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..'Board of Trustees of the Employees' :
, ,Pension Fund'. .
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ACTION AGENDA - CL~ARWATER PENSION TRUSTEES MEETING.
Monday, March 18, 2002 . Commission Chambers
ITEM # 1 '- Call to Order - 9: 12 8.m.
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ITEM #2 - Approval of the Minutes. Regular Meeting 3/4/02
ACTION: Approved 8S submitted.
ITEM #3 .' ReQuest for acceptance Into membership: Corey Lenczden, James Phelps,
.Thelma Catio, Judy Hill, Debra Caputo, Steve Ussery, Rhonda Gracie, Joannis
. Kourmoulakis;. Robert Fahey, Raghu Thanjavur
ACTION: Approved.
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ITEM #4 - Regular Pensions to be granted: James Little, Dean Edwards
ACTION: Approved;'
ITEM #5 - Pensions to be vested: Terry Webber, James Powell, Gregory Howe
ACTION: . Approve~.
ITEM #6 - Approve increase in the amount authorized to be .spent with
. PriceWaterhouseCoopers, LLP for actuary and other related pension consulting services ,
related to potential changes in the Pension Plan by $30,000 at a total cost not to exceed
$1 24,000 for the three-year period ending December 3', 2004.
. ACTION: Approved.
ITEM #7 - Approve.the settlement agreement with SunTrust for damages in the amount of
$109,959 to be paid by SunTrust to the Employees'.Pension Plan.
'ACTION: Approved. '
. ITEM #8 - Approve an expenditure in the estimate'd amount of $40,000 to the law firm of
Christiansen & Dehner for legal services for the remainder of FY 2001-2002 budget.
ACTION: Approved. .
ITEM #9 - Other Business - None.
ITEM #10 - Adjourn - 9:28 8.m.
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03/18/02
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TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING'
CITY OF CLEARWATER
March 18, 2002'
Present:
BriaF) J. Aungst
Whitney Gray'
Hoyt P. Hamilton
William C. Jonson
Chair
Trustee
Trustee
Trustee
Absent:
Ed Hart
Vice-Chair/Trustee
'. Also pre,sent.:
William B. Horne II
. Pamela K. Akin
Lee Dehncr
Paul O'Rourke
Cynthia E. Goudeau
Patricia O. Sullivan
City Manager
City Attorney
, Pension Trustees Attorney
Human Resources Director
City Clerk
Board Reporter
The Chair called the meeting to order at 9:12 a.m.'at City Hall;
To provide continuity for research, Items are In agenda order although not
, necessarily discussed in that order.
, rrEM #2 - Approval of Minutes:
Trustee Jonson moved to approve' the minutes'of the March 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 unanhnously.
ITEM #3 - Request for Acceptance into Membership:
Human Resources Administrator Paul O'Rourke presented the recommendation of
the Pension Advisory Committee to approve membership for employees: Corey Lenczden,
James Phelps, Thelma Catio, Judy Hill, Debra Caputo, Steve Ussery, Rhonda Gracie,
Joannis Kourmoulakis, Robert Fahey, and Raghu Thanjavur.
Trustee Gray moved to accept the recommendation of the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
ITEM #4 - Requests for Pension
Mr. O'Rourke presented the recommendation of the Pension Advls'ory Committee
that James ,Uttla and Dean Edwards be. grantcd reguJar pensions under Sections 2.393
snd 2.397 of the Employees' Ponslon Plan.
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03/18/02
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James Little was employed on July 16, 1973 and his pension service credit is
effective on that date. His pension will be effective February 1, 2002. Based on an
, average s'alary of $66,720 per year over the past 6 years, the formula for computing
regular pensions, and Mr. Little's selection of the 100% Joint & Survivor Annuity, this
pe~sion will approximate $42,913 annually.
