06/18/2012
PENSION TRUSTEES AGENDA
Location: Council Chambers - City Hall
Date: 6/18/2012- 9:00 AM
1. Call to Order
2. Approval of Minutes
2.1Approve the minutes of the May 14, 2012 Pension Trustees meeting as submitted in written summation by
the City Clerk.
Attachments
3. Pension Trustee Items
3.1Approve the new hires for acceptance into the Pension Plan as listed.
Attachments
3.2Approve the request of employee Karen Dombrowski, Police Department; Steven Jackson, Solid
Waste/General Services Department; Donald Ford, Police Department; E. Joanne Bunton, Library
Department; Robert Pagano, Police Department; Michael Sahr, Police Department; John Zegzdryn, Police
Department; and George Koder, Police Department, for a regular pension as provided by Sections 2.397
and 2.398 of the Employees Pension Plan.
Attachments
3.3Approve the recommended pension plan administrative expenditures for fiscal year 2013, totaling
$332,000.
Attachments
3.4Approve the termination of Aletheia Research and Management, a large cap value manager for the
pension plan; approve the transfer of the terminated managers funds to the plans other large cap value
manager, the Northern Trust Russell 1000 Value Index Fund; and authorize staff to conduct a search for a
new large cap value manager.
Attachments
4. Other Business
5. Adjourn
Meeting Date:
6/18/2012
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the minutes of the May 14, 2012 Pension Trustees meeting as submitted in written summation by the City Clerk.
SUMMARY:
Review Approval:
Cover Memo
Item # 1
Attachment number 1 \nPage 1 of 5
CITY OF CLEARWATER
May 14, 2012
Present:Chair/Trustee George N. Cretekos, Trustee Paul Gibson, Trustee
Doreen Hock-DiPolito, Trustee Bill Jonson, and Trustee Jay E.
Polglaze.
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 Nicole Sprague -Official
Records and Legislative Services Coordinator.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
1. Call to Order - Chair George N. Cretekos
The meeting was called to order at 2:10 p.m. at City Hall.
2. Approval of Minutes
2.1 Approve the minutes of the April 16, 2012 Pension Trustees meeting as submitted in written
summation by the City Clerk.
Trustee Bill Jonson moved to approve the minutes of the April 16, 2012 Pension Turstees
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 the request of employee Richard DeBord, Planning and Development Department;
Deborah Ford, Human Resources Department; Anna Fierstein, Human Resources Department;
Gary Coffey, Public Utilities Department; Robert Baxter, Public Utilities Department; and Diane
Manni, City Council Department, for a regular pension as provided by Sections 2.397 and 2.398
Richard DeBord, Code Enforcement Inspector, Planning and Development Services
Department , was employed by the City on September 28, 1987, and his pension service credit
is effective on that date. His pension will be effective June 1, 2012. Based on an average salary
of approximately $50,727 per year over the past five years, the formula for computing regular
and Survivor Annuity, this pension will
approximate $33,763 annually.
Deborah L. Ford, Human Resources Analyst, Human Resources Department , was employed
by the City on May 13, 1985, and her pension service credit is effective on that date. Her
Item # 1
Pension Trustees 2012-04-16
Attachment number 1 \nPage 2 of 5
pension will be effective Junel 1, 2012. Based on an average salary of approximately $55,650
per year over the past f
selection of the 100% Joint and Survivor Annuity, this pension will approximate $40,898
annually.
Anna Fierstein, Senior Human Resources Analyst, Human Resources Department , was
employed by the City on November 29, 1982, and her pension service credit is effective on that
date. Her pension will be effective June 1, 2012. Based on an average salary of approximately
$60,148 per year over the past five years, the formula for computing regular pensions, and Ms.
and Survivor Annuity, this pension will approximate
$47,656 annually.
Gary Coffey, Utilities Mechanic Supervisor II, Public Utilities Department , was employed by the
City on June 9 1986, and his pension service credit is effective on that date. His pension will be
effective July 1, 2012. Based on an average salary of approximately $64,079 per year over the
of the
50% Joint and Survivor Annuity, this pension will approximate $47,502 annually.
