03/17/2003
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
March 17, 2003
Present: Brian Aungst Chair
Whitney Gray Vice-Chair/Trustee
Hoyt Hamilton Trustee
Frank Hibbard Trustee
William C. Jonson Trustee
Also Present: Garry Brumback Assistant City Manager
Pamela K. Akin City Attorney
Rick Ebelke Assistant Human Resources Director
Cynthia E. Goudeau City Clerk
Patricia O. Sullivan Board Reporter
The Chair called the meeting to order at 9:04 a.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 Hibbard moved to approve the minutes of the February 18, 2003, 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:
Assistant Human Resources Director Rick Ebelke presented the recommendation of
the PAC (Pension Advisory Committee) to approve membership for employees: James Purdy,
Mirna Selva, Jason Kinney, Sara DeBella, Brian Davis, Carol Anding, Stacy Keenan, Dawn
Jenkins, Andrew Rawlins, Robert Davis, Jr., Charles McAbee, Ann Galluccio, William Bennett,
Joseph Raffo, Michael Hayes, and Michael Roseto.
Trustee Gray moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
ITEM #4 – Regular Pensions to be granted
Mr. Ebelke presented the recommendation of the Pension Advisory Committee that
Gertrude Devers, Richard Hodge, Roscoe Dobson, Jr., Fredrick Fricke, Melvin Acton,
George Johnson, John Urban regular pensions
and be granted under Sections 2.393 and
2.397 of the Employees' Pension Plan.
Gertrude Devers, Development Review Technician II, Development Services
Department, was employed on June 21, 1971, and her pension service credit is effective on
that date. Her pension will be effective March 1, 2003. Based on an average salary of
approximately $35,668 per year over the past 5 years, the formula for computing regular
pensions, and Ms. Devers’ selection of the 100% Joint & Survivor Annuity, this pension will
approximate $24,195 annually.
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Richard Hodge, Solid Waste Supervisor II, Solid Waste/General Services Department,
was employed on October 6, 1978, and his pension service credit is effective on May 30,
1979. His pension will be effective June 1, 2003. Based on an average salary of
approximately $48,019 per year over the past 5 years, the formula for computing regular
pensions, and Mr. Hodge’s selection of the Joint & Survivor Annuity, this pension will
approximate $31,692 annually.
Roscoe Dobson, Jr., Firefighter, Fire Department, was employed on January 17, 1972,
and his pension service credit is effective on that date. His pension will be effective February
1, 2003. Based on an average salary of approximately $50,481 per year over the past 5
years, the formula for computing regular pensions, and Mr. Dobson’s selection of the 100%
Joint & Survivor Annuity, this pension will approximate $42,088 annually.
Fredrick Fricke, Police Officer, Police Department, was employed on August 1, 1977,
and his pension service credit is effective on that date. His pension will be effective March 1,
2003. Based on an average salary of approximately $55,314 per year over the past 5 years,
the formula for computing regular pensions, and Mr. Fricke’s selection of the 10-year Certain &
Life Annuity, this pension will approximate $41,553 annually.
Melvin Acton, Fire Lieutenant, Fire Department, was employed on August 27, 1973,
and his pension service credit is effective on that date. His pension will be effective February
1, 2003. Based on an average salary of approximately $56,358 per year over the past 5
years, the formula for computing regular pensions, and Mr. Acton’s selection of the Life
Annuity, this pension will approximate $46,263 annually.
George Johnson, Firefighter, Fire Department, was employed on May 8, 1974, and his
pension service credit is effective on that date. His pension will be effective February 1, 2003.
Based on an average salary of approximately $47,991 per year over the past 5 years, the
formula for computing regular pensions, and Mr. Johnson’s selection of the 100% Joint &
Survivor Annuity, this pension will approximate $37,479 annually.
John Urban, Firefighter, Fire Department, was employed on January 11, 1982, and his
pension service credit is effective on that date. His pension will be effective March 1, 2003.
Based on an average salary of approximately $49,841 per year over the past 5 years, the
formula for computing regular pensions, and Mr. Urban’s selection of the Joint & Survivor
Annuity, this pension will approximate $28,935 annually.
The PAC approved pensions for Gertrude Devers, Richard Hodge, Roscoe Dobson, Jr.,
Fredrick Fricke, Melvin Acton, George Johnson, and John Urban on February 13, 2003.
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 services as a Police Officer, Fire Lieutenant, and Fire Lieutenant
Rescue/Paramedic as meeting the hazardous duty criteria. Section 2.393 (p) also 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. Ms. Devers and Mr. Hodge qualify under the
age 55 and 20 years of service criteria. Messrs. Dobson, Jr., Fricke, Acton, Johnson, and
Urban qualify under the hazardous duty criteria.
Trustee Hamilton moved to grant regular pensions for Gertrude Devers, Richard
Hodge, Roscoe Dobson, Jr., Fredrick Fricke, Melvin Acton, George Johnson, and John Urban
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under Sections 2.393 and 2.397 of the Employees’ Pension Plan, as approved by the Pension
motioncarried
Advisory Committee. The was duly seconded and unanimously.
ITEM #5 – Approve the change in ownership of EPW Investment Management, Inc.
EPW Investment Management, a wholly owned subsidiary of United Financial Holding,
is merging with Synovus Financial Corporation. The City’s contract with EPW Investment
Management provides that the City must approve assignment of the contract. EPW is a fixed
income manager who manages a portfolio of Treasuries for the plan. EPW also provides
equity investment advice to the plan. For the year ending December 31, 2002, EPW was
ranked in the top 9th percentile. For the last 5 years they were ranked in the top 33rd
percentile. There will be no changes at EPW Investment Management. The Pension
Investment Advisory Committee recommends approval of the change.
Trustee Hamilton moved to approve the change in ownership of EPW Investment
motioncarried
Management, Inc. The was duly seconded and unanimously.
ITEM #5 – Authorize staff to conduct a search for a “fixed income” style manager for the
Employees Pension Fund, authorize Callan & Associates to assist with the search for a fee of
$25,000, authorize the cost of the search, including staff travel of approximately $4,000, to be
paid from the pension fund.
For the year ending December 31, 2002, the Employees Pension Plan had a rate of
return of 8.75% vs. the benchmark of 8.86%. While the plan’s return beat the customized
benchmark last year, two of three fixed income managers, Vanderbilt Capital Advisors and
Sirach Capital Advisors, performed near the bottom of their peer group for the last two years.
Vanderbilt Capital Advisors attributes their poor relative performance to their belief that
the corporate bond sector will outperform all other fixed income sectors. They believe they
were early and time will prove them right. For the last two years, Vanderbilt performed at the
th
90th and 96th percentile. (1st percentile is the best and 100 percentile is worst performers.)
Sirach Capital Advisors has had some personnel problems. They have made changes,
however their performance has not improved. For the last two years they performed at the
99th and 98th percentile.
The plan’s consultants also are recommending that the City move some of the plan’s
assets from Treasuries to other fixed income securities. It is their belief the US Treasuries
have seen their run and Treasuries will lag other fixed income sectors in performance.
The Pension Investment Committee unanimously recommends an additional “fixed
income” style manager, which is the first step to reduce funding and/or terminate one or both
of the under performing managers. Callan’s $25,000 fee for the search will be paid by
directing investment trades through a selected broker and will not be an additional direct
expense of the pension plan.
The Investment Committee will come back to the Trustees in late summer or early fall
with the results of the search for approval. The cost of committee member travel to
investigate/research the top ranked firm(s) is estimated at $4,000. The actual amount will be
affected by the location of the investment manager(s) and the number that needs to be
researched.
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In response to a question, Cash & Investments Manager Steve Moskun said the Plan
last conducted a search for a fixed-income style manager four years ago. The fund is
monitored quarterly, with meetings held every six months. It was suggested it may be time to
conduct another search. In response to a concern that Callan’s fee is too high, Mr. Moskun
said the fee is standard.
Trustee Jonson moved to authorize staff to conduct a search for a “fixed income” style
manager for the Employees Pension Fund, authorize Callan & Associates to assist with the
search for a fee of $25,000, authorize the cost of the search, including staff travel of
motion
approximately $4,000, to be paid from the pension fund. The was duly seconded and
carried
unanimously.
ITEM #6 – Other Business – None.
The City Attorney was thanked for her participation in PAC/Pension Trustee
discussions related to the RFP (Request for Proposals) process to choose legal representation
for the Employees Pension Fund.
ITEM #7 - Adjournment
The meeting adjourned at 9:11 a.m.
_________________________________
Chair
Employee’s Pension Plan Trustees
Attest:
________________________________________
City Clerk
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