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Pension08-23-11Min BOARD OF TRUSTEES Florida Municipal Trust Fund Retirement Plan and Trust for the Firefighters and Police Officers Longwood City Commission Chambers 175 West Warren Avenue Longwood, Florida SPECIAL MEETING MINUTES August 23, 2011 7:00 p.m. Present: Robert Redditt, Chair Peter Katauskas, Vice Chair Derek Chenoweth, Member Marc McLarnon, Member Scott Christiansen, Board Attorney Jon C. Williams, Acting City Administrator/Director of Financial Services Sarah M. Mirus, Recording Secretary Absent: Chris Kempf, Secretary 1. Call to Order. Chair Redditt called the meeting to order at 7:00 p.m. 2. Pledge of Allegiance. Chair Redditt led in the Pledge of Allegiance. 3. Certify Election of Trustee- Officer Derek Chenoweth. Member McLarnon moved to confirm Officer Derek Chenoweth. Seconded by Vice Chair Katauskas and carried by a unanimous roll call vote with Secretary Kempf absent. 4. Approval of Minutes: October 19, 2010 Regular Meeting. Member McLarnon moved to approve the Minutes as presented. Seconded by Vice Chair Katauskas and carried by a unanimous roll call vote with Secretary Kempf absent. 5. Review of Agenda Packet Material. A. Plan Account Statements (March 2011, April 2011 and May 2011). The Board reviewed the Plan Account Statements in detail. Chair Redditt noted on the March 2011 . Statement it shows a Beginning Balance of $7,231,310.17, the Contributions amount was $17,945.13, the Earnings/ (Losses) amount was $18,576.01, the Distributions amount was Pension 08- 23 -1 -1 /1 ($1,053.60) and the Ending Balance was $7,266,777.71. Chair Redditt noted on the April 2011 Statement it shows a Beginning Balance of $7,266,777.71, the Contributions amount was $16,398.99, the Earnings/ (Losses) amount was $163,255.99, the Distributions amount was $0, the Fees and Expenses amount was ($3,475.04) and the Ending Balance was $7,442.957.65. Chair Redditt noted on the May 2011 Statement it shows a Beginning Balance of $7,442.957.65, the Contributions amount was $16,462.28, the Earnings/ (Losses) amount was ($22;377.65), the Distributions amount was ($795.61), the. Fees and Expenses amount was ($6,525) and the Ending Balance was $7,429,721.67. Discussion was held regarding if the members have received their Benefits Statements and the process for how they receive those Statements. B. Quarterly Performance Review. Chair Redditt said this was for the period of January 1, 2011 through March 31, 2011. He stated they had a Beginning Balance of $6,958,024.29, the total Contributions amount was $61,921.92, the Earnings amount was $251,244.36, the Distributions amount was ($1,053.60), the Expenses amount was ($3,35.9.26) and the Ending Balance was $7,266,777.71. C. Invoices. Chair Redditt outlined the proposed invoices that were submitted in the Agenda Packet. Chair McLarnon moved to approve the bills as presented. Seconded by Vice Chair Katauskas and carried by a unanimous Roll call vote with Secretary Kempf absent. 6. Other Business. A. Discussion on the revised ordinance amending and restating the City of Longwood Police Officers' and .Firefighters' Pension Trust Fund. Mr. Christiansen said a Member gave him a reminder at the last Meeting; they discussed the fact that they did not have the Defined Retirement Accumulation Group Obligation (DRAGO) Plan in the Ordinance. He stated it was really a part of the pension plan, so he suggested they go back and put that in, and that was what he had done. He said they also have made a change in the definition of Salary, which was on page 5. He said the Legislation which was adopted changed the definition of Salary in the things they were allowed to include under the State Law. He said upon Pension 08-23 -11/2 reviewing, he used the Ordinance that was prepared before, and noticed in looking at the actuarial evaluation that the lump sum payments of sick and vacation were now being excluded, so under Salary he needs to add under paragraphs A and B, the following: "For Police Officers Members- the total compensation for services rendered to the City as a Police Officer reportable on the Member's W -2 form, plus all tax deferred, tax sheltered, or tax exempt items of income derived from elective employee payroll deductions or salary reductions, but excluding lump sum payments of accrued, unused, sick or annual leave ". He stated that was what they have now, and that was what State Law was going to require them to do going forward. He said they needed to put that in there so when they approve this document, they can send it to the City and get this done. He said they also needed to put the same language under the Firefighter Members, because it was excluded in both places. He said it was really not an impact on the Plan, but they needed to make that clarification. He said the next change that was dictated by the change in the State Law was the fact that they cannot include more than 300 hours of overtime in the calculations of the benefits. He said if they read the next paragraph down where it says, "With respective to both Police Officers and Firefighters Members ", he put some language in there that was needed regarding the limitation on overtime. He said the one decision the Board had to make, and it was good that Mr. Williams was here, was what year they were going to use. He asked were they using a fiscal year or a calendar year for purposes of the 300 hour limitation. He said the change in the State statute simply says they cannot use more than 300 hours per year. He said a lot of the people he has been talking with around the State have decided fiscal year was the proper way to do it since the City's year was a fiscal year, the plan year was on a fiscal year, so it makes sense to do it that way and recommended going along with that. Discussion was held with regards to how overtime was calculated and if the Plan Members were aware of the amount of overtime the Member was accruing, and the Members were no longer contributing to the Plan after 300 hours. Mr. Christiansen