Dean Edwards was employed on August 16, 1979, and his pension service credit
;s effective on that date. His pension will be effective March 1, 2002. Based on an
average salary of $59,360 per year over the past 6 years, the formula for computing
regular pensions, and Mr. Edwards' selection of the 100% & Survivor Annuity, this
'pension will approximate $36,402 annually. '
The PAC (Pension ,Advisory Committee) approved these pensions on February 14,
2002. Section 2.393 (p) provides for normal retirement eligibility when a participant has
completed 20 years of credited service in a type of employment described as "hazardous
duty" and further specifically defines services as a Police Officer and Fire District Chief as
meeting the hazardous duty criteria. Messrs. Little and Edwards qualify under the
hazardous duty criteria.
In response to a question, Human Resources Director PaulO' Rourke said pensions
approved by the PAC in March will be presented to the Pension Trustees for approval in
April.
,-____ _ Trustee Hamilton moved to grant regular pensions for James Little and Dean
:-....J Edwards be granted under Sections 2.393 and 2.397 of the Employees' Pension Plan, as
approved by the Pension Advisory Committee. The motion was duly seconded and carried
unanimously.
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ITEM #5 - Pension to be Vested
Terry Webber was employed by the City on September 10, 1981 and terminated
from City employment on January 11, 2002. James Powell was employed by, the City on
September 14, 1982 and terminated from City employment on April 18, 2002. Gregory
Howe was employed by the City on January 25, 1988 and terminated from City
employment on Ja~uary 11, 2002.
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The Employees' Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater after completing ten or more years of creditable
service (pension participation), then 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. Section 2.393 (p) provides for normal retirement eligibility when a participant
has reached age 66 and completed twenty years of credited service, has completed 30
years of credited service, or has reache,d age 66 and Gompleted ten years of credited
servlce~
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03/18/02
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Terry Webber would have completed twenty years of service and reached age 56
on July 26, 2004. Her pension will be effective August 1, 2004. James Powell would
have completed twenty years of service and reached age 65 on September 14, 2002. His
, pension will be effective October 1, 2002. Gregory Howe would have completed twenty
years of service and reached age 55 on May 11, 2014. His pension will be effective June
1, 2015. On February 14, 2002, the PAC approved these pensions.
Trustee Jonson moved to allow Terry Webber, Planning & Development Services
Department, James Powell, Public Services Department, and Gregory Howe, Parks &
Recreation Department, to vest their pensions un'der Sections 2.397 and 2.398 of the
Employees' Pension Plan as approved by the Pension Advisory Committee. The motion
was duly seconded and ,?arrled unanimously.
ITEM #6 - Approve increase in the amount authorized to be spent with
PriceWaterhouseCoop-ers, LLP for actuary and other related pension consulting services
related to potential changes in the Pension Plan by $30,000 at a total cost not to exceed
$124,000 for the threeMyear period ending December 31 , 2004.
On August 13, 2001, the Pension Trustees approved the FY (fiscal year) Pension
Plan budget to include $30,000 for pension actuary and consulting services related to
potential changes to the Pension Plan. The PriceWaterhouseCoopers, LLP, contract needs
to be increased by $30,000, from $94;000 to $124,000, to conduct actuarial analyses
on the costs of potential Pension Plan changes: 1 J DROP (Deferred Retirement Option
Plan); 2) Uopt in" option for excluded employees; '3) purchase of prior government service
credit; 4) designation of beneficiary and joint pensioner option; 6) normal retirement
conversion benefit; 6) disability presumption for "extra duty" assignments; 7)
reemployment option; 8) increase of cost of living adjustment from 1.5% to 3%; 9)
increase to benefit formula multiplier from 2.75% to 3.5%; 1 O} average final
compensation from average salary of 5 best years of last 10 to three best years of
credited service; and 11) formal actuarial impact statement, which must be prepared for
the State prior to implementation of any changes. The PAC recommended approval.
In ro:sponse to a question, Mr. O'Rourke said this request will use funds budgeted
for consultants.
Trustee Jonson moved to approve an increase in the amount authorized to be spent
with PriceWaterhouseCoopers, LlP for actuary and other related pension conSUlting
services related to potentIal changes in the Pension PUm by $30,000 for a total cost not
to exceed $1 24,000 for three-year period ending December 31, 2004 and that the
appropriate officials be authorized to execute same. The motion was duly seconded and
carried unanimously. '
ITEM #7 - Approve settlement agreement with SunTrust for damages in the amount of
$109.959 to be paid by SunTrust to the Employees' Pension Plan.
SunTrust, one of the Pension Plan's custodian banks, holds assets managed by 6
or the Plan's 10 money managers. On May 31, 2001, the Pension Plan was funding a
new international manager with $20-miliion taken from other money managers. A
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SunTrust employee incorrectly contacted money manager, Vanderbilt, and informed them
to convert $20-million from bonds into cash. Staff has not reason or logic as to why
SunTrust notified Vanderbilt, as Vanderbilt was not a party to this transaction. After
noticing the cash remained their account following the transfer date, Vanderbilt notified
the City about the SunTrust directive. Staff directed Vanderbilt to reinvest the funds into
the appropriate securities.
Plan performance measurement consultant CallF3n and Associates has estimated the
resulting damages to the plan. As interest rates moved significantly over the short period
of time, actual costs are difficult to calculate. Callan and Associates estimated a market
loss of $103,236.27 and transaction costs of $76,532.69 for a total estimated loss of
$179, 768~96. SunTrust calculated the City's loss at $79,445.03.
Staff has worked with SunTrust to resolve this problem without litigation. Due to
the unique characteristics of the market at that time, staff feels $140,000 would be
reasonable compensation. SunTrust has offered $1 O~,959. Considering costs' associated
with litigation, staff recommends accepting the SunTrust offer. The PAC recommended
~pproval
'Trustee Hamilton moved to approve the settlement agreement with SunTrust for
damages in the amount of $109,959 to be paid by SU,nTrust to the Employees' Pension
Plan and 'that the appropriate officials, be authorized to execute same. The motion was
duly seconded and carried unanimously.
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ITEM <#8 - Approve an expenditure in the estimated amount of $40,000 to the law firm of
Christiansen & Dehner for legal services for the remainder of FY 2001/02 budget
The Pension Trustees approved a Pension Plan budget, which included an
estimated $60,000 for legal services. To date, $30,000 has been' authorized to
Christiansen & Dehner for legal services. The initial estimate of legal service expenses did
not address adequately legal costs associated with proposed changes to the Pension Plan,
the transfer of disability case managem.ent from the Cjty to Christiansen & Dehner, and
the late receipt for legal seryices rendered in FY 2000/01. To date, monthly legal
expenses average $5,500, with a projected annual cost of $66,000.
Staff requests approval of an additional estimated $40,000 to Christiansen &
Dehner for the remainder of FY (fiscal year) 2001/02 to cover: 1) late receipt of bills for
expenses incurred in previous fiscal year with $5,777.71 bill for September 2001 paid in
October; 2) $3,000 for revision of Pension Plan; 3) attorney attendance at six meetings at
$1 ~OOO each with staff and unions to qiscuss propos~d pension changes; 4) increase in
number of processed disability application with 9 pending cases, estimated at $1 ,000
each; and 5) disability medical expenses being charged to legal services with 9 pending
cases estimated at $1,000 each. The PAC recommended approval.
In response to a question, Mr. O'Rourke stated estimating funding for Christiansen
& Dehner will be easier to predict next year. Additional funding for Christiansen & Dehner
to oversee the rnvestment Committee and $6,000 for reviewing contracts is not part of
this request. '
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. Mr. O'Rourke reported approximately $6,000 of the other $20,000 approved by ,
the Pension Trustees was used for' legal services provided by Cypen & Cypen. The
remainder has not been spent and was not designated for Christiansen & Dehner. Funding.
for this cost will come from the Pension Plan.
Trustee Jonson moved to approve an increase in the amount authorized to be spent
with the law firm of Christiansen & Dehner for legal services by $40,000, increasing total
expenditures.authorized for legal services from $30,000 to $70~OOO in FY 2001/02. The
motion was duly seconded and carried unanimously.
ITEM ii9 - Other Business - None.
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. ITEM '#1 0 - Adjournment '
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The meeting adjourned at 9:28 a.m.
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