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HomeMy WebLinkAboutDocumentation_Regular_Tab 7B_2/13/1997 • ja VILLAGE OF TEQUESTA Pont (xi-ice f3()t 32' '57 ,: uccu f)r:'... - T-t:yuk:,1a. Florida z:_( -1)2-- • -107) 575-62;r: a Fax: k407) 575-6203 ♦[`t v co COUNI • TEQUESTA EMPLOYEES' PENSION TRUST FUND BOARD OF TRUSTEES MEETING OCTOBER 28, 1996 • I . CALL TO ORDER AND ROLL CALL The Tequesta Employees' Pension Trust Fund Board of Trustees held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Monday, October 28, 1996 . The meeting was called to order at 9 : 00 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, Thomas •G Bradford, Carl Hansen, Allan Oslund, and James B. Trube. Also in attendance was Finance Director Bill Kascavelis and Attorney Tracey Biagiotti, sitting in for Village Attorney John C. Randolph. Boardmember Shawn Thurmond was absent from the meeting,. II. APPROVAL OF AGENDA Boardmember Bradford requested addition under Any Other Matters of discussion of an item pertaining to Firefighters only. • Boardmember Hansen made a motion to approve the agenda as amended. Boardmember Trube seconded the motion. The vote on the motion was: Ron T. Mackail - for R':ich d P:.r" - Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 2 Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted and the Agenda was approved as amended. III. ELECTION OF A CHAIRMAN AND SECRETARY OF BOARD, PER SECTION 3-2 OF EMPLOYEES' PENSION TRUST FUND, PLAN DOCUMENT Boardmember Bradford explained that this was the first meeting of the Employees' Pension Trust Fund Board, formerly the Firefighters Pension Trust Fund Board, and that a Chairman and Secretary were required to be elected. The primary--responsibilities of the Chairman were to run the meetings and to execute documents as directed by the Board of Trustees; the primary responsibilities of the Secretary were to serve at Board meetings in the absence of the Chairman and to see to it .that minutes of all meetings were kept. Ron T. Mackail had been- Chairman of the former Firefighters Pension Trust Fund Board; the secretary had been Tom Bradford. Boardmember Trube recommended that the same Chairman and Secretary be elected because of their experience. Boardmember Bradford made a motion to appoint Ron T. Mackail as Chairman of the Tequesta Employees' Pension Trust Fund Board. Boardmember Hansen seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 3 the motion was therefore passed and adopted. Chairman Mackail made a motion to appoint Tom Bradford as Secretary of the Tequesta Employees' Pension Trust Fund Board. Boardmember Hansen seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted. IV. APPROVAL OF MINUTES A) BOARD OF TRUSTEES MEETING; JUNE 7, 1996 Boardmember Hansen moved to approve the minutes of the June 7, 1996 meeting of the Tequesta Municipal Firefighter's Pension Trust Fund Board of Trustees as submitted. The motion was seconded by Boardmember Oslund. The vote on the motion was: Ron T. xackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted and the minutes were approved as submitted. IV. RATIFICATION OF THE VILLAGE OF TEQUESTA E PLOYEZS' .PENSION TRUST FUND FOR AD INISTRATION OF THE PENSION PLAN WHICH WAS • Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 4 ADOPTED BY VILLAGE COUNCIL RESOLUTION NO. 37-95/96, DATED SEPTEMBER 12, 1996. Finance Director Bill Kascavelis explained that ratification had been recommended by the Administrator, Florida League of Cities, and by the Village Attorney. Boardmember Bradford explained that an agreement had been entered into by the Village Council on September 12, 1996 between Tequesta and the Florida League of Cities to do all necessary work to invest monies, etc. , and that although alternatives to the League as Administrator were being considered, it was believed best to keep the same Administrator who had served the Firefighters Pension Trust Fund in the beginning of the new Employees' Pension Trust Fund. Mr. Kascavelis reported that Village Attorney Randolph had advised that a resolution was ot necessary so long as ratification was done by a motion of the Board. Attorney Biagiotti verified that the Village Attorney had read the agreement. Chairman Ron T. Mackail made .a motion to ratify the Joinder Agreement with the Florida League of Cities for administration of the Tequesta Employees' Pension Trust Fund Plan. The motion was seconded by Boardmember Hansen. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted. VI. CONSIDERATION OF APPIXOEMOWN,. OF WILLIAM SEARPLESS, ESQ. , AS Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 5 SEVENTH MEMBER OF EMPLOYEES' PENSION TRUST FUND BOARD OF TRUSTEES Chairman Mackail strongly recommended appointment of Mr. Sharpless, with which the other Boardmembers concurred. Chairman Mackail made a motion to appoint Mr. William Sharpless as the seventh member of the Employees' Pension Trust Fund Board. Boardmember Trube seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted. VII. STANDING AGENDA ITEMS A) APPROVAL OF NEW APPLICANTS FOR PARTICIPATION IN PLAN: R. BROWN, P. OGOZALY AND J. WEST Finance Director Kascavelis explained that this was strictly a housekeeping item to be formally presented to the Board, and that participation in the Plan was mandatory. Allan Oslund was not included in the new applicants since the report was through September 30, and he had been hired in October. Mr. Oslund would be included in new applicants at the next meeting. Boardmember Hansen made a motion to accept new applicants R. Brown, P. Ogozaly, and J. Nest for participation in the Employees' Pension Trust Plan. Boardmember Bradford seconded the\ motion. The vote on the motion was: Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 6 Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted. B) APPROVAL OF REQUESTED BENEFICIARY CHANGES (NONE AT THIS TIME) Chairman Mackail verified that no action for this agenda item was needed. VIII. STATUS REPORT ON TEE EMPLOYEES' PENSION TRUST FUND .