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HomeMy WebLinkAboutPension General_Documentation_Tab 01_11/05/2007SYNPOSIS OF GENERAL EMPLOYEES' PENSION BOARD QUARTERLY MEETING MINUTES OF 8.6.07 • 1 A i d f 5 7 07 l . pprove m nutes o . . quarter y meeting as amended. 2. Steve Palmquist provided a presentation on increasing the plan multiplier. 3. Requested Mr. Palmquist provide the cost of doing an actuarial evaluation each year. 4. Voted to make a recommendation to increase the employees' portion of contribution to the pension fund, with no expense to the municipality, to 2.2% multiplier, and take that decision and present it to the employees involved to get a consensus to be part of that and if there was positive feedback to present it to the Village Council. 5. Dave West presented the Bogdahn Consulting LLC report for quarter ending 6/30/07. 6. Approved data authorization transmission form to allow electronic communication between Bogdahn Consulting, LLC and Salem Trust Company. 7. Chair Harding reported regarding Mr. Palmquist's fee to attend the Village Council meeting, that the fee stood. 8. Accepted Mr. Rhodes as the 5~' member chosen by the other four. 9. Approved the 2007 estimated budget and the 2008 estimated budget for expenses for 2008 as presented and amended at the May 7, 2007 meeting of the General Employees Pension Board. 10. Pension Coordinator McWilliams reported the Villa Council onl took under ~ Y advisement the information from Mr. Palmquist's presentation on 7/12/07 regarding paying interest on employee contributions. An ordinance would be presented to the Council at their Thursday, August 9, 2007 regular meeting for them to approve this item. The ordinance would require two public hearings; following the first hearing Mr. Palmquist would provide an actuarial impact statement to the State, and the second hearing would be advertised; then the second hearing would take place. Mr. Palmquist explained that earlier this year he had provided a report of financial impact and the impact statement would just add another page to the work already done. It would be done in the format required by the State. Aboard member would be required to sign the actuarial impact statement. Ms. McWilliams reminded the board they had voted to request 3% interest be paid on contributions. Mr. Palmquist advised he would get the impact statement to Ms. McWilliams and she could get it to a board member to sign. 11. The following items on the consent agenda: Ratification Of Invoices Paid Since Last Quarterly Meeting: • Business Services Connection, Inc. - Recording and Minutes of 5.7.07 meeting $ 249.15 • Hanson, Perry & Jensen, P.A. $ 851.04 • Payments To Be Reviewed And Approved: • Hanson, Perry & Jensen, P.A. $ 468.75 • Bogdahn Consulting, LLC $1,125.00 • Dana Investment Advisors $1,352.64 SYNPOSIS OF GENERAL EMPLOYEES' PENSION BOARD QUARTERLY MEETING MINUTES OF 8.6.07 • • Salem Trust Company fee advice for period Ending 6/30/07 $1,233.70 • Federal Express $ 11.36 Reimbursement to Village of Tequesta • Gabriel Roeder Smith & Company $1,831.00 • Palm Beach Post Reimbursement to Village of Tequesta $ 326.10 Approval of new applicants for participation in Pension Plan: Kathryn A. Barbera, Records Specialist, Police Dept. Hired 6/25/07 Ratification of withdrawals made since the last meeting on 2 signature basis: Darlene Madden 5/30/07 Gross: $960.22; Net Payout $768.18 Patrice Monaco 6/8/07 Rollover $12,201.08 Statement of Activities Budget Report • 11. Approved account statements for period ending June 30, 2007. 12. Accepted Dana Investment Advisors, Inc. quarterly report. 13. Approved sending four members of the board and the Pension Coordinator to the FPPTA school at PGA National in Palm Beach Gardens October 7-10, 2007. 14. Chair Harding reported on her recent attendance at the FPPTA conference and provided materials to be distributed to the board. 15. Information was provided that Independent Community Bank had merged into Sun American Bank. 16. Authorized Attorney Jensen to make an amendment to the contract with Dana Investment Advisors to reflect their fee reduction on fixed income assets from 50 to 25 basis points. END OF SYNOPSIS • • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MINUTES OF REGULAR QUARTERLY BOARD OF TRUSTEES MEETING AUGUST 6, 2007 I. CALL TO ORDER AND ROLL CALL The Tequesta General Employees' Pension Trust Fund Board of Trustees held a regulaz quarterly meeting in the Council Chambers of the Village Hall, 345 Tequesta Drive, Tequesta, Florida, on August 6, 2007. The meeting was called to order at 8:02 a.m. by Chair Catherine Harding. A roll call was taken by Betty Laur, Recording Secretary. Board members in attendance at the meeting were:. Chair Catherine Hazding, Secretary Archie C. Mangum, Jr., Board member Merlene Reid, and Board Member Carl Hansen. Also in attendance were Monitoring Consultant Dave West from Bogdahn Consulting, Actuary Steve Palmquist of Gabriel, Roeder and Smith Company, Attorney Bonni Jensen, Pension Coordinator Lori McWilliams, and Accounting Clerk Monica Rahim. II. APPROVAL OF AGENDA • Chair Harding announced two additions to the agenda: Under VI (9) Reimbursement to Catherine Hazding for travel expense to attend FPPTA pension seminar - $320.22 and Under IX (19) Presentation by Attorney