HomeMy WebLinkAboutDocumentation_Pension General_Tab 6A_1/28/1998 •I�` ,
GABRIEL,ROEDER,SMITH & COMPANY
Consultants&Actuaries
301 East Las Olas Blvd.•Suite 200•Ft.Lauderdale,FL 33301 •954-527-1616•FAX 954-525-0083
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December 18, 1997
Mr. Bill Kascavelis
Finance Director
Village of Tequesta
357 Tequesta Drive
Tequesta, Florida 33469
Dear Bill:
As requested by the Board of Trustees, we have revised the proposed Actuarial Services Agreement
to allow for biennial Actuarial Valuations. If the Board approves the Agreement, please have it signed
and sent to us for our signature.
Please contact us if you have any questions.
Sincerely yours,
fl
J. Stephen Palm uist
P q
JSP/or
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ACTUARIAL SERVICES AGREEMENT
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THIS CONTRACT is entered into the day of , 1998, between the
BOARD OF TRUSTEES OF THE VILLAGE Of TEQUESTA EMPLOYEES PENSION TRUST FUND,
(herein referred to as the "Board") and GABRIEL, ROEDER, SMITH AND COMPANY(herein referred
to as the "Actuary").
WITNESSETH
WHEREAS,the Actuary has demonstrated the expertise and experience to perform the actuarial
services outlined in this Agreement.
NOW, THEREFORE, in consideration of services to be performed and payments to be made
together with mutual covenants and conditions hereinafter set forth, the parties agree as follows:
1. The Actuary shall perform the following Regular Services:
A. Actuarial Valuation Report as of October 1, 1998 and every other year
thereafter..
B. Individual Employee Benefit Statements as of October 1, 1998 and every other
year thereafter.
C. Correspondence with Village's auditors regarding disclosures included in
Village's financial statements.
D. Correspondence with Division of Retirement which reviews the Actuarial
Report.
E. Two meetings with the Board each year.
F. All Benefit Calculations for retirement, disability, death and vesting benefits.
G. Determination of the cost impact of one proposed change in benefits for each
of the three groups. Actuarial Impact Statements would be included.
H. Alerting the Board of significant changes in the pension world that might affect
the System.
Updating the Summary Plan Description when necessary.
2. During the contract period, the Actuary shall also perform such additional actuarial
services as may be requested by the Board. The charges for this work shall be based upon the
amount of time required to complete each task. A firm fee quotation prior to commencing any work
shall be provided. The hourly charges shall be:
Hourly Rate
Senior Actuarial Consultant $190
Senior Benefit Specialist 125
Benefit Specialist 80
Administrative Assistant 64
3. For Regular Services as provided in paragraph 1 of this Agreement, the Board agrees
to pay $200 per month through September, 1998, and $525 per month from October, 1998 through
September, 1999. For services completed in accordance with paragraph 2, the Board agrees to pay
the hourly charges as listed. After September 30, 1999, fees and rates may be increased in
accordance with the Consumer Price Index.
4. This contract embodies the entire agreement of the parties hereto and no modification
thereof shall be made except by written amendment agreed to and executed by both parties.
5. The Board shall deliver to the Actuary all employee and financial data and any such
further information as the Actuary shall deem necessary from time to time in order to complete the job.
6. The Board may terminate this Agreement at any time upon thirty (30) days written
notice to Actuary. In the event that the Board determines to terminate this Agreement without cause,
or in the event that the Board fails to perform any of its duties hereunder for a period of more than
sixty (60) days after written notice by the Actuary of such failure, the Actuary may terminate this
Agreement and be entitled to compensation to the date of such termination, based on the actual work
performed.
7. The term of this Agreement shall be for two (2)years beginning October 1, 1997, and
may be renewed for subsequent periods upon the mutual agreement of the parties hereto. There shall
be no change in any terms unless mutually agreed to by the parties hereto.
8. Neither party hereto may assign, convey, or otherwise transfer any of its rights,
obligations, or interest herein without the prior express consent of the other party.
9. The validity of this Agreement and of any of its terms or provisions, as well as the
rights and duties of the parties hereunder, shall be governed by the laws of the State of Florida. All
prior agreements between the parties are hereby terminated and superseded by this Agreement.
