01/11/2010
4 PENSION TRUSTEES AGENDA
Location: Council Chambers - City Hall
Date: 1/11/2010- 9:00 AM
1. Call to Order
2. Approval of Minutes
2.1 Approve the minutes of the December 14, 2009 Pension Trustees Meeting as submitted in written
summation by the City Clerk.
Attachments
3. Pension Trustee Items
3.1 Employees listed below be accepted into membership in the City of Clearwater Employees' Pension Plan
as approved by the Pension Advisory Committee.
Attachments
3.2 Terry Tennis, Police Department, and Carol Schmidt, Police Department, be granted regular pensions
under Section(s) 2.393 and 2.397 of the Employees' Pension Plan as approved by the Pension Advisory
Committee.
Attachments
3.3 Gina Henry, Parks & Recreation Department, and Jon Marcin, Finance Department, be allowed to vest
their pensions under Section(s) 2.397 and 2.398 of the Employees' Pension Plan as approved by the
Pension Advisory Committee.
Attachments
4. Other Business
5. Adjourn
Meeting Date: 1/ 11/20 10
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the minutes of the December 14, 2009 Pension Trustees Meeting as submitted in written summation by the City Clerk.
SUMMARY:
Review Approval: 1) Clerk
Cover Memo
Item # 1
Attachment number 1
Page 1 of 8
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
MINUTES
CITY OF CLEARWATER
December 14, 2009
Unapproved
Present: Chair Frank Hibbard, Trustee George N. Cretekos, Trustee John Doran,
Trustee Paul Gibson, and Trustee Carlen Petersen.
Also William B. Horne II - City Manager, Jill S. Silverboard - Assistant City
present: Manager, Rod Irwin - Assistant City Manager, Pamela K. Akin - City Attorney,
Cynthia E. Goudeau - City Clerk, and Rosemarie Call - Management Analyst.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
1. Call to Order
The meeting was called to order at 1:15 p.m. at City Hall.
2. Approval of Minutes
2.1 Approve the minutes of the October 19, 2009 Pension Trustees Meeting as
submitted in written summation by the City Clerk.
Trustee Carlen Petersen moved to approve the minutes of the October 19, 2009
Pension Trustees Meeting as submitted in written summation by the City Clerk. The
motion was duly seconded and carried unanimously.
3. Pension Trustee Items
3.1 Employees listed below be accepted into membership in the City of Clearwater's
Employees' Pension Plan as approved by the Pension Advisory Committee.
me, Job. Class, & Dept./Div.
ary Beth Setter, Sr. Acct./Economic Dev.
Hire Elig.
Date Date
8/31/09 8/31 /09
Pension Trustees 2009-12-14 Item #11
Attachment number 1
Page 2 of 8
Dominick Briganti, Firefighter/Fire 10/13/09 10/13/09
Aaron Campbell, Firefighter/Fire 10/13/09 10/13/09
(Robert Finke, Firefighter/Fire (10/13/09 (10/13/09
Jarett Hood, Firefighter/Fire 10/13/09 10/13/09
Christopher Johnson, Firefighter/Fire 10/13/09 10/13/09
Douglas Kellin, Firefighter/Fire 10/13/09 10/13/09
Casey Matz, Firefighter/Fire 10/13/09 10/13/09
Christian Miller, Firefighter/Fire 10/13/09 10/13/09
Kyle Mueller, Firefighter/Fire 10/13/09 10/13/09
Steven Peters, Firefighter/Fire 10/13/09 10/13/09
Alan Ryan, Firefighter/Fire 10/13/09 10/13/09
David Sowers, Firefighter/Fire 10/13/09 10/13/09
Hieu Tran, Firefighter/Fire 10/13/09 10/13/09
James Ingram, Solid Waste Worker/Solid 10/13/09 10/13/09
Waste
Reginald Jackson, Solid Waste Worker/Solid 9/14/09 9/14/09
Waste
Timothy Jones, Solid Waste Worker/Solid 9/14/09 9/14/09
Waste
Albert Alexander, Parks Service Tech. I/Parks & 19/14/09 19/14/09
Terrance Scott, Solid Waste Worker/Solid Waste 9/14/09 9/14/09
Ian Shollenberger, Parks Service Tech. I/Parks & Rec. 9/28/09 9/28/09
Charles Lawrence, Solid Waste Worker/Solid Waste 9/28/09 9/28/09
:Leroy Bostick, Solid Waste Worker/Solid Waste 9/28/09 9/28/09
Jacqueline Lewis, Service Dispatcher/Gas 9/28/09 9/28/09
Daniel Hardesty, Parks Service Tech. I/Parks & Rec.
