03/04/2002 (2)
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: PENSION
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,.JJ~~rd of Trustees of the Employees'
Pension Fund '
Minutes
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ACTION AGENDA - Trustees of the Employees' Pension Fund Meeting
. Monday, March 4, 2002 - Commission Chambers.
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~Item #1 ~ Call to Or~er. 9:3S.a.m.
Item #2 . Approval of Minutes - 2/4/02 regular meeting - Approved.
Item #3 - Approve the assumption study report prepared by PriceWaterhouse Coopers and
approve changes to the assumptions used in calculating the expected liabilities for the
Employees' Pension Plan per the report as follows: increase the expected rate of return on
investments from the current 7% to 7.6%, increase the. expected salary increase rate from
the current 5% to 6%, adjust the expected employee turnover rate to the table recommended
in the report which is bas,ed upon historical experie.nce, change the mortality table to the
1994 Group Annuity Reserving Table from the current 1983 Group Annuity Table, adjust the
expected retirement" rates' to. the table recommended in the report which is based upon
hist.orieal experience (adjusted to be more conservative), and 'make no changes to the
. expected disability rates. - ACTION: Approved.
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. Item #4 ~ Other Business - None.
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, Item #5 :. Adiournment - 9:56a.m.
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TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
March 4, 2002
Present:
Brian J. Aungst
Ed Hart .
. Whitney Gray
Hoyt P~ Hamilton
WilHam C. Jonson
Chair
Vice-Chair/Trustee
Trustee
Trustee
Trustee
Also present:
William B. Horne II
Pamela K. Akin
Lee Dehner
Margie Simmons
Cynthia E. Goudeau
Patricia O. Sullivan
City Manager
City' Attorney
Pension Trustees Attorney
Finance Director
City Clerk
Board Reporter
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The Chair called the meeting to order at 9:35 a.m. 'at City Hall.
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To provide continuity for research, items are in agenda order although not.
necessarily discussed in that order. .
ITEM #2 - Approval of Minutes:
Trustee Gray moved to approve the minutes of the February 4, 2002, meeting, as
recorded and submitted in written summation by the City Clerk to each Trustee., The
motion was duly seconded and carried unanimously. The motion was duly seconded and
carried unanimously.
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Item #3 - Approve the assumption study report prepared by PriceWaterhouse Coopers and
approve chan{:les to the assumptions used in calculatin{:l the expected liabilities for the
Employees' Pension Plan per the report as follows: increase the expected rate of return on
'investments from'the current 7 % to 7.5 %, increase the expected salary, increase rate
from the current 5% to 6%, adjust t~e expected employee turnover rate to the table
recommended in the report which is based upon historical experience, change the
mortality table to the 1994 Group Annuity Reserving Table from the current 1983 Group
Annuity Table, adjust:the expected retirement rates to the table recommended in the
report which is based upon historical experience (adjusted to be more conservative), and
make no changes to the expected disability rates.
. Pension Plan Actuary Steve Metz, of PriceWaterhouse Coopers, reviewed the report
to. assist the City in evaluating the appropriateness of current actuarial assumptions.
PriceWaterhouse Coopers was hired this year to 'evaluate current actuarial assumptions of
the employees' Pension Plan. .A staff com.mittee reviewed the report on.February 1,
2002. The report outlined each assumption, relating its history and comparing it with
other plans, and made recommendations. The assumptions impact plan liabilities and
. costs arId establish what the City believes is the best estimate of future expectations,
regardless .of impact or cost. Recommendations are: 1) economic assumptions: al .
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expected return on investments - recommend Increase from. 7 % to 7.5 % and b) annual
rate of salary increases - recommend increase from 6% to 6% and 2) demographic -
assumptions: a) employee turnover - recommend changing to the report recommended
tabl~, . which is based on historical experience: b) mortality - recommend changing from
current 1983 Group Annuity Table to the 1994 Group Annuity Reserving Table: c)
retirement rates - recommend changing to the report recommended'table, which is based
on historical experience; and d) disability rates - recommend making no change.
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Mr. Metz said he had obtained a letter from the State. Division of Retirement, which
recommended acceptance of the 1994 Group Annuity Reserving Tabla. Finance Director
Margie Simmons said on February 14. 2002. the Pension Advisory Committee had
recommended approval of the assumption study report by a 5: 1 vote. The Pension
.Investment Committee reviewed. the proposed investment rate assumption with
investment consultants Bill Badger and John Willoughby and all were in agreement that a
7.5% investment return rate assumption was reasonable.
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_ Trustee Hart moved to approve the assumption study report prepared by
. Pri,ceWaterlwuse Coopers and approve changes to the assumptions used in calculating the.
expected liabilities for the Employees; Pension Plan per the report as follows: increase the
. expected rate of return on investments from the current 7% to 7.5%, increase the '
expected salary, increase rate from the current 5% to 6%. adjust the expected employee
~urnover rate to the table recommended in the report which is pased upon historical
experlenc.e, change the mortality table to the 1994.Group Annuity Reserying Table from'
the current 1983 Group Annuity Table. adjust the expected retirement rates to the table
recommended in the report which is based upon historical e.xperience (adjusted to be more
conservative). and make no. changes to the expected disability rates. The motion was
duly .seconded and carried unanimously.
Item #4 - Other Business
In response to a question.. Ms. Simmons said the Pension Plan no longer has an
investment contract with Alliance Capital. The plan did have one investment in an Enron
bond; which lost $950,000. She said the loss had only a minor impact on the fund. The
plan does not own any other Enron stock.
ITEM #5 - Adjournment
The meeting 'adjourned at 9:56 a.m.
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