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HomeMy WebLinkAbout05-12-2004 Minutes Minutes of the Quarterly Meeting of the CITY OF OCOEE GENERAL EMPLOYEES PENSION BOARD Held on May 12,2004 At 150 N. Lakeshore Drive Ocoee, FL 34761 Chairperson Tom Ison called the meeting to order at 10:10 a.m. He then called the roll. Trustees Ed Bishop, Jerry Sauerwein,Jean Grafton,and new Trustee Mary Anne Swickerath were all present, constituting a quorum. Attending the meeting by invitation were Attorney H. Lee Dehner,Tim Nash& Diane Garcia representing TRUSCO, Doug Lozen representing Foster& Foster, Inc.,and Jo Ann Lacey, Recording Secretary of the Meeting. Also present were twelve employee Plan members. Mr. Larry Cole representing Merrill Lynch arrived late for the meeting.Chairperson'son welcomed Trustee Swickerath to the Board and asked her to tell those in attendance about herself. Trustee Swickerath advised that she moved to Ocoee 31 years ago and is the editor of the West Orange Times,originally from Mobile, Alabama,has raised two children and has a degree in English literature, is a former Peace Corps volunteer and former English Teacher. Chairperson Ison thanked her for the introduction. Chairperson Ison then called for review of the Minutes of the Quarterly Meeting held on February 11, 2004 and the Special Meeting held on March 17,2004. Copies of those Minutes had been previously circulated to the Trustees. The Trustees were asked if there were any corrections or additions to the Minutes of February 11,2004. There being none, Chairperson Ison asked if there were any corrections or additions to the Minutes of March 17.2004. Trustee Bishop indicated that Cam Hall had been erroneously listed as"Kim"Hall and stated that name should be changed wherever mentioned throughout the Minutes. There being no other corrections, it was on motion by Trustee Grafton,seconded by Trustee Bishop, (irr unanimously RESOLVED that the Minutes of the Quarterly Meeting of the Board of Trustees of the General Employees Pension Board of February 11,2004,be and they are hereby approved and that the Minutes of the Special Meeting of March 17,2004,be and they are hereby approved as amended. Chairperson Ison then addressed the employee Plan members in attendance and made a brief explanation of the process of making improvements to the Plan. He went on to say that input from the members was extremely important in the planning process and explained that was why they had been encouraged to attend this meeting to let the Board know of their thoughts and suggestions. He then asked any of the employees in attendance who would like to do so to come forward and let the Board Members hear their comments. Several employees came forward,one at a time. Buddy Elmore was the first employee to speak. He suggested that, instead of allowing a set 25 or 30 year retirement time,perhaps a formula could be determined to add the age and years of service to get to a certain number and then a person could retire. He then mentioned concerns regarding insurance costs, particularly health insurance,and suggested that a formula using a small percentage for each year worked could be applied toward the insurance premiums. Attorney Dehner commented that with respect to assistance in paying post-retirement expenses such as health insurance premiums,the only way that could be addressed through the Pension Plan would be to provide a supplemental benefit to provide additional money either pursuant to a formula for so many dollars for each year of service or an applied dollar amount. He said a supplemental benefit could be provided but not identified as for a specific purpose such as health insurance premiums. He explained there were several reasons: one would be that if for some reason an employee would not need to pay an insurance premium,that person would not receive the benefit;another reason would be that the Board,as administrators,would have to verify the money was being used to pay health premiums. Therefore,this type of benefit would normally be provided just as a supplemental benefit for an unspecified purpose. General Employees Pension Board Board Meeting—May 12,2004 Page 2 There was a brief discussion among the Board Members and Attorney Dehner about a supplement as an option that had been proposed a year or so ago for which there had been little interest,but it had not been proposed for payment of insurance premiums. Attorney Dehner informed the attendees that, for Plan purposes.there would not be a specified purpose,that it would just be an enhancement to the monthly amount the retiree would receive for the unstated purpose of post-retirement expenses. Chairperson Ison thanked Mr. Elmore for his comments and pointed out to everyone that with any improvement to the Plan,the employee should take to his/her financial advisor to see the IRS implications of taking the Plans as there may be limitations on how soon money can be withdrawn without penalties. He reminded the Members that that would be something they would need to do on their own. Mr. Elmore added that the City is currently reviewing the budgeting for the next year and if there would be any costs to the City,he would like to see these items moved on as quickly as possible. Attorney Dehner stated that if the effective date of any benefit improvement that requires additional funding is not until after October 1 of this year, it would not need to be funded until October I,2005, so the City would have plenty advance notice and opportunity to plan for that. Chairperson Ison then called on Robert Howell for his comments. Mr. Howell said he was interested in the 30-and-out program and would like to see it in effect as soon as possible and also thinks a 25-and-out should be considered. He addressed the possible supplement and said he did not think it would be fair for every employee to get the same monthly dollar amount because some employees were in the Plan much longer than others and he did not think it would be fair for a 5-year employee to get the same benefit as a 30-year employee,especially if that amount were to be paid from the employee's contributions. He added that if the City wanted to provide the benefit at no cost to the employees,that would be fine. He suggested that perhaps a set time for qualification,such as five years,could be determined so it could be as fair as possible for everyone. There was a general discussion following Mr. Howell's comments,addressing the ever-rising insurance costs and Medicare coverage age and possible formulas. Chairperson Ison then called on the next employee. Judy Henry from Public Works said she was against the 30-and-out and the 25-and-out because they do not benefit enough of the Pension Plan members. She said she would like to see a higher multiplier used. She said she did think the insurance situation needed to be addressed,however, if the multiplier were increased that would help defray the cost of insurance. There was a brief discussion following Mrs. Henry's comments. It was stated that the current multiplier is 2.5%. Suggestions were made that it be increased to 3.0%. It was asked whether it would be a concern to keep a distance between the General Employees Fund and the Police Officers and Firefighters Fund. Attorney Dehner advised the attendees of legislation that is an important point. He reminded everyone that it had been discussed for the last year and a half that there were two positions as to the required use of state monies over the frozen amount of 1997. He said one position was that of the Division of Retirement that said every additional dollar had to be used for extra benefits for police officers and firefighters. The other was that of the Attorney General where he rendered an opinion saying the gap of the value of the benefits between the two plans must be measured. He said that House Bill 251 was signed into law on April 27 by the Governor adopting the Division position which is that every additional dollar had to be spent for benefit improvements for police officer and firefighters,therefore,the General Employees would not need to be concerned about the gap any more. He said this Plan could be improved and the City would not need to be concerned about what the effect might be on the Police Officers and Firefighters Plan. Robert Howell asked if the multiplier were to be raised to 3%what would happen after 33 years when it would be of no benefit to the employee to continue working to add to his/her benefits? Attorney Dehner answered that,with respect to maximum benefit, under Florida Statutes Chapter 112, it is provided that anyone who became a participant after January 1. 1980, if the maximum benefit is 100%of average filed compensation. if you have a number of members coming up against that cap, improvements can be done General Employees Pension Board Board Meeting—May 12,2004 Page 3 with either supplemental benefits or COLA's because the cap is exclusive of supplemental benefits and COLA's. Chairperson Ison then called upon Commissioner Danny Howell. Commissioner Howell asked if the insurance supplement being discussed was the one implemented in September,2001. Trustee Bishop answered that that supplement had never been implemented. Commissioner Howell read excerpts from documentation presented in 2001 to the Commission and addressed that proposal as well as information relating to elected officials and indicated that he would like clarification. Attorney Dehner advised that the Board had made a recommendation that was never adopted by Ordinance amendment so it was never implemented. He advised that all this Board has the authority to do with respect to pension benefits including supplements is make recommendation for adoption by the City which in this case did not occur. He then advised Commissioner Howell that the other items he had addressed were things over which this Board has no authority or jurisdiction. Commissioner Howell thanked Attorney Dehner and advised that he was speaking because, as an elected official,he did not want to see an employee spend 25 to 30 years with the City and then have to use his/her retirement to pay for insurance. Chairperson Ison then called upon Tony Wilson from the Police Department. Mr. Wilson stated that the Police Officers and Firefighters have just voted on an additional$200 supplement to go toward insurance or for whatever reason and on a_%increase in the multiplier. He said those votes would be counted later this day at their Board Meeting and he did not know what the outcome would be. He stated that one of the aspects that he felt most people did not understand was the cost associated with benefit improvements. He said that for just a_%increase there is an additional cost of 2.8%which must be paid by someone,either the employee or the City. He said their Plan currently has a 3%multiplier and has an early retirement at age 50. There was a brief question and answer session about the Police Officers and Firefighters Plan. Mr. Wilson then asked about the tier plan which he had heard mentioned during a previous discussion. Chairperson Ison and Attorney Dehner responded with information of what a tier plan is. Attorney Dehner advised that until recently there had been very few of these plans in the State but more