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HomeMy WebLinkAboutDocumentation_Pension General_Tab 04_05/04/2009SYNOPSIS OF GENERAL EMPLOYEES PENSION BOARD QUARTERLY MEETING HELD 02/02/09 1. Minutes of November 3, 2008 quarterly meeting were approved. 2. Bryan Bacardjiev provided the Bogdahn Consulting, LLC presentation. 3. Mr. Bacardjiev was requested to find out why there was a $79,000 difference between the Salem Trust statement and the Bogdahn report as of 12/31 /08 and report back. 4. Mr. Bacardjiev was requested to provide to Attorney Jensen and Pension Coordinator McWilliams a proposed investment policy statement with written recommendations from Mr. West before the next meeting. 5. Mike Dana of Dana Inves#ment Advisors provided a presentation. 6. Mr. Bacardijiev was requested to break out the international segment so it would not be looked at relative to the S&P 500 and provide that information before the next meeting. 7. Mr. Dana requested the Monitor and Board look into whether this fund could purchase a product called enhanced income that was an equity alternative and had consistently paid between 8% and 11 % for some time. After the Monitor had looked at whether this could be added, Mr. Dana indicated he would like to send someone to speak to the Board on this product. Chair Rhodes indicated he felt the Board had a responsibility to explore this. 8. Mr. Dana indicated he did not believe changes should be made to the band portion of the portfolio in the investment policy. 9. The following items were approved on the Consent Agenda: Ratification of Invoices Paid Since Last Quarterly Meeting: Business Services Connection, Inc. for office work -weeks ended 10/17/08 through 1/2/09 - $1,486.63 Business Services Connection, Inc. to attend, record and prepare minutes of 11/3/08 quarterly meeting - $348.29 Hanson, Perry & Jensen, PA Legal Fees through 11/15/08 - $1,501.84 IRS -Fee for IRS Determination Letter - $1,000.00 SYNOPSIS OF GENERAL EMPLOYEES PENSION BOARD QUARTERLY MEETING HELD 02/02/09 2 Payments to be Reviewed and Approved Business Services Connection, Inc. for recording and preparation of 12/10/08 Joint Meeting minutes - $76.45 Business Services Connection, Inc. for office work -weeks ended 1/9/09 through 1/30/09 - $382.28 Hanson, Perry & Jensen PA -Legal Fees through 1/15109 - $1,313.50 Bogdahn Consulting, LLC - $2,625.00 Dana Investment Advisors - $1,263.74 Gabriel Roeder Smith and Company Services through 12/31/08 - $2,418.00 Approval of new applicants for participation in Pension Plan: None Approval of withdrawal of contributions: None Statement of Activities - No questions or comments 10. The Budget Report was reviewed -there were no questions or comments. 11. The Board tabled to the next meeting consideration of expanding investment options. 12. HR Director Merlene Reid provided results of the employee survey regarding a possible COLA benefit. The Board requested information on whether COLA was a component of other municipalities' plans, which Director Reid indicated she could obtain from the Palm Beach County HR Society. This item was tabled to the next meeting. 13. Approval of the Summary Plan Description was tabled to the next meeting. 14. The Board approved the mandatory death benefit and also the disability provision under the HEART Act. END OF SYNOPSIS DRAFT TEQUESTA GENERAL EMPLOYEES PENSION TRUST FUND QUARTERLY BOARD OF TRUSTEES MEETING February 2, 2009 I. Call To Order And Roll Call The Tequesta General Employees Pension Trust Fund Board of Trustees held a regular quarterly meeting at the Tequesta Village Hall, 345 Tequesta Drive, Tequesta, Florida, on Monday, February 2, 2009. The meeting was called to order at 11:35 a.m. A roll call was taken by Chair Michael Rhodes. Board Members in attendance at the meeting were: Chair Michael Rhodes, Secretary Carl Hansen, and Board Member Archie C. Mangum, Jr. Also in attendance were Attorney Bonni Jensen, Senior Accountant Monica Rahim, Bryan Bacardjiev, Bogdahn Consulting LLC -Monitor, Mike Dana, Dana Investment Advisors -Investment Manager, and Finance Director Joann Forsythe who attended representing the Village Management. Board Member Deanna Mayo, Board Member Michelle Gload, and Pension Coordinator Lori McWilliams were absent because they were attending the FPPTA Trustee School. II. APPROVAL OF AGENDA MOTION: Secretary Hansen moved approval of the agenda as submitted. Board Member Mangum seconded the motion, which carried by unanimous 3-0 vote. Chair Rhodes indicated he would like to table some items under unfinished business since not all Board Members were present. III. APPROVAL OF MINUTES 1. Tequesta General Employees' Pension Trust Fund Board of Trustees Quarterly Meeting Minutes -November 3, 2008 2. Joint Meeting of Tequesta General Employees' Pension Trust Fund Board of Trustees and Public Safety Officers Pension Trust Fund Board of Trustees -Meeting Minutes -December 10, 2008 MOTION: Secretary Hansen moved approval of the minutes of the November 3, 2008 meeting as submitted. Board Member Mangum seconded the motion, which carried by unanimous 3-0 vote. Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 2 The minutes of the joint meeting of December 10, 2008 had been previously approved at the joint meeting earlier that morning. IV. PRESENTATIONS 3. Quarterly Presentation By Monitor Bryan Bacardjiev, Bogdahn Consulting, LLC, distributed a synopsis showing what the plan had done over the last quarter, and reviewed his company's presentation booklet. Mr. Bacardjiev advised international and domestic markets had been down to a level that was unprecedented. Fixed income was the only area that had produced positive results for the quarter, and the fund was in compliance with all their requirements. Chair Rhodes questioned the Salem Trust statement showing a $79,000 difference from the Bogdahn report in total assets as of December 31, 2008, and asked if there had been a trade. Mr. Dana advised it could be a timing issue in the reporting. Mr. Bacardjiev indicated he could find the answer and report back. Mr. Bacardjiev reported everything had been negative in the equity markets, although this fund had outperformed the benchmark by 3.5%. The fund had been helped during the quarter by Dana's very solid fixed income results. Mr. Bacardjiev advised that many other plans were in the same boat with negative returns, which was the result of the markets in general. Chair Rhodes advised he had hoped to receive a critique at this meeting of the present investment policy statement with written recommendations from Mr. West. Mr. Bacardjiev indicated he would get with Mr. West to put that together. Chair Rhodes advised that would include the proposed ordinance language, and whether to invest in mutual funds. Mr. Bacardjiev reported he had read that mutual funds were allowed but commingled funds were not, and he needed to see where the discrepancy was. Chair Rhodes commented the proposed investment policy wording should be sent to Pension Coordinator McWilliams and Attomey Jensen. Attorney Jensen noted she had a proposed investment policy #rom October 24. Mr. Bacardjiev commented Mr. West may have already completed the proposed policy, but he would confirm that, and apologized that it had not been available for this meeting. 4. Presentation by Investment Manager (This item was not on the agenda since this was not the scheduled quarter for the Investment Manager's semiannual report.) Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 3 Mike Dana, Dana Investment Advisors, recommended breaking out the international segment so when it outperformed or underperformed, it would not be looked at relative to the S&P 500. Attorney Jensen expressed her agreement with this suggestion, and asked that Mr. Bacardjiev include that in the asset allocation. Mr. Badardjiev advised they had not previously broken it out because of the cost of doing so when the fund was so small Mr. Dana commented his firm had the same concerns with breaking out the cost of multiple meetings on a million dollar account; however, they had taken on the account and would give it full treatment. The numbers were accurate, but breaking out those items would provide a fuller picture. Mr. Bacardjiev assured Chair Rhodes he would provide the information before the next meeting. Mr. Dana felt unemployment might rise to 11 %, or more if GM and Ford were lost. He discussed the banks, and explained that bank problems were starting to get better. The recession would be over when the consumer started spending. Mr. Dana commented the stimulus was positive, but might not be large enough. Create a new widget that people wanted that would provide jobs. Electric cars were needed, but not being created fast enough. Mr. Dana distributed various materials, explained there were opportunities in the corporate bond market, and since his firm did not time the market, they had done better in this economy than others. He hoped to see change in the second half of the year, and commented the stimulus needed to kick in, consumer confidence needed to come back, and banks needed to lend. Mr. Dana advised there would be a lot of tests of the equity market, unemployment claims needed to drop, and housing prices needed to appreciate, all of which would come from a process that was not yet finished. Housing inventories were starting to drop, but prices still needed to stabilize. Other factors that would need to happen to bring back the economy were discussed. Investment strategy going forward would be defensive. Mr. Dana recommended a product called enhanced income that was an equity alternative, basically a hedge fund, that he asked the Monitor and Board to review. This product was doing well in this down market, and he would like to know if it would fit into the portfolio, and if it was kosher to purchase it for this plan. It had consistently paid between 8°lo and 11 % for some time. In response to a question from Chair Rhodes about working with Mr. West on the proposed investment guideline changes, Mr. Dana clarified he would be acquiescing to Mr. West-he did not believe changes should be made to the bond portion of the portfolio. Secretary Hansen asked if we would or should get back to the way things were in 2007; Mr. Dana indicated it would take time, and political help was needed because it was aworld-wide problem, not just a problem of the United States. Protectionism would not work-the United States must trade with the world. In response to other Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 4 questions, Mr. Dana explained they had added an international component to the portfolio, his goal was to have as close to a positive return as possible, and if they saw something to buy they would do it, but they were cautious. Secretary Hansen commented in good times everyone felt fine, but in the down times there might be something to learn. Mr. Dana asked that after the monitor looked at adding the enhanced income product to the portfolio, he would like to send someone to explain it to the Board. He explained that it had more risk than a bond but less risk than a stock, and was enough different that the Board needed to know about it. Chair Rhodes indicated he felt the Board had a responsibility to explore it. MOTION: Secretary Hansen moved approval of the report by the Investment Manager. Board Member Mangum seconded the motion, which carried by unanimous 3- 0vote. Secretary Hansen asked that the Consent Agenda be considered next. VI. CONSENT AGENDA MOTION: Secretary Hansen moved approval of the Consent Agenda. Board Member Mangum seconded the motion, which carried by unanimous 3-0 vote. Therefore the following items were approved: CONSENT AGENDA 8. Ratification of Invoices Paid Since Last Quarterly Meeting: Business Services Connection, Inc. for office work -weeks ended 10/17/08 through 1/2/09 - $1,486.63 Business Services Connection, Inc. to attend, record and prepare minutes of 11/3/08 quarterly meeting - $348.29 Hanson, Perry & Jensen, PA Legal Fees through 1 1/1 5108 - $1,501.84 IRS -Fee for IRS Determination Letter - $1,000.00 9. Payments to be Reviewed and Approved Business Services Connection, Inc. for recording and preparation of 12/10/08 Joint Meeting minutes - $76.45 Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 5 Business Services Connection, Inc. for office work -weeks ended 1 /9/09 through 1 /30/09 - $382.28 Hanson, Perry & Jensen PA -Legal Fees through 1/15/09 - $1,313.50 Bogdahn Consulting, LLC - $2,625.00 Dana Investment Advisors - $1,263.74 Gabriel Roeder Smith and Company Services through 12/31/08 - $2,418.00 10. Approval of new applicants for participation in Pension Plan: None 11. Approval of withdrawal of contributions: None 12. Statement of Activities END OF CONSENT AGENDA VII. BUDGET REPORT Senior Accountant Rahim reviewed the budget report. There were no questions or comments. The Board returned to item V on the agenda: V. UNFINISHED BUSINESS 4. Consideration of expanding investment options as discussed at the 9/18/08 Special Meeting and the 11/3/08 Quarterly Meeting; the Board requested a written and verbal presentation from Dana Investrnent Advisors and a written statement from Mr. West for this meeting Chair Rhodes commented the next step would be a recommendation by Bogdahn. MOTION: Board Member Mangum moved to table consideration of expanding investment options to the next meeting. Secretary Hansen seconded the motion, which carried by unanimous 3-0 vote. 5. Report from HR Director Meriene Reid regarding requested employee survey Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 6 HR Director Reid explained the employee survey had asked if the employee would like a COLA benefit added to their pension, if the answer had been yes, would the employee be willing to contribute to this benefit; how much would the employee be willing to contribute; and whether this would be an incentive to stay with the Village. Twenty five out of thirty five had responded, and 100% wanted to see the COLA benefit added. Seventeen were not willing to contribute--of the eight willing to contribute there were two willing to give 1 %, three willing to give 2%, and three willing to give 3%. Responses to the question of whether a COLA benefit would help to retain them were ten yes, twelve no, and three did not know. Director Reid reviewed ratios and patterns. HR Director Reid was given a copy of the survey presented at the earlier joint meeting, which surveyed other municipalities, and Chair Rhodes asked if she were familiar with whether COLA was a component of other municipalities' plans, especially from the retention perspec#ive. Director Reid responded she was a member of the Palm Beach County HR Society and she could obtain that information from them. Just looking at the survey, slightly more than 50% had COLA. She was unsure what "not mentioned" meant; Chair Rhodes interpreted it as "none", and advised that Pension Coordinator McWilliams had prepared that survey. Chair Rhodes asked that this be tabled to the next meeting since two members of the Board were not present, and the Board was requesting more information. Mr. Bacardjiev advised COLA was being dropped from some plans because of funding requirements, and cautioned this might not be a goad time to add COLA because of the financial impact to the plan. Chair Rhodes indicated that was a valid consideration. MOTION: Board Member Mangum moved to table consideration of adding a COLA benefit to the next meeting. Secretary Hansen seconded the motion, which carried by unanimous 3-0 vote. 6. Consideration of approval of the updated Summary Plan Description with clarification of the meaning of "all tax deferred items of income". (Tabled from August 4, 2008 and November 3, 2008 quarterly meetings) Attorney Jensen advised changes had been made in the Summary Plan Description as the Board had requested, to clarify the definition of "salary". That definition had included "all tax deferred items of income", which she had changed to now read: "and amounts paid on a pre-tax basis for employee benefits". Since the question had been a concern of Board Member Gload, Board Member Mayo, and Pension Coordinator McWilliams, it was decided to table this item to the next meeting. MOTION: Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 7 Board Member Mangum moved to table approval of the change to the Summary Plan Description next meeting. Secretary Hansen seconded the motion, which carried by unanimous 3-0 vote. 7. Consideration of approval of incorporation of the mandatory Heart Act provision into the pension plan and decision on the buy back provision. (Tabled at August 4, 2008 quarterly meeting- skipped at November 3, 2008 meeting due to lack of time) Attorney Jensen reported some changes had been made to Federal legislation which she distributed at the August meeting. The Heroes' Earnings and Assistance Tax Act of 2008 (HEART Act) provided tax benefits to active military personnel. Sections that affected this plan included expanded survivor and disability benefits which required tax qualified plans to provide to the survivors of a participant who died while performing qualified military service the benefits they would have been entitled to had they actually returned from that military service, worked to retirement and then died. This Act also provided benefits to those disabled during qualified military service making them unable to return to work. Differential pay was to be considered as pensionable wages. Attorney Jensen advised the Board must add the provision for someone who died during military service and the differential wages, but must decide about the disability benefit since it was not mandatory. In the case of a disability incurred during military service, the Village was obligated to re-employ but if because of the disability that could not happen, then the person must be provided the same benefits as if they had been employed throughout the whole time they had been in military service; they would not become automatically vested. The financial impact would come from people who left for military service who were not vested but became vested during the time they were gone. The person could also be entitled to disability benefits from the military, which would not affect the Village's pension benefits. Attorney Jensen answered questions from the Board and the audience. MOTION Secretary Hansen made a motion to approve the disability provision for former employees returning from military duty to the Village of Tequesta as well as the death benefit. Board Member Mangum seconded the motion, which carried by unanimous 3-0 vote. XI. ANY OTHER MATTERS XN. COMMUNICATIONS FROM CITIZENS XIII. ADJOURNMENT Board Member Mangum moved to adjourn the meeting; seconded by Secretary Hansen and unanimously carried 3-0. Agenda -General Employees' Pension Trust Fund Board Meeting February 2, 2009 Respectfully submitted Betty Laur Recording Secretary