06/17/1999 - Special
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PENSION
,
(TRUSTEES)
, Board of T~ustees of the Employees'
p'ension Fund
Minutes
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TRUSTEES OF THE EMPLOYEES' PENSION FUND SPECIAL MEETING
CITY OF CLEARWATER
June 17, 1999
Present:
Brian J. Aungst
Ed Hooper
J. B. Johnson
Robert Clark
Ed Hart
Chair
Vice-Chair/Trustee
Trustee
Trustee
Trustee
Also Present: 'Michael J. Roberto
Pamela K. Akin
Margie Simmons
Rick Ebelke
Scott Christiansen
Cynthia E. Goudeau
Patricia O. Sullivan
City Manager
City Attorney
Financial Services Administrator
Human Resources Assistant Director
Trustee Attorney
City Clerk
Board Reporter
The Chair called the rr.eeting to order at 5:00 p.m. at City Hall to discuss pension
buybacks. "
Human Resources Assistant Director Rick Ebelke said staff had identified 24
employees who appear to meet the criteria to buy back pension service due to breaks in
employment. City Actuary Steve Metz reviewed the process used to determine actuarial
equivalents. Based on the participation of 24 employees, he estimated approving buybacks
based .on withdrawn contributions plus 5% interest instead of the actuarial equivalents
would increase the Plan's unfunded liability by more than $1-mlllion.
It was stated the Trustees previously had approved pension buybacks at the lower
rate without adequate information or counsel. In response to a question, Mr. Ebelke said
the previous estimate of 200 had included employees who had worked part-time before
becoming full-time and qualifying for Pension membership. It was indicated the PAC
IPension Advisory Committee) has recommended the Trustees rescind approval of
buy backs by Krieger and Marotta and to not consider any other buy back requests that are
not within the parameters of the pension plan.
Andra Dreyfus, representative for Messrs. Marotta and Krieger, et ai, stated a $1-
million impact on ~he plan is not significant considering the plan's funding. She requested
other employees be allowed to present their cases before this option is closed. Trustee,
Attorney Scott Christiansen recommended the Trustees follow the provisions of the
Pension Plan and amend the plan to reflect changes they wish to initiate.
In response to a question, he said several exceptions had been made to correct past
wrongs. Pending buyback requests relate to breaks in service under the previous plan,
which did not permit buybacks. Concern was expressed the exception allowed Jeff Harper
had occurred outside the 2-year window allowed by the current plan. Mr. Metz stated Mr.
Harper had been excluded illegally from the Plan. The City Attorney said according to IRS
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direction, anyone kept out of the plan improperly must be admitted and the previous error
corrected. In reference to pending requests, the City Attorney said none of those
employees had been excluded illegally.
In response to a question, Mr. Christiansen said Mr. Donagan should have been
required to return the actuarial equivalent to buyback time, instead of his withdrawal
amount plus 5%. He recommended the Trustees correct Mr. Donagan's case if possible.
Mr. Christiansen said impediments to correcting that case probably exist as Mr. Donagan
has retired. In response to a question, he said as the previous plan was silent on the
buyback issue, it did not permit that benefit.
It was recommended proposed changes be researched before implementation and
the established process be followed. Mr. Christiansen reviewed the process required to
amend the plan.
I
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John Lee, IAFF representative, recommended the Trustees abide by plan rules and
amend the plan if changes are desired. In response to a question, Mr. Christiansen said the
2-year buyback limit in the current plan is arbitrary. Mr. Metz agreed the plan would not be
harmed if time limits for buybacks were eliminated as long as the buybacks are based on
actuarial equivalents. He said the plan must be funded in accordance with State law.
Mr. Christiansen said future discussion will review police officer provisions approved
by this year's legislature, which may affect vesting. It was recommended the Trustees
follow their fiduciary responsibility to protect the actuarial soundness of the plan by
following its rules.
Trustee Hart moved to retain and follow the Pension Plan's current language and
allow the PAC to bring forward recommended changes if they so desire. The motion was
dUly seconded. Trustees Johnson, Hooper, and Hart and Chair Aungst voted "Aye";
, Trustee Clark voted "Nay." Motion carried.
Mr. Christiansen suggested the PAC consider changes and forward their
recommendations to the Pension Trustees.
The meeting adjourned at 5:43 p.m.
ATTEST: rtr1L: r. ~
City Clerk
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