and more were now being started. Chairperson Ison commented that there could be three or four simultaneous plans going on at one time and would not necessarily take much more to administer in this day of computers. Chairperson Ison thanked Mr. Wilson for his comments and then called on any other employees who would like to speak. Kenny Bruce,Streets Department,asked if 25-and-out is considered early retirement, would there be a large cut on what they would normally get on early retirement? Attorney Dehner responded that normal retirement age according to this Plan is age 60 and that if the Plan had the 25-and- out as early and you had 25 years at age 55 the reduction would be,as was indicated in actuarial reduction, roughly 7%per year. Mr. Bruce asked for clarification about whether it would be considered early retirement at 25 if age 60 was reached. Attorney Dehner said that if the employee is age 60 with 25 years, because 60 is a normal retirement age,there is no reduction. Chairperson Ison asked for any other comments. There being none,he asked for a show of hands from the members to determine interest in the 25-and-out,30-and-out,multiplier increase and monthly supplement in order for the Board to see which options should be considered and presented to the members in a poll. Mr. Buddy Elmore asked the Board to consider having the employees vote at City Hall where there could be someone available to answer any questions and that would ensure that the employees were informed correctly about each of the items before voting. There was additional discussion and Mr.Tony Wilson commented to the Board that they needed to limit the options when they are sent out to the employees. Chairperson Ison said he appreciated the suggestion and thought they would do three,the three for which the employees indicated the most interest: 30-and-out,multiplier increase,and supplement. Attorney Dehner reminded the Board that there is a legal fiduciary principal that the Board needs to be guided by and that is that the Board has a fiduciary responsibility to the Plan members collectively as a whole so the Board, in making the recommendation,would have to consider fairness and equity to all the Plan members as a body so that be the situation where to make a recommendation that would just benefit a few would be detrimental to the whole group. He said that would not necessarily be the case,he just suggested that it would be a consideration for the Board. General Employees Pension Board Board Meeting—May 12,2004 Page 4 Chairperson Ison thanked everyone for their comments and advised the employees these items would be brought up later in the Agenda with the Foster& Foster representative. He then moved on to the next Agenda item,calling on Attorney Dehner to discuss the distribution of the employee memo. Attorney Dehner asked the Trustees if they had looked at the draft memorandum which needed Board review and approval. He reminded that this memorandum was to highlight categories of information for the members. He went on to explain that the first section is regarding misrepresentation and suggested that when another Plan Ordinance is done,the Board might want to consider amending it into the general Plan. He explained that it provides that a pension can be forfeited if the pension benefits are obtained through fraud or misrepresentation. He said this might need to be deleted from this memo and put in after it was actually amended into the Ordinance. He said the next item specified offense forfeiture which is in the Ordinance. He said he thought it would be good for members to be aware of certain acts that could result in forfeiting pension and that it would perhaps act as a deterrent. Attorney Dehner went on to comment about the qualified domestic relations order which is informing the members of what the Board policy is if they get involved in a divorce. He said the policy of the Board simply reflects what the policy has been which is if a Plan member is getting divorced,he or she should notify one of the Trustees or an administrator or liaison of the Plan and then provide the attorney's name and address which should then be provided to him and he would send the attorney what the applicable law is. He said this is already the policy and it is just being restated for the employee to see. The next item he commented on was beneficiary forms and admonishing them to be sure they have current form designations on file at all times. He said the memo also explains the Board's policy with respect to actuarial studies is that the Board will pay for two and that if a member wants any beyond that,the member will be responsible for payment. There was a brief discussion and then Attorney Dehner wanted to know if there was any other subject matter that would need to be added. There being none, it was on motion made by Chairperson Ison, seconded by Trustee Swickerath, unanimously RESOLVED that the memorandum to be distributed to the General Employee's Pension Fund Members will be amended to read that the Board will pay for two actuarial (1Iw studies per employee`during the course of employment' and to remove the first section of the memorandum regarding misrepresentation until am amendment is made to include it into the general Plan and once amended as directed,the memorandum is approved for distribution. Chairperson Ison then called on Mr.Tim Nash for the money manager's report. Mr.Nash greeted the Board and stated that there was good news during the quarter,however,most had been reversed significantly since the end of the quarter. He reminded the Board that he would be referencing the second fiscal quarter where the good news was. He introduced himself to Trustee Swickerath and briefly explained about his firm and what they do for this Plan. He then told all of the Board members about some of the recent acquisitions of TRUSCO and SunTrust. Mr.Nash advised the Board that all of the growth and value funds had been transitioned out of the large cap funds into separately managed portfolios with all of the transitions completed in April. He advised that they had originally thought this would be completed by March but that would have put a lot of pressure on the consultant and actuary so the date was changed to April to facilitate the change and make it easier for everyone. He then advised that all of the consulting bills for the September and December time period had been received from Merrill Lynch and that TRUSCO would offset the consulting fees against the investment management fees and these two offsets would be on the June bill. He added that Merrill Lynch is in the process of preparing the bills for March and that would be the final quarter in which TRUSCO would be offsetting the consulting fees. Mr.Nash then called attention to his report. He advised that through the second fiscal quarter it had been the 4th quarter in a row that the stock market has had positive gains. He said that there was also an unexpected strong performance out of bonds for the second quarter. He said that all of the gains for the second quarter were erased in April and the Fed has been slowly changing its bias. He said the Fed tries not to shock the market. He said over the last couple of quarters,the bias has gone from easing to patience and there is a market measure of movement within the interest rate environment,suggesting that interest rates are going to go up. He reported that the PE rations were expected to compress a bit but that corporate America is doing well with the economy growing very rapidly. He reported that the Plan was up over $200,000 for the quarter and closed out at$10,245,137,however,most of that gain was gone as of this General Employees Pension Board Board Meeting—May 12,2004 Page 5 meeting date so the Plan was not currently over the$10 million mark. He reminded the Board that TRUSCO has been managing the Plan's money for over nine years and even with the good times and bad, there has been an average rate of return of 10.1%for the last nine years. He advised that there are 60%of assets in stocks and 40%in fixed income funds and that the Plan is very well diversified and there were no recommendations for change at present. He went on to explain some of the investments and reported on several of the names in the portfolio. He also explained the strategy they were employing with bonds and stated that their main focus is on preparing for interest rates to go up. He stated that the bonds they are currently buying have very short maturities as they will be the bonds that will be least effected by a rising interest rate environment. Mr.Nash advised that there is a summary of any stocks or bonds that have moved plus or minus 15%and that would be in the books every quarter as some investment policies mandate that it be provided so it is in their report. He also pointed out that the corporate governance quotient(CGQ)which has been discussed for a long time was finally in the report. He reported that Institutional Shareholder Services(ISS)ranks corporations based on the quality of their corporate governance giving them a score,and that information would be appearing in all future reports so the Trustees will be able to see that the bulk of their portfolios tend to rank fairly high on the corporate governance score and if they do not,there will be an explanation of why they do not and why they are still being held. He explained that ISS looks at the makeup of the Board of Directors,the audit firms assigned to do the audits for the corporations.charter and by-laws,executive directors and compensation,who owns the company and things of that nature to determine the ranking and then give the company a score with 100 the best and 0 the worst. He added that they rank the company against its peer group, i.e., a clothing company would be compared to all the other clothing companies in the U.S.and they will rank it against all of the companies of a particular index whether it be the S&P or others. Mr.Nash stated that the SEC is getting ready to make a ruling on how and when fund holdings can be distributed to the public and that will be governing mutual funds. He said that TRUSCO will adopt whatever the SEC adopts and right now the holdings in mutual funds can only be released two times a year so the best way to accommodate this Plan at this time is to take a look at the stocks that fall in the bottom quarter of each one of the funds based on the corporate governance ranking. He referred to the high-grade growth fund for an example in which the average score of the 70 stocks owned is 79.1 which is saying that the bulk of the stocks owned have a corporate governance ranking which is positive. He pointed out that 4.7%fall into the names that fall in the bottom quartile and those are the names which would be reported about since they have the lowest scores. He reported that in the large cap portfolios the bulk of the portfolio has very good corporate governance rankings. He said that was not surprising because they are all very large capitalization companies where smaller cap companies in general will have a lower corporate governance ranking because the smaller companies are typically family owned businesses and a lot of the key players who started the company are still there. He