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HomeMy WebLinkAboutMinutes_Pension Joint_05/03/2010 JOINT MEETING OF TEQUESTA PUBLIC SAFETY OFFICERS' AND GENERAL EMPLOYEES' PENSION TRUST FUND BOARDS May 3, 2010 I. Call To Order And Roll Call The Tequesta General Employees Pension Trust Fund Board of Trustees and the Tequesta Public Safety Officers Pension Trust Fund Board of Trustees held a joint meeting at the Tequesta Village Hall, 345 Tequesta Drive, Tequesta, Florida, on Monday, May 3, 2010. The meeting was called to order at 11:41 a.m. A roll call was taken by Recording Secretary Betty Laur. General Employees' Pension Board Members in attendance at the meeting were: Chair Michael Rhodes, Board Member Deanna Mayo, Board Mer�ber Michelle Gload, and Board Member John Terzakis. Secretary Carl Hansen was absent from the meeting. Public Safety Officers' Pension Board Members in attendance at the meeting were: Chair Ed Sabin, Secretary Frank D'Ambra, Board Member Ray Giblin, and Board Member Robert Young. Board Member David Cooper was absent from the meeting. Also in attendance were Attorney Bonni Jensen, Daniel Johnson with Bogdahn Consulting LLC, Pension Coordinator Lori McWilliams, and Betty Laur, Recording Secretary. II. Approval Of Agenda MOTION BY PUBLIC SAFETY OFFICERS' PENSION BOARD: Motion was made by Board Member Giblin, seconded by Board Member Young, to approve the agenda as submitted. Motion carried by unanimous 4-0 vote. MOTION BY GENERAL EMPLOYEES' PENSION BOARD: Motion was made by Board Member Mayo, seconded by Board Member Terzakis, to approve the agenda as submitted. Motion carried by unanimous 4-0 vote. III. Presentations 1. Benefits USA Mr. Pete Prior of Benefits USA provided a history of his firm, started in 1997, which now had ten employees, and described his background. Their mission was to provide the best service possible, regardless of what it would take. He was available 24/7 except when in a meeting. Services were Iisted in the presentation book. Backup was provided for the actuary; monthly financials were done on an accrual basis. Financial planning seminars were provided for participants; their company had relationships with several financial planners. Tequesta Public Safety Officers' Pension Board and General Employees' Pension Board Trust Funds Joint meeting Minutes May 3, 2010 2 Their website allowed secure individual access and they would post whatever the Board needed. Their own administration software had been created through which employees would be able to log on to do their own calculations for different scenarios. A module would be added so that their company would be notified through the Social Security Death Index when a participant passed away. In response to a question, Mr. Prior indicated almost all plans he worked with did annual actuarial evaluations. Discussion ensued regarding behind-the-scenes work and communication with consultants between quarterly meetings. Two people were assigned to every client, one principal and one backup. Contact with the Village would be maintained. Meeting packets with backup were provided to the Trustees a week prior to meetings and that was posted on their website. Mr. Prior indicated a lot of time was spent communicating with participants when they were ready to retire. Beneficiary forms were updated annually. Fees were $1,500 per month; initial set-up would be approximately $1,000. This fee was predicated on the assumption that one administrator would be hired for both plans. The Boards could choose specific services and the fees would be adjusted. A list of items was provided which would assure a smooth transition. Mr. Prior advised all his clients were self-funding; none had purchased annuities for funding retirements. Pension Coordinator McWilliams read a list of duties currently performed by the Village staff; Mr. Prior confirmed all of those would be provided. Records would be shipped to his office and maintained according to State records laws; they did not dispose of any records without consulting with the Board. Procedure for paying bills and obtaining Board mernber signatures was discussed. Attorney Jensen advised that Benefits USA would replace all services for the pension boards now done by Village employees. Mr. Prior concluded his presentation by stating kudos to the Boards for the most well-funded plans he had ever seen. 2. Resource Centers Mr. Scott Baur and Denise McNeill with Resource Centers provided a power point presentation. Mr. Baur advised their first office had been in Tequesta; they were now located in Palm Beach Gardens with a total of 15 employees plus a second office on the west coast. Administration of the pension plans was divided into administrative activities, focusing on the people side, and record keeping, focusing on the information side. A diagram was provided to show both sides of their job going from Board level to participant level. They would not take over duties performed by consultants or change how the plans operated in any substantial way. Basic administration was described for both the people side and the information side. Their office communicated primarily electronically. Communication was critical in operation of the plan, both with the Boards and the participants. Their office made many disbursements and they were very familiar with all tax requirements. A very systematic approach was used for tracking benefits and keeping up with participant information. Accounting and other functions done on behalf of plans involved segregation of duties to avoid fraud. Tequesta Public Safety Officers' Pension Board and General Employees' Pension Board Trust Funds Joint meeting Minutes May 3, 2010 3 Ms. McNeill discussed the importance of an organized approach being used by the Administrator, and the importance of the Board and the participants having access to the information and being able to communicate with the Administrator. They would be a contact for everyone, and they understood how the plan played a part in the lives of participants. Good practice was discussed. Mr. Baur discussed their flexibility for communicating on the web, and it would be up to the Board as to how they would like to utilize it. Their fee quote included all services and they would work with the Board on which services were needed. Setting up the systems for the Village would