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HomeMy WebLinkAbout11-05-2008 Minutes Minutes of the Regular Meeting of the CITY OF OCOEE GENERAL EMPLOYEES' PENSION BOARD Held on November 5, 2008 At 150 N. Lakeshore Drive Ocoee, FL 34761 AGENDA ITEM I. CALL TO ORDER-Chairman Wagner A. Chairman Russ Wagner called the meeting to order at 10:05 a.m. in the Commission Chambers in City Hall. The roll was called and a quorum declared present. Present were Trustees David Wheeler, Jean Grafton, Russ Wagner, Tom Hendrix and Wendy West. Also present were H. Lee Denner, Attorney; Gregory Miller, Attorney, Beggs & Lane; Michael Welker and Tim Nash, Bogdahn Consulting. B. Approval of Minutes from Regular Session dated May 14, 2008 Chairman Russ Wagner called for review of the Minutes as stated. There being no additions or corrections, it was, on motion made by Trustee Wheeler, seconded by Trustee Hendrix, unanimously RESOLVED that the Minutes of the Regular Session of the Board of Trustees of the General Employees' Pension Board of May 14,2008, be and are hereby approved. AGENDA ITEM II. NEW BUSINESS A. Investment Consultant Report—Mike Welker, Bogdahn Consulting,LLC Mike Welker started by reminding the Board that he went over the investment report at the last meeting. He said there was one outstanding issue with regard to the International Manager, Barings, and asked Attorney Definer if the final document was ready to be signed by the client. Attorney Denner stated it was ready and will be sent to Barings to sign. Chairman Wagner asked if there was any positive movement in the market. Tim Nash stated the market doesn't like uncertainty and it has been uncertain up to this point. He said now that there is a new president coming in January there is some certainty and went on to explain how this impacts the market. Chairman Wagner asked if the International market was also showing signs of stabilizing. Tim Nash stated they are about 11 months behind where we are in the economic cycle and explained why. He said the US dollar has been rising, which tends to erode the returns of our International funds, and that we are probably going to see International be a little less of a performer going forward. Mike Welker agreed and further explained. Mr. Welker said October was one of the worst months in history. He said there is some uncertainty now about what this administration is going to do. He continued and said hopefully we will see some positives in the fir✓ economy but he doesn't believe what we saw in October was going to happen again in November and December. Chairman Wagner asked if there were any questions. General Employees Pension Board Quarterly Meeting,November 5,2008 Page 2 of 4 L. Mike Welker inquired about whether it would be easier for Attorney Dehner to have Barings send the agreement to Plan Administrator Carnicella. Attorney Dehner said Barings was suppose to send copies to review but instead they sent another red lined copy so at this point it would be quicker and easier for him to complete (cleaning up the relines) and will send it to Barings to sign. Mike Welker said good, then they could get the International fund set up probably the end of this year. He asked if there were any other questions. Being none, the Board moved on to the next item. B. Presentation concerning possible litigation against Merrill Lynch—H. Lee Dehner, Esq. Attorney Dehner stated they have been discussing the situation concerning Merrill Lynch and the ongoing SEC investigation and were going to have discussions about what their responsibilities as fiduciaries are in that regard. Attorney Dehner said in connection with that, he has invited Greg Miller with the law firm of Beggs & Lane to discuss the situation and said he was part of the consortium of four law firms put together for the purpose of xcarsiAgrMerrill Lynch where flurs,4;02? there is liability and sufficient damages. He went on to say the process will be to first provide records with respect to Merrill Lynch so that they can review them; second the firm will come back with a report as to whether or not there is potential liability there and give an assessment of the damages; and then the third step will be for the Board to decide whether it would be prudent to move forward or not. Attorney Denner said there is no cost to the fund at this point until the Board decides to enter into a contractual arrangement. Chairman Wagner asked about the consortium of attorneys and also asked if there were any other group of attorneys this Pursu;1 matter. Attorney Denner said Greg Miller will go over the background but that he has been having discussions with various attorneys concerning this matter. He said there is at least one other attorney that is looking into a class action suit and if it is something that is in the best interest of the plan then we will go that route but said that will be part of the discussions they will have down the line. Greg Miller then thanked the Board for allowing him to be at the meeting. He started by saying his firm, Beggs & Lane, is headquartered in Pensacola, Florida and there were actually five attorneys working on this project. Mr. Miller stated that the firm was Florida's oldest law firm and went on to explain their background and experience. Greg Miller also spoke about his experience. He explained how his firm ended up with this matter. He said they now have a number of funds that have asked them to come speak and have filed one suit and have one case that is in arbitration right now. Greg Miller said they are offering to review records, contracts and investment strategies to determine if our fund was harmed by the conduct of Merrill Lynch. He said they would scan the necessary documents to turn over to the experts for analysis and would come back and explain what they discovered then the Board could decide whether to go forward. He said their firm was here today to offer their services. Mr. Miller finished by asking if there were any questions. Chairman Wagner asked what level of information they needed from us at this point. Greg Miller explained what was outlined in the handout. Chairman Wagner was concerned about the level of effort needed