06/18/2007
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING MINUTES
CITY OF CLEARWATER
June 18, 2007
Present: Frank Hibbard Chair
Carlen Petersen Trustee
John Doran Trustee
George N. Cretekos Trustee
Paul Gibson Trustee
Also Present: William B. Horne, II City Manager
Garry Brumback Assistant City Manager
Rod Irwin Assistant City Manager
Pamela K. Akin City Attorney
Cynthia E. Goudeau City Clerk
Patricia O. Sullivan Board Reporter
The Chair called the meeting to order at 1:30 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
2.1 - Approve the minutes of the May 15, 2007 Pension Trustees meeting as submitted in
written summation by the City Clerk.
Trustee Petersen moved to approve the minutes of the May 15, 2007 Pension Trustee
meeting, as recorded and submitted in written summation by the City Clerk to each Trustee.
motioncarried
The was duly seconded and unanimously.
3 - Pension Trustee Items
3.1 Employees listed below be accepted into membership in the City of Clearwater's
Employees' Pension Plan.
Pension Eligible
Name, Job Class, & Dept./Div Hire Date Date
Charles Stephenson, Traffic Technician/Engineering 04/02/07 04/02/07
Shery Fresk, Drafting & Mapping Technician/Engineering 04/02/07 04/02/07
Christina Beaver, Telecommunicator/Police 04/02/07 04/02/07
Kimberly Altomare, Telecommunicator/Police 04/02/07 04/02/07
Melissa Mason, Telecommunicator/Police 04/02/07 04/02/07
Thomas Leonard, Marine Facility Operator/Marine & Aviation 03/03/07 03/21/07
Kyle Wilson, Solid Waste Worker/Solid Waste 04/02/07 04/02/07
Michael Austin, Solid Waste Worker/Solid Waste 04/02/07 04/02/07
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William Duffin, TV Production Specialist/Public Comm. 04/23/07 04/23/07
Thomas Leonard originally was hired as part-time on March 3, 2007; transferred to full-
time and pension eligible as of March 21, 2007.
Trustee Doran moved to accept the listed employees into membership in the City of
motion carried
Clearwater's Employees' Pension Plan. The was duly seconded and
unanimously.
3.2 Ed Shannahan, Gas Department; Sherwin Meyer, Public Utilities Department; and Wendy
Cason, Fire Department, be granted regular pensions under Sections 2.393 and 2.397 of the
Employees' Pension Plan as approved by the Pension Advisory Committee.
Ed Shannahan, Gas Supervisor, Gas Department, was employed by the City on April 4,
1977, and his pension service credit is effective on that date. His pension will be effective
June 1, 2007. Based on an average salary of approximately $59,082 per year over the past
five years, the formula for computing regular pensions, and Mr. Shannahan’s selection of the
100% Joint & Survivor Annuity, this pension will approximate $48,124 annually.
Sherwin Meyer, Wastewater Treatment Plant Operator A, Public Utilities Department,
was employed by the City on October 26, 1987, and his pension service credit is effective on
that date. His pension will be effective November 1, 2007. Based on an average salary of
approximately $49,356 per year over the past five years, the formula for computing regular
pensions, and Mr. Meyer’s selection of the Life Annuity, this pension will approximate $29,894
annually.
Wendy Cason, Fire Medic Lieutenant, Fire Department, was employed by the City on
January 6, 1986, and her pension service credit is effective on that date. Her pension will be
effective June 1, 2007. Based on an average salary of approximately $71,480 per year over
the past five years, the formula for computing regular pensions, and Ms. Cason’s selection of
the 10-year Certain & Life Annuity, this pension will approximate $43,454 annually.
These pensions were approved by the Pension Advisory Committee on May 10, 2007.
Section 2.393 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
provides for normal retirement eligibility when a participant has completed twenty years of
credited service or has reached age 55 and completed ten years of credited service in a type
of employment described as “hazardous duty” and further defines service as a Fire Medic
Lieutenant as meeting the hazardous duty criteria. Mr. Shannahan qualifies under the thirty
years of service criteria. Mr. Meyer qualifies under the age 55 and twenty years of service
criteria. Ms. Cason qualifies under the hazardous duty criteria.
Trustee Cretekos moved that Ed Shannahan, Gas Department; Sherwin Meyer, Public
Utilities Department; and Wendy Cason, Fire Department, be granted regular pensions under
Sections 2.393 and 2.397 of the Employees' Pension Plan as approved by the Pension
motion carried
Advisory Committee. The was duly seconded and unanimously.
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3.3 Catherine Borden, Public Utilities Department, be allowed to vest her pension in
accordance with Sections 2.397 and 2.398 of the Employees' Pension Plan as approved by
the Pension Advisory Committee.
Catherine Borden, Wastewater Treatment Plant Operator A, Public Utilities
Department, was employed by the City on January 1, 1994, and began participating in the
Pension Plan on that date. Ms. Borden terminated from City employment on April 11, 2007.
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), 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
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.
Borden would have completed at least 20 years of service and reached age 55 on January 6,
2023. Her pension will be effective February 1, 2023. This pension was approved by the
Pension Advisory Committee on May 10, 2007.
Trustee Gibson moved that Catherine Borden, Public Utilities Department, be allowed
to vest her pension in accordance with Sections 2.397 and 2.398 of the Employees' Pension
motion
Plan as approved by the Pension Advisory Committee. The was duly seconded and
carried
unanimously.
3.4 Discussion Item: Provide direction regarding the Citizen member of the Pension
Investment Committee regarding qualifications, selection process, term, etc.
On May 15, 2007, the Pension Trustees approved changes to the Statement of
Investment Objectives and Guidelines including the addition of a citizen member on the
Pension Investment Committee. The Committee meets at least quarterly for approximately
four to six hours to review the performance of the individual managers and the fund as a
whole. In addition, the committee holds special meetings as needed for the screening and
selection of new money managers, to review and make recommendations to changes in the
Statement of Investment Objectives and Guidelines, and for other purposes as needed.
Staff needs direction regarding the following: 1) Qualifications of citizen member; 2)
Selection process to be used; and 3) Term of appointment, etc.
Staff will draft appointment information. Citizen Member shall be a City resident, have
work experience in the financial field, and posses a degree in Finance. The two-year term will
not be subject to term limits. The normal application process will be followed.
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Capital Guardian has had the following performance over the last 4 years:
Year
Cap Guardian Return
Large Cap Core Style
Cap Guardian Ranking
2006
11.36%
16.01 %
93rd
2005
6.60%
7.17%
54th
2004
9.98%
10.15%
53rd
2003
38.42%
27.29%
15t
The Pension Investment Committee recently met with Capital Guardian and based upon
the above performance and the results of that meeting, the committee is recommending the
termination of Capital Guardian. The majority of the assets of Capital Guardian will be
transferred to Northern Trust's EAFE Index product that is currently being used for the City's
international exposure to bring the international equity allocation up to the new portfolio
guidelines. The Pension Investment Committee believes that it is important to increase the
asset allocation to international equity to bring the exposure up to the not to exceed 20% of the
portfolio as soon as possible.
Staff will be bringing items forward at the next Pension Trustee meeting related to asset
allocation, performance measures, active vs. passive investments, and other issues. Based
upon that discussion, staff will begin the process to implement the direction as provided by the
Trustees.
Trustee Petersen moved to approve the termination of Capital Guardian as a money
manager and transfer of the majority of the funds to the Northern Trust EAFE Index Fund with
the balance to be used to rebalance the portfolio. The motion was duly seconded and carried
unanimously.
4 - Other Business:
Consensus was to agenda discussion of Plan investment management on August 14,
2007.
5 - Adjourn
The meeting adjourned at 1 :46 p.m.
~p:~
Chair
Employee's Pension Plan Trustees
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