Jensen regarding reduction of Dana Financial Advisors fees. MOTION: Board member Hansen made a motion to approve the agenda as amended. Secretary Mangum seconded the motion, which carried by unanimous 4-0 vote. III. APPROVAL OF MINUTES MOTION• Boardmember Reid made a motion to approve the minutes of the May 7, 2007 regular quarterly meeting as submitted. Boardmember Hansen seconded the motion, which carried by unanimous 4-0 vote. IV. PRESENTATIONS Presentation by Steve Palm4uist, Gabriel, Roeder & Smith Company. regarding increasing multiplier • Steve Palmquist provided a handout of his report and explained he had been requested to determine the financial impact of determining the plan's multiplier. This was a defined benefit plan and funding for benefits was being done as promised by the pension ordinance. • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 2 Mr. Palmquist commented The multiplier was now 2%, and to figure the retirement benefit for an employee the formula was 2% x years of service x the employee's 5-year average pay = retirement amount; fora 20-year employee it would be 2% x 20 years = 40%, so their pension would be 40% of pay for the rest of their life. The task assigned to him was raising the 2% in increments of ,1, up to 2.5%. The figures used were from the last actuarial report, as of 10-1-2005, since the board only had an actuarial report done every other year. The present value of future benefits for those in the plan October 1, 2006; for each .1 % increase the present value rose approximately $83,000-$84,000. The difference in each .1 % increment was approximately $9,000 annually. If the multiplier were raised to 2.5%, that would mean a 25% increase in everyone's pension. The increases would be the same whether the Village or the employees paid for the increase. Mr. Palmquist confirmed the pensions would be higher, the present value of future benefits would be higher, and annual cost would be higher, and when people retired more would come out of the pension. The extra money coming in would be enough to pay for the extra benefits. Board Member Hansen questioned what would happen if ten people retired at the same time, if money was taken out at a greater rate. Mr. Palmquist explained that would not be an issue because all pension plans in Florida were funded on the basis of pre-funding, building enough money during an employee's career so that by retirement no more money would have to be put into the fund. Also, the different multipliers would all be retroactive-if someone had six years of service, that extra percentage would count all the way back to the date of hire. Board member Reid asked what the multiplier for Public Safety was; the response was 3%. Mr. Palmquist advised looking at the Village's competitors for employees, one of which would be all governmental entities covered by the Florida Retirement System--county and school board-their multiplier was 1.6% but they also had other very valuable features the Village did not have, employees under FRS did not have to contribute out of their pay and retirees received a 3% COLA every year. Board Member Reid commented she could send an email to other towns to ask the amount of their multiplier. Chair Harding asked if additional funding would be needed to pay catch-up to make this retroactive. Mr. Palmquist explained that would be up to the Village Council with the board's recommendation, and explained any time there was a change to the plan with employees paying the whole thing there was a fairness issue: younger employees would not like the plan amended and then a long term employee retiring the very next day and having a windfall included in their benefits, so they might want people with significant amounts of service to put in a little extra because they wouldn't have had to pay for that extra benefit • over past years. Board Member Hansen asked if pension plans were becoming more scarce in the business world, which Mr. Palmquist confirmed, except for mega-companies. Mr. Palmquist advised if the board increased the multiplier they would be going against the trend in the private sector, but in the public sector it was just the opposite. Mr. Palmquist • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 200b PAGE 3 confirmed the plan would increase $9,000 for each .1 %, which would come from payroll. Attorney Jensen asked about unfunded liability, to which Mr. Palmquist responded even raising the multiplier to 2.5%, the funded ratio accrued liability would still be over 100%. Board Member Reid asked why an actuarial report was only done every other year and the upside of having an annual evaluation. Mr. Palmquist advised keeping in mind he had a vested interest in that annual reports meant more revenue to his company, but that aside, approximately 90% of governmental plans had annual evaluations-it was just a more up to date tracking method, a better handle on funding progress in the plan, and the board by going over the actuarial report every year became more familiar with the terminology. Attorney Jensen stated she did not have a vested interest in whether an annual actuarial evaluation was done, but expressed her opinion that it was really important to have one annually because in the bad years it kept from having really bad surprises. The downside was