to gather the information. Discussion ensued. Mr. Miller stated they could send a paralegal to help pull, organize and scan the necessary files. Trustee Grafton said she recognized some of the documents requested on the report. Further discussion ensued. General Employees'Pension Board Quarterly Meeting,November 5,2008 Page 3 of 4 (Trustee David Wheeler left the meeting at 10:35 a.m.) Gary Miller advised they are concerned about the statute of limitations on some of these cases and want to move as quickly as possible. Trustee Grafton asked what the statute of limitations was. Mr. Miller said there is no definite answer but normally it is four years from the time you knew or should have known and went on to explain but said it is based on the case. Further discussion ensued. Trustee Grafton asked if it was time to discuss how much it would cost if they decided to move forward. Greg Miller said if the Board decided to go forward with litigation, whether the Board chose their firm or not, the cost would be based on a percentage of the recovery. Attorney Dehner said it was a little premature at this point to talk about the cost. He said the Board just needed to decide if they wanted to move forward with the first step then they could determine later to continue to move forward or not. Further discussion ensued. Attorney Denner stated he agreed the Board should go forward with this first step as they have a fiduciary responsibility to the fund. On motion made by Trustee Grafton, seconded by Trustee Hendrix, unanimously RESOLVED to provide the law firm of Beggs & Lane with the necessary documents and information pertaining to Merrill Lynch as requested in their report. AGENDA ITEM III. OTHER BUSINESS A. Payment of Invoices Invoices were included in the packet for the Board to approve. Discussion ensued. On motion made by Trustee Grafton, seconded by Trustee Hendrix, unanimously RESOLVED that the bills and other charges and fees be and are hereby approved for payment as presented. (Trustee David Wheeler rejoined the meeting at 10:48 a.m.) AGENDA ITEM IV. ATTORNEY COMMENTS—H. Lee Dehner,Esq. Attorney Denner started by saying the plan needed to be amended for compliance with the Pension Protection Act. He said he has completed drafting those amendments and is in the process of incorporating them and they are shooting to have it done by the end of the first quarter of this next calendar year. Attorney Denner said once the plan is amended with those provisions they should have a discussion about whether they want to file with the IRS for the issuance of a favorable determination letter and went on to explain. Trustee Grafton mentioned one of the things we would be asked to provide is the annual audited financials but said the fund has not been audited. Attorney Denner stated as part of the City audit an audit is done of the pension assets and said that is what we would provide. Attorney Denner reported there is a proposal to extend to all public employees the Pension Protection Act provision pertaining to retirees who obtained health or long-term care insurance receiving up to a $3,000 break in income tax, which was previously extended to only public safety officers, but advised it was still pending. He said most significantly now on the state side is the proposal by Charles Slavin to a rule in the Florida General Employees Pension Board Quarterly Meeting,November 5,2008 Page 4 of 4 Administrative Code and went on to explain why most are opposed to the proposed rules. Attorney Denner said he spoke to Charles Slavin and Mr. Slavin indicated there would be some changes made to the proposal, which he would keep the Board posted on. Discussion ensued. Trustee Wagner asked what the status was on the liability insurance coverage for the Board. Discussion ensued. Trustee Wagner stated he would like a report on this matter for the next meeting. Trustee West asked where the matter stood regarding Board Members being vested and the term limits being extended, to which Attorney Dehner responded that the Ordinance was done and sent to the City. Trustee Wagner inquired about the Summary Plan Description. Attorney Denner said there were many changes made to the plan and thought it was decided once the Ordinances were adopted he would update the Summary Plan Description and would come back with all the changes in one document. Discussion ensued. Chairman Wagner said there was a letter from the Attorney suggesting the Board obtain, from all the companies they deal with, a current Certificate of Insurance or a copy of the declaration page from their insurance policy and asked if it was taken care of. Discussion ensued and Trustee Grafton said it would help if they could get notice that this was done. Chairman Wagner asked if the Board could get an updated copy of the Summary Plan Description at or before the next meeting. Chairman Wagner asked if that was all, to which Attorney Dehner stated yes except that they needed to cover the meeting dates for next year. The dates were confirmed and determined they were approved at the Board Meeting held on October 21, 2008. AGENDA ITEM V. COMMENTS FROM TRUSTEES Trustee Grafton asked if help was needed from Attorney Dehner's office to get some of the documents for Greg Miller. Discussion ensued. Attorney Denner stated if they needed help with anything to let him know. AGENDA ITEM VI. SET AGENDA FOR NEXT MEETING Chairman Wagner said he would like to put on the next agenda further discussions regarding some of the Summary Plan procedures, for example the section about Death Before Retirement, "Buy Back" of Service and the Forfeiture of Pension as he had questions on these sections, which may just need clarification. Attorney Dehner said he reviewed the last Summary Plan Description and it included all but the last two Ordinances (service issue and amending the Board of Trustees), which are still pending. After further discussion regarding the Summary Plan Description, Chairman Wagner asked if there was anything else. AGENDA ITEM VII. ADJOURN There being no other business, the meeting was adjourned at 11:19 a.m. Respectfully submitted by Ap o d by: Debbie Bertling HR Analyst Russell B. Wagner, Ch i[rman