06/16/2003
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
June 16, 2003
Present: Brian Aungst Chair
Hoyt Hamilton Vice-Chair/Trustee
Whitney Gray Trustee
Frank Hibbard Trustee
William C. Jonson Trustee
Also Present: William B. Horne II City Manager
Garry Brumback Assistant City Manager
Pamela K. Akin City Attorney
Joe Roseto Human Resources Director
Mary K. (Sue) Diana Assistant City Clerk
Patricia O. Sullivan Board Reporter
The Chair called the meeting to order at 9:08 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 Jonson moved to approve the minutes of the May 12, 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:
Human Resources Director Joe Roseto presented the recommendation of the PAC
(Pension Advisory Committee) to approve membership for employees: Deborah Lemon,
Jeffery Schmitt, Joseph Miller, Kimberly Miller, John Sever, Christoph auf dem Kampe, Kari
Connor, Felicia Leonard, Floyd Thurman, Ronald Gideon, Christopher Jenkins, Michael
Reynolds, Clifford Fisher, Mark R. Coffin, Lisa Hobin, Dimitrios Tsoustas, Robert Fegley, Zane
Morris, Sharon McAuley, Eddie Marry, and Michael Olsa.
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. Roseto presented the recommendation of the Pension Advisory Committee that
Charles A. Howard John M. Hodgden regular pensions
and be granted under Sections
2.393 and 2.397 of the Employees' Pension Plan.
Charles A. Howard, Police Officer, Police Department, was employed on August 18,
1982, and his pension service credit is effective on September 12, 1992. His pension will be
effective May 1, 2003. Based on an average salary of approximately $52,031 per year over
the past 5 years, the formula for computing regular pensions, and Mr. Howard’s selection of
the 100% Joint & Survivor Annuity, this pension will approximate $13,298 annually.
Pension Trustees 2003-06-16 1
John M. Hodgden, Solid Waste Equipment Operator, Solid Waste Department, was
employed on February 16, 1981, and his pension service credit is effective on June 6, 1983.
His pension will be effective July 1, 2003. Based on an average salary of approximately
$38,114 per year over the past 5 years, the formula for computing regular pensions, and Mr.
Hodgden’s selection of the Joint & Survivor Annuity, this pension will approximate $20,962
annually.
The PAC approved these pensions on May 8, 2003. Section 2.393 provides for early
retirement eligibility when a participant has reached age 50 and completed ten 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. Section 2.393 also
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. Howard qualifies under the hazardous
duty criteria. Mr. Hodgden qualifies under the 20 years of service and age 55 criteria.
Trustee HIbbard moved that Charles A. Howard, Police Department, and John M.
Hodgden, Solid Waste Department, be granted regular pensions under Sections 2.393 and
2.397 of the Employees’ Pension Plan, as approved by the Pension Advisory Committee. The
motioncarried
was duly seconded and unanimously.
ITEM #5 – Request to Vest Pension
Elizabeth L. Garrett was employed by the City on January 5, 1987 and terminated City
employment on April 25, 2003. Ms. Garrett would have completed 20 years of service and
reached aged 55 on January 5, 2007. Her pension will be effective on February 1, 2007. The
PAC approved this item on May 8, 2003.
Trustee Hamilton moved that Elizabeth L. Garrett be allowed to vest her pension under
Sections 2.397 and 2.398 of the Employees Pension Plan as approved by the Pension
motion carried
Advisory Committee. The was duly seconded and unanimously.
ITEM #6 - Authorize staff to conduct a search for a firm to provide performance measurement
and other related services for the Pension Plan
The Pension Plan has been using the services of Callan Associates to measure the
Plan’s performance since 1987. The services of a performance consultant include: 1) provide
a quarterly report of the Plan’s investment performance; 2) monitor the Plan’s money
managers and notify staff of any changes; 3) conduct new manager searches; 4) provide
education opportunities; 5) monitor asset allocation and make recommendations on changes;
6) monitor the investment industry and keep staff updated on new developments and trends
through special reports; and 7) provide special reports, such as manager style drift.
The Pension Investment Committee recommends undertaking a search for a
performance measurement firm. In response to a question, Cash & Investments Manager
Steve Moskun said the Plan’s associate at Callan had retired.
Trustee Jonson moved to authorize staff to conduct a search for a firm to provide
motion
performance measurement and other related services for the Pension. The was duly
carried
seconded and unanimously.
Pension Trustees 2003-06-16 2
ITEM #7 - Authorize staff to negotiate a contract with the firm of Charles D. Hyman & Company
for investment consulting services.
John Willoughby has provided consulting services (i.e. strategic and tactical asset mix,
diversification guidance, economic and market analysis) to the Pension Plan through the firm,
EPW Investment Management. Since the recent buyout of EPW, Mr. Willoughby has moved
to the firm, Charles D. Hyman & Company.
Currently, the Pension Plan is involved in searches for two fixed-income managers and
a small-capitalization value manager. A RFP (Request for Proposals) for a performance
measurement consultant will be issued soon. Given these changes, it would not be feasible to
conduct an additional search for a consultant at this time. Staff requests approval to negotiate
a contract with Charles D. Hyman & Company for Mr. Willoughby’s services.
In response to a question, Mr. Moskun said the Pension Advisory Committee member
who had dissented on this item felt the Plan should have one, not two consultants. He
estimated these services cost about $7,000 annually. It was stated while the fee could
increase up to $15,000, the second opinion this consultant provides is worth the cost.
Trustee Hamilton moved to authorize staff to negotiate a contract with the firm of
Charles D. Hyman & Company for investment consulting services, and that the appropriate
motion carried
officials be authorized to execute same. The was duly seconded and
unanimously.
ITEM #8 - Ratify and confirm the termination of EPW Investment Manager and the transfer of
the assets under their management to Northern Trust’s Lehman Aggregate Bond Fund
On May 28, 2003, staff received notice that the money management firm, EPW
Investment Manager, was involved in a buyout. In addition, staff was notified that the firm is
changing its focus away from money management and that key individuals were leaving the
firm. John Willoughby, the Plan’s consultant, is one of those individuals. A separate agenda
item deals with his services to the Plan.
On May 28, 2003, staff froze Plan assets under EPW’s management and made
arrangements for the assets to be transferred to a Lehman Brothers Index Fund (A.K.A.
Lehman Aggregate Bond Fund) at Northern Trust, the Plan’s custodian. On May 28, 2003,
TPW had $65.8-million of Plan assets under their control.
A fixed-income manager search is underway. A short list of managers has been
developed by Callan Associates. The Pension Investment Committee is meeting this month to
reduce the short list to about four managers and to schedule presentations. The committee
will look for two fixed-income managers, instead of one.
Trustee Jonson moved to ratify and confirm the termination of EPW Investment
Manager and the transfer of the assets under their management to Northern Trust’s Lehman
motion carried
Aggregate Bond Fund. The was duly seconded and unanimously.
ITEM #9 – Other Business – None.
ITEM #10 - Adjournment
The meeting adjourned at 9:14 a.m.
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