06/13/2006
PENSION TRUSTEES AGENDA
Date: 6/13/2006- 1 :30 PM
Location :Council Chambers - City Hall
1. Call to Order
2. Approval of Minutes
2.1 Approve the minutes of the May 30, 2006, Pension Trustees meeting.
@)Attachments
3. Pension Trustee Items
3.1 Accept the employees listed below into membership in the City of Clearwater Employee's Pension Plan
@) Attachments
3.2 Alphonso Hinson, Parks & Recreation 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.
@) Attachments
3.3 Adopt the attached Administrative Rule Goveruing Annual Certification of Pension Entitlement
@) Attachments
3.4 Approve an expenditure not to exceed $25,000 for the law firm of Klausner & Kaufman, PA, to rewrite
the current Pension Plan Ordinance.
@)Attachments
4. Other Business
5. Adjourn
Meeting Date:6/13/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the minutes of the May 30, 2006, Pension Trustees meeting.
SUMMARY:
Review Approval: 1) Clerk
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING MINUTES
CITY OF CLEARWATER
May 30,2006
Unapproved
Present:
Frank Hibbard
Carlen Petersen
Hoyt Hamilton
William C. Jonson
John Doran
Chair
Trustee
Trustee
Trustee
Trustee
Also Present:
William B. Horne, II
Garry Brumback
Pamela K. Akin
Cynthia E. Goudeau
Brenda Moses
City
Assistant
City
City Clerk
Board
Manager
The Chair called the meeting to order at 1 :55 p.m. at City
To provide continuity for research, items are in agenda order not
necessarily discussed in that order.
Approval of Minutes - May 15, 2006
Trustee Jonson moved to approve the minutes of the May 15, 2006, as
recorded and submitted in written summation by the City Clerk to each Trustee. The motion
was duly seconded and carried unanimously.
Pension Trustee Items
Accept the Actuary's Report for the Employees' Pension Plan for the plan year beQinninQ
January 1, 2006.
The January 1 , 2006 actuary reportfor the Employees' Pension Plan indicates an
employer contributionof $15,438,360, equivalent to 20,31 % of covered payroll, is required for
fiscal 2007. This is an increase from the fiscal 2006 required contribution of $14.5 million. The
current requiredcol1tribution of $15.4 million,ihaccordance with Florida statutes, exceeds the
minimumrequired contribution. per the plan ordinance of 7% of payroll, or $5.2 million.
The required employefcontribution was affected by the following factors: (1) The
actuarialinvestment return (5~yearweighted average) was 4.58% versus an assumed rate of
7.5%. This was due to three years of poor performance, 5.16%, 8.83% and 6.67% for calendar
years 2001,2002, and 2005, respectively; partially offset by two years of good performance,
20.08% and 9.73% for calendar years 2003 and 2004. The actuarial investment return five-year
average of4.58%was an improvement from the January 1, 2005 return of 2.18% due to the
dropping off ofanegativereturn of (3.43%) for calendar 2000, replaced by 6.67% for calendar
2005. (2) Actual salary increases were 5.49% versus an assumed rate of 6.0%. The plan has a
current "credit balance" of $18,817,573, which can be used to subsidize future employer
contributions. The employer contribution for fiscal 2006 was budgeted at 10%, with the balance
Pension Trustees 2006-05-30
1
of the required 19.6% required contribution funded from the credit balance. This reduced the
credit balance from $24.1 million to the current $18.8 million level.
Staff recommends the fiscal 2007 employer contribution be funded (budgeted) at 13%,
with the fiscal 2008 and 2009 funding increasing to 16% and 20%, respectively. Any difference
between the budgeted funding and the required employer contribution would continue to be
funded from the credit balance.
In response to a question, Human Resources Director Joe Roseto said by the time
employer contribution equals 20%, the credit balance will be $10 million, if all assumptions are
met.
Pension Plan Actuary Steve Metz said all methods and assumptions are the same as in
prior years. The employer contribution is higher because the ROl(Returnonlnvestment)was
less than expected. He recommended retaining a credit balance as a cushion for a rainy day,
Since employee contributions remain fixed, the City's contribution fluctuates, when the market
goes up, the City's contribution decreases, and visa versa.
In response to a question regarding the trend of defined benefit plans nationwide, Mr.
Metz said the private sector is moving away from definedbenefit plans due tovolatile costs.
Discussion ensued regarding actuarial assumptions and consensus was to maintain a
conservative assumption at 7.5%. Finance DirectorMargierSillllllons said the plan earned more
than 7.5% during two of the previous three years and felt 7.5%is8good assumption.
Trustee Petersen moved to accept the Actuary's Report for the Employees' Pension
Plan for the plan year beginning January 1, 2006. The motion was duly seconded and carried
unanimously.
Investment Update of Emplovee'siPel1sion Plan for YearEl1dina December 31. 2005.
