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HomeMy WebLinkAboutAudio_Regular_Tab 5D_10/12/1995 �A VILLAGE OF TEQUESTA 15 . Post Office Box 3273 • 357 Tequesta Drive '� /; Tequesta,Florida 33469-0273 • (407)575-6200 f.• �e` Fax: (407)575-6203 ••..� 1 2 B ti. �• 4 TEQUESTA MUNICIPAL FIREFIGHTER'S PENSION TRUST FUND BOARD OF TRUSTEES MEETING MARCH 23, 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 Thursday, March 23 , 1995. The meeting was called to order at 9:05 A.M. by Chairman Ron Mackail. Aroll call_was :taken by Betty-Lauri the-Recording Secretary. Board members in attendance at the meeting were: Chairman Ron T. Mackail, Thomas G. Bradford, Bill Davis, Roy 011iff, and Bill Sharpless. Also in attendance was Finance Director Bill Kascavelis. Village Attorney John C. Randolph was absent from the meeting. II. APPROVAL OF AGENDA Boardmember Bradford moved to approve the Agenda. Boardmember 011iff seconded the motion. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for Roy 011iff - for Bill Sharpless . - for the motion was therefore passed and adopted and the Agenda was approved as submitted. III. APPROVAL OF PREVIOUS MEETING MINUTES (Meeting Minutes of December 14, 1994) Recycled Paper Firefighters Pension Trust Fund Board of Trustees Meeting March 23, 1995 Page 2 Boardmember Sharpless moved to approve the minutes of the December 14, 1994 meeting of the Tequesta Municipal Firefighter's Pension Trust Fund Board of Trustees as submitted. The motion was seconded by Boardmember Bradford. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for Roy 011iff - for Bill Sharpless - for Thomas G. Bradford - for the motion was therefore passed and adopted and the minutes were approved as submitted. IV. STATUS REPORT ON THE FIREFIGHTER'S PENSION TRUST FUND Al Bill C. Kascavelis, Finance Director, presented the status report on changes in finances since the last __. meeting and stated that as of 1/31/95 the total assets of the Fund were $118,934.64. -- In response to a question by Boardmember Sharpless, Finance Director Kascavelis verified that the earnings were made up of Tequesta Municipal Firefighters' Pension's share of income received by the trust fund, any capital gains that have been unrecognized, and any unrealized gains in the securities of the fund; and that Atlanta Capital provided a quarterly breakdown which had been included in each Boardmember's packet. Finance Director Kascavelis also indicated that the 1.75% tax from insurance premiums would be received from the State in April or June, with a second adjustment distribution later in the year; and that current procedure was to deposit the funds upon receipt and issue a check to NationsBank. Chairman Mackail inquired when the first report would be available showing activity within the account. Finance Director Kascavelis reported that Atlanta Capital provided that information quarterly to the League and that since the League only received a limited number of reports he had only been able to get one copy. Finance Director Kascavelis verified in response to Boardmember 011iff that the amount the fund had earned during the month of January was $2,334.00. 7 Firefighters Pension Trust Fund Board of Trustees Meeting March 23, 1995 Page 3 Boardmember Bradford moved to approve the Status Report on the Firefighter's Pension Trust Fund. The motion was seconded by Boardmember Sharpless. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for Roy 011iff - for Bill Sharpless - for the motion was therefore passed and adopted. B) Finance Director Kascavelis reported that as of February 28, 1995 there had been no employee changes since the last meeting; therefore, current number of employees was 17 and the average age was 29.6 years. Boardmember Bradford moved to approve the employee changes report. The motion was seconded by Boardmember 011iff. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for Roy 011iff - for Bill Sharpless - for the motion was therefore passed and adopted. V. REVIEW OF INFORMATION REQUESTED BY THE BOARD OF TRUSTEES AT THE DECEMBER 14, 1994 MEETING Al Letter from Joyce Case, Florida League of Cities, Administrator, Firefighters. Pension Trust Fund in response to: 1) Clarification of IRS Consequences for Early Retirement, and 2) Survey of Florida League of Cities Plan Participants with Regard to Early Retirement Penalties and Consequences Chairman Mackail commented that instead of providing an answer, Ms. Case- had suggested, in regard to tax implications on early retirement distributions, that a tax consultant or attorney should be consulted. Finance Firefighters Pension Trust Fund Board of Trustees Meeting March 23, 1995 Page 4 Director Kascavelis responded that since everyone would have a different financial picture with different tax brackets that the response would vary, however, he would pursue the matter for a better response. Chairman Mackail requested an answer to what the tax consequences would be if an individual retired prior to age 59-1/2, and if there was an early withdrawal penalty, since he was not sure whether that was clear to participants of the plan. Boardmember Sharpless stated he believed there would be a 10% penalty. Boardmember 011iff inquired: if he retired at age 55 and withdrew funds monthly to live on would a 10% penalty be taken on his whole retirement account or 10% out of each monthly payment. Chairman Mackail stated that he would have to pay 10% on the annual amount received. Boardmember 011iff commented that the 10% penalty was not addressed in the plan. Chairman Mackail stated that a member's pension would not be taxed at all if he were injured on the job and became unable to work. Finance Director Kascavelis stated he would research in more depth to obtain complete clarification and also to make a suggestion that this should be addressed in the plan summary. Boardmember.__ _ Bradford requested more information regarding use of the actuarial equivalent factor to verify whether that concept determined the impact to the fund of early retirement of a participant based on that participant's age, and whether this was a way to minimize expenses instead of the 3-5 factor. Chairman Mackail stated that the League of Cities was actively lobbying for opting out of the Florida Retirement System, so that the more that the Boardmembers learned would benefit them in making that decision. Finance Director Kascavelis stated that he would request additional information concerning using the actuarial equivalent factor to reduce benefits, and would provide that information to each Boardmember when received so that they would have sufficient review time before the next meeting. Chairman Mackail stated that he agreed with Boardmember Bradford that any cost increase by the employer to the fund should be minimized. Boardmember Sharpless reported that the Board had only one thing to keep in mind in making decisions which was that the Board's sole interest was the best interest of the members of the plan. Boardmember 011iff reported that he and Boardmember Davis were trying to get the members to 4 r Firefighters Pension Trust Fund Board of Trustees Meeting March 23, 1995 Page 5 become more actively involved by urgimg them to attend the quarterly meetings of the Board and by distributing copies of information from the meetings. Boardmember 011iff also stated that there were many other plans available, and if the Florida League of Cities did not perform up to expectations representatives of other plans could be invited to present the benefits of their plans, and that some other plans last year made 2%-3% while this plan lost money. Boardmember Sharpless expressed concern that being too lenient with early retirement would not be good for the plan or for the participants who did not take early retirement. Finance Director Kascavelis suggested some type of disability or life insurance to protect funds in the plan in its early stages since one disability could have a disastrous impact. Finance Director Kascavelis reported from attending the seminar that it was the Board.of Trustees' obligation to look out for the best interests of the members. Chairman Mackail requested that a letter be sent to Joyce Case to request clarification why the plan administration did not address disability and death. Finance Director Kascavelis commented that the-request- should-.inquire_._if_and_to_what.. ._ extent disability and death were addressed in the calculations used, and that he would find out how the plan would be impacted. Boardmember Sharpless explained that it was included in the calculations, however the risk would be considered small since the average age of the firefighters was only 29.6, and that if it happened everyone's contributions would have to be increased tremendously in order to pay for it. It was the consensus of the Board to explore this matter, and to have a presentation by an insurance professional at the next Board meeting. B) Florida Municipal Investment Trust Fund Investment Portfolio, Exhibit 1. Chairman Mackail commented that the exhibit gave a basic overview of the objective of the plan, with maximum exposure to stocks of 55% and 45% of the funds in other investments, with stated goals and objectives and future scenarios on inflation, T-Bill rates, bonds, etc. Chairman Mackail stated that the objective of the Board was to be conservative. Boardmember Sharpless commented that he saw nothing wrong with the investment plan, and reviewed an investment presentation from the recent seminar he had attended of the type of plan that would Firefighters Pension Trust Fund Board of Trustees Meeting March 23, 1995 Page 6 eventually be needed. Chairman Mackail stated that the Board needed to monitor investment performance and to decide if investments were being managed properly. Boardmember 011iff commented that Chapter 175 would be amended to allow foreign market investment; ensuing discussion covered the points that those investments might be more risky, that investment strategy might need to be more aggressive to build up funds at the beginning of the plan, that the Boardmembers needed to learn more about investing before diversifying, that diversification must be done prudently, 'and that all aspects of the Board's fiduciary obligations must be considered before developing an investment plan on their own. Boardmember Sharpless reviewed Exhibit II and commented on how the League of Cities Fund compared with their peers and stated that their 8-year rank was in the 73rd percentile, and that if our pension fund had been with them since their inception our return would have been 10.672%. Boardmember Sharpless commented they also had learned at the recent seminar that every fund should hire a professional monitor as well as a fund manager, who would monitor --the fund __manager --and- -report how=:the---manager= = _= - ranked with his peers. Inviting representatives of different banks to give presentations to the Board exploring what they could offer as plan administrators was proposed by Boardmember Sharpless and Finance Director Kascavelis. Discussion regarding whether representatives would be interested in such a small plan and whether they might just do a sales pitch was countered with the view that those representatives would realize that they would be laying the groundwork for a future customer. Boardmember Davis stated that at the recent seminar that the Boardmembers had learned that they had an obligation to seek more information, and therefore had an obligation to look at other plans in order to show to the members that other plans had been investigated, even though they might not change anything. Boardmember Sharpless expressed agreement. After a lengthy discussion, Finance Director Kascavelis was directed to contact representatives and other fund managers to secure their performance for the past 5 to 10 years; their goals, objectives, . philosophies, and costs; and to explain that no change was being contemplated immediately but that the Board was interested in evaluating all opportunities. Boardmember Sharpless suggested that a publication might be available Firefighters Pension Trust Fund ' Board of Trustees Meeting March 23, 1995 Page 7 which would offer comparisons. C) Graphs and Reports Prepared by Atlanta Capital Management and NationsBank which demonstrate Performance as Compared to Major indices and other Managers, Exhibit II Chairman Mackail stated this item had already been covered by Boardmember Sharpless. D) 1994 Annual Report for Village of Tequesta Municipal Firefighter's Pension Trust fund. Exhibit III Chairman Mackail summarized the report for the Boardmembers. Boardmember 011iff reported ages of several firefighters were wrong on the report. Boardmember Bradford verified with Finance Director Kascavelis that he had prepared the report from audited data and that there was no problem since it had been submitted to the State one day late. Chairman Mackail verified that the annual IRS 5500 was prepared by the City and would be filed before its due date by Finance — —Dir-ector _Kascavelis, who was working with a representative of Florida League of Cities -regarding filling in the proper information in the report. Boardmember Sharpless pointed out the following items which needed to be corrected on the annual report: Trustees Elected/Appointed By: the first two should be "Village Appointee" , the next two should be "Firefighters", and the final one should be "Elected by the Trustees"; and that on page 16 he believed the Plan Administrator should be this Board rather than the Florida League of Cities, however, he would check the proper statute and advise Finance Director Kascavelis. VI. DISCUSSION RELATIVE TO THE 16TH ANNUAL POLICE OFFICERS AND FIREFIGHTERS' TRUSTEES SCHOOL, MARCH 14 AND 15, 1995 ATTENDED BY BOARDMEMBERS WILLIAM DAVIS, DEROY OLLIFF, WIT.T.IAM SHARPLESS, AND FINANCE DIRECTOR BILL KASCAVELIS Boardmember Bradford inquired whether this school was held at any other time of year. Boardmember 011iff responded it was held twice each year and that it was recommended that the trustees attend each session for updates on current legislation. Those who had attended the seminar discussed how much they had learned. Firefighters Pension Trust Fund Board of Trustees Meeting March 23, 1995 Page 8 VII. ANY OTHER MATTERS Boardmember Bradford expressed concern that the Village Attorney might not have received notice of the meeting since he was not present. Wade Griest suggested that the Board contact a knowledgeable citizen regarding financing to recommend someone to speak to the Board. He explained that when he retired he had had to choose from many options and that he should not have been • faced with that kind of decision at that time. VIII. ADJOURNMENT Boardmember Bradford moved that the meeting be adjourned. Boardmember 011iff seconded the motion. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for Roy 011iff - for Bill Sharpless - for The motion was therefore passed and adopted and the meeting was adjourned at 10:50 A.M. Respectfully submitted, Betty Laur Recording Secretary ATTEST: Joann Manganiello Village Clerk DATE APPROVED: