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11/08/2001 (2) " ,~ . .: I ,'. . ", 0 , . ..., , " u .~ ','. ,',. '. :'. I .. " . ',". . .' I., '..' ., ..' ~ . ,.1 I. ,I: " :', .'.."., . + . ' '., A, . l>"',.. ,,' , '., . //' i ,', ..j' " :,0.. H, ,,' }:\ :. ',' , , " I' , " ", " "'J " . Ie', +..1' t:... .', .~ t. >...,....... ~:t :1.....t..J.. II,' " . .....' ~'>:.c' ,'~ 1'. ~." ;!... '" )', '", , , , or,",-,"c 0'1;......,..., '1" . I ~. I 'I " >: . ~ ..<J >~~.:pl ': " , " i' , " .1 , ~ " " ~~~:I ~, .i: r~.;. . ,,' ~'I . ,,, ....'. : . ~. { ',' '.i." o .f~ h ' :~u::. : ..:---.......... ...., -..... --~...- 4.. ...~._' O. L k-:: 4~1 '" " . ~ _ DO,~ ~ . " -.I I I ,,' ../ . \+ f'::',/ ,.' PAC. I t ! ,I ". .' OJ.'. . Y~.~j';: ' :~.::::.I. {~1~S:" ~\ ji;t\'. :h"" "(' -: ';';;";' "'. I. ~;'~":;.. .' . '. ."'" ~ . . . . " '\ Pension Advisory Commi~te.e Minutes , i " .i. , " .. II / D& 10 , Date , " ':'. '. '.\\ .,i".' r ,':.+1 ,. . " . >, . ~ ~:' . ~l::h. , .. .. . .,.!,' ;".'.',;'. . >', ,: '. ~ ~ . ~. . ~', ' I. ;'" 'i ,(, ~' !. I,' . " " I . ~ . . ~. " "r '; ;, I '\ ,\ " ., " )"). !..yq;\ . ~ , I '. ... , rL{,.:", . I , I " "> '\ '. \. /7:< J. ", "I ,> , ' , fr,l,i ;,,:;:~,':r: :'~, ~,. ..... .' \ I,' 'I '. , .. . ,. ' ',' :.. ~ .) , '" c,'. '.' . . 'Ii" : ~"".' 'Ill; I~ .~. . 'I~:.~.',,~ '~~'" ~"'.'l/ !+:"., :......:... , . , .,' '.' ':.<' ','"- '.< ,1' , 'I" : . ,~' f~~ ~~.~)'J ; . ~~ PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER November 8, 2001 Present: Dick Fitzgerald , John Lee Ed Hart John Schmalzbauer' ,Bill Jonson Tom Jensen' Chair , , Committee Member Committee Member/Commissioner Committee Member Committee Member/Commissioner Committee Member Absent: Whitney Gray Vice Chair /Commissioner Also Present: PaulO' Rourke Lee Dehner Patricia O. Sullivan ,Human Resources Administrator Pension Advisory Committee Attorney Board Reporter The Chair called the meeting to order at 9:00 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM ,#2 ~ Aoproval of Minutes . Member Jonson moved to approve the minutes of the regular meeting of October 11, 2001, as recorded and submitted in written summation to each board member. The , motion was duly seconded and carried unanimously. ITEM #4 . Emplovees to be Heard Andra Dreyfus, representing Henry Profiteer and James Kleinsorge, reviewed the background of buy back requests and of those who were permitted to pay back their Pension contribution, with interest, to buy back pension time. She said Messrs. Profiteer and Klelnsorge had Indicated they wished to buy back pension time and she wanted to resolve die Issue, regarding who qualified to buy, back pension time. Human Resources Administrator PaulO' Rourke said one of the new Pension Plan proposals may provide a remedy,. Ms. Dreyfus reviewed past buy back requests, noting the' significant difference , between paying back a contribution with interest versus paying the actuarial equivalent. , She said the PAC (Pension Adviso'ry Committee) and Pension Trustees previously had approved buybacks based on interest amounts rather than the actuarial equivalent. She requested the same conditions be applied to Messrs. Profiteer's and Kleinsorge's requests. Discussion ensued regarding the window of opportunity to bring forward such , claims, associat~d requirements, and issues related to the Pension Trustees re'versing their mpac1101 1 11/08/01 . "'~';:';\;:~':iJ;;i ::';;J'(./;,i,:';:~: ~ I"':' fol/~,~\/~ilL'"~;,,.i ;::",: ',,; ,:,:, ' .f,lf"",:,j .f/,.~,I.j"~"'''~'':::~{.''.:T;;:' "~'. . '.' ,':." cc~. ,~,:".~< H,~ :.~, ..,: ~ .'~ I " > ; I: \ ~ l'~ 'r' ~ ;;' J ~ I. T! , '\."': . !.}' + . ~ ' ~. ; " ,1/. ... . < ~ c > . 'I ~ ... , ' . 0 I " , , . , )>' , , . ' , ~ ~, ~ (l"f~), " ' ...,. , ., .\ ~~ I ~, , , 1 ~ '...'. ( '" " ..;\ .. , decis,ion to approve several buybacks based on interest payments. Pension Advisory Committee Attorney Lee Dehner referred to minutes, which indicate the PAC had denied Mr. Kleinsorge's request at their February 2001 meetIng. His recourse was to file a petition for writ of certiorari within 30 days of that decision. PAC attorney Scott Chiristiansen had responded in October 2001, to Mr. Profiteer's request, and indicated he was not eligible for a buy back. Discussion ensued. Mr. Dehner said it was not appropriate for the PAC to rehear Mr. Kleinsorge's request. Mr. Profiteer is entitled to a formal hearing., Consensus was for Mr. Dehner and Ms. Dreyfus to discuss related issues.' ITEM #5 '- Action Items a) Review and Action on Employee Requests for Years of Service Pension 1. ,franklin Daly, Jr. - Police Lieutenant, Police Department 2. Paul H. Charry - Police Officer, Police Department Member Schmalzbauer moved to approve a Years of Service Pension for Franklin Daly, Jr. and Paul H. Cherry. The motion was duly seconded and carried unanimously. b) Review and Action on Employee Requests to Vest Pensions 1. Miles 8allogg - Public Utilities Assistant Director,:Economic Development Miles 8allogg has resigned his position after being employed by the City for more than 10 years. He will qualify to receive his reduced pension beginning December 1, 2014. Member Jensen moved to approve the request by Miles 8allogg to 'vest his pension. The motion was duly seconded and carried unanimously. c) Approval of New Hires as Pension Plan Members , As of November 1, 2001, the City had 1701.36 FTEs out of 1835.7 budgeted positions. Donald Flemming originally was hired as part-time. He changed to full-time and pension eligible as of April 10, 1999. He changed to part-time on July 28, 2000 and changed to full-time, and again pension eligible, as of October 6, 2001. Cathy Adams originally was hired as part-time and changed to full-time and pension eligible as of October 20, 2001. Jennifer Rush originally was hired as part-time and changed to full-time and pension eligible as of October 8, 2001. ' Member Jonson move,d to' accept the following employees into membership in the Pension plan: mpac1101 2 11/08/01 :; ~ ~ .' t~, ',t ,. ,~ ./, '. " , .., ' " ..;' .,' ~:~\,-I~ " ,t., <.I,~ _:~:'~. /. . '/: ., . . - ~. : : :,~\ ; l:c\"I:~';~c ':,"' ~",.~. ~~\'~"l: .~:, :.'~; .,'/: '; ,. '.Ht~. ..,. t ~ ,t. '\"~' ....'I.!'I~."..I.H~ h...t),,~,'(, d ....- , ./, >,; , '..<,' , " .', ,,,. . ~ I .\: "; ',' .', .1 " , e'- '-~ I' '~ " I#~~ '*",11 , u " Bradford Cheek, Survey Assistant Donald ~Iemmlng, Library Assistant Saphire Reedinger, City Clerk Specialist Andrew Veldon, Parks Service Tech. I ,Jamie Thomas, Solid Waste Worker Cathy Adams, Police Information Tech. Jennifer Rush, Library Assistant Jerry,Rutigliano, Senior Marine Lifeguard Susan Jenkins, Parks Service Tech. I . Denise Balog, Administrative Assistant Gregory Hart, Senior, Marine Lifeguard Gary Hutchinson, WWTP Operator Trnee , Joseph Walden, Parks Service Tech I ' The motion was duly seconded. Public Services Library City Clerk Parks & Recreation Solid Waste Parks & Recreation Library Marine Department Parks & Recreation Fire Department Marine Department Utilities Parks & Recreation It was requested the list break out half-time staff separately. Upon the,vote being taken, the motion carried unanimously. ITEM #5 - Pendino/New Business a) PriceWaterhouseCoopers LlP contract for actuarial services Date of Pension ' Emolovment Elio. Date 1 0108/01 1 2/12/97 10/08/01 1 0108/01 1 0108/01 11/22/99 02/12/01 10/21/01 1 0/22/01 1 0/22/01 10/20/01 10/22/01 10/22/01 10/08/01 10/06/01 1 0/08/01 _ 1 0/08/01 1 0/08/01 10/20/01 1 0/08/01 10/21/01 10/22/01 10/22/01 10/20/01 10/22/01 10/22/01 The 8-member evaluation committee, composed of 3 union representatives, one' Pension Advisory Committee representative, and 4 management representatives reviewed responses to RFP 61-01 and chose PrlceWaterhouseCoopers LLP. The firm, previously Coopers & Lybrand, has performed actuarial services for the Pension Plan for the past 13 years. Fees In the requested "not to exceed" amount include: 1) $19,000, $19,500, and $20,000 - fixed fees for the annual actuarial report for the three-year period~ 2) fee not-to .exceed $20,000 for a comprehensive review of plan, actuarial assumptions; and 3) actuarial advice to, City staff. , . Member Schmalzbauer moved to recommend the Pension Trustees award a contract to PriceWaterhouseCoopers LLP for actuarial services for the Pension Plan and other related ,services for the three-year period ending December 31, '2004, at a total cost not to exceed $94,OOO~ The motion was duly seconded. ' In response to a question, 'Finance Administrator Margie Simmons stated under the previous contract, fees ranged .from $16,000 to $18,000. Ms. Simmons was thanked for permitting union representatives to participate as committee members, regarding this decision.' In response to a question, Ms. Simmons said staff has estimated t~e contracted hourly rate will be less than $5,000. If costs should exceed the estimate, staff will return to the PAC and Pension Trustees for additional funds. mpac1101 ., I I,. 3 11/08/01 :,;. ,:' '.f. I...."..:'.~~' ,:'d ._'r.".....~r f.1.:l...~. .::'.~'..(..'~..}. ..i.':~,1 :~'.'.I'.:'..l... '.~.};::::.;:. ,.::,~~.~'.f ,,' . 0, ~. . ~ . " '. :;: " -: l ~ .'.,; , ',' , " 1 ',~ . ':, '. '. ", " ~ , "',. " r::..' .,',.. ; \ .':/,: '~ .::J ...;, :);:. ::'.\ '" ,I.': '. " ~~ . 'i .~ '"r, ..\ . . ~ :;. ~ ,IJ! ". . ':\. .~ l ~.'~ '. '. I ~ . ,., i":" ~ ;..~ .." -- ~~, (: I 'd~ ',',4. : .:.~~ \.+..,:' ;.:~~'.~~~ ~ It~ '. ,~.;,: ;O>)~ f, ,) ''nt'l' .. ,':.;' :~;./: '('~:::::j , .', t.' . : ~~' ,,:::./ \/ ~ :; f " , " , r . 'J.~""I , .' :." , ' ,.1. ,.'+,.' .~' l \,:," . I", . IJ ~ . " " .+ .,- ';'1. :~:J ".' ,', ;, .::: ~. . ':'. }. . , " ,> " , , It .' '1.1 I, "I'L , ,'.',':': >.\ :' \~ . ~'" , , . , , : .' > ~ :,:) , , " .... . : ,'., . '.' '" i /',' ....\. , . . '.'. ~ , !. ~ , , . ..' I;. r " . t. ,I'., '.! . ' I . \ Upon the vote being taken, the motion carried unanimously. ITEM #6 - Director's Reoorts Human Resources Administrator Paul O'Rourke reviewed changed being evaluated for the Pension Fund. Ideas are conceptual. Pending are: 1) review and recommendations by legal, actuary, and staff; 2) review and recommendations regarding plan assumptions; 31 , 2001 plan valuation; 4) collective bargaining; 5) PAC review and recommendations; 61 trustee review arid approval; and 7) referendum approval. The goal is to present all related issues to the public for approval by the November 2002 referendum. Pension reform will enhance labor market competitiveness in attracting and retaining employees and is proposed to provide an "opt in" option for classified and unclassified , employees, a reemployment option, permit purchase of prior government service credit, and DROP (Deferred Retirement Option Plan). Proposed changes will increase the fairness and equity betweert benef!ts for single and married Pension members by changing the normal benefit and providing a beneficiary designation option. Staff is proposing the City adopt "best pension practices," clarify procedures, and simplify plan language. ' It is proposed the composition of the Board of Trustees be changed to a seven- member board, with two-year terms. The City Commission would appoint three members. One member would be a Police Officer. One member would be a Firefighter. One member 'would be a general employee, either SAMP (Supervisory, Administrative, Managedal, and , Profess!onal) or CWA union member. The six trustees would'choose a seventh member by majority. The board would meet at least quarterly. Pension Plan changes would continue to require City Commission and public referendum approval. In response to a question, Mr. Dehner said the proposed board makeup is normal for most municipal pension Plan's. Concern was expressed regarding staff representation. It was felt Pension Plan members had elected current staff PAC members and that staff PAC members represent all employees and retirees, not just firefighters and police officers. It is proposed to change the normal retirement be'nefit. The in-line of duty disability presumption would be extended to injury or disease sustained while working a City approved "extra duty" assignment. Should a vested employee die prior to retirement, the , beneficiary would be entitled to a benefit payable for 1 20 or 180 months, the beneficiary would be able to elect an actuarially equivalent life annuity benefit, the spouse remarriage cessation provision would be eliminated, and the beneficiary of any public safety member who died on or after December 1, 2000, would be able to elect to retroactively receive an actuarially equivalent benefit designated by the beneficiary. Members with less than 10 years service credit would be able to leave the contribution with the fund for five years. The contributio~ would be mailed to the member after five years elapses. In response to a question, Mr. O'Rourke reviewed approved extra duty positions, such as the School Board or Morton Plant/Mease Hospital. Wages for those pOSitions are not covered by the Pension Plan. In response, to a concern, Ms. Si~mons said should a mpac1101 4 11/08/01 ,,' . " ~ . ': '., , ,. , . " " " . , : .':yo' ;.',', :~' 'J.~ ..~ :.' ~: ,,' " ~; . , ~'. I I , r , , .' " ," ..> "\ , \ ~ '. I + .L ", ~", ,: " '~..',< "0.1 " , . ~.. t' . ~ ~ " , "'~ ~. '. V"I, I ~'.~ , .~;. ~~. :, .'... ~ . I . ~ . '.'." "I I " f; ; '; " .. ! ~ f ~.' :. . ~ ~. ',' "~ . , " ~, . .1' .\~ ~..}, " 1.<; ." 1\'" . . rJ ~ , " .:;..~ I "". ." , , l". ~ :' ,t.:..1 .'... . ~I :,.. '" ~ .~~~ i, ~.I '1:?I.' v , , general employees be infected by a biological agent, they could file an on-the-job disability application. , , It is proposed to change optional forms of benefits. The 66 2/3% joint and survivor annuity option would be added for General Employees. A Social Security option would be added to maintain a level retirement benefit. A designation of beneficiary and joint pensioner option would be added to permit a member to change the beneficiary at any time, but only change the joint pensioner twice.' Upon change of a retiree's joint pensioner, the retirement income payable to the retiree would be actuarially redetermined; and the retiree would pay actuarial recalculation expenses. Regarding General Employees, it is proposed to permit members to purchase credit service for prior governmental service (federal, state, or local) for which they did not qualify and receive' service credit, or receive a retirement benefit: 1) minimum credited service of one year would be required; '2) no maximum on the purchase of credit; 3) member would contribute to the fund the sum that they would have based on salary and contribution rate in effect at the time that credit service is requested; 4) Member would contribute actuarially determined amount that does not result in cost to the fund plus all professional services costs connected with the purchase of years of credited services; 5) credited service for prior service with the City would count for all purposes, including vesting; and , 6) credited service other than the City would not count toward vesting. " Regarding prior police or fire service, it is proposed that members may purchase credit service for prior governmental service (federal, state, or' local) as a 'police officer or firefighter for which they did not qualify and receive service credit, or receive a retirement benefit: 1) minimum credited service of one year would be required; 2) no maximum on the purchase of credit; 3} member would contribute to the fund the sum that they would have based on" salary and contribution rate in effect at the time that credit service is requested; " . 4) member would contribute actuarially determined amount that does not result in cost to , the fund plus all professional services costs connected with the purchase of years of credited services; 5) credited service for prior service with the City would count for all purposes, including vesting; 6) credited service other than the City would not count toward vesting; and 7) credited service will not count toward credited service in Police or Firefighters Supplemental Plan. Regarding military service prior to employment, it is proposed that members may purchase prior (honorable) active duty military service in the Armed Services of the United States, the U.S. Merchant Marine, or U.S. Coast Guard: 1} minimum credited service of one year would be required; 2) no maximum o"n the purchase of credit; 3) member would contribute to the fund the sum that they would have based on salary and contribution rate in effect at the time that credit service Is requested; 41 member would contribute , actuarially determined amount that does not result in cost to the fund plus all professional services costs connected with the purchase of years of credited services; and 5) credited" military service would not count toward vesting. It is proposed that any member eligible for normal.retirement would be able to elect to defer receipt of retirement pension and participate in DROP (Deferred Retirement Option mpac1101 5 11/08/01 '., '. ... . . , . ~ . ., ", I ~ ' . .'..,. . .. L.... ~ . ..... ".':' ..::: '. :', ... : . ,.'.:, '.,.~'., . ," ~. :1. \ ". , " , '~, , :r.;'.":y:,::,.'::::" <'I :.' ::"" ,';':, '., " ~ 1 .: r ., .' : .I. ,'; + ~. ~ '~-" ;"} , ': ~ " , , ":'~ " ,. :' 'I . , ',~ ,0: " .' " ".:') . \..,../ Plan) for a maxlmum,of 60 months. Election to participate in DROP would constitute an irrevocable election to resign from the service of the City at the end of the DROP period. DROP participants would not accrue any additional service credit. DROP participants would not be permitted to contribute to the plan or be eligible for disability or pre-retirement death benefits. DROP participants, who are Public Safety members wouid be deemed to have retired and supplemented pension plans would be payable accordingly. The DROP account, would be debited or credited with earnings after each fiscal quarter. A DROP participant would receive either interest or earnings on their account. Each participant's account would be charged an annual administrative fee of 3/4% of the account balance. . The prese~tation by staff wa~ commended. , . ~ The next PAC meeting is scheduled,for December 13; 2001. , ITEM #7 . Committee Members to be Heard , Member Jensen recommended Investment Committee information regarding the . November .15, '2001, meeting be provided to the City Commission: 'Member Hart indicated' I)e planned to attend the next Investment Committee mee~ing. Mr~ O'Rourke said the meeting' would be noticed to avoid conflict. Ms. Simmons expressed concern bureaucracy related to InvestmenfCommittee meetings is becor:ning too much for her staff to handle. She said it may be necessary to hire a finance director for the Pension Plan. It was felt PAC' attendance at Investment Committee meetings is prudent to, meet fiduciary' responsibilities. Concern was expressed regarding travel expenses related to Mr. Dehne~'s attendance. ITEM #8 - Adjournment The meeting adjourned at 10:37, a.m. . ~ fl. ~64l..e 'Chair ' . Perision Advisory Committee I I mpac,1101 ,', 6 11/08/01 . ell' I,.. " .. , . ~.' " . ~' , I , > ' . ,- " f.i, ~ ,,:t .<: ~,',,~,. ~ ...~c.,.~c, '.~,", 0/:'.