04/17/2017 Pension Trustees Meeting Minutes April 17, 2017
City of Clearwater
City Hall
112 S. Osceola Avenue
Clearwater, FL 33756
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Meeting Minutes
Monday, April 17, 2017
1 :00 PM
Council Chambers
Pension Trustees
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City of Clearwater
Pension Trustees Meeting Minutes April 17, 2017
Roll Call
Present 5 - Chair George N. Cretekos, Trustee Doreen Caudell, Trustee Bob
Cundiff, Trustee Hoyt Hamilton, and Trustee Bill Jonson
Also Present—William B. Horne — City Manager, Jill Silverboard — Deputy City
Manager, Pamela K. Akin — City Attorney, Rosemarie Call —
City Clerk, Nicole Sprague — Official Records and Legislative
Services Coordinator, and Joe Roseto — Human Resources
Director
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 1:08 p.m. at City Hall.
2. Approval of Minutes
2.1 Approve the minutes of the March 13, 2017 Pension Trustees Meeting as submitted in
written summation by the City Clerk.
Trustee Jonson moved to approve the minutes of the March 13,
2017 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 Accept the January 1, 2017 Annual Actuarial Valuation for the Employees' Pension
Plan.
Per the actuary report dated January 1, 2017, a minimum city employer
contribution of$8.65 million, or 10.91% of covered payroll, is required for fiscal
year 2017. This is a decrease of$285,000 over the fiscal 2016 required
contribution of$8.93 million, or 11.13% of covered payroll.
The calendar year 2016 investment return was a gain of 6.70%, net of
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City of Clearwater
Pension Trustees Meeting Minutes April 17, 2017
investment fees, versus the assumed rate of 7.0%. The five-year smoothed
investment return based on the actuarial value of the assets was 8.22% versus
the assumed rate of 7.0%. During calendar years 2012 through 2016,
investment returns were 13.92%, 16.90%, 7.99%, (0.28%), and 6.70%,
respectively.
The plan experienced a net actuarial experience gain of$18.1 million for the
year. The gain is primarily due to the actuarial gain from the actuarial
investment return of 8.22% versus the assumption of 7.0%.
The Plan's funded ratio at January 1, 2017 was 105.38% (including the credit
balance) versus 102.92% for the prior year. The actuarial value of assets
exceeds the market value of assets by $22.4 million as of January 1, 2017.
The plan's credit balance, which reflects actual contributions in excess of
actuarially required contributions for prior years, increased from $15.6 million to
$19.4 million during calendar 2016. This $3.8 million increase was due to the
City's budgeted overfunding of the fiscal 2017 required contribution. The City
contributed approximately 15% of salaries, versus the actuarially required
11.13%, to increase the plan's credit balance reserves for future volatility in
required contributions.
The Employees' Pension Plan is highly leveraged on investment returns in
comparison to most pension plans, which means changes in investment
earnings cause significant increases or decreases in required employer
contributions. This year-to-year volatility necessitates building reserves, such
as the plan's credit balance, during periods of positive investment earnings
experience. This provides the City the ability to subsidize increased employer
contributions during periods of negative investment earnings experience with
contributions from accumulated reserves.
Gabriel Roder Smith Actuary Pete Strong reviewed the actuarial
valuation results. The employer contribution requirement decreased
from the prior year, from $8,944,103 for fiscal year 2017 to $8,659,427
for fiscal year 2018. The actual employer and State contributions during
the year ending December 31, 2016 were $11,729,548, compared to the
required contribution of$8,944,103. The excess contribution of
$2,785,445 was used to increase the credit balance. The credit balance
increased from $15,570,503 to $19,445,883. The Plan continues to be
fully funded. Mr. Strong said the mortality assumption rate was revised,
as required by state statute, to match the Florida Retirement System's
mortality rate for active members. The revised mortality rate increased
the required contribution by 0.11% of covered payroll. The City's Plan had
been using a more conservative mortality table which would have required a
contribution of 11.21% of covered payroll.
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Pension Trustees Meeting Minutes April 17, 2017
In response to questions, Mr. Strong said the FRS mortality assumption
change was effective July 1, 2016. If every year hits the 7% return going
forward, the Plan will remain over 100% funded. Unless the contribution
requirement is reduced, the credit balance will not need to be used. Mr.
Strong said the contribution requirements are expected to remain in the
10-11% of pay range the next couple of years, unless there is a negative
experience. The credit balance reserve is to be used when there is a
negative experience or an unexpected contribution spike. Once at 110%
funded, there is sufficient cushion for the Plan to absorb an average
recession. He said most pension plans do not have the luxury to be over
100% funded. The Plan is being conservative in making extra payments
but the Plan's mortality experience has been lower than expected, it is
always a good idea to make extra contributions. During the past eight
years, the Plan's mortality experience has been aggressive as plan
participants are living longer.
