HomeMy WebLinkAbout02-02-2022 MinutesCITY • OCOEE
MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUNI
BOARD • TRUSTEES
QUARTERLY MEETING MINUTES
City Hall, Commission Chambers
Wednesday, February 2, 2022 - 1 O:OOAM
TRUSTEES PRESENT: Gequita Cowan, Chair
Robert Briggs, Vice Chair
Tammy Brown
Gary Gleason
Patricia Gleason
TRUSTEES ABSENT: None
OTHERS PRESENT: Pedro Herrera, Sugarman & Susskind (via phone)
Doug Lozen, Foster & Foster
Kim Kilgore, Foster & Foster
Chrissy Stoker, Foster & Foster
Lynn Skinner, Salem Trust
Tim Nash, AndCo Consulting
Jack Evatt, AndCo Consulting
Brad Hess, AndCo Consulting
1. Call to Order— Gequita Cowan called the meeting to order at 10:OOAM.
2. Roll Call — As reflected above.
3. Public Comments — None.
4. Approval of Minutes
a. November 3, 2021, quarterly meeting
The minutes from the November 3, 2021, quarterly meeting were approved as presented,
upon motion by Robert Briggs and second by Gary Gleason; motion carried 5-0.
5. Consent Agenda
a. Kim Kilgore gave an overview of the consent agenda for the new trustees. Kim
reviewed there were two warrants already paid and needed to be ratified. Kim
commented the fund activity report showed all the member activity in the plan over
the quarter.
The Board approved the consent agenda as presented, upon motion by Robert Briggs and
second by Patricia Gleason; motion carried 5-0.
6. New Business
a. Gequita Cowan welcomed new trustees Gary Gleason and Tammy Brown.
7. Old Business — None.
8. Reports (Attorney/Consultants)
8. Foster & Foster, Doug LOz8n,Board Actuary
i October 1'2O21.actuarial valuation report
1.
[)OUg LOz8O i[dn]dU&ed himself and CODl0O8Di8d he was present to
deliver the valuation report. OOUg C0Dn08Dted the p|@D'S funded
status continued tOincrease, the plan continued k}get cheaper, and
the Citv'S required C0Ot[ibUtiOO amount was dropping.
2.
Doug LOz8D COD101eDted the Citv'SfUDdiDg F8qUiF8OO8Dt beginning
10/1/2022was 8.S7%Ofthe payroll Ofthe active plan members. Doug
CO0n0HDt8d there were 194 p|8O 080be[G OO p8y[O|| which did not
change from last year's report.
3.
[)OUQ LOz8n COrnnn8Dt8d payroll was getting close to $10 nni||iOD S0
he estimated the City`Srequirement for the current year was going tO
b8approximately $9O0.000.Doug commented even with 8nincrease
in p8y[O||' the City'8 n8qUi[8d CODt[ibVtiOD COU|d continue LOdrop due
tOnet favorable experience.
4.
[]OUQ LOzen commented they were 88SuDliDg @ 7.80% investment
[6tU[D and using 84-y88rsmooth 8v8rag8, which came in at over
10%. O0Ug COOlDleDted S8|8[y increases were lower than expected
and more DOHDlbe[S retired than expected, but this experience was
minor compared t0the investment gains.
5.
UOUg LOz8D C0rOnO8Dted the unfunded liability GhOU|d become
O8A8tiV8 in the D8Xt SOUp|e of years. 0OUg CO008Dt8d the CitV'S
requirement COU|d get C|OG8 to z8F0 in an RCtU@[i8| sense, but the
State required the City to COOt[ibUt8 at |88Gt the NO[O08| Cost, p|US
@d0iDiSt[8tiV8 8Xp8OS8S. OOUg CODl08OtSd having @ negative
unfunded liability would enable them tOtap into the excess when @
bad investment year arrived, So they would have |8SS of negative
unfunded liability and the City would have less O[8credit.
8.
P|8D experience was favorable OV8[8|| based on the p|aD'8 aCtU8[i8|
8SSUDOptiODs. Sources Ofactuarial gain included 8D investment return
of 10.07% /ACtU8[i8| Asset B86iG\ which exceeded the 7.00%
aGGV[DpUOn, GD average S8|8ry inCr8868 Of3.G9% which fell short of
the 4.58% 8SSU0ptiOD' and inactive mortality experience. -FheS8
gains were offset in part by 8 |OSS 8S8OCi8t8d with UDf8VO[8b|8
retirement experience.
7.
Doug LOzeOreviewed the history Ofthe funding progress since 2012.
