04/14/2008
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING MINUTES
CITY OF CLEARWATER
April 14, 2008
Present: Frank Hibbard Chair
John Doran Trustee
George N. Cretekos Trustee
Paul Gibson Trustee
Absent: Carlen Petersen Trustee
Also Present: William B. Horne, II City Manager
Jill S. Silverboard Assistant City Manager
Rod Irwin Assistant City Manager
Pamela K. Akin City Attorney
Cynthia E. Goudeau City Clerk
Brenda Moses Board Reporter
The Chair called the meeting to order at 2:25 p.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
2 - Approval of Minutes
2.1 - Approve the minutes of the March 17, 2008 Pension Trustees meeting as submitted in
written summation by the City Clerk.
Trustee Cretekos moved to approve the minutes of the Pension Trustees meeting of
March 17, 2008, as recorded and submitted in written summation by the City Clerk to each
Trustee. The motion was duly seconded and carried unanimously.
3 - Pension Trustee Items
3.1 - Approve the hiring of Wentworth, Hauser and Violich and Earnest partners LLC as active
EAFE equity managers and authorize staff to sign the appropriate contracts.
At the Pension Trustees meeting of August 13, 2007, the Trustees reaffirmed the
Plan’s commitment to moving the ten percent EAFE allocation from a hybrid passive manager
to active management as recommended in the Asset Allocation Study. The Trustees also
authorized Dahab Associates to assist staff in this search.
Dahab posted a RFQ on their website and contacted firms encouraging them to
respond to our RFQ for active EAFE managers. Dahab received a total of 64 responses to the
RFQ. The RFQ responses have previously been furnished to the Trustees via e-mail.
Staff reviewed the 64 responses and working with the consultants narrowed the list to
eight firms for finals presentations: Alliance Bernstein LP, Earnest Partners LLC, Templeton
Pension Trustees 2008-04-14
1
Investment Counsel, LLC, Baring Asset Management, Inc., Marvin and Palmer Associates,
Inc., Wentworth, Hauser and Violich, GlobeFlex Capital, LP, and Pictet Asset Management.
As a result of the finals presentation the Pension Investment Committee is
recommending that Wentworth, Hauser and Violich and Earnest Partners LLC be retained as
active EAFE managers. The committee feels that theses two companies will have
performance that complements each other. This will result in lower volatility to the pension
plan. Wentworth uses top down, sector rotator approach when being in the right sector is the
most important factor (growth). Earnest Partners is a bottom up relative value approach.
Earnest Partners has beaten their benchmark for the last seven years, which is the history of
this product. Wentworth has beaten their benchmark seven out of the last ten years. The
products have the following average returns (gross of fees):
MSCI EAFE
Earnest Wentworth Benchmark
Last 3 Years 33.29% 38.79% 23.75%
Last 5 Years 31.09% 35.21% 24.05%
Both managers offer a separate account with the following fee structure.
Wentworth charges the following fees:
100bp on the first $10 million
80bp on the next $15 million
75bp on the next $25 million
60bp on the next $50 million
Earnest partners charges the following fees:
75bp on the first $25 million
65bp on the next $25 million
55bp on the balance
The funding for the two new managers will come for the passive EAFE fund and a
rebalancing of the portfolio.
Councilmember Doran moved to approve the hiring of Wentworth, Hauser and Violich
and Earnest partners LLC as active EAFE equity managers and authorize staff to sign the
appropriate contracts. The motion was duly seconded and carried unanimously.
Pension Trustees 2008-04-14
2
3.2 - The employees listed below be accepted into membership in the City of Clearwater's
Employees' Pension Plan as approved by the Pension Advisory Committee on March 13,
2008.
Pension
Eligible
Name, Job Class, & Dept./Div. Hire Date Date
Andrew Forte, Parking Enf. Spec./Engineering 2/4/08 2/4/08
Anthony Lenning, Recreation Spec./Parks & Rec. 2/4/08 2/4/08
Charlene Auclair, Accounting Clerk/Finance 2/4/08 2/4/08
Samantha Bright, Library Assistant/Library 7/12/04 2/4/08
Amy Bure, Police Cadet/Police 2/18/08 2/18/08
Travis Nuttall, Sr. Marine Lifeguard/Marine & Aviation 2/19/08 2/19/08
Samantha Bright was originally hired as part-time on July 12, 2004; status changed to
full-time and pension eligible as of February 4, 2008.
