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HomeMy WebLinkAbout11-02-2022 MinutesN1ffj1*Td• r MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUN_ BOARD OF TRUSTEES QUARTERLY MEETING MINUTES City Hall, Commission Chambers I N. Bluford Avenue, Ocoee, FL 34761 Wednesday, November 2, 2022, at 1 O:OOAM TRUSTEES PRESENT: Gequita Cowan Patricia Gleason Gary Gleason Tammy Brown I . Ill Ill III � 'III 'I'll III milli - 1111101;IIII mi mi:zjli��Il i OTHERS PRESENT: Pedro Herrera, Sugarman & Susskind (via Zoom) Caroline Quill, Sugarman & Susskind (via Zoom) Doug Lozen, Foster & Foster Chrissy Stoker, Foster & Foster Brad Hess, AndCo Consulting 1. Call to Order — Gequita Cowan called the meeting to order at 10:061M and a quorum was determined. 2. Roll Call —As reflected above. 4. Approval of Minutes a. August 3, 2022, quarterly meeting -Vj I k (4S M I I �L*Jtl I I P14 L61 I I 0 1 . I . pUlLeri- second bv Patricia Gleason; motion carried 4-0. 6. New Business a. Proposed 2023 meeting dates i. Chrissy Stoker reviewed the proposed meeting dates. The Board and the consultants discussed the change of the quarter one meeting date from 2/1/2023 to 1/26/2023 due to the FPPTA Winter School. Chrissy commented the City had confirmed the meeting room was available. Pedro Herrera commented he could attend the quarter one meeting virtually. Brad Hess commented he could not attend the quarter one meeting but he would send another consultant in his place. ii. By consensus, the meeting dates were approved as presented. b. Update on Trustee terms i. Chrissy Stoker announced Gequita Cowan was reelected by the membership and Patricia Gleason was reappointed by the Commission, so both would serve another term on the pension board through 9/30/2026. c. Reselection of 5 1h Trustee i. Chrissy Stoker commented Robert Briggs was the 5' Trustee and today was the day to reselect him if the other trustees wanted him to remain on the Board and if so, she would send his name to the City to add to a Commission agenda for ratification of this appointment. OEM= 111111111 F lillilllrm- M-1:07-0: pil Lon Brown; motion carried 4-0. d. Election of Officers Chrissy Stoker commented the Operating Rules provided for a Chair, Vice Chair, and a Secretary, which positions should be selected every two years in November. Chrissy commented Gequita Cowan was Chair, Robert Briggs was Vice Chair, and the Secretary position was vacant. Chrissy commented the primary role of the Board Secretary was to execute contracts along with the Board Chair. Gleason and second by Tammy Brown; motion carried 4-0. Patricia Gleason and second by Gary Gleason; motion carried 4-0. 7. Old Business a. Further discussion of early retirement reduction and COLA cost studies i. Gequita Cowan commented the City Manager was not in favor of paying for a COLA. Gequita commented the funding would need to come from the members by increasing their contributions or by cutting future wage increases. Gequita commented this should be tabled for now, as she did not want to put a burden on the members to pay for it. Gary Gleason and Patricia Gleason commented they agreed. AT, 7 IT I at _ a. AndCo Consulting, Brad Hess, Investment Consultant i. Quarterly Report as of September 30, 2022 1. Brad Hess gave an overview of the market environment over the quarter, commenting this was the worst fiscal year the plan experienced since 2008. Z Brad Hess reviewed the schedule of investable assets over the last 10 years. 3. The Market Value of Assets (MVA) as of 9/30/2022 was $42,310,910. 4. Brad Hess commented as of 11/1/2022, the MVA was $43.7 million. 5. Brad Hess reviewed the asset allocation compliance, commenting they were overweight to real estate and out of compliance. Brad commented last quarter they put in a $1 million redemption request to ARA and it would take some time for them to get the money out and reinvest elsewhere so the fact that they were out of compliance was being addressed. 6. Brad Hess commented he would like to do a formal asset allocation study in 2023, as the Fund had not made any money in bonds in 10 years. Brad commented the study would lay out where they may need to make allocation changes to try to get to their investment return assumption more efficiently. 7. By consensus, the Board agreed to have Brad Hess present the asset allocation study. Brad commented the study would come at no extra cost to the Board. 8, Brad Hess reviewed the financial reconciliation of the fund for the quarter and fiscal year 2021-2022. 9. The total fund net returns for the quarter were -4.01 %. Trailing returns for the 3, 5, and 10-year periods were 3.08%, 4.43% and 6.58%, respectively. Since inception (4/1/04), net returns were 6.04%. 10. Brad Hess reviewed the performance of each manager. Brad had no recommendations for manager changes at this time. 11. Brad Hess reviewed the fiscal year returns going back to fiscal year 2015-2016. 12. Brad Hess reviewed a chart of bull and bear markets since WWII. 13. Brad Hess reviewed a chart of the percentage of positive versus negative rolling holding period returns. 14. Brad Hess reviewed drawdowns of greater than 5% since 2007. b. Sugarman & Susskind, Pedro Herrera, Board Attorney i. Pedro Herrera introduced Caroline Quill, commenting she was another attorney with the firm. Caroline introduced herself and reviewed her history with the firm. Caroline thanked the Board for allowing her to attend via Zoom. ii. Pedro Herrera presented a cybersecurity policy for the Board's consideration. Pedro commented in the private sector it was required to have such a policy due to recent regulations by the Department of Labor. Pedro commented they were not required to abide by the same standards, but this was in the interest of best practices. Pedro commented this policy would require the Plan to have certain protections in place and verify their service providers had security measures in place as well. iii. Pedro Herrera commented he worked with a firm in the private sector, and he would like them to present to the Board. Gequita Cowan commented with so much cyber-hacking and hostage -taking of data in recent years, it would be prudent to hear from this firm. iv. Gary Gleason commented their vendors should have security measures already. Pedro Herrera commented this was correct, but this firm would provide an analysis of what policies and procedures were being used for cyber security. Pedro commented a vendor could provide their own information to the Board, but how would the Board evaluate that information without an outside vendor to analyze this. v. Gequita Cowan asked if they would be under any obligation to hire this firm if they presented to the Board. Pedro Herrera commented this was correct. Pedro commented the public sector did not have the same requirements as the private sector in this sense, but it was keeping with best practices. vi. Gary Gleason asked what would happen if any of their vendors were found to be out of compliance. Pedro Herrera commented they would work with the vendor to advise that their protocols needed to be improved by either updating/fixing problem and reporting back, or the Board could decide they were not comfortable with the vendor and seek a replacement. vii. By consensus, the Board agreed to hear from the firm Pedro Herrera suggested at the next meeting, Chrissy Stoker asked if the presentation would be in person or virtual. Pedro commented it would likely be virtual, but he would confirm. viii. Caroline Quill commented they drafted and finalized the actuarial and administration agreements, and they were ready to be executed today. ix. Pedro Herrera commented the firm was making charitable donations on behalf of their clients, and this year they selected the Red Cross for Hurricane Ian relief. By consensus, the Board agreed this was a great idea. 9. Staff Reports, Discussion, and Action a. Foster & Foster, Chrissy Stoker, Plan Administrator i. Update on overpaid member 1. Chrissy Stoker reviewed a retiree had selected a Social Security form of benefit that was not reduced when it should have been, resulting in an overpayment. Chrissy commented the repayment was complete as of 10/14/2022 and all overpaid funds were back in the pension plan. ii. FPPTA Board membership/CPPT certification renewals 1. Chrissy Stoker commented the cost to renew the Board's membership with FPPTA was $750 and $31 to renew each CPPT certification. • second • Patricia Gleason; motion carried 4-0. iii. Educational opportunities 1. Chrissy Stoker reviewed the upcoming FPPTA Winter Trustee School, commenting currently Gequita Cowan, Patricia Gleason, Robert Briggs, and Gary Gleason were registered to attend. Chrissy commented she would reach out to Tammy Brown to determine if she planned to attend. iv. Cyber Liability quotes 1. Chrissy Stoker commented Gequita Cowan had requested information on cyber liability insurance quotes, and she wanted to know if she should get quotes for the next meeting or wait until after the presentation next quarter. Gequita commented they should wait to hear from the firm about a cyber security policy. By consensus, the Board agreed to wait to obtain cyber quotes until after the next meeting. 11. Chairperson's Report a. Gequita Cowan announced the FPPTA asked her to be part of the Education Committee and she was looking forward to working with the organization. b. Gequita Cowan reiterated she was disappointed that the COLA discussion needed to the tabled, but she could not justify asking members to pay for something in an already tumultuous economic environment. c. Gequita Cowan asked Doug Lozen if he had any items to discuss. Doug commented he estimated an increase of approximately 1.5% of payroll to the City's required contribution due to this year's negative investment performance. Doug commented the City's cost was expected to go up each year over the next four years as the number from this year phased in. Doug commented the plan was still very well -funded and would not drop below the 90% range but they would have to make up this loss. Doug commented eventually the City's cost would go back down. d. Gequita Cowan commented she valued each trustee's opinion, and she did not want anyone to be afraid to speak up during the meeting. e. Patricia Gleason praised Gequita Cowan for her willingness to educate employees on the pension plan and she went out of her way to help others all while doing her own job, Patricia commented she had been on the Board for 8 years and this was the first chairperson to step up in this manner. Patricia commented Gequita was a great representative for the FPPTA Education Committee. 13. Next Meeting —Wednesday, January 26, 2023, at 10: OOAM, quarterly meeting Respectfully submitted by: Approved by: Chrissy Stokdl, an Administrator Geq it Cowan,Chair Date Approved by the Pension Board: wa ut cLvu '2. 2 L22 25