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HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 3A_3/18/1996 ' 11114 VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive �,. lalequesta,Florida 33469-0273 • (407)575-62000- . ,- Fax: (407)575-6203 a Cp &;o0 TEQUESTA MUNICIPAL FIREFIGHTER'S PENSION TRUST FUND BOARD OF TRUSTEES MEETING DECEMBER 19, 1995 I . CALL TO ORDER AND ROLL CALL The Tequesta Municipal Firefighter' s Pension Trust Fund Board of Trustees held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Tuesday, December 19, 1995. The meeting was called to order at 9 : 03 A.M. by Chairman Ron Mackail. A roll call was taken by Betty Laur, the Recording Secretary. Boardmembers in attendance at the meeting were: Chairman Ron T. Mackail, Boardmember Thomas G. Bradford, Boardmember John Flint, and Boardmember Bill Sharpless. Also in attendance were Attorney Scott Hawkins sitting in for Village Attorney John C. Randolph and Finance Director Bill Kascavelis. .Boardmember Shawn Thurmond arrived at 9 : 11 A.M. II. APPROVAL OF AGENDA Boardmember Sharpless moved to approve the Agenda as submitted. Boardmember Flint seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for John Flint - for Bill Sharpless - for l '1 Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 2 the motion was therefore passed and adopted and the Agenda was approved as submitted. III. APPROVAL OF PREVIOUS METING MINUTES (Meeting Minutes of September 25, 1995) Boardmember Sharpless moved to approve the minutes of the September 25, 1995 meeting of the Tequesta Municipal Firefighter's Pension Trust Fund Board of Trustees as submitted. The motion was seconded by Boardmember Flint. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for John Flint - for Bill Sharpless - for • the motion was therefore passed and adopted and the minutes were approved as submitted. IV. STATUS REPORT ON TEE FIREFIGHTER'S PENSION TRUST FUND (Bill C. Kascavelis, Finance Director) A) Financial Report (NationsBank Trust) 1) October 1995 Bill C. Kascavelis, Finance Director, presented the status report on changes in finances since the last meeting and stated that as of 10/31/95 the total assets of the Fund were $231, 796.62. 2) Fiscal Year 94/95 L 1 Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 • Page 3 Finance Director Kascavelis reported the beginning fund balance as of 10/1/94 of $83, 601.29; contributions of $117, 565 .37, earnings on deposits of $29, 809 . 88, distributions (returns to former employees) $2, 997 . 55, fee expense of $5, 346. 81 including $4, 000. 00 audit expense, bringing the total ending balance as of 9/30/95 to $222,632 . 18. Chairman Mackail questioned what had been the amount of return on investment for the fiscal year. Finance Director Kascavelis responded that Mr. Sharpless would be commenting at today' s meeting on the quarterly report of the Florida Municipal Pension Trust Fund, which should address that. Boardmember Sharpless stated that the expense ratio had been excellent, except for the $4, 000 audit. Finance .Director Kascavelis reported that the audit had been done by the actuary, H. Boggs, and was an annual requirement of the plan. Boardmember Bradford explained that the audit was required by State law every three years; however, the Florida League of Cities required an annual audit. Mr. Kascavelis explained that during the past fiscal year employee contributions had been 5%; and that employer contributions had been 14.4%, in addition to $14, 959 .38 received from the State from premiums on casualty and property insurance issued within a municipality. Boardmember Thurmond arrived at this point in the meeting at 9: 11 A.M. B. Report of Contributions (Employees/Employer) Finance Director Kascavelis reported total contributions of $12, 191. 66 for September, $8, 501.14 for October, and $9, 086. 87 for November. Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 4 C. Employee Changes Finance Director Kascavelis reported that one employee, Mr. Davis, had terminated employment on November 11, 1995, making the average age of the current employees 31. 1. D. NationsBank Trust Investment Portfolio Return Summary FY 1994/95 *Atlanta Capital's Quarterly Review of the Florida Municipal Pension Trust Fund dated September 30, 1995, has been forwarded to Board Member William Sharpless, Esq. , for his review and analysis. Finance Director Kascavelis reviewed the NationsBank Trust Investment Portfolio Return Summary for Fiscal Year 1994/95, and reported an average grand total rate of return for month ending 9/95 of 2 .35; for quarter ending ' 9/95 of 5. 10; for calendar year to date ending 9/95 of 21. 70, for year ending 9/95 of 22. 74; and for 2 years ending 9/95 of 10 . 14. Comparison with broad market indexes was also reviewed. Boardmember Sharpless reported that the investment advisor' s report included their client objectives for their client, Florida League of Cities, all of the funds they administered for the League, their market outlook, their equity investments, their fixed income investment, and their investment returns. Investment returns were compared to standard indices in the same way as by NationsBank, with the main ones used for comparison being Standard & Poor 500 and Lehman Bond Index. Boardmember Sharpless referred to the NationsBank report which showed a total market value as of 9/95 for the whole fund of $15,474, 148, including both fixed income and equities, of which Tequesta was only a small part. Boardmember Sharpless explained that there was no index with which to Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 5 compare that amount, since it was made up of equities, fixed income, and cash equivalents. Mr. Sharpless stated Tequesta' s plan was made up of 55% equities, 43% fixed income, and 2% cash equivalents. Therefore, Mr. Sharpless referred to the equities segment to determine comparison to S&P 500 and all of the comparisons were very close. Mr. Sharpless explained that if the Plan could do as well as S&P 500, it was doing quite well . Mr. Sharpless commented that NationsBank also rqceived an annual evaluation report of the Plans investment advisor which compared it to other investment advisors, which the Board also should see. Mr. Sharpless pointed out that client objective stated in the report was to seek long- term growth of capital and income consistent with the conservation of capital; and further, the report stated that the portfolio would be invested in high quality stocks and bonds with maximum exposure to stocks of 55%. Ms . Sharpless explained that the investor really did stick to high quality, A+ S&P rated investments, and therefore missed out on stocks which had done very well during the past month; however, those stocks were also very volatile. The outlook for next year was that the GDP (gross domestic product) would increase to 2. 