be charged by their programmer and would be a one-time $2,500 for each plan. Benefit calculations were systematic with review by the actuary. Participants could change things like their retirement date online for different scenarios but could not change other information. Other services by the programmer if needed later would be approved by the Board ahead of time and the cost passed through to the Board. How their computer systems had evolved and their disaster procedure and recovery time were described. Everything was backed up and mirrored to their west coast office and to an employee in North Carolina. A very intensive Type Two SAS 70 audit of their firm was conducted. Mr. Baur advised they did not destroy records that were part of the work history of participants, they did clean them out and archive them. The medical records request fee was for disability retirement applications, which took a huge amount of time. Their fee increases would be systematic small increases so as not to have to ask for large increases because none had been given over several years. They would typically have two people to service each client, with one being the primary contact. Their firm had retained their initial staff since they were hired. Pension Coordinator McWilliams pointed out the fee schedule on the handout was inconsistent with that shown on the power point presentation; it was confirmed that the packets had the correct information. Mr. Bauer indicated their firm now had 63 or 64 clients, 90% or more were public municipal plans. IV. New Business 3. Discussion by Boards regarding hiring a Third Party Administrator Pension Coordinator McWilliams advised that in February the Village Manager had asked her to suggest to both pension boards that they look for an independent pension administrator to handle all pension related needs and aspects, both administrative and financial. The Manager believed this was an appropriate time to do this as the plans had grown over the years and the Village Clerk's duties had recently been expanded. In an effort to assist both boards, the Village had handled the administrative functions for many years, but the needs of the boards had become more expansive and now might be the best time to make this move. Additionally, both she, as Village Clerk and Pension Coordinator, and the Village Manager, believed the functions of the pension boards should be Tequesta Public Safety Officers' Pension Board and General Employees' Pension Board Trust Funds Joint meeting Minutes May 3, 2010 4 independent of the Village and by mixing the roles of the pension and Village they often became cloudy. She reported that Village Manager Couzzo had pointed out the Village was subsidizing the cost for staff to coordinate and administratively run the pension boards, and they should be funded by the respective boards, thereby keeping them separate and independent. The Manager mentioned the workload of staff had increased with smaller staff, and the equivalent of two full-time positions were being lost due to downsizing. Pension Coordinator McWilliams reported the Village Manager had indicated this was not a mandate that the boards take on a third party administrator and was not a directive from him, but an opportunity for the boards to explore alternative options to provide this service. He wanted to assure that things continued to run effectively and economically. Chair Sabin indicated that annualizing the proposed fees, they probably came to approximately $12,000 per year. Currently, invoices were received for Betty Laur's services, since all other services provided by the Village were not billed to the boards. Pension Coordinator McWilliams clarified that Betty provided 7-1/2 hours per week working for both boards, plus attendance at meetings and preparation of minutes, and that did not include Ms. McWilliams' time and Deanna Mayo's time helping out, because they were paid by the Village. The Pension Coordinator advised the minutes were more detailed than those provided for the Village Council and the preparation was more complicated than one might think, since they were provided in detail because of the nature of the pension boards. She pointed out that one meeting had gone from 8:30 a.m. to 5:30 p.m. Chair Sabin noted the services probably totaled $7,000-$8,000 annually for the Public Safety Board; and it was probably close to that for the General Employees' Board. The fees proposed from the third party administrator would be approximately $12,000 annually, so it would cost more, but they would provide more services. Pension Coordinator McWilliams noted the Village Manager had suggested if the Boards felt it appropriate they might co- mingle their options, using Betty's services for certain things, Finance for certain things, and the third party administrator for certain things. He was also not asking that a decision be made today. Board Member Mayo indicated she felt some of this was to relieve Ms. McWilliam's work load and asked if Betty might be interested in taking on some of Ms. McWilliam's duties, adding to the hours she worked. Ms. Laur responded she would not want to work too many more hours since she had other commitments. Pension Coordinator McWilliams indicated she felt a big part of this was with mixing the roles of staff members with a pension position they became cloudy—she as the Pension Coordinator could not provide benefit calculations and had never attempted to do so, but a third parly administrator could do that. Secretary D'Ambra commented it was not just financial comparisons—with a third party administrator they would get a whole package of services and more than currently provided. If they made a mistake, they had insurance as backup, and the fact that they put themselves through the SAS 70 audit spoke to their abilities and professionalism. Chair Tequesta Public Safety Officers' Pension Board and General Employees' Pension Board Trust Funds Joint meeting Minutes May 3, 2010 5 Rhodes commented there was a workload factor, a service improvement to the participants, and an issue of overlap with the HR side and the financial side and who within the Village was doing certain things and whether it was best to keep it inside, or to have a third pariy do it. He felt from the perspective of the General Employees' Board it was important to have a link and some