HomeMy WebLinkAbout05-14-1996 Minutes THE CITY OF OCOEE
GENERAL EMPLOYEES' RETIREMENT TRUST FUND
(PENSION BOARD) MEETING - May 14, 1996
Chairman Miller called the regular meeting of the City of Ocoee General Employees'
Retirement Trust Fund to order at 3:12 p.m. in the Commission Chambers Conference Room
of City Hall. The roll was called and a quorum declared present.
PRESENT: Chairman Miller, Members Grafton, Oliver, and Waldrop. Also present were
Actuary Garrett, Attorney Dehner, Administrative Officer Garcia, Money
Manager Ballew, and Clerk/Stenographer Lewis.
ABSENT: Member Dabbs.
APPROVAL OF MINUTES OF FEBRUARY 13, 1996.
Clerk Stenographer Lewis corrected the February 13, 1996 Notice of Meeting, Agenda Item
II, to read "... Minutes of February 13, 1996" rather than "...1995." and to also correct the date
in the motion to approve the minutes "...January 15, 1996" rather than "...1995." Member
Grafton, seconded by Member Oliver, moved to approve the Minutes of the February 13, 1996
meeting as corrected. Motion carried 4-0.
QUESTIONS/COMMENTS FROM AUDIENCE
None
CONSIDER/DISCUSSION OF ORDINANCE
Attorney Dehner explained that the Members had received a copy of the ordinance with the
draft in accordance with the direction of the Board at the last meeting. He further explained a
specific item with respect to Mr. Wagner that has led to the "buy back" provision.
That provision of the ordinance (underlined language) page 2, was a buy back that is typically
done where someone is in the Plan, has made contributions from the date that they were in the
Plan, and they leave and take the contributions out, they are re-employed and have an
opportunity, at no cost to the fund, as provided in paragraph 1, to buy back that prior time.
Attorney Dehner said that Mr. Wagner's situation was different, given the fact that(time period
is '85-'88) under the old Plan there were no member contributions. Since there were no
member contributions at that point, the Board would have to provide for a buy back of those
years but if they wanted it to be at no cost to the Fund (everybody else in the Plan subsidizing
it or the City paying for it) then the Board would want to re-draft this to reflect terms other than
the term having withdrawn his contributions, and then put the contributions that he withdrew
back in with additional amounts Actuarially determined, with parts that it is at no cost to the
Fund.
Attorney Dehner said that he thought there were two issues here:
1) One was administration, as it will add some administrative burden on the Board to deal
General Employees' Retirement Trust Fund
May 14, 1996
with these buy backs.
2) As a matter of policy, the Plan allows someone to leave, leaving their money in the Plan
for up to 5 years in the event of re-employment. Most people that are re-employed
usually do that within 5 years so what the Board is really doing with a buy back
provision is giving them an escape from a bad decision in taking their money out when
they could have left it in and bridged time, or to give them an opportunity to have a
second chance. If the Board wanted to do that or not was a matter of policy.
Mr. Dehner said some administrators felt that it was more of a policy issue than legal issue, and
it would depend on whether they watned to accept the additional administrative burden that goes
with doing the buy backs, and measuring the time involved.
Member Waldrop expressed objection if the employee's time was before 1991 which was the
inception date of Plan. He also objected to the Plan providing this option for an employee.
Attorney Dehner gave the Board the definition of credited service and said a change would
require an amendment to the Rules.
Member Oliver, seconded by Chairman Miller, moved to adopt the Ordinance as presented
but to add any administrative cost to the Plan, and to allow them to get any contributions plus
lump sums, and to have the amounts of the buy back count as a member contribution.
Discussion ensued about whether an employee terminated, for whatever reason, and withdrew
contributions, if the additional amounts the employee pays in would go back to the employee.
Attorney Dehner was concerned about "What was a member's contributions?" which would
become significant if someone terminated and asked for their contributions back out of the Plan
(their part of the contribution, and also the City's part, that had been paid for by the employee).
The issue was, if they terminate employment, and say "I want my contributions back!" were
they going to give the figure which was actual payroll member contribution. Actuary Garrett
said that the employee would not get back the administrative fees.