Cash & Investments Manager Steve Moskun reviewed the plan's performance, reporting
investments had substantially beaten benchmarks in last quarter with $548 million in assets
under management. A referendum, tentatively scheduled for November 2006, will be
necessary to address current restrictions and permit diversification. Staff will be bringing
forward a recommendation regarding a search for new money managers.
Other Business - None.
Adiourn
The meeting adjourned at 2:29 p.m.
Chair
Employee's Pension Plan Trustees
Attest
City Clerk
Pension Trustees 2006-05-30
2
Meeting Date:6/13/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Accept the employees listed below into membership in the City of Clearwater Employee's Pension Plan
SUMMARY:
Pension Elig. Name, Job. Class, & Dept./Div. Hire Date Date Jennifer Bass, Neighborhood Ser. Coord.! Dev. & Neigh Ser. 4/3/06 4/3/06
Carolyn Tellier, Accounting Technician/ Engineering 4/3/06 4/3/06 Anne Willis, CM Office Asst./City Manager 4/3/06 4/3/06 Elizabeth
Minor, Rec.Prog.Parks & Rec. 4/3/06 4/3/06 Jesse Switek, Systems Analyst/Finance 4/3/06 4/3/06 Elizabeth Renfroe, Pol. Com.
Oper.!Police 10/15/054/1/06 * Anthony Capria, Water Plant Oper. Trainee/ Public Utilities 3120/06 3120/06 Shannon Winthrop, Pks. Ser.
Tech. I/P&R 4/17/064/17/06 Danielle Smith, Water Plant Oper. Trainee/ Public Utilities 4/17/064/17/16 Leann Holbrook, Cust. Ser. Rep.!
Customer Service 4/17/06 4/17/06 Patricia Shields, Acctg. Clerk/Gen'l Ser. 4/17/06 4/17/06 Adam Kraft, Police Cadet/Police 4/17/06
4/17/06 Michael Hatch, Police Cadet/Police 4/17/06 4/17/06 * transferred from full-time to part-time and received refund of contributions
on 10/15/05; transferred to full-time and pension eligible as of 4/1/06
Review Approval: 1) Office of Management and Budget 2) Legal 3) Clerk
Meeting Date:6/13/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Alphonso Hinson, Parks & Recreation 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.
SUMMARY:
Alphonso Hinson, Recreation Supervisor 1, Parks & Recreation Department, was employed by the City on September 8, 1970, and his
pension service credit is effective on June 7, 1977. His pension will be effective August 1, 2006. Based on an average salary of
approximately $49,011 per year over the past five years, the formula for computing regular pensions, and Mr. Hinson's selection of the
100% Joint & Survivor Annuity, this pension will approximate $38,374 annually. This pension was approved by the Pension Advisory
Committee on May 11, 2006. Section 2.393 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. Mr. Hinson qualify under the age 55 and twenty years of service criteria.
Review Approval: 1) Office of Management and Budget 2) Legal 3) Clerk
Meeting Date:6/13/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Adopt the attached Administrative Rule Governing Annual Certification of Pension Entitlement
SUMMARY:
Under provisions of Section 2.394 of the City of Clearwater Employee's Pension Plan, the Board of Trustees has jurisdiction over control,
management, operation and administration of the Plan. Section 2.394 (h)(l) specifically authorizes the Trustees to "establish rules and
procedures as are necessary to administer the Plan, which rules and procedures shall be applied in a uniform and non-discriminatory
manner." The foremost purpose of the Pension Fund is to pay retirement benefits to members of the Fund and their beneficiaries and the
Board of Trustees must ensure that the proper amount is being paid. To fulfill this fiduciary duty, the Board of Trustees has determined that
it is necessary for Plan members and/or their beneficiaries to submit an annual certification of their entitlement to a retirement benefit from
the Pension Fund. Counsel to the Board has recommended the Board adopt the attached administrative rule in this regard.
Review Approval: 1) Office of Management and Budget 2) Legal 3) Clerk
BOARD OF TRUSTEES
CITY OF CLEARWATER
EMPLOYEES PENSION FUND
ADMINISTRA TIVE RULE GOVERNING ANNUAL
CERTIFICA TION OF PENSION ENTITLEMENT
1. The Code of the City of Clearwater authorizes the Board of Trustees to adopt
administrative rules necessary for the proper administration of the Pension Fund. Section
2.394 of the Plan vests control, management, operation and administration of the Plan in
the Board of Trustees. Section 2.394(c) provides:
"The Trustees shall have final authority and control over the
administration of the Plan herein embodied, with all powers
necessary to enable them to carry out their duties in that respect.
Not in limitation, but in amplification of the foregoing, the
Trustees shall have the power and discretion to interpret or
construe this Plan and to determine all questions that may arise as
to the status and rights of the participants and others hereunder."
Section 2.394(h)(1) specifically authorizes the Trustees to "establish rules and procedures
as are necessary to administer the Plan, which rules and procedures shall be applied in a
uniform and non-discriminatory manner."
2. The foremost purpose of the Pension Fund is to pay retirement benefits to members of the
Pension Fund and their beneficiaries. Incumbent upon the Board of Trustees is to ensure
that the proper amount of retirement benefits is being paid to Plan members and their
beneficiaries. In furtherance of this fiduciary duty, the Board of Trustees has determined
that it is necessary for Plan members and/or their beneficiaries to submit an annual
certification of their entitlement to a retirement benefit from the Pension Fund.
Submission of the certification will help protect the Pension Fund from acts of fraud.
3. In January of each year, the City of Clearwater Human Resources Department shall send
to each retireelbeneficiary receiving a benefit from the Pension Fund, a form entitled
"Annual Certification of Pension Entitlement." The form shall advise that completion
thereof is necessary to ensure that pension benefits are being properly paid and received
by pensioners in accordance with the City of Clearwater Code. The form shall require
pensioners to list their current address, telephone number, Social Security number and
marital status. Additionally, the form shall require pensioners to list their spouse and
dependent children. The form shall also require disability pensioners to state whether
they are currently employed, whether their disability still exists, and whether they are
able to perform the duties of the job classification for which they receive the disability
pension. The form shall be fully completed, and shall be executed before a notary public.
The form must be returned to the Human Resources Department of the City of Clearwater
within sixty (60) days of the initial mailing.
4. Failure to submit the form to the City of Clearwater Human Resources Department shall
be a basis for the Board of Trnstees to discontinue pension benefits until such time that a
proper form is completed and filed. Prior to discontinuance of a benefit, the City of
Clearwater shall send notice of the termination of the benefit to the pensioner by Certified
Mail, Return Receipt Requested.
5. The Board of Trnstees reserves the right to amend this Administrative Rule from time to
time as it deems appropriate. The Board shall retain the right to exercise its discretion in
interpreting this rnle and in resolving any disputes that may arise hereunder.
6. This rnle was considered by the Board of Trnstees at a public hearing, following proper
notice, on ,2006. The Administrative Rule was adopted by vote of
the Trnstees on , 2006.
Meeting Date:6/13/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve an expenditure not to exceed $25,000 for the law firm of Klausner & Kaufman, PA, to rewrite the current Pension Plan Ordinance.
SUMMARY:
City staff has requested that the law firm of Klausner & Kaufman, PA, rewrite the current pension ordinance to simplify the language and
clarify provisions of the Pension Plan. In addition, there are other changes needed to maintain compliance with current and pending Internal
Revenue Code Regulations affecting public plans, as well as compliance with provisions of Florida Statutes. The City will be charged an
hourly rate of $285.00 for all work performed relating to the rewrite, including all drafting, attendance at any required City Council
meetings, and any related work. The project cost will not exceed $25,000.00. Therefore, once the hourly charges reach this amount, no
further fees will be incurred by the City of Clearwater for this project.
Type:
Current Year Budget?:
Other
None
Budget Adjustment:
None
Budget Adjustment Comments:
Current Year Cost:
Not to Exceed:
For Fiscal Year:
Annual Operating Cost:
Total Cost:
to
Bid Required?:
Other Bid / Contract:
No
Bid Number:
Bid Exceptions:
None
Review Approval: 1) Office of Management and Budget 2) Legal 3) Clerk
6 - 1 - 0 6 ; 1 2 : -1 ..:: F'r'-,,'l ; H J rn an Res 0 U r c e s
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RECEIVED
APR 2 8 2005
H. A. DEPI
Klausner c((0) Kaufman
Writer's e-mail: bob(a)robertdklausner.com
April 24, 2006
Joseph P. Roseto, SPHR
Human Resources Director
City of Clearwater
100 S. Myrtle Avenue
Clearwater, Florida 33756-5520
Re: City of Clearwater Employees' Pension Fund - Ordinance Rewrite
Our File No. 03-0014
Dear Joe:
We are pleased to enclose our proposal to provide legal services to the City of Clearwater reference
rewriting the entire Pension Fund Ordinance for the purpose of simplifying Plan language and clarifying
provisions of the Plan that are cause, for concern. Rewrite of the ordinance is also necessary for the
purposes of maintaining compliance with current and pending Internal Revenue Code Regulations affecting
. public plans, as well as compliance with provisions of Florida Statutes.
The City of Clearwater will be charged at our hourly rate of$285.00 for all work performed relating to the
rewrite, to include all drafting, attendance at any required City Council meetings, and any related work.
The project will have a maximum cap of $25,000.00, which means that once hourly charges reach this
amount, no further fees will be incurred by the City of Clearwater for this project. We believe our
extensive experience in the representation of local government retirement systems makes us uniquely
qualified to fulfill this important project.
I remain available to answer any inquiries you may have regarding the rewrite and/or the fee schedule for
this project.
RDK:ldm
N:\lIp\030014\Roseto ltr re ordinance rewrJte,wp
10059 NORTHWEST 1ST COURT, PLANTATION, FLORIDA 33324
PHONE: (954) 916-1202 · FAX: (954) 916-1232
www.robertdklausner.com
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