( 9128/09 9/28/09
Timothy Jennings, Parks Service Tech. l/Parks & Rec. 9/28/09 9/28/09
John Hunter, Field Service Rep. I/Customer Service 9/28/09 9/28/09
Deborah Cruz, Service Dispatcher/Gas 10/12/09 10/12/09
Trustee John Doran moved to accept the employees listed below into membership in
the City of Clearwater's' Employees' Pension Plan as approved by the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
3.2 James Quinlan, Police Department, be granted a regular pension under
Section(s) 2.393 and 2.397 of the Employees Pension Plan as approved by the
Pension Advisory Committee.
Pension Trustees 2009-12-14 Item #21
Attachment number 1
Page 3 of 8
James Quinlan, Police Sergeant, Police Department, was employed by the City
on November 9, 1987, and his pension service credit is effective on that date. His
pension will be effective November 1, 2009.
Based on an average salary of approximately $88,083 per year over the past five
years, the formula for computing regular pensions, and Mr. Quinlan's selection of
the Life Annuity, this pension will approximate $54,675 annually.
This pension was approved by the Pension Advisory Committee on November 12,
2009. Section 2.393 provides for normal retirement eligibility when a participant
has completed twenty years of credited service or has reached age 55 and
completed ten years of credited service in a type of employment described as
"hazardous duty" and further defines service as a Police Sergeant as meeting the
hazardous duty criteria. Mr. Quinlan qualifies under the hazardous duty criteria.
Trustee George N. Cretekos moved to grant James Quinlan, Police Department, a
regular pension under Section(s) 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.
3.3 Nathaniel McAbee, Public Services Department, and Christopher Hall, Public
Communications Department, be allowed to vest their pensions under Section(s)
2.397 and 2.398 of the Employees Pension Plan as approved by the Pension
Advisory Committee.
Nathaniel McAbee, Public Services Coordinator, Public Services Department, was
employed by the City on December 10, 1984, and began participating in the
Pension Plan on that date. Mr. McAbee terminated from City employment on
September 25, 2009.
Christopher Hall, Graphics Supervisor, Public Communications Department, was
employed by the City on January 29, 1990, and began participating in the Pension
Plan on that date. Mr. Hall terminated from City employment on September 25,
2009.
The Employees' Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater or change status from full-time to part-time
after completing ten or more years of creditable service (pension participation),
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 55 and completed twenty years of credited service, has completed
30 years of credited service, or has reached age 65 and completed ten years of
Pension Trustees 2009-12-14 Item #31
Attachment number 1
Page 4 of 8
credited service. Mr. McAbee would have completed 20 years of service and
reached age 55 on September 15, 2012. His pension will be effective October 1,
2012. Mr. Hall would have completed 30 years of service on January 29,
2020. His pension will be effective February 1, 2020. These pensions were
approved by the Pension Advisory Committee on November 12, 2009.
Trustee Paul Gibson moved to allow Nathaniel McAbee, Public Services Department,
and Christopher Hall, Public Communications Department, to vest their pensions under
Section(s) 2.397 and 2.398 of the Employees Pension Plan as approved by the Pension
Advisory Committee. The motion was duly seconded and carried unanimously.
3.4 Award a contract for actuarial services for the Pension Plan for the five year
period ending December 31, 2014, to Gabriel, Roeder, Smith and Company,
authorize a not to exceed amount for the Pension Plan over the 5 year period of
$210,000 and authorize the appropriate officials to execute same.
Annually, the General Employees' Retirement Plan requires an actuarial valuation
of the plan to determine the City's contribution. Annually, as issues arise, the City
seeks consultation from its actuary on issues concerning the retirement plan. In
addition, as the City contemplates changes to the retirement plan, various costing
studies will be required.
Gabriel, Roeder, Smith and Company was selected from a group of twelve (12)
national firms responding to the City's RFP 21-09.
All twelve firms responding were deemed responsible proposals and were
differentiated primarily by firm and staff experience with similar Florida plans and
proposed fees.
GRS was selected by the selection committee as submitting the most desirable
combination of experience and fee structure and maintains an office in Ft.
Lauderdale, FL.
First year fee for the actuarial valuation of the General Employee's retirement
Plan will be $16,000 and paid by the Plan. Subsequent year fees will be adjusted
for inflation by changes in the 12/31 CPI-U index annually during the remaining
term of the agreement.
We have estimated an annual amount of consultation at $5,000 per year and
costing studies of potential pension plan changes at $75,000. Any increases in
these amounts will come back to the Trustees for approval.
The total not to exceed amount is calculated as follows:
$16,000 First year fee
$16,480 Estimated second year fee (increased by estimated CPI of 3%)
$17,000 Estimated third year fee (increased by estimated CPI of 3%)
Pension Trustees 2009-12-14 Item #41
Attachment number 1
Page 5 of 8
$17,500 Estimated forth year fee (increased by estimated CPI of 3%)
$18,020 Estimated fifth year fee (increased by estimated CPI of 3%)
$25,000 Estimated annual consulting of $5,000/year for 5 years
$100,000 Estimated consulting on pension plan changes
$210,000 Estimated total
Included in this contract is the periodic actuarial valuation for the City's OPEB
(Other Post Employment Benefits) liability which is a City expense, unrelated to
the Pension Plan. This liability is related to the State requirement that the City
allow retirees to participate in the City's health insurance plan at the same cost.
The City Council will be considering this part of the contract as part of the Council
agenda this week and this cost will be paid from City funds.
Trustee Carlen Petersen moved to award a contract for actuarial services for the
Pension Plan for the five year period ending December 31, 2014, to Gabriel, Roeder,
Smith and Company, authorize a not to exceed amount for the Pension Plan over the 5
year period of $210,000 and authorize the appropriate officials to execute same. The
motion was duly seconded and carried unanimously.
3.5Accept the 2009 Asset Allocation Review and authorize staff to implement the
recommendations.
Earlier this year the Trustees retained Callan Associates to perform an asset
allocation study. After extensive meetings and considerable deliberations that study
is now complete.
The study considered all of the alternative strategies. Callan found that only four
strategies were worthy of consideration at this time. The following are the
recommendations:
Class
Private real estate
Hedge funds
Private
equity
Timber
Callan Committee
Recommendation
Add to portfolio Add to
portfolio
Not at this time Not at this
time
Add to portfolio More study
required
Add to portfolio Part of real
The following are the current asset allocation and the alternative mix that Callan is
recommending:
Current Callan
Pension Trustees 2009-12-14 Item #51
Attachment number 1
Page 6 of 8
Large Cap Domestic 20% 32%
Equity
Mid/Small Cap Domestic 22% 8
Equity
International 10% 18%
Equity
Emerging Market 8% 3%
Equity
Domestic Fixed 30% 30%
Income
Real - 10% 9%
Estate
Expected Rate of 8.68% 8.43%
Return
Standard .12.36% 11.21%
Deviation
The current asset allocation is a result of an asset allocation study that was
performed several years ago. The current allocation is located on the Efficient
Frontier which is exactly where we want our investment allocation. Rather than have
exact asset allocation targets, Callan is recommending that target ranges be
developed. Staff is updating the investment policy, with assistance from our
consultant, to reflect target ranges and will bring that to the Trustees in the near
future. One advantage of ranges is that it will allow for tactical asset allocations.
These tactical asset allocations will be based upon recommendations by the Plan's
consultants. Currently, the asset allocation is overweight in small/mid cap domestic
and emerging market stocks and underweight developed international
equities. This has benefited the plan given the state of the current economy.
Currently the plan is exposed to real estate through REITs. REITs was a good first
step for the plan and now Callan is recommending we expand the real estate option
to include an open ended institutional co-mingled fund. Cap Trust, the Plan's
advisor, will work with staff to select an appropriate manager/managers. Staff will
bring to the Trustees recommendations as to managers and the actual subclass of
real estate in the early spring. Private real estate will add the attributes of
diversification, alpha generation (additional return), and inflation hedge to the
portfolio mix.
Callan and Associates representative Jay Koepfer reviewed the asset allocation review
process and alternative strategies.
In response to concerns, Cash and Investments Manager Steve Moskun said the
Pension Trustees 2009-12-14 Item #61
Attachment number 1
Page 7 of 8
previous allocation study suggested investing in both REITs and private real estate. If a
closed and co-mingled product is chosen, a negative return is expected the first 2-3
years. Mr. Moskun said there is always a demand for timber, no matter how the
economy goes.
In response to questions, Mr. Moskun said the Recommendation Committee decided
not to pursue managed futures at this time due to high fees. Staff would like additional
studies on hedge funds to determine most appropriate strategies.
Discussion ensued. Questions were raised regarding managed futures and hedge
funds. It was the consensus additional information is needed prior to making decisions
regarding these types of investments. It was agreed that investments in private real
estate should be made in new rather than existing funds.
Staff was directed to schedule a workshop in January or February to explain investment
strategy.
Trustee Carlen Petersen moved to accept the 2009 Asset Allocation Review and
authorize staff to implement the recommendations, placing private real estate
investments in new funds. The motion was duly seconded and carried unanimously.
3.6 Discuss and provide direction re pursuing a second tier pension plan.
At the request of the Trustees, the pension attorney has information for discussion
by the Trustees.