stated once they get the Ordinance adopted, then they will do the summary plan description, which was the little booklet that describes the Pension Plan and the Benefits, and that information would be in the summary plan description, which a copy would go out to all the Police Officers and Firefighters. He said then they would know once they get to 300 hours in a fiscal year, after that, it would not be counted for pension purposes. Vice Chair Katauskas asked if in the booklet, would there be a section outlining what has been changed. Mr. Christiansen said they could do that and highlight and /or underline the Pension 08 -23 -1'1/3 changes that were made. Discussion was held in regards to the definition for Salary for Police Officers and Firefighters and those changes already were being incorporated into the proposed Ordinance. Mr. Christiansen said one (1) additional thing they put in there in the last sentence in the second paragraph that starts with the following: "With respect... ", they put in there a statement that says, "Additional hours work pursuant to the Fair Labor Standards Act (FLSA) shall not be deemed overtime ". He said that was a clarification they felt was important and does not know how they were treating that now. He said he assumes the Firefighters have shift work and they were working extra time and may be getting paid time and a half. He said the State does not deem that to be overtime for purposes of this limitation, because the Firefighters have to work a certain amount of extra hours in each shift every month or every pay period. He said typically it amounts to 1.50 hours a year, but it was really not overtime in the classic sense of the word because overtime was usually volunteering to come in and work overtime to make extra money. He said this was overtime, while it had to be paid as overtime, it was time if they were working on a shift, then they have to work it as part of your basic pay. He said the State has indicated that even if they have a definition of basic compensation, that time was still included in basic compensation. He said the only reason he put that in there was to make it clear that that time was not going to count toward the 300 hours limitation on overtime. He said the 300 hours would be over and above that Federal Labor Standards Act time. He said another change, was he updated the Actuarial Equivalent definition on page 3 and said they checked with the Actuary, and they were going to move to the RP -2000 Combined Healthy Mortality Table. He said they wanted the actual equivalency definition in the Plan to coincide with the Mortality Table they were using in the actuarial evaluation. He said they would be changing that very shortly, and they suggested they make that change in this document, so that was what they have done. He said the other significant change was what they put in on page 38, the DRAGO Fund, and that language was close to what was already in their plan or in the League Plan. He said he had a question about retirement in that they would get a percentage of the amount that was in the DRAGO Fund equal to their total years of service over the total number of years of service in the two (2) departments. He said they would get that fraction of the amount in the DRAGO Fund and noted it had a limitation that it would not be more (page 39, last paragraph) than two and one -half multiplied by the member's normal retirement benefit. He said he thinks that means the annual retirement benefit and wanted to confirm that with the Actuary to make sure that was the case. He said he thought this document was ready to go at this point, if they were all okay with the changes he had made, plus that (1) one clarification in the DRAGO Fund. He asked for approval and said he would like to send it to the City and see Pension 08 -23 -11/4 if they can get some action. Mr. Williams pointed out one (1) typo on the top of Page 3, where it says "City of City of Longwood ". Member McLarnon moved to approve the Plan as presented with the amendments that would be included per the Attorney's request. Seconded by Member Chenoweth and carried by a unanimous roll call vote Secretary Kempf absent. B. Discussion on continuing education for Members of the Florida Municipal Trust Fund Retirement Plan and Trust for the Firefighters and Police Officers Board. Chair Redditt said that he went to the last Firefighters and Police Officers Board Meeting in Tallahassee and said it was absolutely excellent. He encouraged anyone who could, to go. He noted there was a wealth of information and it was well run, with top flight speakers. He stated Mr. Lee Dehner was (1) one of the speakers. He stated it was not an option and if they were on the Pension Board, it was a requirement that they attend within a year of becoming a Trustee, and it was in the Operating Rules as well. He said the next upcoming meeting would be next May, if they plan to stay on the Board. Discussion ensued regarding the upcoming conferences that were going to be held and requested Ms. Mirus look into the dates and costs for the conferences. Mr. Christensen said there were no requirements for the amount of hours to attend and they could get a few speakers to come here. He stated he and Mr. Dehner have done mini - conferences around the State. He said if they were doing one in this area, they would let them know. He said they do not do the mini - conferences to compete with longer conferences that they would get a lot more out of. He said they have talked about getting several boards together and having a one (1) day conference. 