Robert Baxter, Utilities Mechanic, Public Utilities Department , was employed by the City on July
8, 1985, and his pension service credit is effective on that date. His pension will be effective
June 1, 2012. Based on an average salary of approximately $47,099 per year over the past five
and
Survivor Annuity, this pension will approximate $34,838 annually.
Diane Manni, Executive Assistant, City Council Department , was employed by the City on
October 13, 1997, and her pension service credit is effective on that date. Her pension will be
effective June 1, 2012. Based on an average salary of approximately $42,068 per year over the
the Joint and Survivor Annuity, this pension will approximate $16,929 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. Mr. DeBord, Ms. Ford, Ms.
Fierstein, Mr. Coffey, and Mr. Baxter qualify under the age 55 and twenty years of service
criteria. Ms. Manni qualifies under the age 65 and 10 years of service criteria.
Trustee Doreen Hock-Dipolito moved to approve the request of employee Richard DeBord,
Planning and Development Department; Deborah Ford, Human Resources Department; Anna
Fierstein, Human Resources Department; Gary Coffey, Public Utilities Department; Robert
Baxter, Public Utilities Department; and Diane Manni, City Council Department, for a regular
was duly seconded and carried unanimously.
3.2 Approve the request of employee Kristin Hoekstra, Fire Department, and Janet Harrison, Parks
and Recreation Department, to vest their pensions as provided by Section 2.397 of the
Kristin Hoekstra, Firefighter, Fire Department, was employed by the City on May 7, 2001, and
began participating in the Pension Plan on that date. Ms. Hoekstra terminated from City
employment on March 23, 2012
Item # 1
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Janet Harrison, Recreation Specialist, Parks and Recreation Department, was employed by the
City on March 3, 1986, and began participating in the Pension Plan on that date. Ms. Harrison
terminated from City employment on March 14, 2012
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. Section 2.397 also provides
for normal retirement eligibility when a participant has completed twenty years of credited
service in a type of employment descri
service as a Firefighter as meeting the hazardous duty criteria. Ms. Hoekstra would have
completed at least 20 years of service on May 7, 2021. Her pension will be effective June 1,
2021. Ms. Harrison would have completed at least 20 years of service and reached age 55 on
December 11, 2014. Her pension will be effective January 1, 2015.
Trustee Bill Jonson moved to approve the request of employee Kristin Hoekstra, Fire Department, and
Janet Harrison, Parks and Recreation Department, to vest their pensions as provided by Section 2.397
3.3 Accept the Actuary's Report for the Employees' Pension Plan for the plan year beginning
January 1, 2012.
Per the actuary report dated January 1, 2012, a minimum City employer contribution of $20.9
million, or 27.97% of covered payroll, is required for fiscal year 2013. This is an increase of $2.0
million over the fiscal 2012 required contribution of $18.9 million, or 24.69% of covered payroll.
The increase in the required contribution is primarily due to investment returns for calendar
2011 of negative 0.32% versus the plan's assumed rate of 7.5%. The underperformance in
calendar 2011 reduced the actuarial return (based on actuarial value of assets smoothed over 5
years) to 4.46%, versus 5.98% for the previous year.
The increase in the required contribution due to underperformance of investments was partially
offset by salary increases of 2.56% versus the assumed rate of 6.00% for calendar 2011.
The plan's credit balance, which reflects actual contributions in excess of actuarially required
contributions for prior years, decreased from $7.1 million to $6.6 million during calendar 2011.
This $0.5 million decrease was the result of applying the actuarially required employer
contribution rate (24.69% of payroll) to a declining payroll due to budget cuts.
The Plan's funded ratio is 97.4% versus 97.2% for the prior year. For comparability to other
plans, the actuary notes in the report that the current funded ratio is 94.5% based on the more
commonly used Entry Age funding method.