Chairman Miller expressed a desire than an employee could get their contribution back,
provided they had worked a number of years equal to the number of years that they bought back
or five (5) years, whichever is greater from the date of the buy back. It would be more
equitable because the Plan would have the money in there earning for the Fund those years.
Member Waldrop objected to the Board allowing the member the option of getting their money
back.
Money Manager Ballew advised he must leave the meeting early, and Member Grafton,
seconded by Member Oliver, moved to table the motion until after the reports had been
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submitted. Motion carried 4-0.
REPORTS
MONEY MANAGER
Money Manager Ballew presented the Board with the analysis of the investment performance
of the General Employees' Retirement Trust Fund for the period ending March 31, 1996. He
also presented various charts about small cap value income funds. Performance Monitor
Garrett discussed the cap amount on stocks, and Attorney Dehner explained the limitations
under the Policy Statement.
In response to Administrative Officer Garcia, Member Grafton said that she will be
presenting the Distribution Form she had received from Ms. Garcia for Board approval. She
explained that the form included the information needed to process the return of member
contribution on one page (front and back).
Administrative Officer Garcia left the meeting at 4:34 p.m.
PERFORMANCE MONITOR
Performance Monitor Garrett presented an analysis of the investment of the General
Employees' Retirement Trust Fund for the period ending March 31, 1996. The Fund had out
performed the Index, and Mr. Garrett commended SunBank/STI for doing a wonderful job of
cash management (in keeping the cash portion of the Fund down to a minimum).
ACTUARY
No Report.
OTHER BUSINESS
BILLS AUTHORIZED FOR PAYMENT
Secretary Grafton said that the Board had received another bill from SunTrust and she did not
know if they were waiting until after this meeting to authorize payment for the last quarter's bill
(it was appearing on this bill as previous balance). Secretary Grafton questioned if SunTrust
waited for Board authorization before taking the fee from the account and suggested that when
authorizing payment that SunTrust would include a current bill. Mr. Ballew said that he would
check into the matter.
Secretary Grafton presented the bills for payment, and then requested approval of the Board
to present to SunBank for payment, the following bills:
1. SunTrust
Statement of Services $4,053.59
Previous Balance $3,739.44
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Total $7,793.03
2. Foster & Foster, Inc.
Preparation, attendance and travel
for special seminar meeting
on Feb. 21, 1996. $250.00
3. Christiansen & Dehner, P.A.
Billing Date:3-29-96 Previous Balance $2,263.25
4. City of Ocoee
Expense Report:
January
Copies 166 - $4.15
Postage $7.65
Phone Calls/FAX $1.44
February
Copies 1361 $34.03
Postage $ 1.10
Phone Calls/FAX $ 0.24
Total Expenses Charged $48.61
5. Judie Lewis, Recording Secretary
Preparation of agenda, notices, etc.
for February 13, 1996 Regular
Board Meeting. $ 29.43
6. Judie Lewis, Recording Secretary
Expenses incurred/Pre-retirement Seminar.
($381.77 Split with Police/Fire Board)
Total $190.88
Member Oliver, seconded by Member Waldrop, moved to a. .rove ea ment of the bills as
presented, and to pay the additional SunTrust amount of ($4,053.59 or $7,793.03). Motion
carried 4-0.
REQUEST FOR RETURN IN CONTRIBUTIONS
Member Oliver, seconded by Member Waldrop,moved to disperse contributions for$1,996.12
to Margaret Bratcher (1/13/94 to 3/13/96) for a rollover to Farmers State Bank, Winside,
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May 14, 1996
Nebraska, subject to receipt of the outstanding forms. Motion carried 4-0.
Member Oliver, seconded by Member Grafton, moved to disperse contributions for$1,592.29
to Paul A. Waldrop (6/10/93 to 3/17/95) for a rollover in an IRA to Fidelity Trust Company.
Motion carried 4-0.
Member Oliver, seconded by Member Waldrop, moved to disperse contributions for$3.453.59
to Gary R. Larson, (terminated 5/6/96) monies to be paid directly to him. Motion carried 4-0.
