02/15/2011
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
MINUTES
CITY OF CLEARWATER
February 15, 2011
Present: Chair/Trustee Frank Hibbard, Trustee George N. Cretekos, Trustee
John Doran, Trustee Paul Gibson, and Trustee Bill Jonson.
Also Present: William B. Horne II - City Manager, Jill S. Silverboard - Assistant City
Manager, Rod Irwin - Assistant City Manager, Pamela K. Akin - City
Attorney, Rosemarie Call - City Clerk, and Karen Vaughan -
Administrative Analyst.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
Unapproved
1. Call to Order - Chair Frank Hibbard
The meeting was called to order at 8:43 a.m. at City Hall.
2. Approval of Minutes
2.1 Approve the minutes of the January 11, 2011 Pension Trustees meeting as
submitted in written summation by the City Clerk.
Trustee John Doran moved to approve the minutes of the January 11, 2011 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 Approve new hires as listed for acceptance into the Pension Plan.
Pension
Name, Job. Class, & Dept./Div. Hire Date Elig. Date
Susan Becotte, Senior Accountant/Police 11/22/10 11/22/10
Robert Birdwell, SW Worker/Solid Waste/Gen. Ser. 9/27/10 11/22/10 *
Ashlee Sarsano, Crime Scene Technician/Police 12/6/10 12/6/10
JoAnna Fagan, Library Assistant/Library 8/28/10 12/4/10 **
Pension Trustees 2011-02-15 1
Sandra Wilson, Deputy Police Chief/Police 12/6/10 12/6/10
*originally hired as temporary on 9/27/10; status changed to permanent and pension
eligible as of 11/22/10
**originally hired as part-time on 8/28/10; changed to full-time and pension eligible as of
12/4/10
Trustee George N. Cretekos moved to approve the new hires as listed for acceptance
into the Pension Plan. The motion was duly seconded and carried unanimously.
3.2 Approve the requests of employees Deborah Lutz, Engineering Department, and
Thomas Allegretti, Fire Department, for regular pensions as provided by
Sections 2.397 and 2.398 of the Employees Pension Plan.
Deborah Lutz, Senior Staff Assistant, Engineering Department, was employed by the
City on April 11, 1988, and her pension service credit is effective on that date. Her
pension will be effective January 1, 2011. Based on an average salary of approximately
$40,491 per year over the past five years, the formula for computing regular pensions,
and Ms. Lutz’ selection of the Life Annuity, this pension will approximate $25,289
annually.
Thomas Allegretti, Fire Lieutenant, Fire Department, was employed by the City on
October 12, 1980, and his pension service credit is effective on that date. His pension
will be effective February 1, 2011. Based on an average salary of approximately
$76,605 per year over the past five years, the formula for computing regular pensions,
and Mr. Allegretti’s selection of the Life Annuity, this pension will approximate $69,490
annually.
Section 2.397 provides for normal retirement eligibility when a participant has completed
thirty years of credited service, has reached age 55 and completed twenty years of
credited service, or has reached age 65 and completed ten years of credited service.
Section 2.397 also 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 Fire Lieutenant as meeting the hazardous duty criteria. Ms.
Lutz qualifies under the age 55 and 20 years of service criteria. Mr. Allegretti qualifies
under the hazardous duty criteria.
Trustee Paul Gibson moved to approve the requests of employees Deborah Lutz,
Engineering Department, and Thomas Allegretti, Fire Department, for regular pensions
as provided by Sections 2.397 and 2.398 of the Employees Pension Plan. The motion
was duly seconded and carried unanimously.
Pension Trustees 2011-02-15 2
3.3 Approve the request of employee Jack Bryant, Marine and Aviation Department,
to vest his pension as provided by Section 2.397 of the Employees’ Pension
Plan.
Jack Bryant, Marine Facility Operator, Marine and Aviation Department, was employed
by the City on July 24, 1995 and began participating in the Pension Plan on that date.
Mr. Bryant terminated from City employment on January 17, 2011.
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 2.397 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.
Mr. Bryant would have completed at least 10 years of service and reached age 65 on
January 17, 2013. His pension will be effective February 1, 2013.
Councilmember Bill Jonson moved to approve the request of employee Jack Bryant,
Marine and Aviation Department, to vest his pension as provided by Section 2.397 of
the Employees’ Pension Plan. The motion was duly seconded and carried unanimously.
3.4 Approve agreements hiring Hancock Timber Resource Group and the Molpus
Woodlands Group as timber investment managers for the pension plan and
authorize the appropriate officials to execute the same.
The Trustees authorized staff to conduct a search for timber investment managers for
the plan. CapTrust, the plan’s performance measurement consultant, and the Pension
Investment Committee developed a short list of the five following firms for interviews:
RMK Timber Group
Molpus Woodlands Group
Hancock Timber Resources Group
Forest Investments Associates
Timbervest
Pension Trustees 2011-02-15 3
As a result of the interviews and due diligence the Pension Investment Committee and
CapTrust recommend that the plan hire Molpus Woodlands Group and Hancock Timber
Resources Group as timber investment managers.
The Trustees approved an asset allocation plan on December 13, 2009, that included
three percent of the plan’s assets in the timber asset class. The Pension Investment
Committee and Cap Trust are recommending an allocation of eight million dollars to
each manager. This sixteen million dollar allocation to the timber asset class represents
approximately 2.3% of the current plan assets.
Investment in this type of assets can only be made by qualified/accredited investors.
The pension plan qualifies as a qualified/accredited investor because the plan has
assets in excess of five million dollars and because the Pension Investment Committee
has adequate investment expertise. Because this type of investment is available, only to
qualified/accredited investors the procedure to enter into a contract with a manager is
different than we have previously done. For this type of investment, the trustees need to
approve hiring the manager, sign the documents and submit the documents to the
timber manager for approval. The manager will then execute the agreement when he
determines we qualify. This type of investment is a long-term commitment on the part of
the pension plan. The main benefit to the pension plan of a timber investment is that
correlation of timber is very, very low or negative to the other investment classes
currently in the pension plan, while earning a competitive return. This should help
reduce the volatility of the plan earnings from year to year.
Molpus Woodlands Group charges an annual management fee of 100 basis points and
an incentive fee of 15% on returns greater than 7%. Molpus also charges pass through
fees for administration, accounting, acquisition, disposal, legal and harvest supervision.
Hancock Timber charges an annual management fee of 95 basis points with an
incentive fee of 20% on returns greater than 7%. Hancock charges no pass through
fees. Both fee structures are about average for this asset class.
Trustee John Doran moved to approve agreements hiring Hancock Timber Resource
Group and the Molpus Woodlands Group as timber investment managers for the
pension plan and authorize the appropriate officials to execute the same. The motion
was duly seconded and carried unanimously.
4. Other Business - None.
Pension Trustees 2011-02-15 4
5. Adjourn
The meeting was adjourned at 8:49 a.m.
j.,...^,—,K10.1/4—*°//
Chair
Attest Employee's Pension Plan Trustees
4 / („, X1
City Clerk H � ',,`= -�. .„et
'c, -::--:::--_:_ ' . ir.n r qs--- it,,s0
Pension Trustees 2011-02-15 5