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09/14/1998TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING CITY OF CLEARWATER September 14, 1998 Present: Rita Garvey Chair Ed Hooper Vice-Chair/Trustee J. B. Johnson Trustee Robert Clark Trustee Karen Seel Trustee Michael J. Roberto City Manager Pamela K. Akin City Attorney Cynthia E. Goudeau City Clerk Gwen Legters Board Reporter The Chair called the meeting to order at 1:37 p.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM #2 - Approval of Minutes Trustee Clark moved to approve the minutes of the August 31, 1998, meeting, as recorded and submitted in written summation by the City Clerk to each Trustee. The motion was duly seconded and carried unanimously. ITEM #3 - Request for Acceptance into Membership: The City Manager presented the recommendation of the Pension Advisory Committee to approve membership for the employee(s) listed below: a) Dale Chappell b) Gray Joyce c) Jeffrey Palmer d) LaDrea Young e) Carol McAnally f) Joseph Gabay g) Robert Strieder h) Linda Truehaft i) Linda Galioto j) Mary Ann Stuart k) Robert Postell l) Dexter Waters m) Willie McGee n) Anthony Gammon o) Tyrone Floyd p) Terrance R. Labelle q) Brett Faulk r) Yvonne Becker s) David Robertshaw t) Kyle Resler u) Robert Furman v) Virginia G. Gallon w) Sharon Marzola x) Robert Young Trustee Johnson moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #4 - Request for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Richard G. Howard, Robert D. Pease, Stephen M. Brooks, Allen O. Hicks, Lucinda A. Hicks, and Carolyn M. Moore be granted a regular pensions under Section(s) 2.393 and 2.397 of the Employees' Pension Plan. Richard G. Howard was employed on April 17, 1972, and his pension service credit is effective that date. His pension will be effective on August 1, 1998. Based on an average salary of approximately $49,580 per year over the past five years, the formula for computing regular pensions, and Mr. Howard’s selection of the Joint and Survivor Annuity, this pension will approximate $35,795 annually. Robert D. Pease was employed on June 12, 1978, and his pension service credit is effective that date. His pension will be effective on August 1, 1998. Based on an average salary of approximately $41,115 per year over the past five years, the formula for computing regular pensions, and Mr. Pease’s selection of the 100% Joint and Survivor Annuity, this pension will approximate $22,380 annually. Stephen M. Brooks was employed on April 19, 1967, and his pension service credit is effective that date. His pension will be effective on August 1, 1998. Based on an average salary of approximately $51,858 per year over the past five years, the formula for computing regular pensions, and Mr. Brooks’ selection of the Joint and Survivor Annuity, this pension will approximate $37,236 annually. Allen O. Hicks was employed on April 19, 1967, and his pension service credit is effective that date. His pension will be effective on August 1, 1998. Based on an average salary of approximately $50,556 per year over the past five years, the formula for computing regular pensions, and Mr. Hicks’ selection of the Life Annuity, this pension will approximate $46,762 annually. Lucinda A. Hicks was employed on April 26, 1967, and her pension service credit is effective that date. Her pension will be effective on August 1, 1998. Based on an average salary of approximately $31,304 per year over the past five years, the formula for computing regular pensions, and Ms. Hicks’ selection of the Life Annuity, this pension will approximate $28,414 annually. Carolyn M. Moore was employed on March 26, 1973, and her pension service credit is effective November 30, 1973. Her pension will be effective on September 1, 1998. Based on an average salary of approximately $57,003 per year over the past five years, the formula for computing regular pensions, and Ms. Moore’s selection of the 100% Joint and Survivor Annuity, this pension will approximate $37,672 annually. These pensions were approved by the PAC on August 13, 1998. Section 2.393 (p) provides for normal retirement eligibility when a participant has completed twenty years of credited service in a type of employment described as “hazardous duty” and further specifically defines service as a Police Officer as meeting the hazardous duty criteria. Mr. Howard, Mr. Pease, and Mr. Brooks qualify under the hazardous duty criteria. Section 2.393 (p) also provides for normal retirement eligibility when a participant reaches age 55 and has completed twenty years of credited service or when the participant has completed thirty years of credited service regardless of age. Mr. Hicks and Mrs. Hicks qualify under the thirty years of service criteria. Ms. Moore qualifies under the age 55 and twenty years of service criteria. Trustee Clark moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #5 - Request to Vest Pension: The City Manager presented the recommendation of the Pension Advisory Committee that William Held, John Haffkoss, and Gretchen Bush be allowed to vest their pensions under Section(s) 2.397 and 2.398 of the Employees' Pension Plan and that John Amiro and William Mooney be allowed to vest their pensions under Section(s) 2.396 and 2.407 of the old Employees' Pension Plan. William C. Held, Jr. was employed on November 9, 1981, and his pension service credit is effective that date. His pension will be effective on December 1, 2001. John Haffkoss was employed on December 19, 1983, and his pension service credit is effective that date. His pension will be effective on January 1, 2004. Gretchen A. Bush was employed on November 21, 1977, and her pension service credit is effective that date. Her pension will be effective on September 1, 2002. John Amiro was employed on March 28, 1977, and his pension service credit is effective that date. His pension will be effective on March 29, 2007. William Mooney was employed on December 10, 1979, and his pension service credit is effective that date. His pension will be effective on December 11,1999. Both the previous and current Employees’ Pension Plans provide that should an employee cease to be an employee after completing ten or more years of creditable service (pension participation), then such employee shall acquire a vested interest in the retirement benefits. Under the current plan, vested pension payments commence on the first of the month following the month in which the employee normally would have been eligible for retirement. Under the old plan, pensions were effective the day following the date the employee would have been first eligible to retire. Mr. Held would have completed at least twenty years of service and reached age 55 on November 9, 2001. Mr. Haffkoss would have completed at least twenty years of service and reached age 55 on December 19, 2003. Ms. Bush would have completed at least twenty years of service and reached age 55 on August 8, 2002. Mr. Amiro would have completed at least thirty years of service on march 28, 2007. Mr. Mooney would have completed at least twenty years of service and reached age 55 on December 10, 1999. These requests to vest pensions were approved by the PAC on August 13, 1998. Trustee Hooper moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #6 - Approve administrative expenditure budget for City of Clearwater Employees’ Pension Plan The Employee’ Pension Plan has assets (investments) totaling $395 million (market value) as of 6/30/98. This is an increase of $60 million over last years’ number. For the year ending 6/30/98 the plan had a rate of return of 18.40%. Money Manager, Safekeeping Service, Pension Administrator and Actuary fees are all set by contracts approved by the trustees and are not included in this administrative budget. Travel and training is for members of the Pension Investment Committee to attend the Callan training seminar, visit Callan, the pension plan’s performance measurement firm, and a due diligence visit to one of the money managers. Printing and Binding is for the statutorily required annual information distribution to the members of the plan. Medical Bills is for the medical services the Pension Advisory Committee authorizes. Reimbursement to the General Fund is for the cost of oversight of the plan and cost of issuing pension checks. New for this year is an amount to cover administrative oversight costs incurred by Human Resources and Legal. Steve Moskun, Finance Department Cash and Investments Manager, stated a budget is proposed so individual items do not have to be brought forward for Trustees approval. Increase in reimbursement to the General Fund is proposed to recognize the costs incurred by the Legal Department and Human Resources Department associated with the pension plan. Last year only the Finance Department was reimbursed for the cost of its work regarding the pension plan. Providing a breakdown, Mr. Moskun estimated about $5,000 is budgeted for Legal; $11,500 for Finance; and about $9,500 for Human Resources. In the past, the General Fund supported the pension plan with no reimbursement. Discussion ensued regarding whether the PAC should have separate counsel to avoid placing undue burden on City staff, and to have the ability to seek opinions in a timely manner. Trustees expressed interest in hiring pension counsel to advise the PAC and the Pension Trustees. The Legal Department would continue to attend PAC meetings as the City’s representative. Finance Director Margie Simmons stated this would be an additional administrative expense to the pension plan. Discussion ensued regarding the selection process. Trustee Johnson moved to direct staff to proceed with obtaining outside counsel for the Pension Advisory Committee. The motion was duly seconded and carried unanimously. Staff will prepare a Request for Quotation for professional services, going through PAC for recommendations. Trustee Clark moved to approve an administrative expenditure budget for the City of Clearwater Employees’ Pension Plan. The motion was duly seconded and carried unanimously. ITEM #7 - Other Business: - None. ITEM #8 - Adjournment: The meeting adjourned at 2:08 p.m.