01/12/2004
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
January 12, 2004
Present: Brian Aungst Chair
Hoyt Hamilton Vice-Chair/Trustee
J. B. Johnson Trustee
Frank Hibbard Trustee
William C. Jonson Trustee
Also Present: William B. Horne II City Manager
Garry Brumback Assistant City Manager
Ralph Stone Assistant City Manager
Pamela K. Akin City Attorney
Joe Roseto Human Resources Director
Cynthia E. Goudeau City Clerk
Brenda Moses Board Reporter
The Chair called the meeting to order at 1:13 p.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
2. Approval of Minutes: December 15, 2003
Trustee Hibbard moved to approve the minutes of the December 15, 2003,
meeting, as recorded and submitted in written summation by the City Clerk to each
motioncarried
Trustee. The was duly seconded and unanimously.
3. Request for acceptance into membership: Kathy Day, Michael Conroy, Jason
Wallace, Gerard Grace, Darren Pohorenec, Joseph Metz, Chris Topping, Terry
Swatzell, Merewyn Mendenhall and Tarik Jones
Human Resources Director Joe Roseto presented the recommendation of the
PAC (Pension Advisory Committee) to approve membership for employees: Kathy Day,
Michael Conroy, Jason Wallace, Gerard Grace, Darren Pohorenec, Joseph Metz, Chris
Topping, Terry Swatzell, Merewyn Mendenhall and Tarik Jones.
Trustee Hamilton moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
4. Regular Pension(s) to be granted: Michael Burke, Alan Mayberry, Joseph Rinaldi
and Thomas Grow
Mr. Roseto presented the recommendation of the Pension Advisory Committee
that Michael Burke, Alan Mayberry, Joseph Rinaldi and Thomas Grow be granted
regular pensions under Section(s) 2.393 and 2.397 of the Employees' Pension Plan as
approved by the Pension Advisory Committee.
Michael Burke, Equity Services Manager, Equity Services Department, was
employed by the City on October 25, 1982, and his pension service credit is effective on
Pension Trustees 2004-01-12 1
that date. His pension will be effective May 1, 2004. Based on an average salary of
approximately $51,583 per year over the past five years, the formula for computing
regular pensions, and Mr. Burke’s selection of the 10-year Certain & Life Annuity, this
pension will approximate $32,501 annually.
Thomas Grow, Gas Supervisor, Gas Department, was employed by the City on
August 26, 1975, and his pension service credit is effective on July 6, 1976. His pension
will be effective August 1, 2004. Based on an average salary of approximately $48,325
per year over the past five years, the formula for computing regular pensions, and Mr.
Grow’s selection of the Joint & Survivor Annuity, this pension will approximate $37,273
annually.
William A. Mayberry, Urban Forestry Manager, Public Services Department, was
employed by the City on July 25, 1973, and his pension service credit is effective on
January 26, 1974. His pension will be effective February 1, 2004. Based on an average
salary of approximately $50,478 per year over the past five years, the formula for
computing regular pensions, and Mr. Mayberry’s selection of the Joint & Survivor
Annuity, this pension will approximate $41,645 annually.
Joseph J. Rinaldi, Police Sergeant, Police Department, was employed by the City
on August 12, 1985, and his pension service credit is effective on that date. His pension
will be effective December 1, 2003. Based on an average salary of approximately
$76,717 per year over the past five years, the formula for computing regular pensions,
and Mr. Rinaldi’s selection of the 100% Joint & Survivor Annuity, this pension will
approximate $37,973 annually.
These pensions were approved by the Pension Advisory Committee on
December 11, 2003. Section 2.393 (p) 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. Section 2.393 also (p) provides for normal retirement eligibility
when a participant has completed twenty years of service in a hazardous duty position or
ten years of service and age 55. It provides for an early hazardous duty retirement with
ten years of service and at least age 50 with a 3% reduction for each year under age 55
to a maximum reduction of 15%. It further specifically defines service as a Police
Sergeant as meeting the hazardous duty criteria. Mr. Burke and Mr. Grow qualify under
the 20 years of service and age 55 criteria. Mr. Mayberry qualifies under the 30 years of
service criteria. Mr. Rinaldi qualifies under the hazardous duty early retirement criteria.
Trustee Jonson moved to grant regular pensions for Michael Burke, Alan
Mayberry, Joseph Rinaldi and Thomas Grow as approved by the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
5. Pension(s) to be vested: Millie F. McFadden and Paul Ritz
Millie McFadden, Parks Maintenance Coordinator, Parks & Recreation
Department, was employed by the City on March 6, 1989, and began participating in the
Pension Plan on that date. Ms. McFadden terminated from City employment on
November 3, 2003.
Pension Trustees 2004-01-12 2
Paul Ritz, Librarian II, Library Department, was employed by the City on
September 3, 1985, and began participating in the Pension Plan on that date. Mr. Ritz
terminated from City employment on October 3, 2003.
The Employees’ Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater after completing ten 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 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. Section 2.393 also (p) provides for normal retirement eligibility when a
participant has reached age 55 and completed twenty years of credited service, has
completed 30 years of credited service, or has reached age 65 and completed ten years
of credited service.
Ms. McFadden would have completed twenty years of service and reached age
55 on July 18, 2014. Her pension will be effective August 1, 2014.
Mr. Ritz would have completed twenty years of service and reached age 55 on
April 26, 2007. His pension will be effective May 1, 2007.
These pensions were approved by the Pension Advisory Committee on
December 11, 2003.
Trustee Hibbard moved to allow Millie F. McFadden and Paul Ritz to vest their
pensions under Sections 2.397 and 2.398 of the Employees Pension Plan as approved
motion carried
by the Pension Advisory Committee. The was duly seconded and
unanimously.
6. Authorize up to an additional $80,000 to be paid to Klausner and Kaufman
increasing the not to exceed amount from $60,000 to $140,000 for the period
5/12/03 through 9/30/04.
On May 12, 2003, the Pension Trustees approved a legal services agreement
with Klausner & Kaufman, which authorized payments to Klausner & Kaufman in the
amount not to exceed $60,000 for the period May 12, 2003 through September 30,
2004.
Payments from May 12 through November 2003 equal $48,397.02:
May 12 - 29, 2003 $ 975.00
June 2003 4,911.59
July 2003 5,572.74
Aug 2003 5,368.30
Sept 2003 5,277.63
Oct 2003 8,921.12
Nov 2003 17,370.64
Pension Trustees 2004-01-12 3
Total $48,937.02
These payments include both hourly rates paid to Klausner and Kaufman as well
as reimbursement for expenses incurred on the plan’s behalf, such as medical exams,
copies, travel expenses, etc. It is anticipated that increasing the not to exceed amount
from $60,000 to $140,000 will allow payments to be made to Klausner and Kaufman for
the duration of the fiscal year, which ends September 30, 2004.
In response to a question, Trustee Hibbard said at the PAC meeting, staff had
indicated that there were more disability claims than anticipated, which prompted the
need to increase fees to Klausner and Kaufman.
Trustee Hibbard moved to approve authorizing up to an additional $80,000 to be
paid to Klausner and Kaufman increasing the not to exceed amount from $60,000 to
motion
$140,000 for the period May 12, 2003 through September 30, 2004. The was
carried
duly seconded and unanimously.
7. Ratify and confirm the termination of Invesco Capital Management, transferring the
total assets held by Invesco of approximately $19 million dollars to Northern Trust
the plan custodian, where they will be distributed to other existing money managers
as required to keep the Plan balanced within our current investment guidelines.
For the last year, Invesco has performed at the 79th percentile (one being the
best and one hundred the worst). For the last two years, they have performed at the
49th percentile. However, during this period when staff would have thought value-
oriented managers would do well, Invesco only delivered an "average" performance.
Additionally, John Rogers, leader of the Invesco international discipline when Invesco
was hired, has been given more management responsibilities. It is unlikely that he can
devote the attention to the international discipline that he did when the Plan hired
Invesco.
Invesco currently is subject to legal proceedings involving securities and
consumer fraud charges and are fighting the charges. That battle, our advisors feel, will
create an unnecessary distraction for Invesco. The Plan's advisors, John Willoughby of
Charles D. Hyman and Company, and Paul Troup of Callan Associates Inc. recommend
that the plan terminate Invesco. Monies from Invesco will be distributed among existing
money managers to rebalance the Plan's assets to Domestic Equity 55%, International
Equity 5%, and Domestic Fixed Income 40%. The Plan's attorney, Klausner and
Kaufman, PA have been notified of the decision to terminate Invesco and concurs.
Ms. Simmons said staff had contacted Invesco in December and gave the firm 30
days notice regarding this action. In response to a question, Mr. Moskun Invesco has
performed less than stellar and is also in trouble.
Trustee Hamilton moved to ratify and confirm the termination of Invesco Capital
Management, transferring the total assets held by Invesco of approximately $19 million
dollars to Northern Trust the plan custodian, where they will be distributed to other
existing money managers as required to keep the Plan balanced within our current
motioncarried
investment guidelines. The was duly seconded and unanimously.
Pension Trustees 2004-01-12 4
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8.
9.
Other Business - None.
Adiourn
The meeting adjourned at 1: 17 p.m.
Attest:
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Pension Trustees 2004-01-12
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