04/04/1988 (2)
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April 4, 1988
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TRUSTEES or THE EMPLOYEES' PENSION FunD MEETING
The City
Pension Fund,
at 9:10 a.m.,
Commission, meeting as the Board of Trustees of the Employees
met in regular session at the City Hall, Monday, April 4, 1988,
with the following members present:
Rita Garvey
James Ber-field
Mayor/Commissioner-
Vice-Mayor/Commissioner
(arrived at 9:16 a.m.)
Commissioner
Commissioner
Commissioner
Lee Regulski
Don \Hnner
William Nunamaker
Also Present were:
Ron H. Rabun
Joseph R. McFate, II
City Manager
Planning & Urban Development
Director
City Attorney
City Cler-k
Milton A. Galbraith, Jr.
Cynthia Goudeau
ITEM #2 - Minutes - Commissioner Winner moved to approve the minutes of the
March 14, 1988, meeting. Motion was duly seconded and carried unanimously.
()
ITEM H3 - Request for Acceptance into Membership
The City Manager presented the recommendation of the Advisory Committee
to approve member-ship for- three (3) employees listed below:
HaDIe
Classification
Department
Dennis Allen
Anthony Pattakos
Celeste Marshall
Electrician
Pub. Sere Tech.
Accounting Clerk I
Traffic Engineering
Pub. Wks./Pub. Sere
Police
Commissioner Winner moved to accept the recommendation of the Advisory
Committee. Motion was duly seconded and carried unanimously.
ITEM #4 - Request for Pension
The City Manager presented the recommendation of the Advisory
Committee, General Employees' Pension Fund that the employees listed below be
granted a regular pension under Section 26.34 of the Employees' Pension Plan.
1) Gerald Weimer, Assistant City Manager, Cit1 Manager's Department, to
be effective upon his date of resignation, at an amount to be calculated
by the Finance Department.
2) Betty Russell, Senior Legal Secretary, Legal Department, to be effective
March 23, 1988, at an amount to be calculated by the Finance Department.
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Book 2
142.
04/04/88
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Commissioner Regulski moved to accept the recommend3tion of the Advisory
Committee. Motion was duly seconded and oarried unanimously.
ITEM D5 - Approval of Pension Contribution and Authorization to Request
Proposals for Actuarial Services.
The Ogle and Waters valuation report determined a required City
contribution for the current (87-88) fiscal year of $2,916,7B4.00. This
was less than originally budgeted and the corresponding savings will be
reflected in the mid-year budget review.
amount
Staff is also recommending that the City proceed with the request for
proposals to provide the January 1, 198B actuarial valuation, which will
determine the required City contribution for fiscal year 88-89. Ogle and Waters
have prepared the last two valuations and also performed three special studies
relating to the pension rewrite project. In virtually every case, staff has
had difficulty in obtaining the reports by the agreed upon time, and in
reSOlving billing disputes over charges for additional work that was neither
anticipated nor authorized by the City. It is felt that it is in the best
interest of the Pension Plan to consider all available actuarial firms at this
time. The Pension Advisory Committee concurs with this recommendation and will
be represented on the committee to review the proposals and recommend to the
trustees an actuarial firm to prepare the current valuation.
The Finance Director indicated that the Trustees should actually be
recommending to the City Commission to make the contribution, and in response
to a question indicated that the contribution equates to approximately 11% of
employee salaries.
Commissioner Winner moved to recommend to the City Commission that they
contribute $2,916,7B4.00 to the Employee Pension Fund as determined by the Ogle
and Waters January 1, 19B7 actuarial report. The mot~on was duly seconded
and carried unanimously.
Commissioner Winner moved to authorize request for proposals to perform
the January 1, 19BB actuarial valuation. The motion was duly seconded and
carried unanimously.
ITEM D6 -
Appointment of Callan Associates to replace SEI Funds Evaluation
as performance measurement vendor.