(BILL,C. KASCAVELIS, FINANCE DIRECTOR) A) REPORT OF EMPLOYEE CONTRIBUTIONS FY 95/96 Finance Director Kascavelis reported that employee contributions for the fiscal year for both -the Firefighters' Pension and the General Employees' Pension- was 5%. Mr. Kascavelis reviewed the report of employee contributions, and commented that since employee Ogozaly had been hired during the time when the plan was in the process of being changed from only firefighters to include all employees, no contribution had been made for that period. The total contributions by firefighters as reported by Imo'. Kascavelis was $29, 869.64 from 9/30/95 to 9/30/96; and the total contributed by general employees for the same period was $270.12. B. REPORT OF EMPLOYER CONTRIBUTIONS FY 95/96 Finance Director Kascavelis reported employer contributions for FY 95/96 of $86, 124.74 for the firefighters; and $186.36 for general employees. Mr. Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 7 Kascavelis explained that when preparing the annual financial report that if it appeared the employer contributions were inadequate when consolidated with the contributions received from the State that a liability for additional contributions would be created; however, such action was not anticipated. Boardmember Bradford made a motion to accept the report of Employer Contributions for Fiscal Year 95/96. Boardmember Oslund seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted. Boardmember Bradford made a motion to accept the report of Employee Contributions for Fiscal - Year 95/96. Boardmember Hansen seconded the motion. The vote on the motion was: Ron T. Kackail - for Tam Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for • the motion was therefore passed and adopted. C) CUSTODIAL BANK FINANCIAL REPORTS Finance Director Kascavelis reviewed the NationsBank financial reports for the months of May through August 1996. \As of 8/31/96 total assets were $347, 076.08. In Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 8 response to Boardmember Oslund' s question of how transfers were broken down, Finance Director Kascavelis explained that all expenses with the exception of investment management fees were approved by the Board, and that the figures referred to by Boardmember Oslund were withdrawals of contributions by employees who had left employment. Mr. Kascavelis commented that all such payments in the future would be on the agenda under Standing Agenda Items for approval by the Board. Chairman Mackail questioned whether when an employee left if their contribution was transferred into another account and held 60 days as prescribed by law, and if not, whether the Village was responsible to withhold 25% for federal taxes. Mr. Kascavelis explained that at termination of employment forms were forwarded to the Administrator either for withdrawal or for transfer if the employee was going to a job which had a qualified 457 plan. Chairman Mackail stressed the importance of the employee understanding his or her options clearly. Mr. Kascavelis responded that all items were reviewed with the employee who was leaving and if they requested withdrawal, the process was to go through the • Administrator. Mr. Kascavelis verified for Boardmember Bradford that in the future the Board would approve any withdrawal of personal contributions requested by a departing employee, since the Board was responsible for administration of the Plan. Chairman Mackail commented that the Board would merely be performing a housekeeping matter; Boardmember Bradford explained that it would be a check and balance. Mr. Kascavelis explained that he may have signed forms in the past to expedite matters, but now realized that the Plan required those items to be signed either by a notary or a member of the Board; therefore, he would review past documents and obtain Mr. Bradford' s signature where necessary. In the future, all items would be placed on the agenda for Board approval. Mr. Kascavelis explained that in the past it had taken 30 days for an employee to get their contribution funds, and Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 9 now there would. be an additional delay of waiting until Board approval. Because the Board was required to meet a minimum of quarterly, additional meetings might be called in order to expedite- payment of a distribution in the event of an employee' s termination of employment. Chairman Mackail commented that he could not agree with holding a meeting every couple of weeks for employees who left, and questioned whether Board approval was really necessary since the Board could not disapprove payment of a disbursement. Attorney Biagiotti responded that her understanding was that Board approval was needed, however, in light of problems that might be created with the timing of getting an employee' s contributions into another fund, she would research the matter. Chairman Mackail explained that the law required sixty days and if that was in the Plan document then_, proval would be a housekeeping matter which could be done at any time. Boardmember Bradford commented that the process was really to provide checks and balances to see that improper amounts were not disbursed; and - that at other places he had worked the check was cut and Board approval was obtained later, although he. did ,not know where money would be obtained to correct an error if an overpayment was made. Chairman Mackail commented that the Board would not know if an error had been made in a distribution, and the Administrator had responsibility for issuing the correct amount. Mr. Kascavelis commented that each payday the Administrator received a report of contributions, and the Finance Department merely verified total contributions. Mr. Kascavelis stated that if approval after the fact was found by the Attorney to be proper that he would need to make sure that every disbursement was included as a standing agenda item. Boardmember Oslund requested that in the future distributions be itemized per individual. Mr. Kascavelis commented that in the future the Board would be approving withdrawals and agreed to provide details for withdrawals so that the Board could see lAat they were approving. • Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 10 Boardmember Trube suggested that a distribution breakdown sheet could be provided in the same format used for the contributions breakdown, which would make it easy for the Boardmembers to read. Chairman Mackail questioned the $4, 000 actuarial fee, to which Mr. Kascavelis responded that was an annual charge which the Board had discussed in the past, and explained that although the actuarial review was required by law only every three years that it was believed to be in the best interest for the former firefighters and police pension trust funds to have an annual review. Boardmember Bradford verified with Mr. Kascavelis that one actuarial review would be conducted during the coming year for police and firefighters; but the League of Cities would not review the'-general employees pension \\ '. trust fund because the assets in that fund were so low that they recommended waiting three years. Mr. Kascavelis stated that it was the policy of Florida League of Cities that any fund with significant assets should have an annual actuarial review, and it was the League' s intent to conduct an annual review unless directed by the Board not to do so. Chairman Mackail expressed his opinion that the review did not need to be done every year in light of the high cost; however, stated that he would like to obtain a letter from the Administrator stating that it was not necessary to do an annual review, and then let the Board decide whether or not to hold the review annually. Boardmember Bradford commented that he thought that Florida Municipal Pension Trust Fund participants were required under that program to have an annual actuarial study. Boardmember Bradford indicated that he could see the viewpoint of members of the Florida Municipal Pension Trust Fund Board, which oversaw all pension plans for cities across the State, since if changes were made a fund could ' become drastically underfunded giver a time span of three years. A city might claim that underfunding to be the fault of Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 11 the League of Cities, who therefore took the prudent position of recommending annual actuarial reviews. Boardmember Bradford stated that his understanding was that if a fund was administered by the League of Cities that the fund had to have actuarial reviews done annually. Boardmember Hansen commented that if the League would provide the letter desired by Chairman Mackail, that the Village might be able to have a study performed only every other year. Chairman Mackail commented that because the plan was so new and did not have an unfunded balance, that the Board could monitor it very closely and look at it every year to make sure it still did not have an unfunded balance. At any point if benefits were increased, then the Board could call for an actuarial study to be done. Boardmember Bradford recommended that Finance Director Kascavelis write requesting the letter; however, stated that he believed the League had already told the Village that if they were in the League' s program that an actuarial study was required annually. Mr. Kascavelis stated that he would look into whether the League could be directed not to perform an annual review. Boardmember Bradford stated . _ that the Village would be faced with two actuarial charges per year unless Imo'. Kascavelis learned that there was an option on how often it must be done. Mr. Kascavelis commented that he would draft a letter to Florida League of Cities and would distribute the response to all Boardmembers. Boardmember Bradford made a motion to accept the Custodial Bank Financial Report. Boardmember Hansen seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen - for Allan Oslund - for James Trube - for �. Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 12 the motion was therefore passed and adopted. D) FLORIDA MUNICIPAL PENSION TRUST FUND QUARTERLY REVIEW JUNE 30, 1996. Finance Director Kascavelis reported that as directed at the last meeting and as recommended by Stephen Palmquist, he had obtained proposals from Sun Bank Trust and Barnett Bank to provide investment management services for the consolidated/ plan. Copies of the two proposals had been provided to the Boardmembers, along with a copy of Atlanta Capital' s quarterly review for comparison. Finance Director Kascavelis provided a brief overview of the Atlanta Capital quarterly report ending June 30, 1996,. beginning with the investment objective, and reviewed investment guidelines. Mr. Kascavelis commented that there would be',more risk if more stocks were held; however, there would also be the possibility of a higher yield. Investment returns were compared to market indexes, with results listed for the quarter as well as other time periods up to a 5-year annual •return. Mr. Kascavelis recommended that e'ath-Boardmember review the proposals and compare them with the current cost for administration plus the charge from Atlanta Capital for investing funds, and then discuss the results of their analyses at a meeting so that the Board could decide whether to keep the current administrator or to make a change. Mr. Kascavelis stated that he would provide copies of the proposals to Mr. Sharpless as well. Chairman Mackail commented that Atlanta Capital was investing with 55% in stocks, looking at growth against inflation, looking at long-term, and selling equities based on changes in market conditions; and historically had done as good a job as anyone else. Boardmember Oslund commented that in considering proposals from other companies that administrative costs and fees would be the area where the village could realize savings. Mr. Kascavelis indicated that he had only contacted two Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 13 companies, but there were many others who would be willing to provide proposals. Boardmember Bradford commented that the section six of the quarterly report indicated a decent quarter, however, the following quarter had not been as good. Mr. Kascavelis reported that he had not yet received the report for the quarter ending September 30 . Chairman Mackail made a motion to accept the Florida Municipal Trust Fund Quarterly Review dated June 30, 1996. Boardmember Hansen seconded the- motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Carl Hansen for Allan Oslund - for James Trube for the motion was therefore passed and adopted. IX. CORRESPONDENCE FROM FLORIDA MUNICIPAL PENSION TRUST FUND AND ITEeMS FOR DISCUSSION A) FEE SCHEDULE REVISIONS EFFECTIVE OCTOBER 1, 1996 Finance Director Kascavelis referred to the handout from Florida League of Cities regarding administrative fees for benefit calculation at retirement and explained that such fee revisions were previously included in administrative charges and were now being broken out. Mr. Kascavelis pointed out that the Village would not be affected by the changes for some time, and such charges were insignificant. In response to a question regarding a determination letter from IRS, Mr. Kascavelis explained that each pension trust fund participant must request such a letter if they so desired. The League was Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 14 currently going through this process for the first time with one of their plan participants. The League indicated they would provide information regarding obtaining a determination letter as soon as they had completed the process. Chairman Mackail commented that he believed the State of Florida would have a letter on file for 175 and 185 plans, and that Mr. Kascavelis could write for a copy. Boardmember Bradford advised that the general employees fund plan was not governed by State statute, however it did mirror the other plans. Boardmember Bradford made a motion to accept the Florida Municipal Trust Fund fee schedule revisions. Boardmember Hansen seconded the motion. The vote on the motion was: Ron T. Mackail \ - for Tom Bradford for Carl Hansen - for Allan Oslund - for James Trube - for the motion was therefore passed and adopted. B) CUSTODIAL ACCOUNTS FOR POLICE/FIRS AND GRNIRAL =PLOYEE FUNDS Finance Director Kascavelis reported that a letter from the Florida Municipal Pension Trust Fund indicated that general employees' funds cannot be commingled with those of police and fire. Mr. Kascavelis explained that he would set up accounts and track balances for each of the three funds separately, however, for reporting purposes fire and police would be combined, and general employees would be separate. Two annual reports would be generated- -one for general employees and one for police and fire. Mr. Kascavelis explained that State contributions applied only to police and firefighters and not to general employees, therefore the general • Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 15 employees' pension funds must not be comingled. Boardmember Bradford commented that the percentage of state contribution for police was . 85 and for firefighters was 1. 