said that in general small or mid-caps will not rank as high as large-caps because they don't have the resources to have multiple directors and hit every single one of the corporate governance issues. Chairperson Ison told Mr.Nash that he had read that the manager of the SunTrust Retirement hi-grade growth withheld voting on the Michael Eisner reappointment and asked if that was correct. Mr.Nash said that was correct. Chairperson Ison asked who actually made that decision. Mr.Nash reported that the decision was two-fold,that ISS is the third-party firm TRUSCO hired to administer their proxy-voting policy. He said that ISS does their research and comes up with recommending rankings within each one of the votes for TRUSCO based on the preferences that have been chosen based on their 400 page document which tells them how to vote in all instances. Mr.Nash returned to his explanation of the corporate governance ranking. As an example he referred to the bottom of the small cap fund to Goody's Family Clothing. He said that Goody's is a clothing store which operates in the south and that 45%of the stock is owned by the founder of the company which is a huge negative from ISS's standpoint. He said that part of the reason TRUSCO bought the company is that they think that is significant because he has a vested interest in the company's success. He added that the company has no long term-debt on their balance sheet and they have 10%cash they could use for further investments so they don't even need to go to a bank to borrow money. He said they have a lot of resources General Employees Pension Board Board Meeting—May 12,2004 Page 6 and that plus is a very attractive investment opportunity. He explained that this shows where there is a difference and why TRUSCO still keeps the stock. Attorney Dehner asked if the companies that issued bonds for the Fund could be added to this report. Mr.Nash answered that he did not think that would be a problem. He said that the report should show that they should rank very high because it is usually the largest capitalization companies they are buying bonds from. Chairperson Ison asked if there were any additional questions or comments. There being none,he thanked Mr.Nash for his report and called upon Mr. Larry Cole for the Merrill Lynch report. Mr.Cole greeted the Board and explained that his firm does the consulting work for the Plan and is the performance monitor and advisor over TRUSCO and helps establish investment policies and guidelines. He confirmed that earnings for the quarter were$282,605 raising the Fund balance to$10,245,137. He reported that the gain for the fiscal year has been $914.000 through the second quarter. He advised that there have been a lot of changes in the asset allocation over the fiscal year,not in the overall split of 60%in stock and 40%in bonds,but in the makeup of the assets,the different funds which TRUSCO has changed considerably. Mr.Cole called the Board's attention to the mid-cap fund which is the fund where there had been a portfolio manager change. He reported that the mid-cap fund underperformed its benchmark by about 1.3%for the quarter which was slightly below average, however,the small-cap fund outperformed by about 2.3% so if the two are combined the result is that they did slightly above average. He said that the changes that TRUSCO has made to address the problems with the mid-cap fund have helped. Mr.Cole reported that the return for the quarter was 2.9%. He said that 2.9%is a good absolute number for just a three month period of time and it ranked in the top 21%of peers across the country during that particular period. He said that happened because of good bond performance,above average stock performance and the Fund had a little more in stocks than most plans which helped get the total return a bit higher. He reported that for the fiscal year to date the return was slightly over 10%. He said they expect to firie see an improvement in the next couple of quarters in the stock market. He said he thinks there is an overreaction to an expected Fed rate increase and there is some fear of the increase but that once it happens. he expects the market to be fine and quarterly earnings will be good. He reported that the one-year return is 20.4%which is good news,however,that is below average and ranks in the 72nd percentile. He said this was because of quality issues with lower quality stocks outperforming higher quality stocks and the majority of this portfolio is in higher quality issue. He pointed out that over the longer term returns are typically above average so the portfolio has done well. Mr.Cole called attention to the last page of the report which is the ranking of the Fund's performance against the 90 plans that Merrill Lynch works for in the State of Florida which ranks every quarter based on the last twelve months and reported that the Fund was a little below average because TRUSCO did not have a particularly good year but, longer term,the rank would be better. He reminded the Board that when market news is bad,TRUSCO is doing better than most but when market news is good they don't enjoy the good times as much as some of the other managers but that is not all bad for a pension fund for the manager to protect the assets on the down side. He added that he thought the recent changes in the small and mid- cap funds and the additional exposure to International that TRUSCO has added should cause the returns to be better. He said that Merrill Lynch has no recommendation for changes at present and assured the Board that if they do see that any change is needed in the future,they will certainly