Klausner and Kaufman representative Stu Kaufman reviewed allowable options for a
2nd tier retirement benefit plan, which is relatively new in Florida. Pension benefits
must be bargained even for new hires and must meet the minimum level of benefits
required by State Statutes. The following changes can be considered:
* Retirement Benefit Multiplier
- reduce multiplier to 2%
* Normal form of Retirement Benefit
- 10 years certain and life thereafter for hazardous
- Life annuity for non-hazardous
- Annuity for employee only
* Disability Benefit
- Line of Duty, not less than 42%
* Overtime for Police
- 300 hours minimum
* Contributions
- can be raised
* COLA
Pension Trustees 2009-12-14 Item #71
Attachment number 1
Page 8 of 8
- can be eliminated
* Maximum Benefit
- can be lowered
* Normal Retirement Age
- can be eliminated or raised
In response to a question, Mr. Kaufman said council must bargain benefit changes for
both general wage employees and public safety employees. There are some
protections for police and fire plans that are not available to general wage employees. It
was noted any changes would also have to be approved by the voters.
Concern was expressed regarding impact to employee morale if a 2nd benefit tier is
instituted.
Staff was directed to look at viable alternatives and present specific items for
consideration.
4. Other Business - None.
5. Adjourn
The meeting was adjourned at 2:27 p.m.
Chair
Employee's Pension Plan Trustees
Attest
City Clerk
Pension Trustees 2009-12-14 Item #8I
Meeting Date: 1/ 11/20 10
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Employees listed below be accepted into membership in the City of Clearwater Employees' Pension Plan as approved by the Pension
Advisory Committee.
SUMMARY:
Pension
Name, Job Classification, & Department/Division Hire Date Elig Date
Scott Lipp, Parks Service Technician/Parks & Rec. 10/25/09 10/26/09
Review Approval: 1) Clerk
Cover Memo
Item # 2
Meeting Date: 1/ 11/20 10
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Terry Tennis, Police Department, and Carol Schmidt, Police Department, be granted regular pensions under Section(s) 2.393 and 2.397
of the Employees' Pension Plan as approved by the Pension Advisory Committee.
SUMMARY:
Terry Teunis, Police Lieutenant, Police Department, was employed by the City on January 17, 1990, and his pension service credit is
effective on that date. His pension will be effective February 1, 2010.
Based on an average salary of approximately $90,725 per year over the past five years, the formula for computing regular pensions, and
Mr. Tennis' selection of the 100% Joint & Survivor Annuity, this pension will approximate $49,102 annually.
Carol Schmidt, Police Officer, Police Department, was employed by the City on June 30, 1986, and her pension service credit is
effective on that date. Her pension will be effective February 1, 2010.
Based on an average salary of approximately $71,780 per year over the past five years, the formula for computing regular pensions, and
Ms. Schmidt's selection of the 10-Year Certain & Life Annuity, this pension will approximate $46,547 annually.
These pensions were approved by the Pension Advisory Committee on December 10, 2009. Section 2.393 provides for normal
retirement eligibility when a participant has completed twenty years of credited service or has reached age 55 and completed ten years
of credited service in a type of employment described as "hazardous duty" and further defines service as a Police Lieutenant and Police
Officer as meeting the hazardous duty criteria. Mr. Tennis and Ms. Schmidt qualify under the hazardous duty criteria.
Review Approval: 1) Clerk
Cover Memo
Item # 3
Meeting Date: 1/ 11/20 10
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Gina Henry, Parks & Recreation Department, and Jon Marcin, Finance Department, be allowed to vest their pensions under Section(s)
2.397 and 2.398 of the Employees' Pension Plan as approved by the Pension Advisory Committee.
SUMMARY:
Gina Henry Recreation Programmer, Parks & Recreation Department, was employed by the City on January 15, 1990, and began
participating in the Pension Plan on that date. Ms. Henry terminated from City employment on October 30, 2009.
Jon Marcin, Risk Management Specialist, Finance Department, was employed by the City on May 9, 1994, and began participating
in the Pension Plan on that date. Mr. Marcin will terminate from City employment on March 19, 2010.
The Employees' Pension Plan provides that should an employee cease to be an employee of the City of Clearwater or change status
from full-time to part-time after completing ten or more years of creditable service (pension participation), 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 55 and completed twenty years of
credited service, has completed 30 years of credited service, or has reached age 65 and completed ten years of credited service. Ms.
Henry would have completed 20 years of service and reached age 55 on February 4, 2013. Her pension will be effective March 1,
2013. Mr. Marcin would have completed 10 years of service and reached age 65 on June 19 2011. His pension will be effective July 1,
2011. These pensions were approved by the Pension Advisory Committee on December 10, 2009.
Review Approval: 1) Clerk
Cover Memo
Item # 4