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HomeMy WebLinkAboutMinutes_Pension Public Safety_01/28/2009TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND EMERGENCY MEETING MINUTES January 28, 2009 I. Call To Order And Roll Call An emergency meeting of the Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees was held at the Tequesta Village Hall, 345 Tequesta Drive, Tequesta, Florida, on January 28, 2009. The meeting was called to order at 4:02 p.m. A roll call was taken by Pension Coordinator McWilliams. In attendance at the meeting were: Chair Ed Sabin, Board Member Ken Nielson, and Board Member Robert Young. Secretary David Cooper and Board Member Ray Giblin were absent from the meeting. Attorney Bonni Jensen attended via telephone. Senior Accountant Monica Rahim, and Pension Coordinator Lori McWilliams were also in attendance. II. Authorization to Pay $500 IRS Fee for Voluntary Correction Program Attorney Jensen advised that the Board had voted to file for an IRS Determination letter, and during the course of her review of the documentation, going back in time, she had found that the plan had not been amended timely for some IRS requirements. When the plan was created, it was a standardized plan, which did not have those provisions. The IRS would look to see if the plan had been timely amended under their requirements when they reviewed it for the .~~~ ~ determination letter, and this plan had not been amended until 2005. The ~~y"0 , choices were to not file for the IRS determination letter at all, not to file at this point and file for it February 2, 2010 through January 31, 2011, and go through this same process again, or go through the Voluntary Compliance and Approval Program and file by January 31, 2009 to make the corrections, when the cost would be half of the usual $1,000 fee, or $500, to get this corrected. Attorney Jensen explained that if one went through the determination letter process and was found not to be compliant, there were penalties which were substantially more than the fee for voluntary compliance. The question today was whether to continue forward with the determination letter process and go through the voluntary correction program and pay the $500 fee. By using the voluntary correction plan, that would help the determination letter process. Both applications had to be sent together. During ensuing discussion, Chair Sabin asked if the board had to approve the changes to the plan before the applications were sent in. Attorney Jensen explained that the voluntary compliance process should occur first, with the proposed changes, and the IRS would either make the plan legislatively amended or grant compliance and send it on through the determination letter process and their letter would say they found the plan to be qualified provided the board adopted these amendments as proposed. Attorney Jensen clarified in Emergency Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund January 28, 2009 2 response to Chair Sabin's question of what her recommendation was, that she recommended not approving the proposed changes, but approving the Voluntary Correction Program and the IRS Determination Letter. Chair Sabin questioned whether any of the changes were of significance to plan participants. Attorney Jensen responded no, because that was how this plan currently operated-the amendments were in the plan, but just didn't happen when they were supposed to. Board Member Nielson asked when this plan came into existence. Attorney Jensen explained the plan came into existence for the firefighters in September 1993, and in 1996 the Village had repealed that plan and created a new one which included firefighters, police, and general employees. In 2005 the plans were split into one for general employees and one for public safety officers. The rollover provision was added then, but not filed with the IRS-filings with the IRS were only done when a determination letter was requested. Even if it had been filed with the IRS in 2005 this same process would have had to occur, because the rollover provision had not been in the plan in 1993. Attorney Jensen explained it was not unusual for governmental plans not to have had this rollover provision because it dealt with lump sum distributions from the plan, and most governmental plans did not allow that type of distribution. Board Member Nielson asked if that meant the plan was not qualified. Attorney Jensen explained it only meant the plan was not timely amended, and she hesitated to say what the IRS would do, but it was her opinion the IRS would not disqualify the plan for not having timely amended the plan, but would penalize the plan in dollars. The normal fee for the voluntary correction fee was $1,000. If the IRS found out on their own there was a problem with timely amendments they could penalize the plan up to $5,000. Chair Sabin confirmed with Attorney Jensen that identification of the problem came about as part of a process she went through, and she explained she had been looking for timeliness, which was not normally something that mattered to the pension plan. There was a checklist to be filled out, and she would also inform the IRS these amendments had been part of the plan since 2005 but ask that they be treated as being amended farther back in time at the point when the IRS required them to be in the plan. Chair Sabin asked that in the minutes of this meeting it be clear that the amendments had been in the plan since 2005, but a technicality had now determined they were not timely amended in 1996; and the board had just learned of this. oard Member Nielson asked if it was ical to re uest a determination letter at typ q ~ , x,0`1 the time a plan was established. Attorney Jensen responded it had been a practice in the early 1990's, but now was not typical. Now the IRS had bought Emergency Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund January 28, 2009 3 out the governmental plans to get them back into the process to begin filing for determination letters again. MOTION: Board Member Nielson made a motion to approve filing of the IRS voluntary correction program and the $500 fee. Board Member Young seconded; motion carried by unanimous 3-0 vote. Chair Sabin announced there would be discussion at a future meeting regarding how to handle items like this that might have a time deadline when there was the possibly of not being able to get a quorum. Pension Coordinator McWilliams advised she had almost not been able to get a quorum for this meeting. III. Adjournment There being no further business, the meeting was adjourned. Respectfully submitted, ~~~ ,~~..~~" Betty Laur Recording Secretary