The Board approved the October 1, 2021, actuarial valuation as l2resented, upon motion
by Patricia Gleason and second by Gary Gleason; motion carried 5-0.
8. Tim Nash commented 7.00% was a reasonable rate of return.
The Board voted the declaration of returns for the plan shall be 7.00% for the next year,
the next several years, and the long-term thereafter net of investment -related expenses,
upon motion by Patricia Gleason and second by Gary Gleason; motion carried 5-0.
b. Salem Trust Company, Lynn Skinner, Board Custodian
i. Lynn Skinner introduced herself and gave 8Ooverview Ufher role with the
Board for the new trustees.
ii LVDD Skinner requested 8O updated authorized signature form and would
like itupdated every 3years O[sooner ifchanges were made.
iii. Lynn Skinnerreminded the Board all service providersforthe plan received
UD|iD8 statements from S8|8Dl.
iv. Lynn Skinner commented the City could send their contribution by wire or
by ACH rather than by check if they preferred. Lynn C0nonn8n|ed there was
DOpressure to dOthis, but they should let her know ifthey wanted tOmake
aCh@Og8.
V. LVDD Skinner CODlDl8Ot8d C|aGG actions were done through Chicago
Clearing Court /C{}C\ and had recently filed 8 d@GS 8ChOD suit for Pacific
Gas fk E|HCL[iC which had filed for bankruptcy. LVDD cODlOo8ntHd C{}C
reached out to a law firm to oversee the bankruptcy, and it was their opinion
to talk to all clients iDVO|vHd and notify them of this. Lynn commented the
C|@i0 was 8PDUDd $100 net Offees. LVDD C0O00HDtHd this attorney group
had afee Of15%.Lynn commented they would have 8nengagement letter
from the firm, which Pedro HHr[8[8 vvOU|d O8Hd to [eVi8VV. and the Board
would need t0sign off.
Vi. Pedro Herrera commented this could b8found money, but there was 8fee
8G8OCi8tHd with the rRCOV8ry ifany money was found. Pedro cO0nO8Dted
he had OO problem with this from 8 legal standpoint.
vii. Robert Briggs asked Pedro Herrera what his recommendation was. Pedro
[8C0OOn08Dded the Board to PBCOUp the funds. Pedro COmDl8Dted it was 8
|OVV-COSt item to the Board that C0U|d prove valuable.
Viii. Byconsensus, the Board agreed 10move forward with the claim.
ix. G8qUit8 Cowan thanked S8l8OO Trust for their service. Lynn Skinner
thanked the Board for their business.
C. AndCO Consulting, Tim Nash, Investment Consultant
i. Quarterly Report 8SOfDecember 31'2O21
1. Tim Nash COrnnnent8d he was Q|8d to have had the opportunity to
VVO[h with the Board. Tim commented he VVOU|d still be with ADdCO
until the end OfMarch 2022.G8qUit8Cowan commented ithad been
8 pleasure tOwork with Tim and thanked him for his service.
2. Tim Nash iOtF0dUC8d Jack EV8tt8Od Brad H8GS and reviewed their
roles with ADdOO.Tim commented Brad would b8taking over 8Sthe
Board's investment consultant.
3. Jack Ev8tt CUDlDl8DtHd ADdCO had very low turnover, GO this was 8
UDiqU8 GitU8tiOD. and he VVGDt8d the Board to kOOYV this was
something they did not take lightly, SOifthe Board had any questions
or COOCeFDS to p|88S8 F88Ch OUL j8Ck thanked Tim Nash for his
service with ADdC0.
4. Brad Hess iDt[OdUC8d himself and g8V8 an Overview of his
professional background.
S. Brad Hess [8Vi8VV8d 8 letter from Mike VVH|k8[ and gave 8 brief firm
update. Brad thanked the 0O8Fd for their bUGiD8GS.
8. Brad Hess gave 8Doverview Ofthe market environment over the past
quarter.
7. The market value of assets as Of 12/31/21 was $53.020.060.
8. Brad H8GS [8Vi8VV8d the SCh8dU|8 of investable 8SSetS over the |8SL
10 y88[S.
9. Brad H8SS reviewed the asset allocation cOOlp|i8DC8, C0rnnneDtiDg
everything was in -line with the policy targets and he had DO
recommendations tOrebalance.
10.Brad Hess reviewed his role 8Gthe investment consultant for the new
Trustees and discussed the Investment Policy Statement.
11.B[8d Hess [8Vi8vY8d the DO8DCi8| [8CODCi|i8tiUD Of the fund for the
quarter ended 12/31/21.Brad discussed the management fees.