there was a cost. Mr. Palmquist was requested to provide the cost of doing the evaluation annually, which he stated he would provide in writing. • Board member Hansen asked what reci itated raisin the multi Tier. Att e P P g p orn y Jensen reminded the board they had made a motion requesting Mr. Palmquist to figure the cost of raising the multiplier. Pension Coordinator McWilliams advised it was requested at a staff meeting by the Village Manager, who requested it be looked into. Chair Harding asked if this could be an option or if every employee would have to do it. Mr. Palmquist advised it could be anoption byoffering aone-time opportunity to pay more to get a higher multiplier. Anyone electing not to do it would stay where they were, with all new hires paying the higher amount so there would be a dwindling number of people at the lower benefit. It would be hard for a young family to pay more, but a few years down the road they would wish they had gone to the higher amount. The next step would be to find out which employees were interested and re-doing the figures. In comparing pension benefits with other towns, the Village was low in benefits, especially compared to those with FRS because although their multiplier was low, the employees not having to pay and the annual COLA increase for retirees were very valuable. Mr. Palmquist described the fairness concept again. Board member Hansen commented in the example given by Mr. Palmquist of a 20-year employee only getting 40% of salary was not much. Mr. Palmquist agreed, but noted they would also get Social Security, which typically provided 30%-40%. The number of long-term employees in this plan was discussed: there might be one in the 10-year category. How to proceed with this matter was discussed. Mr. Palmquist advised this was the time to make a change when most employees in the plan were not long term, so that it was a less expensive • proposition. Secretary Mangum asked for more clarification on the amount of Social Security; Mr Palm uist advi ed th h . q s e government c anged the rules in 1983--it was a lower percentage for higher paid people and a higher percentage far lower paid people. • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 4 Board Member Hansen suggested passing on to the Village Council a recommendation to increase the multiplier to 2.2%. Chair Harding commented she saw no reason the Village Council would object since this would be paid entirely by the employees. Mr. Palmquist advised he had seen cases where the elected officials objected even with the employees paying for the increase because there was no guarantee the municipality would never have to pay. Chair Harding asked if the recommendation could be backed up with a report that most likely the Village would never have to pay. Mr. Palmquist responded a statement could be included in the amendment that the increase would be recalculated every five years to see if it was still adequate, so that the municipality would not be asked to make up the difference. Attorney Jensen advised this request did not come from the employees and asked if the board wanted to send this back to staff to see if they were interested. Discussion ensued. Board member Reid indicated she would be the person on staff who would contact staff to see who was interested in this. Secretary Mangum commented he was all for increasing retirement benefits but there would be disparity because younger employees might not feel they could afford it while those closer to retirement would jump at it, and recommended not more than 2.25%. MOTION: Board Member Hansen made a motion to make a recommendation to increase the employees' portion of contribution to the pension fund, with no ezpense to the municipality, to 2.2% multiplier, and take that decision and present it to the employees involved to get a consensus to be part of that and if there was positive feedback to present it to the Village Council. Board Member Reid seconded the motion, which carried by unanimous 4-0 vote. Mr. Palmquist confirmed that the next actuarial report would be as of October 1, 2007 and he would provide the board with the cost of providing that report annually. Presentation By Monitor Dave West, Bogdahn Consulting, LLC, explained his report was as of June 30, which had been a good period; more recently the stock mazket had experienced turmoil, but this fund had no issues to report and her not held any shares of American Home Mortgage. Mr. West reviewed the figures and advised that $34,000 in investment gains had been added for the quarter. The return yeaz to date was 10.48%, above the target return of 8%. Fixed income and equity returns were reviewed. One quarter had been low during the year due to the • stocks that were in the portfolio at that time. Board Member Hansen asked the cost of doing business, to which Mr. West responded that Mr. Palmquist would be integrating all of the cost in his actuarial report and would address that question, that Bogdahn Consulting looked at the investment portion, taking inflows and outflows and time weighting them for the • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2046 PAGE 5 period it was actually invested. Mr. West reported they were looking at net of investment manager fees. Mr. Pahnquist advised this fund was relatively