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03/17/2003 (2) I .. . . '.' .' . .., .' .' . + .' : '" .' ' . " PENSION ..' (TRUSTEES) Board of Trustees of the Employees' Pension Fund " ' Minutes' , . . , . ,'..' D'a.te ,03/17 /D3 . '. ' , . ,. ., " . , " " ..< , ' , . . , , ' ' . c " ~ . . . " " ,; . " . . ~ f j ~, . . . . I, '. , " . . : . "'.< . . . . ,.',,' , . . j ,: ,~< , f. I /, ' '. " , , ' , ~ I' . ,. . I . , .. . . \ . . . I '. . . ,. +'. . . . . ACTION AGENDA - CLEARWATER PENSION TRUSTEES MEETING Monday, March 17, 2003 - 9:04 A.M. - Commission Chambers ITEM #2 - Approval of Minutes - 2/18/02 ACTION: Minutes approved as submitted. ITEM #3 - Request for Acceptance into Membership: James Purdy, Mirna Selva, Jason Kinney, Sara DeBella, Brian Davis, Carol Anding, Stacy Keenan, Dawn Jenkins, Andrew Rawlins, Robert Davis, Jr., Charles McAbee, Ann Galluccio, William Bennett, Joseph Raffo, Michael Hayes, and Michael Roseto. ACTION: Approved ITEM #4 - Requests for Pension by Gertrude Devers, Richard Hodge. Roscoe Dobson, Jr., Fredrick Fricke, Melvin Acton, George Johnson, and John Urban. ACTION: Approved ITEM #5 - Approve the chanQe in ownership of EPW Investment Manadement. Inc. ACTION: Approved ITEM #6 - Authorize staff to'conduct a search for a ufixed income" stvle manager for the Emplovees Pension Fund. authorize Callan & Associates to assist with the search for a fee of $25.000. authorize the cost of the search. includinQ staff travel of approximately $4.000. to be paid from the pension fund. ,ACTION: Approved ITEM #7 - Other Business: ACTION: City Attorney thanked for her participation in PAC/Pension Trustee discussions re RFP process to choose legal representation for Employees Pension Fund. ITEM #8 - Adiournment: 9:11 a.m. Pension Trustees Action Agenda 2003-0317 1 . .' . TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING CITY OF CLEARWATER March 17, 2003 Present: Brian Aungst Whitney Gray Hoyt Hamilton Frank Hibbard William C. Jonson Chair Vice~ChairlTrustee Trustee Trustee Trustee Also Present: Garry Brumback Pamela K. Akin Rick Ebelke Cynthia E. Goudeau Patricia o. Sullivan Assistant City Manager City Attorney, Assistant Human Resources Director City Clerk Board Reporter ' The Chair called the meeting to order at 9:04 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM #2 - Approval of Minutes: Trustee Hibbard moved to approve the minutes of the February 18, 2003, meeting, as recorded and submitted in written summation by the City Clerk to each Trustee. The motion was duly seconded and carried ,unanimously. ITEM #3 - Request for Acceptance into Membership: Assistant Human Resources Director Rick Ebelke presented the recommendation of the, PAC (Pension Advisory Committee) to approve membership for employees: James Purdy, Mirna Selva, Jason Kinney, Sara DeBella, Brian Davis, Carol Anding, Stacy Keenan, Dawn Jenkins, Andrew Rawlins, Robert Davis, Jr., Charles McAbee, Ann Galluccio, William Bennett, Joseph Raffo, Michael Hayes, and Mi,chael Roseto. Trustee Gray moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded'and carried unanimously. ITEM #4 - ReQular Pensions to be Qranted Mr. Ebelke presented the recommendation of the Pension Advisory Committee that Gertrude Devers, Richard Hodge, Roscoe Dobson, Jr., Fredrick Fricke, Melvin Acton, George Johnson, and John Urban be granted regular pensions under Sections 2.393 and 2.397 of the Employees' Pension Plan'. Gertrude Devers,' Development Review Technician II, Development Services Department, was employed on June 21, 1971, and her pension service credit is effective on that date. Her pension will be effective March 1, 2003. Based on an average salary of approximately $35,668 per year over the past 5 years. the formula for computing regular pensions, and Ms. Devers' selection of the 1000/0 Joint & Survivor Annuity, this pension will approximate $24,195 annually. . Pension Trustees 2003-0317 03/17/03 , " , '. .' . r I . I.. . . .. '. '; " \ I' . '. . I , , ' , " " ,., , ~,., . '. ; .. .' 