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HomeMy WebLinkAbout08-06-2008 Minutes Minutes of the Regular Meeting of the CITY OF OCOEE GENERAL EMPLOYEES' PENSION BOARD Held on August 6, 2008 At 150 N. Lakeshore Drive Ocoee, FL 34761 AGENDA ITEM I. CALL TO ORDER—Vice Chairman Terry Reed A. Vice Chairman Terry Reed called the meeting to order at 10:02 a.m. in the Commission Chambers in City Hall. The roll was called and a quorum declared present. Present were Trustees Jean Grafton, Terry Reed and Wendy West. Absent were Trustees Russ Wagner and Tom Hendrix Also present were H. Lee Dehner, Attorney; Jim Carnicella, Human Resources Director/Plan Administrator; Mike Welker and Tim Nash, Bogdahn Consulting. B. Approval of Minutes from Special Session dated January 18, 2008 and Minutes from Regular Session dated February 13, 2008 Vice Chairman Reed called for review of the Minutes as stated. There being no additions or corrections, it was, on motion made by Trustee Grafton, seconded by Trustee West, unanimously RESOLVED that the Minutes of the Special Session of the Board of Trustees of the General Employees' Pension Board of January 18, 2008 and Minutes of the Regular Session of the Board of Trustees of the General Employees' Pension Board of February 13,2008, be and are hereby approved. AGENDA ITEM II. NEW BUSINESS A. Investment Consultant Report—Mike Welker, Bogdahn Consulting, LLC Mike Welker started by introducing Tim Nash. Mr. Welker said Tim Nash was new at Bogdahn and said he will be a nice addition to their firm. Mike Welker then began to go over the Performance Review for the Second Quarter of 2008. He said the second quarter was not a very good quarter and for the most part the broad market was down about a little over 2%. He said Value got hurt again because of financials but Growth did much better and was led by the Mid& Small-Cap Growth area. He reminded the Board why they hired the two Managers they did for the Growth part. Mr. Welker said there is just over $15 million in the fund and went over the asset allocation of the portfolio. He continued going over the report and said the new Manager structure was all up and running by July so the next quarter report will show how performance is with all of them in place. Mike Welker then went over the performance of the fund in detail. He reported the total fund, net of fees, for the quarter was down .51%, so it was not too bad with all things considered. He stated the portfolio was in the 35th percentile, beating the majority of their piers, and said the General Employees Pension Board Quarterly Meeting,August 6,2008 Page 2 of 5 index was in the 62nd percentile. He continued and said they believe this year was going to be a ,,. bad year but reminded the Board that the changes they made did a nice job preserving capital better than what the market did. He asked if there were any questions. Mike Welker then spoke about the International side. He said if there were no questions regarding the performance there was an issue he would like to go back to concerning the International piece. He reported they were good to go with Voyageur but said if they couldn't come to terms with Barings he suggests the Board do a new Manager search. He said the reason is because Voyageur and Barings were a great compliment to each other due to their different styles and went on to explain. Discussion ensued between Mr. Welker and Attorney Dehner regarding the side agreement with Barings. Mike Welker said if they can't do the side agreement, he would come back to the next meeting with some Managers that can be the sole International Manager or might look at one that would complement Voyageur on the Growth side but will come back and have that discussion at the next meeting if it was necessary. Mike Welker then handed out an Investment Policy Statement dated August 6, 2008. He also handed out the Addendums to the Statement of Investment Policy for Voyageur, ICC Capital and Rockwood. He said one change made in the Policy Statement concerning International Funds was adding some language regarding pooled funds and went on to explain. Attorney Denner asked Mr. Welker if he would take care of the filings, to which Mike Welker answered yes. On motion made by Trustee Grafton, seconded by Trustee West, unanimously RESOLVED that the Board of Trustees of the General Employees' Pension(arr pursuant to the recommendation of the Investment Consultant, adopt the Investment Policy Statement amended August 6, 2008 and the Addendum to Statement of Investment Policy for Voyageur Asset Management, the Addendum to Statement of Investment Policy for ICC Capital Management, and the Addendum to Statement of Investment Policy for Rockwood Capital Advisors, as presented by Bogdahn Consulting. After a brief break was taken to obtain the Board's signature on the documents, they moved on to the next item. B. Reappointment/Election of Board Members—Jim Carnicella, HR Director Plan Administrator Carnicella spoke about the terms ending September 30, 2008 for the seats currently held by Trustees Reed, Hendrix and West. He reported that the City Clerk's office has already started the process of nominations for the Board seat currently held by Terry Reed, which is elected by the employees. He stated the City Commission appoints the Board seat that is currently held by Tom Hendrix and the other four Board Members appoint the one Wendy West currently holds. Discussion ensued. Trustee West asked if the Board ever settled the issue about being an employee for a certain length of time before being eligible to become a Board Member. Jim Carnicella said that Attorney Dehner sent him a copy of the Operating Rules and suggested they could address the issue when the Board goes over them. After a brief discussion, Plan Administrator Carnicella said he could come back to the Board with a recommendation. Trustee Grafton stated at this point it would not affect the current election. Further discussion ensued. Jim Carnicella stated General Employees Pension Board Quarterly Meeting,August 6,2008 Page 3 of 5 he also recommends the Board Members become certified and went on to explain why this should be required. Discussion ensued. Attorney Denner stated he checked the Ordinance and it provides that any Member is eligible to be an elected Trustee so it would take an Ordinance amendment to make a change. He said with respect to Trustee terms, the longer you can keep a Trustee and have an experienced one, the better. He noted the term length of Trustees is currently two years and said he thought it would be advisable to consider extending the length and stated this change would also take an Ordinance amendment. Plan Administrator Carnicella asked if the Board could take action today regarding direction to draft an Ordinance amendment for these changes, to which Attorney Dehner stated yes. Discussion ensued. Attorney Dehner asked if the Board would like to have the Ordinance amendment come back to them before going to the Commission for approval. After some discussion, Plan Administrator Carnicella asked Attorney Dehner if the issue about becoming certified would be something they would address in the Operating Rules. Attorney Denner stated yes. Further discussion ensued. Trustee Grafton mentioned she received a notice regarding FPPTA charging $100 to maintain their certification. Plan Administrator Carnicella advised he was not going to continue participating in FPPTA and thanked the Board for allowing him to be involved with International Foundation, which he thought was more beneficial. Discussion ensued. Plan Administrator Carnicella reminded the Board they needed to go back and finish the motion and said he would bring back some recommendations regarding changes to the Operating Rules. Mr. Carnicella said if they decided to move forward Attorney Denner could draft the Ordinance and then he could have this done by the time they reorganized the Board. Further discussion ensued. On motion made by Trustee West, seconded by Trustee Grafton, unanimously RESOLVED to have Attorney Dehner draw up an Ordinance amendment to require that employees be vested before being eligible to run for a seat on the General Employees' Pension Board and to amend the term length a Board Member serves from two years to five years. AGENDA ITEM III. OTHER BUSINESS A. Payment of Invoices Invoices were included in the packet for the Board to approve. On motion made by Trustee Grafton, seconded by Trustee West, unanimously RESOLVED that the bills and other charges and fees be and are hereby approved for payment as presented. L General Employees Pension Board Quarterly Meeting,August 6,2008 Page 4 of 5 B. Reminder to discuss meeting dates for next year. Attorney Denner said his office prepares the meeting dates, coordinating with the consultants, but it was in the works and his office will be sending the dates to the Board for their consideration at the next meeting. Trustee Grafton said before they move on with the meeting she had a question about whether the Board adopted the Summary Plan Description at the last meeting, to which Attorney Denner and Plan Administrator Carnicella both replied yes. Trustee Grafton stated she had a few red flags and asked to address them. After Trustee Grafton asked for clarification on a few areas, Plan Administrator Carnicella said he had some questions regarding re-employment after retirement. Attorney Denner said they would need to amend a provision in the plan to address these issues and went on to explain. Discussion ensued. Plan Administrator Carnicella suggested he would take a close look at this issue and would come back to the Board with some recommendations. Further discussion ensued. Trustee Grafton noted that the previous Summary Plan Description had a paragraph at the bottom about keeping your beneficiary information up to date but didn't see it on this document, to which Attorney Denner replied it was moved to the front page. Plan Administrator