small, now approaching $1 million, and the overall cost of a plan this size was about 1-1 /2% of total assets, which would decrease as the fund grew. He estimated that costs of this fund was probably 1-1 /2% of assets, or $15,000. Attorney Jensen pointed out the blue page of Bogdahn's report was fairly close to that, the report showed the quarterly rate of return was 3.75% and the blue page showed net of fees the rate of return was 3.65%--so 10% difference in cash flow had been transferred out. Boazd Member Reid asked how the policy benchmazk was arrived at, to which Mr. West responded the investment policy statement gave them their orders and standards for measurement. Attorney Jensen commented the policy was the return the boazd wanted to make, and that had been set before Ms. Reid joined the board. Mr. Bogdahn had helped the board create an investment policy, and his company told the board how they were doing in comparison. Mr. West presented a release form for signature required by Salem Trust to allow Bogdahn • Consulting to communicate with them electronically. Attorney Jensen confirmed that a motion would be in order to authorize this. MOTION: Secretary Mangum made a motion to approve the data authorization transmission form to allow electronic communication between Bogdahn Consulting, LLC and Salem Trust Company. Board Member Hansen seconded the motion, which carried by unanimous 4-0 vote. V. UNFINISHED BUSINESS Results of Chair Hardin~'s conversation with Mr Palm4uist regarding cost of presentation to the Village Council regarding Having interest on employee contributions per Gabriel. Roeder and Smith Company calculations proposal Chair Catherine Harding reported the result of her negotiation with Mr. Palmquist was the fee stood. Discussion of vacancy on board - 5th member position open Lori McWilliams, Pension Coordinator, introduced Michael D. Rhodes, who was present in • the audience, and advised he had volunteered to fill the vacancy of the 5~' position on the board. Ms. McWilliams reported she had provided everyone with a copy of Mr. Rhodes' letter and resume, and explained that Mr. Rhodes had assured her he would be available to attend meetings, had had experience in this field, and was very interested in filling the 5~' • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 6 member position. Mr. Rhodes, a Tequesta resident since 1991, provided details of his background and experience and stated he was honored to have this opportunity, and would take the position seriously. Board member Hansen indicated he knew Mr. Rhodes and was very happy he wanted to serve. MOTION: Board Member Hansen made a motion to accept Mr. Rhodes to fill the Std member position on the board. Secretary Mangum seconded the motion, which carried by unanimous 4-0 vote. Ms. McWilliams advised this appointment would come before the Village Council as an administrative approval. Chair Harding welcomed Mr. Rhodes to the board. Mr. Palmquist and Mr. West answered questions from 1VIr. Rhodes. . Anaroval of 2007 Estimated Budget and 2008 Estimated Budget Pension Coordinator Lori McWilliams explained that the boazd had considered the proposed budget at their May 7, 2007 meeting, however, the motion for approval had only mentioned the items they wanted changed, so the Finance Department was requesting a motion containing language that would include the whole budget. Ms. McWilliams provided copies of the budget and the minutes regarding that item from the May 7, 2007 meeting. MOTION: Board member Reid made a motion to approve the 2007 estimated budget and the 2008 estimated budget for ezpenses for 2008 as presented and amended at the May 7, 2007 meeting of the General Employees Pension Board. Secretary Mangum seconded the motion, which carried by unanimous 4-0 vote. Status Resort on Mr Palmauist's aresentation to Village Council on 7/12/07 regarding paving interest on emuloyee contributions and Council action Pension Coordinator Lori McWilliams reported the Village Council only took the information from Mr. Pahnquist's presentation under advisement; they had taken no action on the matter. An ordinance would be presented to the Council at their Thursday, August 9, 2007 regulaz meeting for them to approve this item. The ordinance would require two public • hearings; following the first hearing Mr. Palmquist would provide an actuarial impact statement to the State, and the second hearing would be advertised; then the second hearing would take place. Mr. Palmquist explained that earlier this yeaz he had provided a report of financial impact and the impact statement would just add another page to the work already • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 7 done. It would be done in the format required by the State. Aboard member would be required to sign the actuarial impact statement. Ms. McWilliams reminded the board they had voted to request 3% interest be paid on contributions. Mr. Palmquist advised he would get the impact statement to Ms. McWilliams and she could get it to a board member to sign. VI. CONSENT AGENDA Board member Hansen made a motion to approve the consent agenda. Board member Reid seconded the motion, which carried by unanimous 4-0 vote. Therefore, the following items were approved on the consent agenda: Ratification Of Invoices Paid