The Actuarial Value of Assets exceeds the Market Value of Assets by $7.4 million as of January
1, 2012. If Market Value had been the valuation basis, the required contribution rate would have
been 29.28%. In the absence of other gains, losses, or pension plan changes, the City's
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required contribution should approximate the 29% level over the next several years.
The actuary is recommending one change in an actuarial assumption. The change is to revise
the mortality assumption to include a margin for future mortality improvements, consistent with a
recent revision to an Actuarial Standard of Practice.
In response to questions, Finance Director Jay Ravins said all the investment managers have been
reviewed in detail and staff is comfortable with the current managers and asset allocations.Gabriel,
Roeder, Smith and Co. representative Stephen Palmquist for next
fiscal year will be about $2 million more than it was for this fiscal year due to the fact that the
investment return of the pension fund was less than the actuarial assumption. This is the fifth year that
the number of active members has decreased. The Citys 97% funded ratio is very strong compared to
other plans. The average funded ratio for other municipal plans is 70%. Mr. Palmquist said the
information provided does not reflect the proposed changes that would be made to the pension fund
next year if the referendum passes in November.
Trustee Hock-Dipolito moved to accept the Actuary's Report for the Employees' Pension Plan for the
plan year beginning January 1, 2012.The motion was duly seconded and carried unanimously.
3.4 Determine Trustees' total expected rate of return for the pension plan's investments for the
current year, for each of the next several years, and for the long term thereafter.
Florida Statutes 112.661 (9) requires an annual determination of expected investment rates of
return be filed with the Florida Department of Management Services, with the plan's sponsor,
and with the consulting actuary.
Compliance with this requirement has been previously assumed via the Trustees' acceptance of
the annual actuary report and related investment rate of return assumption. However the State
is requiring a separate determination be agreed upon by the Trustees.
Staff is recommending the current plan investment rate of return assumption of 7.5% as the
expected annual rate of return for the current year, for each of the next several years, and for
the long term thereafter.
In response to a question, Finance Director Jay Ravins said the state wants these figures updated
annually so setting a long term rate of return can be updated in the future.
Trustee Bill Jonson moved approve a 7.5% total expected rate of return for the pension plan's
investments for the current year, for each of the next several years, and for the long term thereafter.
The motion was duly seconded and carried unanimously.
3.5 No Item.
4. Other Business None.
5. Adjourn
The meeting was adjourned at 3:10 p.m.
Item # 1
Pension Trustees 2012-04-16
Attachment number 1 \nPage 5 of 5
Chair
Pension Plan Trustees
Attest
City Clerk
Item # 1
Pension Trustees 2012-04-16
Meeting Date:
6/18/2012
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the new hires for acceptance into the Pension Plan as listed.
SUMMARY:
Pension
Name, Job. Class, & Dept./Div. Hire Date Elig. Date
Andrea Fisher, Parking Enf. Specialist/Engineering 4/9/12 4/9/12
John Ryder, SW Equip. Oper./SW-General Services 4/10/12 4/10/12
Tracy Loibl, Crime Scene Technician/Police 4/23/12 4/23/12
Dustin Purcell, Parks Services Tech. I/Parks & Recreation 4/23/12 4/23/12
Mark Parry, Planner III/Planning & Development 4/23/12 4/23/12
Terrance Elkins, Parks Service Tech. I/Parks & Recreation 4/23/12 4/23/12
Review Approval:
Cover Memo
Item # 2
Meeting Date:
6/18/2012
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the request of employee Karen Dombrowski, Police Department; Steven Jackson, Solid Waste/General Services Department;
Donald Ford, Police Department; E. Joanne Bunton, Library Department; Robert Pagano, Police Department; Michael Sahr, Police
Department; John Zegzdryn, Police Department; and George Koder, Police Department, for a regular pension as provided by Sections
2.397 and 2.398 of the Employees Pension Plan.
SUMMARY:
Karen Dombrowski, Administrative Support Manager, Police Department
, was employed by the City on April 12, 1982, and her
pension service credit is effective on that date. Her pension will be effective August 1, 2012.