Performance measurement services can best be defined as the production of
comparative statistical data that assists the City and the equity investment
advisor in the review and analysis of the plan's performance. The services
of our current performance measurement vendor, SEI Funds Evaluation Service,
have not been totally satisfactory, especially in the area of measuring our
fixed income investments. As an example, their September 30, 1987 report
referenced the $10 million which was withdrawn from the equity market in August,
but made no attempt to include the resulting internally managed treasury
portfolio in the overall plan performance data. Several other problems with
the firm have been documented and were summarized in a letter from John
Willoughby, Equity Investment Advisor.
Book 2
143.
04/04/88
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After meeting with representatives of Callan and Associates, City staff
concurs with Mr. Willoughby that Callan and Associates will provide us with
a more useful product, including a report format that will include both GIC's
and internally managed treasuries as well as equities. Their proposed fee is
identical to that previously charged by SEI, and does not impact the plan
financially because all fees are paid through directed brokerage commissions,
usually referred to as "soft dollars."
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Concerns were expressed regarding the directed commission fees and it was
explained that this is a common practice throughout the industry.
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In response to a question, the Finance Director indicated that as of
December 31, 1987 Aetna is performing in the 35th percentile and Denver in the
60th percentile placing them in median performance.
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Commissioner Winner moved to approved the appointment of Callan Associates,
Inc. to perform performance measurement services for one year(four calendar
quarters) at an annual fee of $20,500 in directed brokerage commissions ("soft
dOllars") and that the appropriate officals be authorized to execute the same.
Motion was duly seconded and carried unanimously.
ITEM #7 - Investment of Existing Cash Balance in Pension Fund.
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The cash which has accumulated since August was generated from employees,
at 8% of salaries, and from the City, whose contribution was accelerated this
year to comply with a request from the State. Since there will be no additional
City contributions after March 31, we believe that some cash should be kept
to meet benefit payments, but that $3 million is reasonably available for
reinvestment. The Investment Committee has recommended the current 40-40-20
allocation as agreed to in August.
Discussion ensued regarding whether or not the 40-40-20 mix is appropriate
in light of the stock market climate.
Commissioner Winner moved to continue this item to the meeting of the
trustees of May 2, 1988. MOtion was duly seconded and carried unanimously.
ITEM D8 - Other Business
The Personnel Director reported that Mr. Cary Singletary, Attorney for
John Welch, has submitted a voluminous set o~ documents to the four
psychiatrists who have evaluated Mr. Welch stating that the City will pay for
their evaluation of said documents. There was concern that when the Trustees
authorized payment of the psychiatrists it was for the approximately 17 page
document submitted by the City.
There were concerns that the charge by the psychiatrists to review all
of the papers submitted by Mr. Singletary would be expensive. Direction ~rom
the Commission was that Mr. Singletary and the psychiatrists be advised that
the City would pay for evaluation of material submitted b Mr. Sin letary that
was of the same volume as that submitted by the City.
ITEM fJ9
Adjournment, 9:34 a.m.
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Book 2
144.
04/04/88
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AGENDA
Board or Trustees or the Employees' Pension Fund
April 4, 1988
9:00 AM
------------ _..----..~-
1. Call to order.
1.
9:10 a.m.
2. Approval of Minutes of
March 14, 1988
2.
Approved as submitted.
3. Request for acceptance
into membership:
3.
3 members accepted.
1) Dennis Allen
2) Anthony Pattakos
3) Celeste Marshall
4. Pensions to be Granted:
4.
Granted 2 pensions.
1) Gerald Weimer
2) Betty Russell
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5. Approval of Pension Contribution
& Authorization to Request
Proposals for Acturial Services.
5.
Recommended City Commission make
contribution of $2,916,784 and
authorized RFP for Actuarial
Services.
6. Appointment of Callan Associates
to replace SEI Funds Evaluation
as performance measurement
vendor.
6.
Approved
7. Investment of Existing Cash
Balance in Pension Fund.
7.
Continued to 5/2/88
8. Other Business
8.
Directed Miles Lance to inform
psychiatrists and Mr. Singletary,
Attorney for John Welch, City will
pay for evaluation of material
submitted by Mr. Singletary as
long as it is the same volume as
that submitted by City.
9. Adjournment
9.
9:34 a.m.
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Book 2
141.
04/04/68