Since Last Quarterly Meeting: • Business Services Connection, Inc. - Recording and Minutes of 5.7.07 meeting $ 249.15 • Hanson, Perry & Jensen, P.A. $ 851.04 • Payments To Be Reviewed And Approved: • Hanson, Perry & Jensen, P.A. $ 468.75 • Bogdahn Consulting, LLC $1,125.00 • Dana Investment Advisors $1,352.64 • Salem Trust Company fee advice for period Ending 6/30/07 $1,233.70 • Federal Express $ 11.36 Reimbursement to Village of Tequesta • Gabriel Roeder Smith & Company $1,831.00 • Palm Beach Post Reimbursement to Village of Tequesta $ 326.10 Approval of new applicants for participation in Pension Plan: Kathryn A. Barbera, Records Specialist, Police Dept. Hired 6/25/07 Ratification of withdrawals made since the last meeting on 2 signature basis: Darlene Madden 5/30/07 Gross: $960.22; Net Payout $768.18 Patrice Monaco 6/8/07 Rollover $12,201.08 Statement of Activities • Budget Report VII. FINANCIAL REPORTS • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 8 Account Statements (Auril-June 2007) MOTION: Board member Reid made a motion to approve the Account Statements from Salem Trust Company. Board member Hansen seconded the motion, which carried by unanimous 4-0 vote. Accent Investment Manaaer's quarterly resort for quarter ended 6/30/07 Dana Investment Advisors, Inc. MOTION: Board member Reid made a motion to accept the Investment Manager's quarterly report from Dana Investment Advisors, Inc. Secretary Mangum seconded the motion, which carried by unanimous 4-0 vote. • VIII. NEW BUSINESS FPPTA school at PGA National in Palm Beach Gardens October 7-10 2007 Pension Coordinator Lori McWilliams announced at the last meeting those present had expressed interest in attending the next FPPTA school, scheduled to be held at PGA National in Palm Beach Gardens October 7-10, 2007. Discussion ensued. The following five people expressed an interest to attend: Board member Reid, Board member Hansen, Chair Harding, Board member Rhodes, and Pension Coordinator McWilliams. When concern was expressed there were not enough funds shown on the budget, Attorney Jensen explained the board's budget was only a guide and was not a budget like that of the Village where if a line item did not contain sufficient funds money had to be transferred from somewhere else. MOTION: Board member Hansen made a motion to approve sending four members of the board and the Pension Coordinator to the FPPTA school at PGA National in Palm Beach Gardens October 7-10, 2007. Board member Reid seconded the motion, which carried by unanimous 4-0 vote. Report by Chair Harding re~ardin~ FPPTA Conferenee she attended in June, 2007 Chair Catherine Harding reported she had found the conference very, very interesting and • had enjoyed it. She reported the speakers were very experienced. Ms. Harding commented she had collected reports provided, but since the presentations had been made by power point, all of the information she had heard was not included in the printed reports, making it • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 9 difficult to go back to review what she had experienced. Ms. Harding had obtained information on the FPPTA certification program, which Mr. Palmquist explained required attending classes and passing exams, and earned the designation CPPT. Ms. Harding advised she would provide the materials to Pension Coordinator McWilliams, so that it would be available to other members of the board. Ms. McWilliams advised she would scan the report Ethics Statutes for Public Pension Trustees and distribute it by e-mail to the trustees. Chair Harding recommended members of the board attend the conferences. IX. ANY OTHER MATTERS Information Item: Independent Community Bank merged into Sun American Bank-previously e-mailed to board - no action required Board member Hansen asked if the Village had their account with this bank. Ms. Rahim explained the Village's account was with Bank of America; the account at Sun American Bank was the pension board's account. Dana Investment Advisors -Reduction in fee Attorney Jensen advised approval was needed by the board to make an addendum to their contract with Dana Investment Advisors, since they were decreasing their fee on fixed income assets from 50 to 25 -basis points. It was explained that a basis point was 100' of one percent. Chair Harding asked if this plus raising the employee contribution to 2.2% would increase the fund. Attorney Jensen advised the fund would be getting more from the employees but would be spending it on a benefit; but the fund would get more interest. Mr. Palmquist commented there would be an extra $18,000 in the account annually from increasing the contribution from 2% to 2.2%, but that would not mean the fund could get better interest rates for a while. MOTION: Board Member Hansen made a motion to authorize Attorney Jensen to make an amendment to the contract with Dana Investment Advisors to reflect their fee reduction on fazed income assets from 50 to 25 basis points. Secretary Mangum seconded the motion, which carried by unanimous 4-0 vote. X. COMMUNICATIONS FROM CITIZENS • There was no communication from citizens. XI. ADJOURNMENT • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES August 7, 2006 PAGE 10 The meeting was adjourned at 10:20 a.m. Respectfully submitted, Betty Laur Recording Secretary • •