Member Grafton said that Leonard Dyal (terminated employment with Ocoee) had gone to
work for Disney, and he had $5,849.34 that he was leaving in the funds until he reached a
decision about what to do with it.
REPORT/COMMENTS FROM ATTORNEY
Attorney Dehner reported that nothing had come out of Tallahassee that affected the Fund this
session. They were continuing to monitor the Pension Classification Act in Washington.
RETURN TO ORDINANCE
Member Oliver, seconded by Member Waldrop, moved to take the Ordinance from the table.
Motion carried 4-0.
L
Member Oliver supported Chairman Miller's recommendation of matching, if they are buying
back 3 years, they must be in the Plan for 3 years before they can get the additional portion of
their money back. Actuary Garrett suggested 5 years for everybody from the day they buy
back as that way it matched the vesting period and would eliminate the case where an employee
buys back 20 years. Attorney Dehner said that he did not think that had been a part of the
motion as it had come up under discussion on the motion. It would be an amendment to the
motion that would need a second.
Chairman Miller seconded b Member ? moved to amend the motion for su .oses of
accumulated contribution definition, the person who buys back time for previous time served
with the Ci will have to receive five (5) years of credited service from the date that they
de a osit their bu back mone a lus the contributions that the would have made with the Fund
to receive credited service for the buy back time, in order, should they terminate, to receive
back the bu back •ortion of their bu -in alon with their contribution and if the terminate
in a period less than five (5) years from the date that they pay their money in, they will only
receive back their contribution portion of their payment as a refund of their ? contributions.
Attorney Dehner would re-do the Ordinance and bring it back for Board approval.
Vote was taken here on the original motion which was a unanimous "nay."
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Attorney Dehner summarized the issue of voluntary versus involuntary termination, and
explained that 1) the contribution piece, what they would have made or what they did make and
took out when they left. They have a right to that under any circumstances, and 2) the buy back
portion, the extra money they had put in so there had been no cost to the Fund is the part that
they were setting parameters on. The employee did not have right to that unless they gave it
all back or none back was up to the Board, or they could give all if it back to them if they had
been here five (5) years after the buy back.
Three (3) examples were used:
1) A situation where a person terminates, and says "I want my contributions back," the
Board could give him just the $5,000 back and provide the $7,000 additional stays in the
fund no matter when he terminates or how he is terminated.
2) Using the same numbers, a person buys in for $12,000, $5,000 is his contribution,
$7,000 is the City's part, he terminates or is terminated and says "I want my money
back," you give him $12,000 back.
3) A person came back, terminates or is terminated in less than five (5) years, severs term
of employment and says "I want my contributions back," does the Board want to do that
in under five (5) years, all he gets back is $5,000. But, five years after his buy back or
more, he says "I want my contributions back," he gets back $12,000.
Member Oliver, seconded by Member ?, moved to accept No. #3 that Attorney Dehner had
discussed with the 5 years minimum years but still the matching years with a minimum of 5
years in the buy back, and they get all their monies back, less the administrative costs.
Member Waldrop objected and said to him it was an opening for a law suit. At the
recommendation of Attorney Dehner, Member Oliver withdrew her motion.
Considering the liability, Attorney Dehner presented two options:
1) Define contributions for the purpose of return of contribution on termination of any sort
either it is their portion that they took out when they left and they were putting it back
in, and whatever extra they paid, to result in no cost to the Fund, they do not get back,
or
2) They terminate, and receive every cent they put in with the exception of the actuarial and
legal fees that they had paid that had been associated with the buy back.
By consensus of the Board, Chairman Miller directed Christiansen & Dehner, P.A., to work
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May 14, 1996
up something with the #2 scenario.
Attorney Dehner said that the ordinance will read "plus payment of costs for all professional
services rendered to the Board in connection with the purchase of the years of credited service."
DISCUSSION ABOUT DISTRIBUTION FORMS
Member Grafton explained that she would like the Board to review a return of member
contribution distribution form from Administrative Officer Garcia that included everything that
was needed on one page (front and back). She would distribute it for their review at the next
meeting.
ADJOURNMENT
The meeting adjourned at 5:40 p.m.
Respectfully submitted,
Jul Lewis, Clerk/Stenographer
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