12.The total fund net returns for the quarter were 3.83%. Trailing R)tU[DS
for the 3. 5, and 10-ye8[ periods were 15.48%' 11.24% and 9.72%'
respectively. Since inception /4/1/04\` gross returns were 7.54%.
13.Brad Hess reviewed the performance Ofeach manager.
14.Patricia Gleason and Brad Hess briefly discussed real estate.
15.Brad Hess reviewed the fee analysis Ofthe fUDd'Smanagers.
d. Sugarman &GUSSNnd, p8d[O H8FRe[8. Board Attorney
|. Pedro Herrera diGQJSGHd pending legislation that 8inl8d to [O8he C(]V|D-
19 an additional in -line Ofduty disability presumption. Pedro C0nlnOeDt8d
the pF8SU[Dpti0O was not applicable tO g8D8[8l 8[Dp|Oy88S 8tthis time, as
the legislature had chosen tOfocus Onpublic safety employees.
ii. Pedro H8rF8[8 commented there was 8 qUVSUOD regarding 8 Ol8Dlb8r'G
average final compensation. Pedro commented hejust responded tOthe
actuary so they ShOU|d be all set with that i8GU8.
9. Staff Reports, Discussion, and Action
8. Foster & Foster, N][O Kilgore/Chrissy Stoker, Plan Administrators
i GeqUit8Cowan welcomed {|hhSSVStoker and thanked Kim Kilgore for her
service tOthe Board.
ii. Kim Kilgore iO|nOdUc8d (}h[iSSy Stoker, C0DlOn8DtiDg {}h[iSSy had been
working with her on the plan as an analyst and would be transitioning to the
p|8D 8dnniniGin8h][. >{iD1 CO[DDn8nt8d she would still be an administrator on
the p|8D' but ChFiG8yvvOU|d attend fUtU[8 meetings.
iii. Fiduciary liability iDSu[8OCe
1. Kim Kilgore COnnDleOhed the fiduciary liability policy would expire on
2/1g/22and presented 8renewal quote from Travelers for 83-ye@[
policy. Kim commented the 8DOUa( premium was $0,448.10. for
total term premium Of $19,484.30. 0D1 stated the increase in
p[8OniU[n was due to the growth Of GSS8tS in the plan. Kim
CODl[OeOted she [8qU8Sied further quotes but had not yet received
them. P{i0 asked Pedro H8[[e[8 if she could work directly with the
Chair to nn8k8 @ change to the policy if 8 cheaper quote was
received. Pedro commented the Board could authorize binding the
policy and give discretion to the administrators such that 0nC8 the
qUVt8S were [8CeiV8d. they COU|d select the lowest fee option and
bind coverage before the policy expired,
3. The Board and Kim Kilgore discussed getting more quotes.
3. Pedro H8[[8r3 CO[DrOeOted 8 policy could @|vv@yS be cancelled if
they were dissatisfied with the policy they bound coverage with,
The Board voted to approve binding coverage with Traveler's, contingent upon the receipt
of other quotes and follow-up with other carriers to determine if any fees were lower, upon
motion by Robert Briggs and second by Patricia Gleason; motion carried 5-0.
k/ Educational Opportunities
1. FPPTAADDU8l CDDfe[8DC8, June 26-20' 2022. (]d8OdO. FL
8. KjDl Kilgore [eV8Vxed the UpCODliOg ADOU8| Conference.
(38qUib3 Cowan, Patricia G|88SOn^ Gary G|88SOD' and
T8OlDly B[oVVD C0DlDl8Dted they VV0V|d like to attend,
G8qUit8 [8DliDd8d the AO8nj they COU|d stay at the host
hotel in |i8U of commuting, per each Trustee's preference.
10. Trustees' Reports, Discussion, and Action
8. GeqUd8Cowan commented ifany other Trustees wanted k] providetheir input for
the pension O8VV8|8Ker, She VVOU|d @pp[8[j8t8 their 8SSiSt8DD8. Robert Briggs
asked if she had received any feedback on the newsletter. Gequita commented all
feedback received had been positive. Gequit8 added that the PO|iC8 and Fire
pension plans had also started 8newsletter.
b. Patricia G|e8SUD CODlO08Ot8d they needed tOwork with public officials to GdUC8t8
them about defined benefit pension p|8OS and hOvv good they were for the
economy. Brad Hess COD1[O8Dt8d he would b8happy LO provide education.
11. Adjournment — The meeting adjourned at 11:33 AM.
12. Next Meeting, — Wednesday, May 4, 2022, at 10:00 AM, quarterly meeting
Respectfully submitted by: Approved by:
Date Approved by the Pension Board: