01/16/2007
TRUSTEES OF THE EMPLOYEE’S PENSION FUND MEETING MINUTES
CITY OF CLEARWATER
JANUARY 16, 2007
Present: Frank Hibbard Chair
Carlen Petersen Trustee
J. B. Johnson Trustee
William C. Jonson Trustee
John Doran Trustee
Also Present: William B Horne II City Manager
Garry Brumback Assistant City Manager
Pamela K. Akin City Attorney
Cynthia E. Goudeau City Clerk
Rosemarie Call Management Analyst
The Chair called the meeting to order at 10:16 a.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
2. Approval of Minutes
2.1 Approve the minutes of the December 12, 2006 Pension Trustees Meeting as submitted in
written summation by the City Clerk.
Trustee Johnson moved to approve the minutes of the December 12, 2006 meeting, as
motion
recorded and submitted in written summation by the City Clerk to each Trustee. The
carried
was duly seconded and unanimously.
3. Pension Trustee Items
3.1 Candace McDaniel, Library Department; Philip Seissian, Public Services Department;
Robert Cruickshank, Fire Department; and Edward Lee, 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.
Candace K. McDaniel, Librarian I, Library Department, was employed by the City on
September 28, 1966, and her pension service credit is effective on June 2, 1967. Her pension
will be effective January 30, 2007. Based on an average salary of approximately $46,232 per
year over the past five years, the formula for computing regular pensions, and Ms. McDaniel’s
selection of the Joint & Survivor Annuity, this pension will approximate $46,232 annually.
Philip Seissian, Construction Inspector II, Public Services Department, was employed by
the City on December 27, 1977, and his pension service credit is effective on that date. His
pension will be effective February 1, 2007. Based on an average salary of approximately
$46,257 per year over the past five years, the formula for computing regular pensions, and Mr.
Seissian’s selection of the Joint & Survivor Annuity, this pension will approximate $36,993
annually.
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Pension Trustees 2007-1-16
Robert Cruickshank, Firefighter, Fire Department, was employed by the City on
December 17, 1973, and his pension service credit is effective on that date. His pension will be
effective November 1, 2006. Based on an average salary of approximately $56,135 per year
over the past five years, the formula for computing regular pensions, and Mr. Cruickshank’s
selection of the Joint & Survivor Annuity, this pension will approximate $50,745 annually.
Edward Lee, Police Officer, Police Department, was employed by the City on July 19,
1982, and his pension service credit is effective on that date. His pension will be effective
December 1, 2006. Based on an average salary of approximately $60,313 per year over the
past five years, the formula for computing regular pensions, and Mr. Lee’s selection of the 100%
Joint & Survivor Annuity, this pension will approximate $39.574 annually.
These pensions were approved by the Pension Advisory Committee on December 14,
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. Section 2.393 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 Firefighter and
Police Officer as meeting the hazardous duty criteria. Ms. McDaniel qualifies under the age 55
and twenty years of service and the 30 years of service criteria; Mr. Seissian qualifies under the
age 55 and twenty years of service criteria; and Mr. Cruickshank and Mr. Lee qualify under the
hazardous duty criteria.
Trustee Jonson moved that Candace McDaniel, Library Department; Philip Seissian,
Public Services Department; Robert Cruickshank, Fire Department; and Edward Lee, Police
Department, be granted regular pensions under Section(s) 2.393 and 2.397 of the Employees’
motion
Pension Plan as approved by the Pension Advisory Committee. The was duly
carried
seconded and unanimously.
3.2 Eric C. Stokholm, Solid Waste Department, and Alicia H. Farrell, Parks & Recreation
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.
Eric C. Stokholm, Container Maintenance Worker, Solid Waste Department, was
employed by the City on April 29, 1985, and began participating in the Pension Plan on that
date. Mr. Stokholm terminated from City employment on November 3, 2006.
Alicia H. Farrell, Administrative Analyst, Parks & Recreation Department, was employed
by the City on May 15, 1995, and began participating in the Pension Plan on that date. Ms.
Farrell terminated from City employment on October 23, 2006.
The Employees’ Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater 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.
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Pension Trustees 2007-1-16
Mr. Stokholm would have completed at least 30 years of service on April 29, 2015. His
pension will be effective May 1, 2015.
Ms. Farrell would have completed at least 20 years of service and reached age 55 on
November 13, 2017. Her pension will be effective December 1, 2017. These pensions were
approved by the Pension Advisory Committee on December 14, 2006.