Trustee Cretekos moved to accept the listed employees into membership in the City of
Clearwater's Employees' Pension Plan. The motionwas duly seconded and carried
unanimously.
3.3 James McGee, Public Services Department; Gary DeYoung, Solid Waste/General
Services Department; and James Battle, Parks & Recreation Department, be granted regular
pensions under Section(s) 2.393 and 2.397 of the Employees’ Pension Plan as approved by
the Pension Advisory Committee.
James McGee, Public Services Technician II, Public Services Department, was
employed by the City on August 18, 1975, and his pension service credit is effective on that
date. His pension will be effective April 1, 2008. Based on an average salary of approximately
$40,330 per year over the past five years, the formula for computing regular pensions, and Mr.
McGee’s selection of the Joint & Survivor Annuity, this pension will approximate $36,177
annually.
Gary DeYoung, Fleet Mechanic, Solid Waste/General Services Department, was
employed by the City on February 23, 1987, and his pension service credit is effective on that
date. His pension will be effective March 1, 2008. Based on an average salary of
approximately $42,758 per year over the past five years, the formula for computing regular
pensions, and Mr. DeYoung’s selection of the 100% Joint & Survivor Annuity, this pension will
approximate $24,237 annually.
James Battle, Parks Service Technician II, Parks & Recreation Department, was
employed by the City on June 4, 1984, and his pension service credit is effective on that date.
His pension will be effective March 1, 2008. Based on an average salary of approximately
$31,937 per year over the past five years, the formula for computing regular pensions, and Mr.
Battle’s selection of the 100% Joint & Survivor Annuity, this pension will approximate $20,505
annually.
These pensions were approved by the Pension Advisory Committee on March 13,
2008. Section 2.393 provides for normal retirement eligibility when a participant has reached
Pension Trustees 2008-04-14
3
age 55 and completed twenty years of credited service, has completed thirty years of credited
service, or has reached age 65 and completed ten years of credited service. Mr. McGee
qualifies under the 30 years of service criteria. Mr. DeYoung and Mr. Battle qualify under the
age 55 and 20 years of service criteria.
Trustee Gibson moved that James McGee, Public Services Technician II, Public
Services Department, Gary DeYoung, Fleet Mechanic, Solid Waste/General Services
Department, and James Battle, Parks Service Technician II, Parks & Recreation Department,
be granted regular pensions under Section(s) 2.393 and 2.397 of the Employees’ Pension
Plan as approved by the Pension Advisory Committee. The motionwas duly seconded and
carried unanimously.
3.4 Barbara Borgan, Customer Service Department, be allowed to vest her pension under
Section(s) 2.397 and 2.398 of the Employees’ Pension Plan as approved by the Pension
Advisory Committee.
,
Barbara Borgan, Customer Service Representative, Customer Service Department
was employed by the City on August 31, 1992, and began participating in the Pension Plan on
that date. Ms. Borgan terminated from City employment on October 29, 2007.
The Employees’ Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater or change status from full-time to part-time after completing
ten or more years of creditable service (pension participation), such employee shall acquire a
vested interest in the retirement benefits. Vested pension payments commence on the first of
the month following the month in which the employee normally would have been eligible for
retirement.
Barbara Borgan, Customer Service Department, be allowed to vest their pensions
under Section(s) 2.397 and 2.398 of the Employees’ Pension Plan as approved by the
Pension Advisory Committee. Section 2.393 (p) provides for normal retirement eligibility when
a participant has reached age 55 and completed twenty years of credited service, has
completed 30 years of credited service, or has reached age 65 and completed ten years of
credited service. Ms. Borgan would have completed at least 20 years of service and reached
age 55 on August 31, 2012. Her pension will be effective September 1, 2012. This pension
was approved by the Pension Advisory Committee on March 13, 2008.
Trustee Doran moved to allow Barbara Borgan to vest her pension under Section(s)
2.397 and 2.398 of the Employees’ Pension Plan as approved by the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
Pension Trustees 2008-04-14
4
4 - Other Business - None.
5 - Adjourn
The meeting adjourned at 2:30 p.m.
=Le~~
Ctrair
Employee's Pension Plan Trustees
rest: ~
J~z.
City lerk
~.~
, -
Pension Trustees 2008-04-14
5