recommend it. After a brief discussion,Chairperson Ison thanked Mr.Cole for his comments and moved on to the next Agenda item,resolution for adopting signatures for custodian. He asked Attorney Dehner about making an improvement to the document by including the clause that no Trustee shall authorize disbursement directly to self.' Attorney Dehner said that was a good idea. There was a brief discussion regarding forms which had been received from SunTrust one of which was to name the authorized signers and the other was an authorization for wire transfers. It was determined that the wire transfer authorization form would not be completed because there would be no need to transfer any funds. After a brief discussion, it was on motion made by Chairperson Ison,seconded by Trustee Bishop,unanimously General Employees Pension Board Board Meeting—May 12,2004 Page 7 RESOLVED,that the Resolution For Adopting Signatures For Custodian be (Irri approved as written with the exception of being amended to allow any one of the Trustees to sign individually as needed with the exclusion of authorizing disbursement directly to self, and is hereby adopted. Chairperson Ison called the Board's attention to the next Agenda item—Rehire Policy Modification of Plan and called upon Attorney Dehner for his comments. Attorney Dehner reminded the Board that they had previously discussed the issue and implications of Federal and State Law if there would be a situation where a retired employee is reemployed. He said the bottom line is that should there be someone interested in reemployment with the City and the City is interested in rehiring that person he should be contacted before the rehire occurs to be sure that the rehiring is done in accordance with State and Federal Law. He reminded that he had distributed a document at the last meeting which set forth various Plan provisions and options that a person would have the opportunity to participate in. He advised the Board that if this is not on the horizon,not to go to the expense and time of amending the ordinance until the situation would arise. He said one of the main considerations is whether or not payment of retirement benefits would continue and another is if the person is reemployed, will he/she be given the opportunity to participate in the Plan again for the second period of employment. He said it would need to be determined what kind of retirement benefit it is. If it is early, it would have to be suspended. If normal retirement,the decision has to be made whether it will be suspended or not. Following a brief discussion,Chairperson Ison suggested that this item be held in abeyance and if a retiree does come in to apply for rehire,a special session could be called to address the situation so as not to interfere with the rehire whether it be as part-time,full-time, or as a contractor. Reminded that this would also have to go before the City Commission,Chairperson Ison said he would ask for an emergency meeting with the Commission so it would not interfere with the reemployment. Chairperson Ison then called on Doug Lozen representing Foster&Foster, Inc. He told Mr. Lozen that he had been asked to attend to the meeting to clarify a few points which had arisen regarding the services provided by his firm. He indicated that there were concerns over the$100 fee and printouts which were late coming to the City. He also asked if their contract provided for them to attend every one of the Board's sessions. Mr.Lozen responded that there is not usually a reason for them to attend the meetings four times a year. He said that they normally attend only for the presentation of the valuation statements and then for anything like this meeting regarding benefit improvements and employment meetings. He also advised that there are additional charges to attend special meetings and if there was any particular special study to do,there would be costs associated with that as outlined in the service agreement. Chairperson Ison asked the Trustees for any questions or comments they may have for Foster& Foster. Trustee Bishop commented that there had been discussion about an employee who was going to retire and when he asked for his valuation,the figures did not seem to be in agreement with the last statement he had received and he did not understand why. Mr. Lozen responded that,almost always,the actual benefit at retirement is going to be higher than the statement given out each year. He said that in the particular case Trustee Bishop was referencing.the retiree had a heart problem and had been out for half the year and the loss of service and pay caused a difference and the amount was lower than the statement had showed. Trustee Bishop then commented on the fact that he thought there had been a delay in getting statements because there had been a change in the format for providing the information to Foster& Foster. Mr. Lozen said he did not have the details on that but advised that the service agreement indicates that they have sixty (60)days from when all the data is collected to distribute the personal statements with the valuations. He said that the sixty(60)days were allowed but in most cases they can beat that time frame.There was a general discussion regarding other aspects of the services provided by Foster& Foster and the responsibilities of the Board Members for requesting calculations. Chairperson Ison then addressed the question of the$100 fee for calculations. Mr.Lozen indicated that the current fee per the service agreement is for$75 and that is all that has been charged. There were questions about charges that appear on the current Foster&Foster