10. This Agreement may be executed in several counterparts, each of which shall be
deemed an original.
IN WITNESS WHEREOF, the Board has signed duplicates hereof, and GABRIEL, ROEDER,
SMITH AND COMPANY has caused its corporate name to be signed to said duplicates by its proper
officers thereunto duly authorized on the date and in the year first above written.
GABRIEL, ROEDER, SMITH AND COMPANY BOARD OF TRUSTEES OF THE
VILLAGE OF TEQUESTA EMPLOYEES
PENSION TRUST FUND
By: By:
Senior Consultant and Actuary Chairman
ATTEST: ATTEST:
By: By:
Secretary
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VILLAGE OF TEQUESTA EMPLOYEES' PENSION TRUST FUND
INVESTMENT POLICY STATEMENT
1. PURPOSE OF INVESTMENT POLICY STATEMENT
The Pension Board Trustees maintain that an important determinant of future investment returns
is the expression and periodic review of the Fund's investment objectives. To that end,the
Trustees have adopted this statement of Investment Policy.
In fulfilling their fiduciary responsibility,the Trustees recognize that the retirement system is an
essential vehicle for providing income benefits to retired participants or their beneficiaries. The
Board also recognizes that the obligations of the Fund are long-term and that investment policy
should be made with a view toward performance and return over a number of years. The general
investment objective,then,is to obtain a reasonable total rate of return-defined as interest and
dividend income plus realized and unrealized capital gains or losses-commensurate with the
Prudent Investor Rule and any other applicable statute.
Reasonable consistency of return and protection of assets against the inroads of inflation are
paramount. However,the volatility of interest rates and securities markets make it necessary to
judge results within the context of several years rather than over short periods less than three
years.
2. INVESTMENT PERFORMANCE OBJECTIVES
The below listed performance measures will be used as objective criteria for evaluating
effectiveness of the investment manager:
A. Total Fund Performance
1. The performance of the Total Fund will be measured for rolling
three and five year periods. These periods are considered sufficient
to accommodate the market cycles experienced with investments.
The performance of this portfolio will be compared to the returns of
a portfolio comprised of 50%(60%)of the S&P 500 Stock Index and
50%(40%)of the Merrill Lynch Intermediate Gov't Bond Index.
2. On a relative basis,it is expected that the balanced investment manager's
performance,with regard to the total time weighted return of combined
equity,fixed income and cash portfolios shall meet or exceed the median
return of a managed or balanced universe.
3. On an absolute basis,it is expected that total return of the combined
equity, fixed income and cash portfolios,will equal or exceed the
actuarial earnings assumption,and equal or exceed the Consumer
Price Index plus 3.0%over three to five year periods.
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4. Volatility, as measured by the standard deviations of quarterly returns,
should not exceed that of the referenced composite index.
B. Common Stock Performance
The equity portions of the portfolio,defined as common stocks and convertible
bonds and preferred stocks,is expected to perform at a rate equal to the S&P 500 •
Index. Total time-weighted rates of return should meet or exceed the median
return of a peer group of domestic equity funds i.e.Barra or Lipper Universe of
Managers for comparison of equity style.
C. Bond Performance
The bond portion of the portfolio,defined as fixed income,is expected to perform
at a rate at least equal to the Merrill Lynch Intermediate Government Bond Index.
Total time weighted rates of return that equal or exceed the median return of a
universe of fixed income funds.
3. INVESTMENT GUIDELINES
A. Authorized Investments
All investments made or held by the fund shall be limited to:
1. Time, savings and money market deposit accounts of a national bank,
a state bank or a savings and loan institution,insured by the Federal
Deposit Insurance Corporation,provided the amount deposited does not
exceed the insured amount.
2. Obligations issued by the United States Government or obligations
guaranteed as to principal and interest by the United States Government
or by an agency of the United States Government.
3. Stocks,bonds or other evidences of indebtedness issued or guaranteed
by a corporation organized under the laws of the United States or the
District of Columbia,provided that:
a. Equities or fixed income securities are limited to those traded on a
recognized national exchange or NASDAQ.
b. The security meets the following rating criteria:
i) Fixed Income: Standard&Poor's AAA,AA,A
or Moody's Aaa,Aa,A. (25%of the
bonds at time of purchase may be
rated Baa investment grade).
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ii) Cash Reserves: Short term investments due less than
1 year where overall quality and
minimal risk guidelines apply.
Investments which may be used are: •
money market funds of custodians,
Certificates of Deposit,U.S.
Government Obligations and
Commercial Paper rated A-1
(Standard&Poor's)or P-1
(Moody's).
iii) If any of the parameters described above are violated as a
result of market movements,credit downgrades or other
events not within the control of investment manager,
investment manager shall have a reasonable period of time,
not to exceed six months,to bring the portfolio into
compliance with the foregoing investment guidelines.
c. i) At the time of purchase,not more than five percent(5%)of
the Fund's assets shall be invested in the common stock or
capital stock of any one issuing company,nor shall the
• aggregate investment in any one issuing company exceed
five percent(5%)of the outstanding capital stock of the
company.
ii) It is not mandatory to adjust to above percentages should
issue exceed levels at any time during holding period.
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B. Limitations
1. Investments in corporate common stock, convertible preferred stock and
convertible bonds shall not exceed 50%(60)of the Fund assets at time of
purchase.
2. • No foreign investments including ADRs.
3. The manager is prohibited from investing in real estate,private placements
or from speculating in fixed income or interest rate futures.
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4. Investment in options or futures contracts is also prohibited.
4. COMMUNICATIONS
A. The custodian shall apprise the Trustees of all transactions and shall forward all
proxies to the manager or his agent within fourteen calendar days. On a monthly
basis,the custodian shall supply an accounting statement which will include a
summary of all receipts and disbursements and the cost and the market value of
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all assets. On a monthly basis,the manager shall provide a written report
reflecting a summary of common stock diversification and market value of assets
in portfolio. In addition,the manager shall deliver each quarter a report detailing
the fund's performance, adherence to the investment policy,forecast of the market
and economy,portfolio analysis and current assets of the Trust. Written reports
and personal presentations shall be delivered to the Trustees within 60 days of the
end of the quarter. The manager will provide immediate written and telephone
notice to the Trustees of any significant deviation from the standards set forth in
Section 3 above.
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B. The manager will disclose any securities which are not in compliance with
Section 3 in each quarterly report.
C. The manager shall report to the Trustees on a quarterly basis with respect to
proxies,the issues,votes and dates,and if not voted,a written explanation.
5. CRITERIA FOR INVESTMENT MANAGER REVIEW
The Board wishes to adopt standards by which judgments of the ongoing performance of a
• portfolio manager may be made. With this in mind,the following are adopted:
If,at any time,any one of the following is breached,the portfolio manager will be informed of
the Board's concern for the Fund's performance.
A. Four consecutive quarters of total Fund performance below the 50th percentile
in manager performance rankings.
B. Loss by the manager of any senior investment personnel servicing account.
C. Any change in basic investment philosophy by the manager.
D. Failure to attain a 60%vote of confidence by the Board of Trustees..
E. Failure to observe the investment guidelines.
6. FLORIDA STATUTES 175 AND 185 AND APPLICABLE VILLAGE OF
TEQUESTA ORDINANCES
If at any time, this document is found to be in conflict with Chapters 175 and 185,Florida
Statutes,or the applicable Village of Tequesta Ordinances,the Statutes and ordinances shall
prevail.
7. REVIEW AND AMENDMENTS
It is the Trustees'intention to review this document periodically and to amend this statement to
reflect any changes in philosophy objectives or guidelines. In this regard,the money manager's
interest in consistency in these matters is recognized and will be taken into account when
changes are being considered. If at any time any portfolio manager feels that the specific
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objectives defined herein cannot be met, or the guidelines constrict performance,the Trustees
;_t should be notified in writing. By initial and continuing acceptance of this Investment Policy
° Statement,the money manager concurs with the provisions of this document.
Date , 1998 Date , 1998
LOOMIS, SAYLES & COMPANY,L.P. BOARD OF TRUSTEES
By:LOOMIS, SAYLES & COMPANY,INC. VILLAGE OF TEQUESTA
Its: General Partner EMPLOYEES'PENSION.TRUST FUND
By By
As Chairman,Board of Trustees
Title:
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