statutory requirement, at least once a term in two areas, investment and legal related topics. The Rules further suggest the Board encourage more frequent attendance of conferences and for a new Trustee to try to attend within the first six (6) months. Chair McLarnon inquired where they would get a list of the available conferences. Mr. Definer advised that the Division of Retirement sponsors two conferences a year. One is in March that they sponsor in conjunction with Florida State University. The Division sponsors another conference each year that is typically in late September or Octobc;r. The Florida Public Pension Trustees Association (FPPTA) is anot-for-profit educational organization that sponsors three conferences a year, typically in January, June, and September or October. He said there was no fee to attend the September/October Division of Retirement Conference. There is a nominal fee for their conference in March. He said the FPPTA requires joining the organization, so there was a membership fee and a fee associated with attending the conference. Ms. Rogers said the City would advance the funds and the travel arrangements and she would then bill the League to be reimbursed. Chair McLarnon said it sounded as if'these conferences consumed eight (8) to sixteen (16) hours of time. He inquired if the education was done in-house, how would it be organized and who would be conducting the program. Mr. Definer said their firm conducts something every month or two throughout the State. He stated he would conduct the legal part and they would have one of their investment a)nsultants do the investment part. He stated generally Plans would want to :invite others in the area and they would split the cost among those plans. He said they could hold it here and these were generally very well attended. Hc; stated this leaves more room for discussion and it meets the education requirement. Chair McLarnon said this might be the easiest way :for them to get the required education and at the same time be less inconvenience for everyone. Mr. Definer said if this Board would like to sponsor it, they will schedule it through their office. He said they would get one of the investment consultants. He stated they could do this just for tl'~is Board or they could send out notices to other Boards in the area who may hike to attend. Chair McLarnon inquired if they had ;anything scheduled locally with other Boards. Pension 1-15-21)08/3 Mr. Delmer said, to his knowledge, nothing was currently scheduled. He said he would check with his partner to see if he had anything scheduled. He stated if they did have. anything scheduled locally, they would give the Board notice. If there is not anything currently scheduled, and if the Board would like to host something here, they could do that and notice the other Boards. He said they do represent other Plans such as Apopka, Ocoee,, Deltona, and various Plans so there would be other opportunities. Chair McLarnon said he would be encouraged to have one here and invite people from the other communities. He said he would like to see this done on a smaller venue. He stated their next meeting is April 15`h and he would like to investigate if they could hold something toward the middle or end of March. Mr. Delmer suggested the Recording Secretary look into the scheduling.. He said it would be a matter of contacting their office and determining which of the investment professionals would conduct the investment part. It was the consensus of the Board to cook into scheduling an in-house education session the middle or end of March. Chair McLarnon asked the Recording Secretary to investigate this and let ~ them know of possible dates. Mr. Delmer said with respect to the Rules and Procedures, they would need to be adopted by the Board. at some poirrt. He said he would make the necessary changes so they are in conformity wi1:h the items addressed in the Ordinance:. He will do a final copy for adoption apt the next meeting. B. Review of RFP's for Fund Analysis. Chair McLarnon said each Trustee w;~s provided a copy of the proposals. He inquired if there were any questions r-egarding the cun•ent fund managers. Member Smythers said with. Mr. Shamoun attending the last meeting the concerns by the Board were addressed. He suggested it was not necessary to go further with this. Chair McLarnon said there was a breakdown with how the system worked and the review of the investment fund. He stated Mr. Shamoun cleared that up at the last meeting. He said he was of the opinion they should stay with who they have at this time and there was no need to change. He asked Ms. Rogers her opinion regarding the proposals acid the current financial advisors. ~ Ms. Rogers said in her opinion the League was performing this task and the Plan was paying for it. She said it would be at the Board's discretion if they wanted to add another layer, but it would be redundant. Pension 1-15-21)08/4 Mr. Delmer said it was a requirement that they do have an investment consultant evaluate the managers, wlhich was addressed at the last meeting. He said this was pursuant to the discussiion for cone-time evaluation. Mr. Shamoun did, address the concerns at the last meeting. He said if the Board was comfortable based on what was presented, they do not have a rule or statutory requirement to have an independent evaluation. Member Smythers referenced Section 10.2 of the draft Rules that states the Board shall engage a performance monitor responsible for reviewing the performance of the various investment managers. Mr. Delmer said that was represented and it meets the legal requirement and the requirement of the rules. He said if the Board had concerns or was uncomfortable with what has been presented to them, then they could obtain a private Frm to do an evaluation. The League of Cities retains an independent firm to evaluate. the Plan. 6. Board Attorney Report. IVIr. Delmer reported Legislative Bills were being pre-filed now for the March and April Session. He said the Bills that would affect this fund would allow going from two (2) to four (4) year Trustee terms, allow a maximum in foreign securities of 20%, and allow making a direct payment from the Pension Fund to an insurance company. This would enable a retiree to take advantage of the Federal pre-tax payment for health insurance or long term care insurance premiums. He stated he did send the materials for the insurance benefit, should the City need these documents for any retirees. Ms. Rogers advised there are no retireesthat would qualify at this time. Mr. Delmer said his office had sent documents that should be received this week regarding the notification requirement of collecting Social Security Numbers on a form. He advised the Board will need to implement this policy and send letters t:o report each year by Jan 31St to the President of the Senate and the Speaker of thF; House. The other requirement of the Sta1l:~te is if we receive an inquiry from a Commercial Enterprise asking for Social Security Numbers, this also needs to be reported each year by January 31St Ms. Rogers said the City has already sent letters to comply. 7. Member Comments. Member Kempf asked Mr..Dehner to review with the Board about what they had previously discussed on the phone. Mr. Delmer said Member Kempf had called and they discussed the Supplemental Benefit and who it applies to. He advised this was only foi• normal retirees. Pension }-t5-2008/5 Normal retirees would be age 50 and 10 years of service or 25 years of service.. Mr. Delmer said the other item discussed was the use of excess State money. He stated that currently the excess State money provided :for the Plan was funding the Supplemental Benefit. He said under the: Statute one of two things can be done with the excess State money. It can be used either to be deposited as an interval part of the Def ned Benefit Plan where i t will be utilized to provide additional Defined Benefits or segregated in a Shared Plan. He reiterated that the Supplemental Benefit of this :Plan is being funded by the excess State money. Member Kempf said he thinks everyone was pleased with the Supplemental Share Plan. Mr. Delmer said the language was a bit Hybrid in this plan. He stated often in a Supplemental or Shared Plan. they are synonymous and typically that was where the money would go and was not adding another Defined Benefit such as they have here. He advised that this Plan was fine, as it is a Supplemental within the Defined Benefit. He said that most memlberships in the State prefer to buy additional Defined Benefits. Member Kempf said there was concern ~~bout the market fluctuations and the performance. He said there was no real set amount of money that they can. bank: on as a retiree with the Share Plan. Plan members have discussed this and felt there may be some fail-safe guarantee th,~t could be implemented. Mr. Delmer said the way this Plan was structured, they do have a limited risk by virtue of the fact that the Supplemental. Benefit is provided and funded with excess State money. Chair McLarnon said the excess State money was tied into the insurance premiums. The insurance premiums were: continually goi~ig up. He stated they could look at the history of what the excess State money has been as a benchmark. The number of participants would affect the benefit. Member Kempf said the Supplemental Benefit was what the Plan members were concerned about. Mr. Delmer said more Plans were using the excess monies to determine what COLA's will be or a Supplemental Benefit such as this. He said if they wanted a guarantee, then they would need an automatic COLA. Chair McLarnon said this program was superior to a COLA. He said if the COLA. was tied to the CPI, this increased 3.1% this year and 2.7% last year. He said these numbers were relatively insignificv~t when you look at how much it would affect someone's pension versus the overall performance of the portfolio. Mr. Delmer said that under the formula that is currently in the Ordinance, the market fluctuation will not affect it. The flan provision is that the distribution is Pension 1-15-2008/6 determined by increases in the State money and credited with interest at the end of ~ each year at the actuarial assumed rate. He stated the confusion may come from discussions that they have with those in other Plans that have a different structure. Chair 1VIcLarnon said he and Ms. Rogers went back several years of excess contributions and trended them going forward. He stated the City was taking great care of the Plan members. This gives the:m the opporhinity to take that lump sum to invest as they desire. Mr. Dehner said the bottom line was that the Supplement does not have a market risk. 8. Public Participation. Ms. Rogers said she wanted to let the Board know that her role with the City was changing slightly. She stated this should be transparent to the Board. She will be working for another company, but would still be performing her technical responsibilities as the Director of Financial Services. She advised she would still be attending the meetings and would be ;available. She said she would be working for Government Services Group, a consulting firm. Member Kempf said before they adjourn, he was not here for the last meeting and inquired if they went over the PLOP and DROP benefits. Mr. Dehner said he had provided information to the Trustees regarding this and he would be happy to discuss this at any time. He said after it is discussed with the Board the next step would be to determine the interest of the membership. Chair McLarnon said one of the issues that came up was trying to get an estimate and Mr. Shamoun was going to try to provide an estimate based on age and what would be involved. Mr. Dehner advised that most DROP or PLOP benefits were designed so there were no additional funding requirements. He said the examples were going to be numbers based on what the cost would bf: to the Plan member if buying in. Member Kempf said members were also interested in a joint survivorship. Mr. Dehner said the Plan currently has a joint survivorship provision. He stated if they have a Partial Lump Sum Option them they could overlay that provision. He said they have not discussed previously, lout there seems to be some interest among some Plans regarding a bounce back or pop-up provision. He said with this, if a Plan member survives their spouse, they would be recalculated to the normal form of benefit they would have received prior to taking the joint survivorship. Member Kempf said he would like to discuss this at the next meeting. Pension I-15-2008/7 9. Adjournment. Chair McLarnon adjourned the meeting at 8:15 p on, a~ ATTEST: ~ ~.mda F. Goff, ~2ecording Se ary Pension 1-15-2008/8