type of communication between the Board and the Village. He asked how many of the financial functions should stay or go outside; how many of the actuarial functions should be retained. Board Member Terzakis he favored letting the third party administrator do as much as possible because once you started trying to separate, you could have problems. Assuming their model ran extremely well and efficiently, there was not that much difference in the dollars, he would like to see some type of link with the Village. Chair Rhodes commented if the link could be seamless with numbers accessible to the third party administrator without additional work being put onto the shoulders of the Village financial team, that was an important consideration. Secretary D'Ambra agreed, commenting with the work subdivided as it was now, there was a much bigger chance of something falling through the cracks, plus things that were not even being done. A much better job of communicating with the participants should be done, and this would be enhancement of services. Board Member Young asked under the current division of the work who would represent the Village in case of an audit by Department of Revenue or the IRS. Attorney Jensen advised the Department of Labor would not audit; but the IRS could, and it would be the Board's responsibility to bring the information together for them. Discussion ensued regarding the two firms which had made presentations. It was the consensus of both boards they liked the second firm. Chair Sabin noted the boards seemed to want to move forward jointly—they could make a decision to go ahead now, but there were likely next steps they wanted to do as due diligence, including getting back and confirming with the Village Manager. Some things that came to his mind were if they had this technology, someone whether a Board member and/or someone with the Village who might have some interest in seeing this in action should go see it. Chair Rhodes suggested both Boards talk with the third party administrator's references who had used their systems two or three years to see their thinking on adaptability, flexibility and troubleshooting to see how they had handled problems. Talk to people who had used this service, both on the administrative side and also at the participant level, if possible--this might be done by the HR department. On-site due diligence should also be conducted. Chair Sabin indicated he agreed with Board Member Terzakis, and the third party administrator had provided a proposal but the Boards should make sure there was an itemized list of their responsibilities, and then compare and contrast with where they might get some of those services either internally within the Village or perhaps with the outside service providers today. It should be clarified with the actuary that in the future statements would come from the third party Tequesta Public Safety Officers' Pension Board and General Employees' Pension Board Trust Funds Joint meeting Minutes May 3, 2010 6 administrator instead of requests from the actuary—the Board should make sure they had spoken to the actuary. The actuary might say that was clear but they also did another piece of it, and that should be made clear. Chair Rhodes noted on the internal function to the extent there was overlap to make sure it was seamless—there were not additional people involved. Chair Rhodes agreed it was best not to pick and choose so long as there were not adverse internal consequences. He felt it was important to be linked to the Village. Secretary D'Ambra commented the Village was the plar►s' sponsor. Chair Rhodes clarified he meant in terms of ongoing participation and communication. Secretary D'Ambra volunteered to do the due diligence on behalf of the Public Safety Officers' Board; Board Member Terzakis volunteered to do the due diligence on behalf of the General Employees' Board. MOTION BY PUBLIC SAFETY OFFICERS' PENSION BOARD: Motion was made by Board Member Giblin, seconded by Board Member Young, to set up a committee to perform due diligence. Motion carried by unanimous 4-0 vote. MOTION BY GENERAL EMPLOYEES' PENSION BOARD: Motion was made by Board Member Mayo, seconded by Board Member Gload, to set up a committee to perform due diligence. Motion carried by unanimous 4-0 vote. It was clarified that the Secretary D'Ambra was the committee member representing the Public Safety Officers' Pension Board and that Board Member Terzakis was the committee member representing the General Employees' Pension Board. Chair Sabin expressed his opinion it would be helpful to have one or two representatives from the Village administration who currently performed the work to also attend, and it was suggested the Village Manager appoint the two staff members. Chair Sabin commented there could always be a special joint meeting of both boards or this could wait until the next quarterly meeting, depending on timing. Board Member D'Ambra favored accelerating the process, with due diligence in the next 2-3 weeks if that could be done with Board Member Terzakis' schedule, and if so, then the Boards could meet again in 4-6 weeks. Board Member Sabin stated what the Boards would like, in addition to this new provider and seeing and getting clarification, and that responsibility is internaf with the Village to clarify responsibilities as well as how they might interact with other providers such as the actuary, etc. Chair Sabin indicated it would be wonderful if the target meeting date could be 6-8 weeks out, or sooner if they were ready for the boards to hear an update, coordinating with those who were traveling. Secretary D'Ambra indicated he would be traveling in June and July. Tequesta Public Safety Officers' Pension Board and General Employees' Pension Board Trust Funds Joint meeting Minutes May 3, 2010 7 Board Member Giblin indicated he would also be out. Chair Sabin noted everyone was in and out, and the meeting would need to be coordinated. Pension Coordinator McWilliams stated her office could coordinate that meeting. V. Any Other Matters There were no other matters to come before the Boards. VI. Communications From Citizens There was no communication from citizens. VII. Adjournment There being no further business to come before the Boards, the meeting was adjourned at 1:47 p.m. Respectfully submitted, � Betty Laur Recording Secretary