statement regarding a$75 charge for `Green' and a$25 charge for 'Reed'. No one could identify either of the charges and following a discussion it was determined that details for line items on the statements are needed. Attorney Dehner said that there had been a reference to a new fee schedule and that if there is a new fee schedule, it would General Employees Pension Board Board Meeting—May 12,2004 Page 8 require a new contract. Mr. Lozen said that the last service agreement was dated March of 2001 for a three-year period. He said he would remind Ward Foster to send a new fee schedule with the new service agreement. Attorney Dehner informed the Board that the procedure on the fee schedule should be that Mr. Foster or Mr. Lozen will provide it to the Board,the Board will approve it at the next meeting and then he would do a contract pursuant to that. Chairperson Ison then asked the Trustees if they wanted to direct Mr. Lozen to run a study to determine what the costs may be to implement the Plan improvements which had been discussed earlier. After a lengthy discussion among the Trustees about what should be included in a new study, it was on motion made by Chairperson Ison,seconded by Trustee Grafton,unanimously RESOLVED that Foster& Foster,Inc. be and is hereby directed to run a study including the options of 30-and-out,increasing the multiplier to 3%,and a formula supplement tied to years of service of perhaps$5 per month for each year of service up to a maximum of $150,being done two ways,with the City paying or the members paying,with each item set out separately and then combined,with the study being made available to the Board Members in June so it can be discussed at the next regularly scheduled Board meeting which is set for August 11. Chairperson Ison thanked Mr.Lozen for attending the meeting. He then called upon Trustee Bishop for presentation of the current bills. Following a brief discussion,it was on motion made by Chairperson Ison and seconded by Trustee Swickerath, unanimously RESOLVED that all of the bills be and they are hereby approved with the exception of the bill from Foster& Foster,Inc.which should be reduced from$7,200 to$7,100 to allow for time to get clarification on the charges referenced as`Green' and `Reed' as were discussed earlier in this meeting. Trustee Bishop pointed out to the Trustees that the quarterly payment to SunTrust for maintenance fees were$14,854 which was$3,600 less that the previous quarter. He advised that this decrease was due to the combination of this Fund with the Police Officers and Firefighters Fund to determine fees. Chairperson Ison called upon Acting Secretary Grafton for any correspondence. There being none,he then called upon Trustee Sauerwein for a report on records retention. Trustee Sauerwein advised that he had attended a seminar on May 11 and got a lot of useful information. Chairperson Ison reminded the Trustees about the process of turning in expenses for reimbursement for travel to education sessions. Chairperson Ison advised the Board that his term will expire on September 30,2004 and he had thought he would be retiring from this Board but he has decided to ask to be reappointed for another two years. There was a round of applause from those in attendance. Chairperson Ison then moved on to the Agenda item which was for the election of Vice Chairman. He said he would like to get someone ready to move into the Chairmanship and it is his intention in the November meeting to elect a new Chairman. After a brief discussion, it was on motion made by Trustee Grafton and seconded by Trustee Sauerwein, unanimously RESOLVED that Trustee Ed Bishop is hereby elected by the Board Members to serve as Vice Chairman of the City of Ocoee General Employees Pension Fund Board, effective immediately. Chairperson Ison moved on to the Agenda item for the election of the Board Secretary. After a brief discussion it was on motion made by Chairperson Ison and seconded by Trustee Swickerath, unanimously RESOLVED that Trustee Jean Grafton is hereby elected by the Board Members to serve as Secretary of the City of Ocoee General Employees Pension Fund Board,effective immediately. General Employees Pension Board Board Meeting—May 12,2004 Page 9 Chairperson Ison then asked Attorney Dehner for any comments. Attorney Dehner reiterated what he had said earlier about not having to worry about the value differential between this Plan and the Police Officers and Firefighters Plan. He also noted,just to avoid any confusion,that there is Federal legislation pending with respect to lump sum distributions on drop-plans that would exempt Police Officers and Firefighters from a 10%penalty for early withdrawal,but this does not apply go general employees. He said it has not passed yet but is moving forward through the Senate and the House in Washington and he felt this should be mentioned so there is no confusion among the Plan members. Chairperson Ison thanked Attorney Dehner for his comments and went on to set the Agenda for the next meeting. He listed as items to be addressed: the revised form for authorization of Trustees to sign on behalf of the Board for TRUSCO; Foster& Foster, Inc. to be present to provide the study for discussion on improvements to the General Pension Board and/or any new fee arrangement that they may have;and clarification of the line items on `Green' and `Reed' on the Foster&Foster, Inc.bill. Chairperson Ison asked the Board for any additional comments. There being none,the meeting was adjourned at 1:25 P.M. Respectfully submitted, Jo Ann Lacey Recording Secretary of the Meeting Approved by: Tom [son,Chairperson