08/13/2001
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
August 13, 2001
Present: Brian J. Aungst Chair
Ed Hart Vice-Chair/Trustee
Whitney Gray Trustee
Hoyt P. Hamilton Trustee
William C. Jonson Trustee
Also present: William B. Horne II City Manager
Ralph Stone Assistant City Manager/Economic Development
Pamela K. Akin City Attorney
Lee Dehner Pension Trustees Attorney
Paul O'Rourke Human Resources Administrator
Cynthia E. Goudeau City Clerk
Brenda Moses Board Reporter
The Chair called the meeting to order at 1:08 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 Jonson moved to approve the minutes of the July 9, 2001, meeting, as
motion
recorded and submitted in written summation by the City Clerk to each Trustee. The
carried
was duly seconded and unanimously.
ITEM #3 - Request for Acceptance into Membership:
The Human Resources Director presented the recommendation of the Pension
Advisory Committee to approve membership for the employees listed below:
Daniel Toro, Anthony Suggs, Connie Tuisku, Robert Sullivan, Richard Bonton, Andrea
Bass, Raymond Minniefield, Dennis Britt, Kathleen McCauley, Thomas Fears, & Antonio Green
Trustee Gray moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
ITEM #4 - Request for Pension:
The Human Resources Director presented the recommendation of the Pension
Jeffrey Daniels, Leonard Marotta, and Eddie Griffin
Advisory Committee that be granted
regular pensions
under Section(s) 2.393 and 2.397 of the Employees' Pension Plan.
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Jeffrey Daniels was employed on January 17, 1972, and his pension service credit is
effective on that date. His pension will be effective July 1, 2001.
Based on an average salary of approximately $50,381 per year over the past 5 years,
the formula for computing regular pensions, and Mr. Daniels' selection of the Joint & Survivor
Annuity, this pension will approximate $40,752 annually.
Leonard Marotta was employed on September 26, 1978, and his pension service credit
is effective on April 17, 1980. His pension will be effective August 1, 2001.
Based on an average salary of approximately $46,908 per year over the past 5 years,
the formula for computing regular pensions, and Mr. Marotta's selection of the 100% Joint &
Survivor Annuity, this pension will approximate $27,183 annually.
Eddie Griffin was employed on April 19, 1976, and his pension service credit is
effective on October 9, 1976. His pension will be effective August 1, 2001.
Based on an average salary of approximately $62,218 per year over the past 5 years,
the formula for computing regular pensions, and Mr. Griffin's selection of the 100% Joint &
Survivor Annuity, this pension will approximate $41,711 annually.
The PAC approved these pensions on July 12, 2001. Section 2.393 (p) provides for
normal retirement eligibility when a participant has completed 20 years of credited service in a
type of employment described as “hazardous duty” and further specifically defines service as a
Fire Inspector and Police Sergeant as meeting the hazardous duty criteria. Mr. Daniels, Mr.
Marotta, and Mr. Griffin qualify under the hazardous duty criteria.
Trustee Hamilton moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
ITEM #5 - Request to Vest Pension:
The Human Resources Director presented the recommendation of the Pension
James Hill vest his pension
Advisory Committee that be allowed to under Section(s) 2.397
and 2.398 of the Employees' Pension Plan.
James Hill was employed on June 20, 1988. Mr. Hill terminated from city employment
on May 17, 2001.
The Employees' Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater after completing 10 or more years of creditable service
(pension participation), then 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 20 years of credited service, has completed 30 years of
credited service, or has reached age 65 and completed 10 years of credited service. Mr. Hill
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would have completed 20 years of service and reached age 55 on May 8, 2009. His pension
will be effective on June 1, 2009. The PAC approved this request on July 12, 2001.
Trustee Jonson moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
domestic large cap
ITEM #6 - Agreement with Capital Guardian Trust Company, serve as
value equity manager
for Employees' Pension Plan, $142,500
Cash and Investment Manager Steve Moskun gave an update on the pension
performance for quarter ending June 30, 2001. He said the pension plan needs a balance
between stocks and fixed income. Staff conducted a search with the above firms and is
recommending the Commission chose Capital Guardian Trust Company as the City’s domestic
large cap value equity manager for the Employee’s Pension Plan.
The Investment Committee recommends that Capital Guardian Trust Company be
funded to start with $30 million. Capital Guardian's management fee is .50 of 1% on the first
$25 million and .35 of 1% on the next $25 million. The annual fee for $30 million would be .50
of 1% of $25 million ($125,000) plus .35 of 1% of $5 million ($17,500) for a total of $142,500.
The source of these funds for investment will be determined as the Investment Committee
rebalances the portfolio.
Trustee Jonson moved to approve an agreement with Capital Guardian Trust Company
to serve as the domestic large cap value equity manager for the Employees' Pension Plan in
motioncarried
the amount of $142,500. The was duly seconded and unanimously.
expenditure budget for Fiscal Year 2001-2002
ITEM #7 - Administrative totaling $243,728 for
Employees' Pension Plan
In the past, medical exams were paid by the General Fund and were reimbursed via a
transfer to the pension plan. Starting with this budget they will be paid directly to the pension
plan.
Consultants include the following projects: $10,000 Pension Analysis Update, $10,000
DROP Modeling/Assessment and $10,000 Assessment of Retiree Health Subsidy.
Travel is for members of the Pension Investment Committee to attend the Callan
training seminar and visit Callan, the pension plan's performance measurement firm. The
decrease was caused by due diligence trips staff made in Fiscal Year 2000-2001 that do not
need to be repeated in the next fiscal year.
The Actuary contact will be out for Request for Proposals shortly and an increase in
miscellaneous consulting fees is anticipated.
The legal budget is being increased to reflect actual legal costs.
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An Integrated Disability Management project is being funded at $9,000 for phase one
and $10,000 for phase two.
Reimbursement to the General Fund and the Central Insurance Funds is for the cost of
oversight of the plan and is recognized as revenue to the General Fund and Central Insurance
Fund. Reimbursements have been updated to more accurately reflect costs. This will bring
the reimbursements to $80,448. Of this number, $24,288 is Finance, $13,980 is payroll, and
$41,180 is Human Resources. The reimbursements will be $20,630 to the Central Insurance
Fund and $59,818 to the General Fund.
Mr. Moskun said one major change to the budget is that medical examinations will be
charged to the Employee Pension Plan directly.
Concern was expressed regarding the steep increase in consulting fees and a
recommendation they be phased in was made.
Trustee Hamilton moved to approve the administrative expenditure budget for Fiscal
motion
Year 2001-2002 totaling $243,728 for the Employee's Pension Plan. The was duly
seconded. Upon the vote being taken, Trustees Gray, Jonson, Hamilton and Chair Aungst
carried
voted "Aye"; Trustee Hart voted "Nay". Motion .
ITEM #8 - Other Business:
Human Resources Director Paul O’Rourke said Attorney Steve Cyphen, attorney
representing the Trustees in Police Chief Klein's request to be admitted into the Pension Plan,
has advised the City that Chief Klein’s legal remedies have been exhausted. Mr. Cyphen
recommends no action regarding Chief Klein's request for a pre-litigation mediation.
City Attorney Pam Akin said Mr. Cyphen states the Trustees are prohibited from
participating in mediation negotiations. She said what is proposed is a close session. She
stated Mr. Cypen's opinion is there is no need to mediate.
Mr. O’Rourke said allowing exempt employees to participate in the Pension Plan is
being considered. Some tax issues are forthcoming which will make it easier for employees to
buy back their pension credit. He said this will come back as part of a larger issue.
Mr. O'Rourke said at today's Commission Worksession, there will be some technical
corrections to the ordinance that were approved by the Trustees and require the Commission's
approval.
ITEM #9 - Adjournment:
The meeting adjourned at 1:18 p.m.
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