1 . ~. 1 ' . , , . . . Richard Hodge. Solid Waste Supervisor fl. Solid Waste/General Services Department. was employed on October 6. 1978. and his pension service credit is effective on May 30. 1979. His pension will be effective June 1. 2003. Based on an average salary of approximately $48.019 per year over the past 5 years. the formula for computing regular pensions, and Mr. Hodge's selection of the Joint & Survivor Annuity. this pension will approximate $31.692 annually. Roscoe Dobson. Jr.. Firefighter. Fire Department. was employed on January 17.1972. and his pension service credit Is effective on that date. His pension will be effective February 1. 2003. Based on an average salary of approximately $50A8 1 per year over the past 5 years. the formula for computing regular pensions. and Mr. Dobson's selection of the 1000/0 Joint & Survivor Annuity. this pension will approximate $42.088 annually. Fredrick Fricke. Police Officer. Police Department. was employed on August 1. 1977. and his pension service credit is effective on that date. His pension will be effective March 1. 2003. Based on an average salary of approximately $55,314 per year over the past 5 years. , the formula for computing regular pensions. and Mr. Fricke's selection of the 1 O-year Certain & Life Annuity. this pension will approximate $41.553 annually. Melvin Acton. Fire Lieutenant. Fire Department. was employed on August 27. 1973. and his pension service credit is effective on that date. His pension will be effective February 1. 2003. Based on an average salary of approximately $56.358 per year over the past 5 years, the formula for computing regular pensions. and Mr. Acton's selection of the Life Annuity, this pension will approximate $46.263 annually. , George Johnson. Firefighter. Fire Department. was employed on May 8.1974. and his pension service credit is effective on that date. His pension will be effective February 1,2003. Based on an average salary of approximately $47.991 per year over the past 5 years. the formula for computing regular pensions, and Mr. Johnson's selection of the 1000/0 Joint & Survivor Annuity, this pension will approximate $37,479 annually. John Urban. Firefighter. Fire Department. was employed on JanualY 11. 1982. and his pension service credit is effective on that date. His pension will be effective March 1, 2003. Based on an average salary of approximately $49.841 per year over the past 5 years. the formula for computing regular pensions.' and Mr. Urban's selection of the Joint & Survivor Annuity, this pension wlll approximate $28.935 annually. The PAC approved pensions for Gertrude Devers. Richard Hodge. Roscoe Dobson, Jr.. Fredrick Fricke. Melvin Acton, George Johnson. and John Urban on February 13. 2003. 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. Fire Lieutenant. and Fire Lieutenant ' Rescue/Paramedic as meeting the hazardous duty criteria. Section 2.393 (p) also provides for - normal retirement eligibility when a participant has reached age 55 and completed twenty years of credited service, has completed thirty years of credited service, or has reached age 65 and completed ten years of credited service. Ms. Devers and Mr. Hodge qualify under the age 55 and 20 years of service criteria. Messrs. Dobson. Jr., Fricke. Acton. Johnson. and Urban qualify under the hazardous duty criteria. Trustee Hamilton moved to grant regular pensions for Gertrude Devers. Richard Hodge. Roscoe Dobson. Jr.. Fredrick Fricke. Melvin Acton. George Johnson. and John Urban 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. Pension Trustees 2003-0317 2 03/17/03 . . . ITEM #5 - Approve the chanqe in ownership of EPW Investment Management. Inc. EPW Investment Management, a wholly owned subsidiary of United Financial Holding, is merging with Synovus Financial Corporation. The City's contract with EPW Investment Management provides that the City must approve assignment of the contract. EPW is a fixed income manager who manages a portfolio of Treasuries for the plan. EPW also provides equity investment advice to the plan. For the year ending December 31,2002, EPW was ranked in the top 9th percentile.' For the last 5 years they were ranked in the top 33rd percentile. There will be no changes at EPW Investment Management. The Pension Investment Advisory Committee recommends approval of the change. . Trustee Hamilton moved to approve the change in ownership of EPW Investment Management, Inc. The motion' was duty seconded and carried unanimously. ITEM #5 - Authorize staff to conduct a search for a "fixed income" stvle manaqer for the Emplovees Pension Fund. authorize Callan & Associates to assist with the search for a fee of ~25.000. authorize the cost of the search. includinq staff travel of approximately $4.000. to be paid from the pension fund. For the year ending December 31,2002, the Employees Pension Plan had a rate of return of 8.750/0 vs. the benchmark of 8.860/0. While the plan's return beat the ,customized benchmark last year, two of three fixed income managers, Vanderbilt Capital Advisors and Sirach Capital Advisors, performed near the bottom of their peer group for the last two years. Vanderbilt Capital Advisors attributes their poor relative performance to their belief that the corporate bond sector will outperform all other fixed income sectors. They believe they were early and time will prove them right. For the last two years, Vanderbilt performed at the 90th and 96th percentile. (1 st percentile is the best and 100th percentile is worst performers.) Sirach Capital Advisors has had some personnel problems. They have made changes, however their performance has not improved. For the last two years they performed at the 99th and 98th percentile. The plan's consultants also are recommending that the City move some of the plan's assets from Treasuries to other fixed income securities. It is their belief the US Treasuries have' seen their run and Treasuries will lag other fixed income sectors in performance. The Pension Investment Committee unanimously recommends an additional "fixed income" style mana'ger, which is the first step to reduce funding and/or terminate one or both of the under performin'g managers. Callan's $25,000 fee for the search will be paid by directing investment trades through a selected broker and will not be an additional direct expense of the pension plan. The Investment Committee will come back to the Trustees in late summer or early fall with the results of the search for approval. The cost of committee member travel to investigate/research the top ranked firm(s) is estimated at $4,000. The actual amount will be affected by the location of the investment manager(s) and the number that needs to be researched. In response to a question, Cash & Investments Manager Steve Moskun said the Plan last conducted a search for a fixed-income style manager four years ago. The fund is monitored quarterly, with meetings held every six months. It was suggested it may be time to Pension Trustees 2003-0317 3 03/17/03 Cha' Employee's . conduct another search. In response to a concern that Callan's fee Is too high, Mr. Moskun said the fee is standard. Trustee Jonson moved to authorize staff to conduct a search for a ufixed income" style manager for the Employees Pension Fund, authorize Callan & Associates to assist with the search for a fee of $25,000, authorize the cost of the search, including staff travel of ' ,approximately $4,000, to be paid from the penslo'n fund. The motion was duly seconded and carried unanimously. ITEM #6 - Other Business - None. The City Attorney was thanked for her participation in PAC/Pension Trustee discussions related to the RFP (Request for Proposals) process to choose legal representation for the Employees Pension Fund. ' ITEM #7 - Adiournment ,The meeting adjourned at 9:11 a.m. Attest;, , ' 1,\ J i . ,J/u Ci,ty Cle;~ e'f. '. . ., Pension Trustees 2003-0317 4 03/17/03 '..,1. '" ...., ": . , j ,. " ,..' ",' ,,' .', . I' . . t"'. . I ." . . \'