05/16/2016 Pension Trustees Meeting Minutes May 16, 2016
City of Clearwater
City Hall
112 S. Osceola Avenue
Clearwater, FL 33756
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Meeting Minutes
Monday, May 16, 2016
1 :00 PM
Council Chambers
Pension Trustees
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City of Clearwater
Pension Trustees Meeting Minutes May 16, 2016
Roll Call
Present 4 - Chair George N. Cretekos, Trustee Doreen Caudell, Trustee Bob
Cundiff, and Trustee Bill Jonson
Absent 1 - Trustee Hoyt Hamilton
Also Present—William B. Horne — City Manager, Jill Silverboard —Assistant City
Manager, Pamela K. Akin — City Attorney, Rosemarie Call — City
Clerk, Nicole Sprague — Official Records and Legislative Services
Coo rd in ator
To provide continuity for research, items are listed in agenda order although not
necessarily discussed in that order.
1. Call To Order— Chair Cretekos
The meeting was called to order at 1:46 p.m. at City Hall.
2. Approval of Minutes
2.1 Approve the minutes of the April 18, 2016 Pension Trustees Meeting as submitted in
written summation by the City Clerk.
Trustee Jonson moved to approve the minutes of the April 18, 2016
Pension Trustees Meeting as submitted in written summation by
the City Clerk. The motion was duly seconded and carried
unanimously.
3. Citizens to be Heard Regarding Items Not on the Agenda — None.
4. New Business Items
4.1 Approve the new hires for acceptance into the Pension Plan as listed.
Name/Job Classification/Department Pension Eligibility Date
Robert Waite*/Solid Waste Worker/Solid Waste 03/05/2016
Candace Tuetken/Police Comm. Operator Trainee/Police Dept 03/07/2016
Christopher Damm/Water Dist. Operator Trainee/Public Utilities 03/07/2016
Tyler Jones/Water Distribution Operator Trainee/Public Utilities 03/07/2016
Nicholas Gossard/Customer Service Rep. Customer Service 03/07/2016
Jamie Thomas/Solid Waste Worker/Solid Waste 03/07/2016
Courtney Schultz**/Recreation Leader/Parks and Recreation 03/19/2016
Tonya Sandy/Customer Service Rep./Gas Department 03/21/2016
Valerie McHargue/Paralegal/Legal Department 03/21/2016
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City of Clearwater
Pension Trustees Meeting Minutes May 16, 2016
Daniel Castellano/Parks Service Technician I/Parks and Rec. 03/21/2016
Gregory Graff/Police Service Technician/Police Department 03/21/2016
Jada Grabis***/Parking, Facility and Security Aide/Marine&Aviation 03/19/2016
Trustee Caudell moved to approve the new hires for acceptance
into the Pension Plan as listed. The motion was duly seconded and
carried unanimously.
4.2 Approve the following request of employee Brent Peters, Information Technology
Department to vest his pension as provided by Section 2.419 of the Employees'
Pension Plan.
Brent Peters, Senior Systems Programmer, Information Technology
Department, was employed by the City on May 20, 2002, and began
participating in the Pension Plan on that date. Mr. Peters terminated from City
employment on January 8, 2016.
The Employees' Pension Plan provides that should an employee cease to be
an employee of the City of Clearwater or change status from full-time to
part-time after completing ten or more years of creditable service (pension
participation), 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 2.416 provides for normal retirement eligibility for non-hazardous duty
employees hired prior to the effective date of this reinstatement (January 1,
2013), a member shall be eligible for retirement following the earlier of the date
on which a participant has reached the age of fifty-five years and completed
twenty years of credited service; the date on which a participant has reached
age sixty-five years and completed ten years of credited service; or the date on
which a member has completed thirty years of service regardless of age. For
non-hazardous duty employees hired on or after the effective date of this
restatement, a member shall be eligible for retirement following the earlier of
the date on which a participant has reached the age of sixty years and
completed twenty-five years of credited service; or the date on which a
participant has reached the age of sixty-five years and completed ten years of
credited service. Mr. Peters will meet the non-hazardous duty criteria and
begin collecting a pension in June 2022.
Section 2.416 provides for normal retirement eligibility for hazardous duty
employees, a member shall be eligible for retirement following the earlier of the
date on which the participant has completed twenty years of credited service
regardless of age, or the date on which the participant has reached fifty-five
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City of Clearwater
Pension Trustees Meeting Minutes May 16, 2016
years and completed ten years of credited service.
Trustee Cundiff moved to approve the following request of
employee Brent Peters, Information Technology Department to vest
his pension as provided by Section 2.419 of the Employees'
Pension Plan. The motion was duly seconded and carried
unanimously.
4.3 Approve the following request of employees Dale Johnson, Public Utilities
Department, Terry Avery, Solid Waste General Services Department and Russell
Shawen, Engineering Department, for a regular pension as provided by Sections
2.416 and 2.424 of the Employees' Pension Plan.
Dale Johnson, Wastewater Treatment Plant Oper A, Public Utilities
Department, was employed by the City on January 19, 1987, and his pension
service credit is effective on that date. His pension will be effective May 1,
2016. Based on an average salary of approximately $71,663.09 over the past
five years, the formula for computing regular pensions and Mr. Johnson's
selection of the Life Annuity, this pension benefit will be approximately
$57,704.16 annually.
Terry Avery, Fleet Mechanic Supervisor, Solid Waste General Services
Department, was employed by the City on February 17, 1987, and his pension
service credit is effective on that date. His pension will be effective May 1,
2016. Based on an average salary of approximately $68,037.87 over the past
five years, the formula for computing regular pensions and Mr. Avery's
selection of the Life Annuity with a 20% Partial Lump Sum payment, this
pension benefit will be approximately $43,711.68 annually.
Russell Shawen, Parking Operations Supervisor, Engineering Department, was
employed by the City on October 27, 1997, and his pension service credit is
effective on that date. His pension will be effective April 1, 2016. Based on an
average salary of approximately $40,635.22 over the past five years, the
formula for computing regular pensions and Mr. Shawen's selection of the
100% Joint and Survivor Annuity, this pension benefit will be approximately
$17,403.24 annually.
Section 2.416 provides for normal retirement eligibility for non-hazardous duty
employees hired prior to the effective date of this reinstatement (January 1,
2013), a member shall be eligible for retirement following the earlier of the date
on which a participant has reached the age of fifty-five years and completed
twenty years of credited service; the date on which a participant has reached
age sixty-five years and completed ten years of credited service; or the date on
which a member has completed thirty years of service regardless of age. For
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City of Clearwater
Pension Trustees Meeting Minutes May 16, 2016
non-hazardous duty employees hired on or after the effective date of this
restatement, a member shall be eligible for retirement following the earlier of
the date on which a participant has reached the age of sixty years and
completed twenty-five years of credited service; or the date on which a
participant has reached the age of sixty-five years and completed ten years of
credited service. Mr. Johnson, Mr. Avery and Mr. Shawen have met the
non-hazardous duty criteria.
Section 2.416 provides for normal retirement eligibility for hazardous duty
employees, a member shall be eligible for retirement following the earlier of the
date on which the participant has completed twenty years of credited service
regardless of age, or the date on which the participant has reached fifty-five
years and completed ten years of credited service.
Trustee Jonson move to approve the following request of
employees Dale Johnson, Public Utilities Department, Terry Avery,
Solid Waste General Services Department and Russell Shawen,
Engineering Department, for a regular pension as provided by
Sections 2.416 and 2.424 of the Employees' Pension Plan. The
motion was duly seconded and carried unanimously.
4.4 Approve Class A Interests fee structure for IFM Global Infrastructure money manager,
to include foreign currency hedging.
The Trustees recently approved the hiring of IFM Global as the pension plan's
infrastructure money manager under the existing fee structure for the money
manager at the time.
IFM Global has recently notified us that they are adopting a new fee structure
for new investors. They are also offering the new fee structure as an option to
existing investors such as Clearwater's pension plan.
The new fee structure lowers the base management fee, from 0.97% to 0.77%,
but accelerates the money managers timing of sharing of earnings over the 8%
hurdle rate.
Additionally, the new fee structure will include foreign currency hedging. The
foreign currency hedging is intended to reduce the volatility of returns from
year to year caused by currency exchange rates.
An irrevocable election is required by May 20, 2016, for any existing investors
that would like to opt for the new Class A Interests fee structure with foreign
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City of Clearwater
Pension Trustees
5. Adjourn
Attest
C/14,a
City Clerk
Meeting Minutes May 16, 2016
currency hedging. Any existing investors not responding by the deadline will
remain in the existing Class B Interests fee structure.
The plan's investment consultant, CapTrust, recommends adoption of the new
fee structure as being in the best interests of the plan, as it decreases net
management fees up to an earning threshold of 9.5% and increases manager
incentives for performance in excess of the 8% hurdle rate. Additionally the
foreign currency hedging is expected to produce the desired result of
decreasing the volatility of investment returns from year to year.
In response to questions, CapTrust Advisors Consultant John Griffith
said there is no intent to engage in currency hedging to make profits; the
idea is to mitigate differences between different investors, making the
returns more consistent without invoking the changes in currency. The
new fee schedule with the hedging strategy (Option A) helps to
moderate volatility. If the new fee schedule with the hedging strategy is
not approved, the City would return to the previous fee schedule, which
was higher (8 %). Mr. Griffith said the new fee schedule would lower the
cost if the fund does not perform above 8 %. He said the
consultant provides advice and is not involved in the brokerage aspect.
Trustee Jonson moved to approve Class A Interests fee structure
for IFM Global Infrastructure money manager, to include foreign
currency hedging. The motion was duly seconded and carried
unanimously.
The meeting adjourned at 1 :59 p.m.
�cteo (le r\creAf%S
City of Clearwater
Chair
Employees' Pension Plan Trustees
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