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HomeMy WebLinkAboutDocumentation_Regular_Tab 5E_10/12/1995 1, .„ G :, IL, a..... s _;_.0( .,; VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive 1�1 Aw.-_, . Tequesta,Florida 33469-0273 • (407) 575-6200 I :-.ti¢ Fax: (407)575-6203 TEQUESTA MUNICIPAL FIREFIGHTER'S PENSION TRUST FUND BOARD OF TRUSTEES MEETING JUNE 28, 1995 I . CALL TO ORDER AND ROLL CALL The Tequesta Municipal Firefighters Pension Trust Fund Board of Trustees held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Wednesday, June 28, 1995. The meeting was called to order at 8:30 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, and Bill Davis. Also in attendance was Finance Director Bill Kascavelis. Boardmember Bill Sharpless and Village Attorney John C. Randolph were absent from the meeting. II. APPROVAL OF AGENDA Boardmember Bradford moved to approve the Agenda. Boardmember Davis seconded the motion. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for Recycled Paper a Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 2 the motion was therefore passed and adopted and the Agenda was approved as submitted. III. APPROVAL OF PREVIOUS MEETING MINUTES (Meeting Minutes of March 23, 1995) Boardmember Bradford moved to approve the minutes of the March 23, 1995 meeting of the Tequesta Municipal Firefighter's Pension Trust Fund Board of Trustees as submitted. The motion was seconded by Boardmember Davis. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - 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 A) Bill C. Kascavelis, Finance Director, presented the status report on changes in finances since the last meeting and stated that as of 4/28/95 the total assets of the Fund were $151,099.07. B. Finance Director Kascavelis reported that as of the close of business on March 31, 1995 there were 15 employees in the Tequesta Fire Rescue Department; however two employees had since resigned- -Stephen Medford and Deroy 011iff. Boardmember Bradford moved to approve the Status Report on the Firefighter's Pension Trust Fund, which included the Financial Report and the Employee Changes Report. The motion was seconded by Boardmember Davis. The vote on the 1 Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 3 motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for the motion was therefore passed and adopted. V. REVIEW OF INFORMATION REQUESTED BY THE BOARD OF TRUSTEES AT THE MARCH 23, 1995 MEETING A) 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) Clarification with Regard to Early Retirement Penalties and Consequences; Finance Director Kascavelis read from Ms. Case' s letter: 'The Village of Tequesta Firefighters' Pension Plan does not contain any provision for any payment prior to age 50 and 10 years of service. Early retirement requires 10 years of service and 50 years of age. The benefit is reduced by five percent (5%) each year before normal retirement age (age 55 and 10 years of service and age 52 and 25 years of service) . Any monies paid directly to a retired participant between ages 50 and 54 would be taxed in accordance with the IRS requirements. ' Finance Director Kascavelis stated he believed Ms. Case was quoting from Tequesta' s plan. He read Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 4 , further from the letter: 'Enclosed is a pamphlet entitled Special Tax Notice Regarding Plan Distributions. Please see specific highlighted example for 10% tax consequences if participant receives distribution under age 59-1/2. In most instances, all . retirement monies paid to a participant prior to age 55 and not previously taxes, will be taxable upon receipt by the participant. ' Finance Director Kascavelis explained that he believed the major tax consequence for early retirement was 10% and the remainder would depend upon individual financial status. Chairman Mackail requested that Boardmember Davis share with the other firefighters that even though they could. receive their pension 'after so many years service that if they had not reached 59-1/2 that they would have the IRS penalty of 10% per year. 3) Actuarial Equivalent Factors for Early Retirement; Ms. Case' s letter explained that the 5% reduction factor each year was a commonly used factor for early retirement, and commented that Tequesta' s early retirement ages were much earlier than required by the Florida Retirement System. Chairman Mackail commented that the overall impact to the Village would be costly because firefighters could retire at age 52 and would still be fit and able to work. 4) Death and Disability Benefit Pensions . Finance Director Kascavelis reported that Ms. Case had listed in her letter the sections in Tequesta' s plan document which, applied to those provisions as Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 5 Section 7, page 16, and Section 8, pages 16 and 17, and explained that the terms 'Line of Duty' and `On Duty' were synonymous. 