Staff was directed to include supporting legislation that allows individual
municipal retirement plans to choose a more conservative mortality table
to the City's 2018 State Legislative Agenda.
Trustee Cundiff moved to accept the January 1, 2017 Annual
Actuarial Valuation for the Employees' Pension Plan. The motion
was duly seconded and carried unanimously.
4.2 Approve the new hires for acceptance into the Pension Plan as listed.
Name/Job Classification/De partmentPension Eligibility Date
Nicholas Pryor, Parks Service Technician I, Parks and Recreation02/06/2017
Cory Garakop, Parks Service Technician I, Parks and Recreation02/06/2017
Janelle Saylor, Police Communications Operator Trainee, Police 02/06/2017
Christie Bishop, Police Communications Operator Trainee, Police 02/06/2017
Chelsea Pruess, Police Communications Operator Trainee, Police 02/06/2017
Sean Austin, Police Communications Operator Trainee, Police 02/06/2017
William Kostka, Electronics Technician, Public Utilities 02/06/2017
Stephen Ross, Water Distribution Operator Trainee, Public Utilities 02/06/2017
Don Kelly, Parking, Facility, and Security Aide, Library 02/18/2017
Lisa Alber, Accounting Technician, Engineering 02/21/2017
Jacob Shaw, Stormwater Technician I, Engineering 02/21/2017
Ivan Dimitrov, Engineering Specialist II, Engineering 02/21/2017
Jeremy Brown, Senior Professional Engineer, Engineering 02/21/2017
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Pension Trustees Meeting Minutes April 17, 2017
Jessica Pryor, Customer Service Representative, Gas 02/21/2017
Cleophas Lyons, Network Analyst I, Information Technology 02/21/2017
Eric Verhayden, Network Analyst I, Information Technology 02/21/2017
Hailey Bryant, Accounting Clerk, Solid Waste 02/22/2017
Trustee Hamilton moved to approve the new hires for acceptance
into the Pension Plan as listed. The motion was duly seconded and
carried unanimously.
4.3 Approve the following request of employees Felicia Donnelly, Parks and Recreation
Department, Tracey Reed, Library Department and Scott Jordan, Planning and
Development Department, to vest their pensions as provided by Section 2.419 of the
Employees' Pension Plan.
Felicia Donnelly, Admin Support Manager, Parks and Recreation Department,
was employed by the City on April 7, 2003, and began participating in the
Pension Plan on that date. Ms. Donnelly terminated from City employment on
February 25, 2017.
Tracey Reed, Librarian III, Library Department, was employed by the City on
November 14, 2005, and began participating in the Pension Plan on that date.
Ms. Reed terminated from City employment on December 3, 2016.
Scotty Jordan, Development Review Tech II, Planning and Development
Department, was employed by the City on October 30, 2006, and began
participating in the Pension Plan on that date. Mr. Jordan will terminate from
City employment on March 18, 2017.
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
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City of Clearwater
Pension Trustees Meeting Minutes April 17, 2017
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. Ms. Donnelly will meet the non-hazardous duty criteria and
begin collecting a pension in August 2024. Ms. Reed will meet the
non-hazardous duty criteria and begin collecting a pension in April 2026. Mr.
Jordan will meet the non-hazardous duty criteria and begin collecting a pension
in October 2017.
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 moved to approve the following request of
employees Felicia Donnelly, Parks and Recreation Department,
Tracey Reed, Library Department and Scott Jordan, Planning and
Development Department, to vest their pensions as provided by
Section 2.419 of the Employees' Pension Plan. The motion was
duly seconded and carried unanimously.
4.4 Approve the following request of employee Donald Thomson, Fire Department, for a
regular pension as provided by Sections 2.416 and 2.424 of the Employees' Pension
Plan.
Donald Thomson, Firefighter/Driver-Operator, Fire Department, was employed
by the City on January 6, 1986, and his pension service credit is effective on
that date. His pension will be effective March 1, 2017. Based on an average
salary of approximately $66,720.71 over the past five years, the formula for
computing regular pensions and Mr. Thomson's selection of the 100% Joint
and Survivor Annuity, this pension benefit will be approximately $55,762.20
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
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City of Clearwater
Pension Trustees
5. Adjourn
Meeting Minutes April 17, 2017
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.
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. Mr. Thomson has met the
hazardous duty criteria.
Trustee Caudell moved to approve the following request of
employee Donald Thomson, Fire 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.
The meeting adjourned at 1:44 p.m.
—cteor\enweke.kof
Chair
Attest Employees' Pension Plan Trustees
City Clerk , ‘��
City of Clearwater
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