Carnicella said he would like to have meetings with all the general employees, pass this document out to them and have training in the next year to go over what their benefits are and what their entitlements are. Mr. Carnicella noted that the document didn't refer to the Plan Administrator anywhere and asked that they amend it in the future. After brief discussion about the exhibits the Board moved on to the next item. L AGENDA ITEM IV. ATTORNEY COMMENTS—H. Lee Dehner, Esq. Attorney Denner said he just wanted to report on a couple things. He advised them of the pending amendment to the Pension Protection Act, which would extend the $3000 pretax on health insurance and long-term insurance exemption to all public employees and said he would keep the Board posted. He said there was also one amendment to Chapter 112, which will affect the administration of our plan relating to the section regarding forfeiture of pension benefits and said hopefully we won't be confronted with it. He went on to explain. Attorney Denner then spoke about federal compliance and said they were in the process of amending the plans to comply with the changes. He said there have been many Ordinance amendments and suggested they consider consolidation and restatement of everything in one document. Attorney Dehner said once the compliance amendments have been made then he would like to discuss whether or not the Board wants to file for a favorable determination letter with the IRS. He went on to explain. Discussion ensued. Attorney Denner said there was also a proposed amendment to the Florida Administrative Code and went on to explain. Plan Administrator Carnicella asked if it was required to offer Retirees the employer's health care plan when they retired, to which Attorney Dehner said yes but said it could be at their expense. Plan Administrator asked if the health plan no longer had to be offered to someone who was 65 or older. Attorney Dehner said he wasn't sure if it was required by statute. Discussion ensued. Plan Administrator Carnicella asked that Attorney Denner check into the issue of what they are required to do when the person becomes Medicare eligible, to which Attorney Denner said he would but suggested Mr. Carnicella also check with someone that works on the health benefits side. Further discussion ensued. General Employees Pension Board Quarterly Meeting,August 6,2008 Page 5 of 5 ,,, Attorney Definer said he had two other things to address. He advised the Board he and several other Attorneys that represent a lot of the funds in Florida are having discussions about the Merrill Lynch situation. He said there are three ways they can approach this situation but in any event the beginning of the process would involve the determination of what our damages are and the prospects for recovery of those damages. Discussion ensued. Attorney Dehner said the last item was the communication he received from Plan Administrator Jim Carnicella concerning a request for certain fund records relating to a Trustee. He said he communicated back to Mr. Carnicella that the appropriate way to do this was for them to make a public record request and said he contacted Mr. Van De Graaf and left a message to that affect but said he hadn't heard anything back. Plan Administrator Carnicella said he spoke to Trustee Hendrix last night and Mr. Hendrix indicated that he believed the issue was resolved. Brief discussion ensued. Attorney Dehner reminded the Board to file their financial disclosure if they hadn't done so already and spoke about the obligation of new Trustees. Plan Administrator Carnicella asked Attorney Delmer if he was required to file a financial disclosure. After some discussion, Plan Administrator Carnicella said he would check into it further. Attorney Dehner said it wouldn't be a bad idea to go ahead and file. AGENDA ITEM V. PLAN ADMNISTRATOR COMMENTS—Jim Carnicella Plan Administrator Carnicella stated he had no other comments. AGENDA ITEM VI. COMMENTS FROM TRUSTEES Attorney Definer asked if the Summary Plan Description had been approved, to which Plan Administrator Carnicella said it was approved at the last meeting with the changes that were discussed. Trustee Grafton asked if the Summary Plan Description talked about elections, to which Attorney Definer stated it was in the Operating Rules. Trustee Grafton asked if the City Clerk was doing this election by the new Rules, to which Plan Administrator said he believed so but would double check. AGENDA ITEM VII. SET AGENDA FOR NEXT MEETING • Vice Chairman Reed stated the next meeting was scheduled for November 5, 2008. Plan Administrator Carnicella said he should be bringing the Rules forward for them to look at and recommendations for a possible Ordinance change to consider the re-employment issue. AGENDA ITEM VIII. ADJOURN There being no other business, the meeting was adjourned at 11:51 a.m. Respectfully submitted by A: .r ved b . Debbie Bertling , Cr' — HR Analyst 'ussell B. Wagner, Chairman