5) Management of Investment Portfolio Ms. Case explained in her letter that the League of Cities as Administrator for the Florida Municipal Pension Trust Fund met with the portfolio managers quarterly to review the portfolio to determine if fund objectives were met and/or if the results were meeting or exceeding performance standards; and that the evaluation was presented quarterly to the FMPTF Board of Trustees. She also explained that NationsBank provided an independent analysis of how the portfolio manager performed compared to similar portfolios and other managers. Finance Director Kascavelis reported that members of the Board were invited to attend one of the quarterly meetings of the FMPTF Board of Trustees, and that it seemed that overall the League performance seemed to be improving, and that Tequesta' s fund was ranked 26th, which he would highlight in future reports. Chairman Mackail expressed his desire to attend one of the meetings, and stated .that this Board was concerned with obtaining the best return on investment for a new pension fund, and being sure the money was managed properly. Boardmember Bradford commented that 1994 had been an off year for return on investments and just happened to be the first full calendar year of the firefighters' pension program; therefore, the Board should assume the first year had been in keeping with the downward trend and continue to monitor return on investments. Chairman Mackail expressed concern with the Florida Retirement System' s large unfunded balance, and stated a pension should fund itself, and Tequesta should make sure that the funds were Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 6 there to provide retirement funds when they were needed. 6) Pension Fund Administrators and Money Managers Finance Director Kascavelis reported he was still in the process of obtaining information from various administrators and money managers for analysis purposes. He also noted that the investment strategy of most pension plans, although similar, varied slightly. B) Florida Municipal Pension Trust Fund Master Trust Agreement. The agreement was provided to the Boardmembers. VI. VOT Municipal Firefighters' Pension Fund Actuarial Valuation for Fiscal Year 1994. A) Review • Boardmember Bradford questioned why the non-employee contribution percentage of payroll on the Review of Costs was shown as 16. 8% rather than 14.4%. After discussion, it was determined that the extra 2 .4% reflected the insurance premium tax revenues from the State of Florida, and that the Village was paying in 33% more than the minimum contribution required. Finance Director Kascavelis recommended that the contribution not be reduced since the additional funds were needed for expenses. Finance Director Kascavelis reviewed highlights of the Comparative Summary of Principal Valuation Results, which reflected that the necessary contribution would have been 13 . 8%. Chairman Mackail commented that the excess contribution would assure that the fund would not have an unfunded balance and would be Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 7 able to provide for pension payments in 20/25 years. Chairman Mackail stated that it was important for the firefighters to realize that the Board was looking strongly at future benefits. B) Approval of Payment for FY 94 Actuarial Valuation (H. G. Boggs & Associates) Finance Director Kascavelis explained that Joyce Case would authorize the $4, 000 annual payment to be drawn from the NationsBank account. Motion was made by Boardmember Bradford to authorize Finance Director Kascavelis to make the annual payment pursuant to the procedures required. Motion was seconded by Boardmember Davis. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for the motion was therefore passed and adopted. VII. ANY OTHER MATTERS Boardmember Davis reported that Firefighter 011iff had resigned and that the firefighters unanimously recommended Firefighter John Flint as his replacement on the Board. Boardmember Bradford stated he would check the required procedure to determine whether any formal action was required by the Village or the Board to accept a replacement Boardmember. Boardmember Bradford referred to a memorandum he had received from the Division of Retirement stating rule changes. Finance Director Kascavelis commented he believed the memo had been provided for information purposes, but Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 8 would clarify that no action was necessary. Finance Director Kascavelis reported that he had investigated disability income insurance for members of the plan, and that Mr. Boggs had recommended against such a purchase in the beginning stages of the plan since he had taken the possibility of a disability into consideration in his actuarial calculations. Chairman Mackail requested that Finance Director Kascavelis obtain that statement in writing from Mr. Boggs. Boardmember Davis stated that Mr. Bogg' s figures were based on large numbers, and it would be interesting to see what an actuarial study of just Tequesta' s plan would determine in the event of a disability. Chairman Mackail asked Director Kascavelis to ask Mr. Boggs whether he used a large number or just the fifteen members of the Tequesta plan in his figures. Wade Griest commented that the firefighters were lucky to have such a good plan. Mr. Griest strongly recommended that the Board obtain all the advice they could from outside sources, and suggested that outside speakers be invited to speak to the Board. Mr. Griest explained that even though the speakers would be selling their products that the Board would have the benefit of information, and could then disregard the sales pitch information. VIII. ADJOURNMENT Boardmember Bradford moved that the meeting be adjourned. Boardmember Davis seconded the motion. The vote on the motion was: Ron T. Mackail - for Thomas G. Bradford - for Bill Davis - for The motion was therefore passed and adopted and the meeting ft Firefighters Pension Trust Fund Board of Trustees Meeting June 28, 1995 Page 9 was adjourned at 9:46 A.M. Respectfully submitted, Betty Laur Recording Secretary ATTEST: Joann Manganiello Village Clerk DATE APPROVED: