Loading...
HomeMy WebLinkAboutDocumentation_Regular_Tab 09_11/09/2006SYNPOSIS OF GENERAL EMPLOYEES' PENSION BOARD QUARTERLY MEETING MINUTES OF 4.24.06 1. Approved minutes of 2.16.06 quarterly meeting. 2. Requested the following items from Bogdahn Consulting LLC: Add an executive summary to include a snapshot of the numbers Clarify the amount that was needed to be kept in cash Report the rate of return that 10% in cash was generating (There was a comment that the report was too voluminous) Ask Dana to explain their cash position, why they were holding cash and for what purpose. Accepted the Actuarial Report dated September 30, 2005. 4. Chair Garlo requested information at the next meeting regarding whether the employee benefit statement was provided annually or every two years with the actuarial report. 5. Chair Garlo indicated he would take a resolution to Village Council to advise that the Village contribution wou]d be reduced. 6. Approved payments to: • Business Services Connection - $ 418.86 • Hanson, Perry & Jensen, P.A. $ 821.64 • Bogdahn Consulting, LLC $ 500.00 • Dana Investment Advisors $ 1,120.54 • Gabriel, Roeder, Smith & Company $ 500.00 • Salem Trust Company fee advice $ 339.99 7. Approved new applicant Joe Petrick -date of hire 3/27/06 Approved budget report. 9. There were no questions regarding the account statements. 10. Accepted investment manager's report for quarter ended 3/31/06. 11. Voted to keep board's meeting time and dates as established at the last meeting, on the 4`f' Monday of each month-therefore the upcoming dates would be July 24, October 23, and January 22 at 8 a.m. 12. Consensus of board was to receive the information items electronically from the Pension Coordinator instead of in the meeting packets. 13. Boardmember Koch requested the draft minutes after transcription; the other members indicated they preferred to receive the draft minutes in their meeting packets. 14. Voted to have the Finance Department contact the actuary for an estimate of the cost of a study to find out how much it would cost to pay interest on non-vested withdrawals, and to have the Finance Department report the actuary's response at the next meeting. END OF SYNOPSIS TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY BOARD OF TRUSTEES MEETING APRIL 24, 2006 I. CALL TO ORDER AND ROLL CALL The Tequesta General Employees' Pension Trust Fund Board of Trustees held a regular quarterly meeting in the Emergency Operations Center (EOC) of the Tequesta Public Safety Facility, 357 Tequesta Drive, Tequesta, Florida, on Apri124, 2006. The meeting was called to order at 8:00 a.m. A roll call was taken by Betty Laur, Recording Secretary. Board members in attendance at the meeting were: Chair Bob Garlo, Secretary Archie C. Mangum, Jr., Board member Tom Paterno, Board member Anne Koch, and Board member Catherine Harding. Also in attendance were Attorney Bonni Jensen, Pension Coordinator Gwen Carlisle, Accounting Manager Patrice Monaco, and Accounting Clerk Monica Rahim. Monitoring Consultant Joe Bogdahn was unable to be present but was available by conference call. II. APPROVAL OF AGENDA MOTION: Board member Paterno made a motion to approve the agenda as submitted. Board member Harding seconded the motion, which carried by unanimous vote. III. APPROVAL OF MINUTES 1. TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND BOARD OF TRUSTEES QUARTERLY MEETING MINUTES -February 16, 2006 MOTION Secretary Mangum made a motion to approve the minutes of the February 16, 2006 regular quarterly meeting as submitted. Board member Harding seconded the motion, which carried by unanimous vote. IV. PRESENTATIONS 2. PRESENTATION BY MONITOR Pension Coordinator Carlisle reported that the monitor, Joe Bogdahn, Bogdahn Consulting, LLC, could not attend the meeting but was available by phone. Board member Paterno expressed his opinion that Mr. Bogdahn should be able to attend four times a year. Board member Koch reported she had expected a learning experience through Mr. Bogdahn's explanations. Secretary Mangum stated the report was too voluminous and asked for an executive summary at the beginning-an analysis of the report. Pension Coordinator Carlisle noted the Public Safety Board had asked for the BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES April 24, 2006 PAGE 2 samething-an analysis with highlights of what was in the report. Board member Paterno commented he read the whole thing, and found it interesting that the fund was doing better than 8% at this point, and if that continued the Village would have to contribute less next yeaz than in the past, which was explained on page 11 of Mr. Bogdahn's report. 8% was the goal and anything over that would mean the Village would have to contribute less; and what held this fund back was the money invested in bonds. Board member Koch questioned why it was down so far in the spring of 2003, to which Attorney Jensen responded when this fund was split off from Fire and Police, the General Employees' fund money was placed in a money market account. Board member Paterno commented that was right, but expressed his opinion it should not have been that low, so he did not understand what happened. Attorney Jensen advised that page 2 was the executive summary of the report, showing the entire portfolio, and she reviewed that page. Attorney Jensen noted the near term results were good, while long term fell behind what they were expecting. Board member Paterno commented that 11 % in cash seemed like a lot. Board member Paterno suggested keeping that percentage below 5% to get more of that cash invested. Secretary Mangum asked how much cash was needed each quarter for expenses. Accounting Manager Monaco advised a minimum could be kept in the checking account and enough to pay bills transferred-this time the total to be transferred for bills was $7,300, but that was a little high because an actuarial report was included. Discussion ensued. Attorney Jensen advised that at the end of the report book it showed $70,000+ in cash, and why it was that much was a question for Dana-they might be waiting to buy something. Secretary Mangum noted he did not see much buying and selling, and they should not sell any bonds that would result in a loss. Secretary Mangum asked that the purpose of holding 11 % in cash be questioned. Chair Gazlo commented he thought it was Dana's policy to hold 10% in cash, and asked for clarification on that for the next meeting_ Boazd member Paterno commented Dana was doing well and getting good returns. Board member Paterno referred to page 17 of the report, the last line under March 2006 the second column after difference, where it showed -22, and asked if that were a zero if that would mean the Village would not have to contribute anything. Attorney Jensen explained that would depend on other things also, which would be shown in the actuarial report. It was discussed that after that number became a positive number then the amount the Village would have to pay would be reduced. Boazd member Koch requested that Pension Coordinator Carlisle report the board's BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES Apri124, 2006 PAGE 3 requests to Mr. Bogdahn. Ms. Carlisle explained that the minutes would reflect what he needed to do, and that she would also contact him. It was summarized that the board wanted an executive summary to include a snapshot of the numbers; the number that was needed to be kept in cash, and what rate of return that 10% in cash was generating. Attorney Jensen advised that Dana would need to explain their cash position and the board needed to understand why they were holding cash and for what purpose. Ms. Carlisle noted that Dana would be attending the next quarterly meeting, and would be given a heads up by providing them with the minutes. Attorney Jensen continued to review the report. Board member Paterno noted that Dana had improved the fund's position. Attorney Jensen noted that page 6 showed the executive summary of fixed income and page 7 was the universe comparisons. In response to a question of what was included in the universe, Attorney Jensen advised that would be a question for Mr. Bogdahn of exactly what he included, but he used the Mobius universe of investment managers across the country. Board member Paterno commented this fund was probably 84~' because of having such a small portfolio. Attorney Jensen reviewed pages 8 and 9, which reflected equities. Board member Paterno commented page 21 was an important page to look at because it showed risk/rewazd-cur risk was less than the S&P but our fund was doing very well and was in a very good risk position. V. UNFINISHED BUSINESS 3. ACCEPT THE ACTUARIAL REPORT DATED SEPTEMBER 30, Chair Garlo announced this was the formalized report of the information reviewed at the last meeting. Pension Coordinator Cazlisle advised that Steve Pahnquist was available by phone, and he had reviewed the information at the last meeting. Chair Gazlo commented that the employees had received an employee benefit statement and asked if that was only being done every other year when the actuarial report was done, because he thought the boazd had an obligation to provide that information annually to the employees. No one at the meeting could answer the question of whether the employee benefit statement was provided annually, so Chair Garlo requested that be looked at between meetings and reported at the next quarterly meeting, and stated it was important for the employees to get the statements once a year. Board member Koch asked why not all employees were shown as being in the plan, to which the response was the others were in FRS. It was clarified that no one had retired yet, so no retirement payments were being made. Board member Koch asked about an employee transfemng to another department that had a different plan-such as David Cooper who had been in the General Employees fund and was now in the Police Academy BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES Apri124, 2006 PAGE 4 and would be coming back as a police officer. Chair Garlo explained that Mr. Cooper's pension plan would probably be changed when he graduated from the academy. Board member Paterno commented the fund had gained $106,000 because of people terminating before their 6-year vesting period was fulfilled; that turnover was good for the pension plan and reduced the Village's contribution. Discussion ensued regarding the Village's contribution, which was projected for two years by the actuary. The number from 2005 to 2006 was 8.06%, and anything over that would roll into the next year as an asset, shown on the Village's financial statements. Attorney Jensen noted that was like a contribution reserve. Chair Garlo commented the fund was doing well because of investment actions by the board. Pension Coordinator Carlisle asked since a resolution had come before the Village Council when increased funds were requested, should there be a resolution to show the amount now, or if not, certainly there should be an FYI to the Village Council so they would know Village expenses had been reduced because of the board's good work. Chair Garlo indicated that would be placed on the Village Council's agenda. 8.06% would remain through the next fiscal year, and would be adjusted with the next actuarial report. Attorney Jensen advised this fund was in a good position-that some funds did smoothing averaged over a 4-5 year period, so they were still recognizing market losses from 2001- 2002. Secretary Mangum commented that most everyone did well the last 12-13 months. Board member Paterno asked for clarification of item G on page 4, which showed a big reduction. Attorney Jensen responded that was the cost to provide the benefits-for each employee every year, and explained how the actuary calculated those amounts. Board member Paterno commented the termination numbers were interesting. MOTION: Board member Paterno made a motion to accept the actuarial report dated 9/30/2005. Secretary Mangum seconded the motion, which carried by unanimous 5-0 vote. Chair Garlo stated he would take a resolution to Village Council. Pension Coordinator Carlisle noted that the Gabriel Roeder Smith & Company representative would be coming to the Village Council meeting to be there for the audit, so he might also talk about the actuarial report. VI. CONSENT AGENDA MOTION: Board member Koch made a motion to approve the Consent Agenda as submitted. BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES April 24, 2006 PAGE 5 Secretary Mangum seconded the motion, which carried by unanimous 5-0 vote. Therefore, the following items were approved on the Consent Agenda: 4. PAYMENTS TO BE REVIEWED AND APPROVED • Business Services Connection - 2/16/06 meeting and minutes $ 418.86 • Hanson, Perry & Jensen, P.A. $ 821.64 • Bogdahn Consulting, LLC $ 500.00 • Dana Investment Advisors $ 1,120.54 • Gabriel, Roeder, Smith & Company 10/1/OS Actuarial Valuation Report & Employee Benefit Statements $4,500.00 • Salem Trust Company fee advice for period 1/1/06 to 3/31/06 $ 339.99 5. Approval of new applicants for participation in Pension Plan Joe Petrick Date of hire 3/27/06 6. Approval of Beneficiary Changes None 7. Request for withdrawal of contributions (employees terminating employment with Village of Tequesta) None 8. Ratification of withdrawals made since the last meeting on 2 signature basis: None BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION. TRUST FUND REGULAR QUARTERLY MEETING MINUTES Apri124, 2006 PAGE 6 9. Budget Report VIII. FINANCIAL REPORTS 10. Account Statements (January-March 2006) Pension Coordinator Gwen Carlisle commented the statements from Salem Trust were very thorough and the Finance Department was very happy. Board member Paterno asked how Rockwood was doing with the Public Safety Officers' fund, to which Accounting Manager Monaco responded this fund had about 1 /3 the assets the Public Safety Officers' fund had but had made more money in dollars. Ms. Monaco reported the process of transferring to Independent Community Bank was working just fine. IX. NEW BUSINESS 11. Accept the Investment Manager Report for Quarter ended 3/31/06 Pension Coordinator Gwen Carlisle noted the Investment Manager representative only attended the board meetings every six months, and could answer any questions at the next meeting. Chair Garlo commented the only question at this point was the question about cash. MOTION: Board member Koch made a motion to accept the Investment Manager Report for the Quarter ended 3/31/06. Secretary Mangum seconded the motion, which carried by unanimous 5-0 vote. 12. Discussion of Quarterly Meeting Dates Chair Garlo asked that this issue be resolved today so that it did not come up at every meeting, and noted the only ones really affected on the board were Mr. Paterno and Mr. Mangum, since the others were employees so were here anyway. Pension Coordinator Carlisle commented that both Public Safety Officers' Pension Board and this board had moved their meetings to April, but in talking to the consultants it was found they were having a problem getting the numbers for their reports in time to prepare their reports for these meeting dates, and there had been a suggestion of moving back to May. Mr. Bogdahn would like to have meetings on the same day and was saying the original agreement was for both meetings to be on the same day, and if not, he might need to look at a cost. Chair Garlo recalled there had been discussion BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES April 24, 2006 PAGE 7 that there was to be one trip for both meetings. Ms. Carlisle reported that Mr. Bogdahn suggested he is coming anyway for a Palm Beach Gardens meeting, so if one of our boards met the same day as Palm Beach Gardens then costs would stay the same. Board member Paterno commented this board had the 8 a.m. time first and he liked that time and did not want to come in the middle of the day. Discussion ensued. Board member Paterno indicated he preferred this board to keep the same dates and let the Public Safety Officers' board meet the same day as Palm Beach Gardens-then both boards could stay at 8 a.m. Board member Paterno noted that Mr. Bogdahn would like all three meetings on the same day, but then that affected this board because they would have to come at 10:30 on alternate quarters. The board discussed changing from the last Monday in July to the first Monday in August to give the consultants more time to prepare. It was noted that Dana had expressed no complaints and their booklet had been received first. Secretary Mangum commented he had no problem coming at 10:30 a.m., but the first board to meet would always be in a bind to finish by a deadline. During ensuing discussion, Secretary Mangum expressed his opinion the board should stick to a date. Chair Garlo suggested keeping the date that had been set at the last quarterly meeting because the Public Safety Board was having their August meeting the same day as the Palm Beach Gardens meeting. The board discussed changing to the last Monday of the month instead of the 4~' Monday, since there were 5 Mondays in upcoming months, but consensus was to stay with the 4~' Monday. Board member Paterno commented this board did not have to change the time and there was no issue of fees going up for another three months by keeping the dates as established. MOTION: Secretary Mangum made a motion to keep the board's meeting time and dates as established, on the 4'h Monday of the month each quarter-therefore the upcoming dates would be July 24, October 23, and January 22 at 8 a.m. Board member Koch seconded the motion, which carried by unanimous 5-0 vote. Attorney Jensen confirmed those dates worked for her. XII. ANY OTHER MATTERS 13. Information Item - GRS News Scan and Research Memos for January & March 2006 14. Information Item -from Dana Investment Advisors Consensus of the board was they preferred to receive the information items BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES Apri124, 2006 PAGE 8 forwarded electronically from staff instead of having them in printed form in their agenda packets. Board member Koch requested a copy of the draft minutes after they were transcribed; the other members of the board indicated they preferred to receive the draft minutes in their agenda packets. Board member Harding raised the issue that it was mandatory for employees to be in the pension plan and have 5% taken from their pay as contributions, but they did not receive any interest on their contributions into the fund. Board member Harding expressed her opinion that employees should get some interest on that money when they were leaving. Chair Gazlo asked Attorney Jensen her experience in this matter. Attorney Jensen advised about 2/3 to 3/4 of the funds she dealt with paid no interest on refunds of contributions, and some paid a set amount of interest on a refund. Board member Harding requested this be looked into. Secretary Mangum agreed this issue should be addressed, and commented he thought if someone had worked five yeazs they should be given something. Board member Koch asked if she became a policeman if she would get her contributions back, to which Pension Coordinator Carlisle responded Joe Petrick had been a police officer and received his payout when he left, and now as Code Enforcement Officer was in the General Employees Pension. Attorney Jensen responded some cities had city vesting-so as long as an employee was working for a municipality for the required number of yeazs they were vested-that was a new item that was coming up in some plans. Board member Paterno commented it was not that common. An example was given of an employee who worked 3 years as a general employee and then became a policeman for 20 years-the general pension fund would pay them for 3 years and then the police fund would pay them for 20 years. Board member Koch asked what a reasonable interest amount would be. Attorney Jensen commented the boazd could ask the actuary, and it could be tied to a money market rate or something else, such as CPI. Board member Paterno questioned what happened if there was a set rate and the market fell below that, concluding it probably would be to their advantage because the market would be at a loss. Board member Hazding noted average interest over a period could be pro rated. Secretary Mangum discussed how interest could be calculated, using as an example another pension fund with which he was involved, and advised that the actuary could tell you exactly the amount of interest and it would not be difficult for the actuary to do-each employee would have a percentage of interest. Board member Harding reported at her last j ob she got 10% and was fully vested the first day. Attorney Jensen advised that Boazd member Harding had been in a defined contribution plan, which was very different-this plan was a defined benefit plan which was geared towazd the benefit one would receive at retirement. Attorney Jensen explained that this plan was guaranteed and participants would never outlive those dollars, and commented that Board member Harding was talking about a type of fund where the participants were responsible to make decisions and they could outlive the dollars. Board BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES Apri124, 2006 PAGE 9 member Paterno explained if Board member Hazding retired this year the Village would pay for 40 years if she lived 40 years. With the type of plan she had previously, she would have to make her payout last 40 yeazs. That was the difference in a nutshell. Chair Garlo commented the board was looking at the 24 participants in the plan-those employees were looking at this plan for the rest of their lives. There had previously been a situation where payouts had to wait to be approved by the board at their next quarterly meeting so it could have been 90 days before the employee received payout, with no interest, but this board had undid that policy. Board member Harding commented she would like to see some kind of interest, and suggested asking Steve Palmquist how much it would cost to do a cost study. Attorney Jensen advised there would be a cost to pay interest on refunds of contributions and the fund's cost savings as a result of turnover would be less. Board member Paterno commented that $106,000 for the past year could become zero. Board member Paterno stated he understood Board member Hazding's position but his job here was to add benefits or make sure there was money in the program at the end-and asked if it was the Village Council's decision to add benefits. Attorney Jensen advised the board's job was to act in the best interests of the participants and beneficiaries to ensure the integrity of this fund. Improving benefits was something the board could recommend as an advisory board but ultimate authority to make that decision was by the Village Council and required an ordinance. Pension Coordinator Carlisle commented there would be a cost to the Village if they had to do another actuarial report. Secretary Mangum commented if there was unfairness it needed to be addressed. It was confirmed that the amount of payouts without interest during the past year had been $106,000, but the time over which that had accumulated was unknown. Board member Koch asked if there were more participants how would that change the integrity of the pension fund, to which the response was it just made it bigger-there would be more money involved. Board member Paterno commented the cost to the Village would be less than 1%. Page 15 was referred to, which showed a turnover rate of 25%. Board member Harding suggested paying interest only after one year employment. Secretary Mangum indicated he would like to know how much money would be involved. If something happened and an employee had to leave after four years he only got his money back, which Secretary Mangum considered unfair, and suggested paying cumulative 2% over 4 years -if the employee put in $7,500 it would cost the Village $700 in interest. Secretary Mangum expressed his opinion the interest could be calculated easily from the first day an employee was in the plan to the last day, and if it cost the town a little that was secondary to this board's concerns, and that was why the residents paid taxes. Secretary Mangum commented the boazd should not expect arisk-there was no risk. Chair Garlo commented it was not unusual for the government to have plans that were all about the BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES April 24, 2006 PAGE 10 retirement, police and fire employees expected to work there 20 years, and there were really two different philosophies. Board member Paterno commented there were tradeoffs on both sides-an employee was guaranteed retirement for the rest of their life in return for only getting their contribution back if they left. Secretary Mangum was concerned about employees who had no choice but to leave early. Attorney Jensen advised most plans vested at 10 years but this one was only 6 years. Accounting Manager Monaco spoke as an employee in the plan and suggested offering an option not to participate, which. was then discussed, with the conclusion that this fund would not remain viable. Chair Garlo indicated it would cost money to have Mr. Palmquist to this research; Attorney Jensen advised the board would have to provide parameters. During ensuing discussion it was noted participation in the plan was mandatory and new employees were now told they would earn no interest on their contributions if they left before six years. Board member Harding commented those were issues the employee felt they could worry about later. Chair Garlo commented it was not unusual not to get interest and he had not heard anyone complain. Secretary Mangum stated, do not pursue nocontributions-it had to be mandatory, and should be looked at like insurance, but he had been amazed to learn someone who left got nothing in interest if they worked 4-1 /2 years. Board member Paterno commented this plan would grow as older employees retired and new people came into the plan. The proposal to have Mr. Palmquist do a cost study and the amount of interest to pay was discussed. Attorney Jensen recommended asking the cost if 1 % interest were paid, and if that could be doubled to get the amount for 2%, etc. Using the CPI rate, which had been around 3% lately, was discussed. Board member Harding suggested Secretary Mangum come up with something as a guide rather than taking it outside; however, Secretary Mangum indicated he would not want to come up with something for the board-he would prefer it be done in a more official capacity. MOTION: Board member Harding made a motion that when an employee left the pension plan prior to being vested and after a minimum of 12 months employment that they receive 3% on their money when they leave. Secretary Mangum seconded the motion for discussion purposes. Board member Koch commented she did not know how much a study would cost-things seemed to cost a lot-and the Council would have to give final approval. Attorney Jensen advised that there must be a cost study for the Village to submit to the State between first and second reading, and most municipal Councils would like to know the cost in the beginning, so it was much better to have a cost study going in. Chair Garlo agreed. Board member Paterno commented you would have to have a cost study either way before it could go to the nett step-Council approval. BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES April 24, 2006 PAGE 11 Chair Garlo noted any change to the existing plan required Village Council approval. Board member Paterno commented it might be better to do a cost study before coming up with a figure. Secretary Mangum commented he had seconded the motion, but believed that would be a more appropriate route to know what they were talking about, and he felt a study should not be that expensive-we could ask our actuary what it would cost us and tell him the situation and he might come up with asuggestion-he would ask the actuary for ideas. Chair Garlo commented the actuary probably had already done a lot of the work, but he was probably going to do projections on turnover anticipated and extrapolation, and they all knew before it went to Village Council they were going to want to see a study. Board member Paterno commented it needed to be in a form for the Council that was ready to move on. Board member Harding withdrew her motion. Discussion ensued, following which Secretary Mangum made the following motion: MOTION: Secretary Mangum made a motion to have the Finance Department contact the actuary for an estimate of the cost of a study to find out how much it would cost to pay interest on non-vested withdrawals. Board member Harding seconded the motion, which carried by unanimous 5-0. The Finance Department was asked to report the actuary's response at the next quarterly meeting. XIII. COMMUNICATIONS FROM CITIZENS No citizens were present. XIV. ADJOURNMENT There being no further business, upon motion by Board member Harding, seconded by Secretary Mangum, the meeting was adjourned at 9:59 a.m. Respectfully submitted, :r Betty Lai~Y Recording Secretary