5%, inflation would be 2.5%, interest would decline slightly, the yield curve would steepen, earnings would grow slowly, stocks would be reasonably valued, and bonds would remain attractive; and their strategy was to remain fully invested, emphasizing capital investment, exports, and consumer multi-rational companies. Focus would be on companies with earnings stability, above-average sales growth, and improving margins. Fixed income would be invested in high quality companies rated B+ to A+ for a slightly longer duration based on forecasted interest rates. Investment themes would be health care, multi- national consumers, small cap stocks, infrastructure companies, export companies, capital spending and technology and business services. A few examples of Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 6 companies with these themes would be American International, Coca Cola, Foster Wheeler, and Hewlett Packard. Mr. Sharpless stated that the total number of stocks that were invested was only about 50, which was really a small number without too much diversification and the one thing Mr. Sharpless believed was not conservative, since there were no utilities or energy stocks. Mr. Sharpless commented that he felt this report had been very helpful and had given him a much better idea of how the Village investments were being handled, and could not find fault. Chairman Mackail commented that the money managers had followed the conservative approach desired by the Board by establishing specific criteria and had taken a very conservative approach and achieved a good return on their investment. Chairman Mackail requested that next year a basic return on the investment that the Village had contributed to the fund be provided. Mr. Sharpless commented that he had been pleasantly surprised with the increase in the fund in only one year. Chairman Mackail requested the amount of year-to-date Village contributions for comparison with the opening amount. Mr. Kascavelis explained that the opening figure was $83, 000, that deposits were $117,565--which included employee contributions. of $26,444.65 and employer contributions of $91, 120, and that earnings were $22,204. Boardmember Bradford commented that the coming year would be very interesting since 1994 had been a down year and 1995 an up year. Discussion of recent stock market events ensued. In response to Boardmember Sharpless' question regarding the amount of contributions which would be made during 1996, Finance Director Kascavelis explained that the amount should mirror 1995 with cost of living added. Mr. Sharpless therefore estimated that with 1996 contributions added to the current base, the total would . Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 7 be approximately $350, 000 with no market loss or with a modest gain the total could be $400, 000 . Finance Director Kascavelis stated that approximately $14, 000- $16,000 revenues from insurance premiums should be added, and explained that the Village was attempting to provide a safeguard to the Pension Fund by over contributing in the early years of the Plan. Mr. Kascavelis thanked Boardmember Sharpless for his analysis. N. FMPTF Trustee Meeting Schedule 1996 Mr. Kascavelis stated the meeting schedule had been provided in the event that any of the Boardmembers desired to attend one of the meetings, and reported that the primary function of the meetings was to look at return on investment. Boardmember Bradford questioned the date of the next training class to go over procedures of the pension fund, which Mr. Kascavelis stated was presently unknown but would be provided by memo to the Boardmembers. VII. ANY OTHER MATTERS Finance Director Kascavelis distributed a handout received from Joyce Case of the Florida Municipal League of Cities, regarding possible revisions to the Plan regarding disability, and requested that the Boardmembers review this material and report any comments before the next meeting, since this matter would be on the next meeting' s agenda. Mr. Kascavelis explained that at present the Plan had no provision for a medical board for the administration of disability pensions, which was addressed in the handout information, and that some items listed were complied with by the physical exam required of all new employees. Boardmember Bradford commented that during the course of preparing plans which the Village Council was anticipating adopting in order to opt out of the Florida Retirement System, he had discovered that Chapter 112.66 required that . Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 8 • every plan have a summary plan to go with it which• must be updated every two years and that the summary plan must be given to all new hires when employed and must be written in ' a fashion so that a typical firefighter could understand the language in the summary. Therefore, it was time to update the Firefighters summary plan and to develop internal procedures to insure that every newly hired firefighter was given a copy of the summary plan. Boardmember Bradford requested that the next meeting agenda include a proposed summary plan for the Board to review. Boardmember Sharpless questioned whether the Florida League of Cities would do that for all the Plans, and if so, recommended that copies of what they planned to do be obtained. Boardmember Bradford responded that he believed every plan contained small differences and that the Statute specified that the Board of Trustees for the Plan was required to do it. Attorney Hawkins suggested that the Florida League of Cities might generate a pro forma document which this Board could modify. Attorney Hawkins stated that in establishing internal procedure to insure receipt of a summary plan by new employees that proof of receipt should be maintained for future reference. Chairman Mackail suggested that if a pro forma were provided that it could be reduced to bulleted items in the summary given to employees for their ease in understanding the material. Mr. Sharpless stated an annual report should be given to each participant showing that employee' s share. Mr. Kascavelis stated that the Village maintained an account balance for each individual, and that the annual report which must be completed by the end of February would contain all the details and would be on the next agenda. Mr. Kascavelis stated that the audit report would also be on the next agenda, verified that fiscal year end was September 30, and that the next meeting would be prior. to the end of February, 1996. Chairman Mackail called for any comments from the public and received no response. Firefighters Pension Trust Fund Board of Trustees Meeting December 19, 1995 Page 9 VIII. ADJOURNMENT Boardmember Bradford moved that the meeting be adjourned. Boardmember Flint seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for John Flint - for Bill Sharpless - for Shawn Thurmond - for The motion was therefore passed and adopted and the meeting was adjourned at 9:47 A.M. Respectfully submitted, 4427Cti Betty Laur Recording Secretary ATTEST: Joann Manganiello Village Clerk DATE APPROVED: