06/17/1999
TRUSTEES OF THE EMPLOYEES' PENSION FUND SPECIAL MEETING
CITY OF CLEARWATER
June 17, 1999
Present: Brian J. Aungst Chair
Ed Hooper Vice-Chair/Trustee
J. B. Johnson Trustee
Robert Clark Trustee
Ed Hart Trustee
Also Present: Michael J. Roberto City Manager
Pamela K. Akin City Attorney
Margie Simmons Financial Services Administrator
Rick Ebelke Human Resources Assistant Director
Scott Christiansen Trustee Attorney
Cynthia E. Goudeau City Clerk
Patricia O. Sullivan Board Reporter
The Chair called the meeting to order at 5:00 p.m. at City Hall to discuss pension
buybacks.
Human Resources Assistant Director Rick Ebelke said staff had identified 24
employees who appear to meet the criteria to buy back pension service due to breaks in
employment. City Actuary Steve Metz reviewed the process used to determine actuarial
equivalents. Based on the participation of 24 employees, he estimated approving buybacks
based on withdrawn contributions plus 5% interest instead of the actuarial equivalents would
increase the Plan’s unfunded liability by more than $1-million.
It was stated the Trustees previously had approved pension buybacks at the lower rate
without adequate information or counsel. In response to a question, Mr. Ebelke said the
previous estimate of 200 had included employees who had worked part-time before becoming
full-time and qualifying for Pension membership. It was indicated the PAC (Pension Advisory
Committee) has recommended the Trustees rescind approval of buybacks by Krieger and
Marotta and to not consider any other buy back requests that are not within the parameters of
the pension plan.
Andra Dreyfus, representative for Messrs. Marotta and Krieger, et al, stated a $1-million
impact on the plan is not significant considering the plan’s funding. She requested other
employees be allowed to present their cases before this option is closed. Trustee Attorney
Scott Christiansen recommended the Trustees follow the provisions of the Pension Plan and
amend the plan to reflect changes they wish to initiate.
In response to a question, he said several exceptions had been made to correct past
wrongs. Pending buyback requests relate to breaks in service under the previous plan, which
did not permit buybacks. Concern was expressed the exception allowed Jeff Harper had
occurred outside the 2-year window allowed by the current plan. Mr. Metz stated Mr. Harper
had been excluded illegally from the Plan. The City Attorney said according to IRS direction,
anyone kept out of the plan improperly must be admitted and the previous error corrected. In
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reference to pending requests, the City Attorney said none of those employees had been
excluded illegally.
In response to a question, Mr. Christiansen said Mr. Donagan should have been
required to return the actuarial equivalent to buyback time, instead of his withdrawal amount
plus 5%. He recommended the Trustees correct Mr. Donagan’s case if possible. Mr.
Christiansen said impediments to correcting that case probably exist as Mr. Donagan has
retired. In response to a question, he said as the previous plan was silent on the buyback
issue, it did not permit that benefit.
It was recommended proposed changes be researched before implementation and the
established process be followed. Mr. Christiansen reviewed the process required to amend
the plan.
John Lee, IAFF representative, recommended the Trustees abide by plan rules and
amend the plan if changes are desired. In response to a question, Mr. Christiansen said the 2-
year buyback limit in the current plan is arbitrary. Mr. Metz agreed the plan would not be
harmed if time limits for buybacks were eliminated as long as the buybacks are based on
actuarial equivalents. He said the plan must be funded in accordance with State law.
Mr. Christiansen said future discussion will review police officer provisions approved by
this year’s legislature, which may affect vesting. It was recommended the Trustees follow their
fiduciary responsibility to protect the actuarial soundness of the plan by following its rules.
Trustee Hart moved to retain and follow the Pension Plan’s current language and allow
motion
the PAC to bring forward recommended changes if they so desire. The was duly
seconded. Trustees Johnson, Hooper, and Hart and Chair Aungst voted “Aye”; Trustee Clark
carried
voted “Nay.” Motion .
Mr. Christiansen suggested the PAC consider changes and forward their
recommendations to the Pension Trustees.
The meeting adjourned at 5:43 p.m.
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