Based on an average salary of approximately $61,460 per year over the past five years, the formula for computing regular pensions, and
Ms. Dombrowskis selection of the Joint and Survivor Annuity, this pension will approximate $51,197 annually.
Steven Jackson, Production Control Coordinator, Solid Waste/General Services Department
, was employed by the City on
November 16, 1981, and his pension service credit is effective on that date. His pension will be effective October 1, 2012.
Based on an average salary of approximately $65,817 per year over the past five years, the formula for computing regular pensions, and
Mr. Jacksons selection of the 100% Joint and Survivor Annuity, this pension will approximate $55,453 annually.
Donald Ford, Custodial Worker, Police Department
, was employed by the City on May 4, 1992, and his pension service credit is
effective on August 3, 1992. His pension will be effective September 1, 2012.
Based on an average salary of approximately $29,379 per year over the past five years, the formula for computing regular pensions, and
Mr. Fords selection of the 100% Joint and Survivor Annuity, this pension will approximate $15,581 annually.
E. Joanne Bunton, Library Assistant, Library Department
, was employed by the City on April 23, 2001, and her pension service
credit is effective on April 20, 2002. Her pension will be effective July 1, 2012.
Based on an average salary of approximately $23,997 per year over the past five years, the formula for computing regular pensions, and
Ms. Buntons selection of the Joint and Survivor Annuity, this pension will approximate $6,726 annually.
Robert Pagano, Police Aide, Police Department
, was employed by the City on May 24, 1999, and his pension service credit is
effective on September 21, 2002. His pension will be effective October 1, 2012.
Based on an average salary of approximately $24,503 per year over the past five years, the formula for computing regular pensions, and
Mr. Paganos selection of the Joint and Survivor Annuity, this pension will approximate $6,738 annually.
Michael Sahr, Police Major, Police Department
, was employed by the City on July 12, 1982, and his pension service credit is
effective on that date. His pension will be effective June 1, 2012.
Based on an average salary of approximately $99,311 per year over the past five years, the formula for computing regular pensions, and
Mr. Sahrs selection of the 100% Joint and Survivor Annuity, this pension will approximate $80,520 annually.
John Zegzdryn, Police Sergeant, Police Department
, was employed by the City on November 4, 1985, and his pension service credit
is effective on that date. His pension will be effective May 1, 2012.
Cover Memo
Based on an average salary of approximately $89,077 per year over the past five years, the formula for computing regular pensions, and
Item # 3
Mr. Zegzdryns selection of the 100% Joint and Survivor Annuity, this pension will approximate $63,918 annually.
George Koder, Police Lieutenant, Police Department
, was employed by the City on December 30, 1991, and his pension service
credit is effective on that date. His pension will be effective June 1, 2012.
Based on an average salary of approximately $103,102 per year over the past five years, the formula for computing regular pensions,
and Mr. Koders selection of the 100% Joint and Survivor Annuity, this pension will approximate $57,258 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 Police Major, Police Sergeant, and Police Lieutenant as meeting the hazardous duty criteria. Ms. Dombrowski and Mr. Jackson
qualify under the thirty years of service criteria. Mr. Ford qualifies under the age 55 and twenty years of service criteria. Ms. Bunton
and Mr. Pagano qualify under the age 65 and 10 years of service criteria. Mr. Sahr, Mr. Zegzdryn, and Mr. Koder qualify under the
hazardous duty criteria.
Review Approval:
Cover Memo
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Meeting Date:
6/18/2012
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the recommended pension plan administrative expenditures for fiscal year 2013, totaling $332,000.
SUMMARY:
The Employees Pension Plan does not have a legally required annual budget. However, the Trustees must approve all expenditures. The
following are routine expenditures that staff is requesting approval of for the sake of administrative efficiency.
The recommended expenditures for fiscal 2013, as detailed on the attachment, reflect a $3,500, or 1.04%, decrease from the fiscal 2012
expenditures of $335,500. This decrease is due to a net decrease in General Fund employee costs to administer the plan.
Printing and binding expenditures are for the State statutorily required annual information distribution to pension plan members.
Postage expenditures are for necessary mailings, including the annual information distribution to plan members.
Membership dues reflect annual dues for the Florida Public Pension Trust Association.
Training and travel are for the estimated costs of pension training, including fiduciary training for trustees and Pension Advisory Committee
(PAC) members. This is a not-to-exceed amount given the uncertainty regarding which trustees and PAC members will elect to attend
conferences during the year.
Reimbursement to the General Fund is for the cost of the oversight and administration of the Plan, and is recognized as revenue to the General
Fund. This reimbursement covers the services provided by Human Resources, Payroll, and Finance personnel.
The firm of Klausner, Kaufman, Jensen and Levinson serves as the plan's pension attorney. Annual attorney fees also include medical
bills for medical services authorized by the Pension Advisory Committee. Medical services totaled $10,056 for fiscal year 2011, and current
fiscal year 2012 (thru May 31) total $1,750.
We are including budget for a Referendum for proposed pension plan changes.
Money manager, safekeeping, actuary, and pension investment consulting fees are all governed by contracts approved by the Trustees and are
not included in this approved budget.
Review Approval:
1) Office of Management and Budget 2) Legal 3) Clerk 4) Assistant City Manager 5) City Manager 6) Clerk
Cover Memo
Item # 4
Attachment number 1 \nPage 1 of 1
City of Clearwater
Employees' Pension Plan
Administrative Expenses Budget
Increase/
Decrease
DescriptionFiscal Year 2013Fiscal Year 2012
Printing & Binding$400$ 400$ -
Postage400400-
Memberships600600-
Misc100100-
Training5,0005,000-
Travel Expense3,0003,000-
Physicals30,00030,000-
Reimbursement to General Fund (Human Resources)42,00049,000(7,000)
Reimbursement to General Fund (Accounting & Finance)19,50019,000500
Reimbursement to General Fund (Payroll & IT)76,00073,0003,000
Pension Attorney140,000140,000-
Referendum15,00015,000-
Totals$332,000$335,500$(3,500)
Item # 4
Meeting Date:
6/18/2012
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the termination of Aletheia Research and Management, a large cap value manager for the pension plan; approve the transfer of
the terminated managers funds to the plans other large cap value manager, the Northern Trust Russell 1000 Value Index Fund; and
authorize staff to conduct a search for a new large cap value manager.
SUMMARY:
The pension plans investment committee is recommending the termination of Aletheia Research and Management on the basis
th
of poor performance. Per the pension plans investment policy, managers are expected to perform in the upper 50percentile (i.e.
stth
1to 50 percentile) of comparable money managers over a minimum of a three year period and a maximum of a five year
period. The large cap value market performance results for Aletheia as of March 31, 2012, as reported by the plans performance
measurement consultant, Cap Trust, are as follows:
Three-year Investment Return As Of Indicated Date (%):
3/12 12/11 9/11 6/11 3/11
Aletheia Research 19.03 11.50 (2.07) 0.72 2.38
R1000 Value Benchmark 22.82 11.55 (1.52) 2.28 0.61
Three-year Peer Group Rankings As Of Indicated Date (percentile):
3/12 12/11 9/11 6/11 3/11
ththndth rd
Aletheia Research 88 86 92 88 73
ththththth
R1000 Value Benchmark 68 85 89 79 88
As part of the termination process of Aletheia staff will do some rebalancing of the total portfolio allocation, with the balance of the monies
transferred to the plans other large cap value manager, the Northern Trust Russell 1000 Value Index Fund.
Staff will work with Cap Trust, the pension plans performance measurement consultant, to conduct a search for a new large cap value
manager.
Review
1) Office of Management and Budget 2) Financial Services 3) Office of Management and
Approval:
Budget 4) Legal 5) Clerk 6) Assistant City Manager 7) City Manager 8) Clerk
Cover Memo
Item # 5