Trustee Petersen moved that Eric C. Stokholm, Solid Waste Department, and Alicia H.
Farrell, Parks & Recreation 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
motioncarried
Committee. The was duly seconded and unanimously.
3.3 Approve changes to the Mortality, Withdrawal, and Retirement Assumptions for the
Employees' Pension Plan as recommended by the plan's actuary, PriceWaterhouseCoopers
LLP.
The plan's actuary, PriceWaterhouseCoopers LLP, has recommended changes to the
plan's mortality, withdrawal, and retirement assumptions that are used to calculate the plan's
liability and related contribution requirements. The recommended changes were the result of a
comprehensive review of the plan's assumptions relative to the implementation of a new
reporting requirement for the City's liability for Other Post Employment Benefits (OPEB).
A comprehensive set of assumptions for calculation of the OPEB liability will be
presented to the City Council for approval at a later date. The actuary has indicated that the
change to the mortality assumption, using the RP 2000 Blended Healthy Mortality Table versus
the current 1994 Group Annuity Reserving Table, should result in an increase in the plan's
liability. However this increase is expected by the actuary to be more than offset by the
favorable changes in the withdrawal and retirement assumptions, resulting in a net decrease in
the plan's actuarial liability as the result of these three assumption changes. The actuary has
recommended that these changes be implemented to more fairly and accurately estimate the
plan's liabilities and required contribution rates.
In response to questions, Finance Director Margie Simmons said the changes are
needed to make sure liability to the plan is being calculated accurately.
Discussion ensued and concern was expressed that use of the tables was not clear.
Trustee Doran moved to approve changes to the Mortality, Withdrawal, and Retirement
Assumptions for the Employees' Pension Plan as recommended by the plan's actuary,
motion
PriceWaterhouseCoopers LLP. The was duly seconded. Trustees Petersen, Johnson,
Motion carried.
Doran, and Chair Hibbard voted “Aye”; Trustee Jonson voted “ Nay.”
3.4 Approve a contract with Independence Investments LLC as a small cap growth manager for
the Employees' Pension Plan.
The Trustees authorized a search for a small cap growth manager in accordance with the
asset allocation study. Dahab and Associates was retained to help staff with the search. Dahab
issued a RFP and received 59 responses. Dahab reduced that list to the following five finalists:
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Pension Trustees 2007-1-16
??Independence Investments LLC
??Missouri Valley Partners
??Oppenheimer Investment Management
??The Boston Company
??Wells Capital Management
After presentations from the five firms listed above, the Pension Investment Committee
recommends hiring Independence Investments LLC. Independence will be given an initial
allocation of $30 million that will come from a reduction of assets of the plan’s existing
managers.
Independence management fee is .85% for the first $25 million and .75% for amounts
between $25 and $100 million. This is compatible to what we are paying our other small cap
managers and is within the industry norm.
The contract has been approved by Pension Attorney Stuart Kaufman.
Trustee Jonson moved to approve a contract with Independence Investments LLC as a
motion
small cap growth manager for the Employees' Pension Plan. The was duly seconded
carried
and unanimously.
3.5 Approve a contract with Wedge Capital Management LLP as a mid cap value manager for
the Employees' Pension Plan.
The Trustees authorized a search for a mid cap value manager in accordance with the asset
allocation study. Marquette Associates was retained to help staff with the search. Using
Marquette’s data base of managers and other data bases they reduced that list of candidates to
the following three finalists:
??Wedge Capital Management
??Systematic Financial Management
??Keeley Asset Management Corporation
After presentations from the three firms listed above, the Pension Investment Committee
recommends hiring Wedge Capital Management. Wedge will be given an initial allocation of $30
million that will come from a reduction of assets of the plan’s existing managers.
Wedge’s management fee is .75% for the first $10 million and .65% for the next $15 million and
.50% for all amounts over $25 million. This is compatible to what we are paying our other mid
cap managers and is within the industry norm.
Trustee Johnson moved to approve a contract with Wedge Capital Management LLP as
motion
a mid cap value manager for the Employees' Pension Plan. The was duly seconded
carried
and unanimously.
4. Other Business – None.
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Pension Trustees 2007-1-16
5. Adjourn
The meeting adjourned at 10:28 a.m.
Attest:
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Pension Trustees 2007-1-16
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Employees' Pension Fund
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