7. Board Attorney Report. Mr. Christiansen said Vice Chair Katauskas' term was over at the end of July 2011. He reminded everyone to complete their Financial Disclosure Forms. He then inquired about the status of the Meeting Minutes for January 2011 and April 2011. Ms. Mirus stated that she was working on those Minutes, and the January and April Minutes were outstanding. She stated Vice Chair Katauskas was approved at the May 2, 2011 City Commission Meeting for reappointment and his term commenced on July 21, 2011 and will end on July 20, 2013. Pension 08 -23 -11/5 Mr. Christensen said they approved the Actuarial Evaluation at the last Meeting, and they did the drill the State requires for them to do where they declare they expected to get a seven and one -half (7' /z %) percent investment return over the next year, several years and long -term thereafter. He inquired if the letter went out to the State indicating what they had done. Mr. Williams said he would have to check his records, but he did not think it went out to the State. Mr. Christiansen said there was a form letter in their package. He said they have either received or would be receiving the State money and inquired if there were any issues. Mr. Williams responded in the negative. Mr. Christiansen said they mailed the check on the 22" and it had to be turned over to the Pension Board within five (5) days of receipt and the amount they got this year for police was $.146,000 and last year, they received $148,000, so it went down a little. He said Fire received $82,3011 and last year, they received $82,165, so it was almost the same. He said sometimes they do not get all of the money and there was a cut -off in the State Statute. He then explained where the funds came from. 8. Member Comments. Chair Redditt said one of the things that were presented to new Trustees at the Trustee Board was that every Board should have a listing of all the participants in the funds they manage, and when their retirement was anticipated, they would have an idea when people were scheduled to retire and may be asking for their pension. He said they have people who are no longer with the City but who still may have earned a pension. Ms. Mirus said she was still waiting for that information from the Human Resources Division and will forward the information to the Board upon receipt it. Mr. Christiansen asked if they were talking about terminated vested people, their benefit calculations should have been done and if they have not, they should be. He said the reason for that was they may have somebody who leaves here and they were vested, but they may not be able to collect. that benefit for fifteen (15) years. He said it makes sense, since their benefit does not change that when someone leaves and they were vested, they do a benefit calculation and that was what they can receive and when they can receive it. He said if you wait, and then fifteen (15) years go by and they come back and say they were ready to draw their benefit, then staff would have to go back and try to find payroll numbers from fifteen (15) years ago and sometimes those were not available. He stated why it was very important to get those calculations done when somebody leaves who Pension 08 -23 -11/6 was vested. He said the Actuary would do those calculations for them and there would be a fee involved. Chair Redditt said they needed to have a current list of who was in the plan and how many they have. Vice Chair Katauskas said they needed to also get a cost amount of that benefit payout and then they can set it as a motion to spend that money or not. He said it seems like it would make sense to do so and then it was a part of the file, and they do not. run into problems in the future. Mr. Williams said it would also be important to point out that was going to change, and could change daily as people leave employment that may have been vested. He said to keep that in mind if they do that on an annual basis, and it was only good at a specific point in time. Vice Chair Katauskas stated the list was only good at a certain point in time, but the calculation that was done for a person that has left was constant. Mr. Christiansen said he thinks the standard operating procedure (SOP) should be that if somebody leaves that was vested, they should immediately do their calculation. Vice Chair Katauskas said that would be part of the motion or recommendation they would want to consider. Chair Redditt said they should first get the list to find out how many people they were looking at, then which category they were in. He said it can get complicated because some people have left voluntarily, some may not have. Mr. Christiansen said if they were vested, unless they have done something that gives rise to forfeiture, he should know about those people. Chair Redditt said they do have one that was in that circumstance and it was John Zeh and he could fall into that category. He said the City was going to have to tell him what the reason for the dismissal. Mr. Williams said Mr. Zeh had resigned. Chair Redditt said he did not know how much they could discuss but it was in the newspaper. He said it was a criminal situation and he was out on bond.. Mr. Christiansen said the Board of Trustees, under State Law, has the responsibility to make a determination as to whether the situation amounts to a circumstance under which he forfeits and they need to know about it. He said if they have a situation under which someone was fired for this, then he needs someone to tell him the circumstances, and if he was a police officer. Pension 08 -23 -11/7 Mr. Williams said his hesitancy was not because he does not want to talk about it on the public record, his hesitancy was he did not recall what the specifics were. Chair Redditt said he had heard several stories, so it needed to be double - checked. Vice Chair Katauskas recommended the Board Attorney get the information that was relevant, the accurate information. Mr. Christiansen asked if there was an internal affairs investigation done. Mr. Williams responded in the affirmative. Discussion ensued regarding when Mr. Zeh had resigned from the City. Mr. Williams said he could get all the information to the Board's Attorney. The Board agreed Mr. Christiansen needed to receive the information. 9. Public Participation. None. 10. Adjournment. Chair Redditt adjourned the meeting at 7:59 p.m. Robert Redditt, Chair ATTEST: Sarah M. Mirus, MMC, MBA, Recording Secretary Pension 08 -23 -11/8