5. Boardmember Trube reported that the firefighters had expressed concern with their funds being comingled with those of the police and possible problems that might arise with future distributions. Discussion ensued regarding annual reports, which would be reviewed and approved by the Board prior to transmitting them to Tallahassee. Boardmember Bradford questioned how the Board would see the status of the police fund separately from the status of the firefighters fund with a merged report, to which Mr. Kascavelis responded that the Village would have three separate funds on the books but two would be merged for reporting, and that two bank accounts would be maintained, one for police and fire and the other for general employees. Administrative costs would be lower since bank account service charges would be only for two accounts, and only two actuarial reviews would be needed. Boardmember Bradford expressed concern that with funds comingled in one account that there- could never be an accurate status report for the separate funds; and that over time with changes in either fund that data could become confused. Boardmember Hansen left the meeting at 10:22 A.M. After a lengthy discussion, it was the consensus of the Board that the desire was to establish three separate bank accounts and to report each fund separately, so that no commingling of assets could ever occur. Finance Director, Kascavelis was requested to contact the actuary regarding having three separate accounts. C) DISCUSSION OF DETERMINATION LETTER FROM IRS DESIGNATING TEQUESTA EMPLOYEES PENSION TRUST Fpm A QUALIFIED PENSION PLAN. • Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 16 Mr. Kascavelis commented that he would check with both the State and the IRS regarding a determination letter. Boardmember Bradford stated that he would like to know the amount of the IRS charge and the 25% administrative fee from the League of Cities. Chairman Mackail expressed his opinion that the State may already have a letter of determination from IRS for the police and firefighters' plans. Chairman Mackail requested that Mr. . Kascavelis find out the charges and whether another city had a plan similar to Tequesta' s general employees' plan. X. ANY OTHER MATTERS Boardmember Bradford commented that he wanted the Boardmembers to aware that the firefighters must take a vote before January 1, 1997 pursuant to Florida Statute Chapter 175.351 Subsection 13 regarding items for which they wished premium tax dollars to be spent. Boardmember Bradford explained that currently the money, approximately $17, 000 annually, was being used as an integral part of the fund to reduce the cost to the firefighters of having a retirement plan. The firefighters could now either vote to use the money for extra benefits, for example, health insurance coverage upon retirement; or to continue using it to reduce the cost of having the retirement plan. If they chose to use the money for something else, then their current costs would rise. Boardmember Bradford explained that whatever the firefighters' voted to do must be implemented by this Board. Boardmember Trube questioned what benefits $17, 000 a year would provide, and commented that more information would be needed on the numbers before a vote could be taken. Since it would cost $4, 000 for the actuary from Florida League of Cities to provide that information, Boardmember Trube stated that he would ask the firefighters whether they wished to spend $4,000 to get this information. Boardmember Bradford explained that the State • Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 17 had indicated they would not issue premium tax dollars for this year until they had received information regarding an election. Chairman Mackail suggested that the firefighters might choose to vote not to make a change at this time, and then could make a-. change next year if they desired. Boardmember Trube suggested that when the next actuarial _ study was done the actuary could be requested to answer the firefighters' questions at that time, so that they would not be charged twice. Boardmember Bradford suggested that the firefighters discusslthe matter to determine the primary things they might -be interested in and that list could be transmitted as a part of the proposal to the actuary. Boardmember Bradford verified that there was no list of possible benefits, and that the money could be used for anything legally allowed. Boardmember Trube stated that he would take the information to -the firefighters. Boardmember Oslund inquired whether a sign should be placed in front of the Village Hall to announce the meetings of the Board. Boardmember Bradford explained that a sign was needed and that a new sign must be ordered. The Board discussed the possibility of establishing a standard meeting time. It was the consensus of the Board that future meetings would be quarterly on the third Monday of the last month of each quarter at 8:30 A.M. , with additional meetings to be called if needed. VIII. ADJOURNMENT Boardmember Trube moved that the meeting be adjourned. Boardmember Oslund seconded the motion. The vote on the motion was: Ron T. Mackail - for Tom Bradford - for Allan Oslund , - for Employees' Pension Trust Fund Board of Trustees Meeting Minutes October 28, 1996 Page 18 James Trube - for The motion was therefore passed and adopted and the meeting was adjourned at 10:56 A.M. Respectfully submitted, 4.eltAt Betty Laur Recording Secretary ATTEST: Joann Manganiello Village Clerk DATE APPROVED: