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HomeMy WebLinkAbout02-03-2010 Minutes - Not signedPage 1 of 4 THE CITY OF OCOEE POLICE OFFICERS’/FIREFIGHTERS’ RETIREMENT FUND BOARD MEETING –FEBRUARY 3, 2010 Chairman Brown called the meeting of the City of Ocoee Police Officers’/Firefighters’ Retirement Trust Fund to order at 1:00 p.m. in the Commission Chambers of City Hall. The roll was called and a quorum declared present. PRESENT:Chairman Charlie Brown, Secretary Ken Strickland, Wayne Vaughn, Bill Wagner and Butch Stanley Also present: Board Attorney Lee Dehner, Tim Nash of Bodgahn, Doug Lozen of Foster & Foster, and Mr. Pete Prior of Benefits USA ABSENT: CALL TO ORDER – Chairman C. Brown Roll call and determination of quorum Roll call was taken and it was determined that there was a quorum. APPROVAL OF MINUTES Approval of Minutes from Regular Session dated December 17, 2009. Trustee Strickland moved to approve the minutes as submitted. Trustee Vaughn seconded the motion and the motion passed. NEW BUSINESS Election of Chair and Secretary Chairman Brown and Trustee Strickland were both reelected. Christiansen and Dehner - Proposed Ordinance to Amend and Restate the Fund Attorney Dehner noted that the restatement is completed. Attorney Dehner asked that the board review the document that Benefits USA sent to the Trustees in email. Attorney Dehner reviewed the summary of the document noting that the plan will be easier to read and understand, as well as including the language from HB 538. Chairman Brown asked if the window for the back drop was included. Attorney Dehner said no but they can add the back drop. Chairman Brown asked if there was a window for the employee to buy back time. Attorney Dehner said that the window is the first 12 months. Chairman Brown said that he did not think the window is appropriate as the employee may have a life altering change and decide to buy back the time at a later date. After reviewing the summary, Chairman Brown said that he would like to open the buy back policy for the employees. Mr. Prior asked if employee works 30 years and back drops the employee pension is calculated at 25 years of service and contributions are returned. Attorney Dehner confirmed that is how it would apply. Attorney Dehner said he will amend the restatement, adding the removal of the window for the back drop. Page 2 of 4 Christiansen and Dehner – Memorandum Regarding Pre-tax Treatment of Health Insurance Premiums Attorney Dehner discussed the fact that since The Pension Protection Act of 2006 that “eligible retired public safety officers” are allowed to elect to exclude from gross income certain deductions made from their Pension Plan to pay for “qualified health insurance premiums.” This exclusion is limited to the amount of annual premiums paid, up to $3,000. Trustees discussed that in order for the retiree to get the pretax treatment, that they actually have to complete the necessary form and turn it into the City. Trustee Notebooks/Educational Information Chairman Brown said the books are for the trustees to offer them an insight into the plan. Chairman Brown would like to have 175/185 in the booklets as well. Mr. Prior said he would send FS 175 and 185 to the trustees. Foster and Foster Report on Valuation Mr. Doug Lozen provided a brief explanation to the new trustees of what a Valuation is and what it means to the plan and the employer. Mr. Lozen reported that the City and State contributions to the plan are 22.1% of payroll. State contributions total $421,324 or 5.96% of payroll. Member contributions total 7.6% and the balance from the city is 16.25% of payroll. Mr. Lozen explained the smoothing technique the plan uses. Mr. Lozen noted that over a four year period the plan averages the returns. The plan currently has an annualized return of 2.40%, clearly not making the assumption rate of the plan. The smoothing method is used by nearly every plan in the state, as it provides a stabilized return to the plan, rather than causing the city to avoid the peaks and valleys of contributions. Mr. Lozen noted that the main reasons for the increase in the city costs is the lower returns on investments and a higher than assumed salary increases. Chairman Brown asked Mr. Lozen to review the state premium rebate to the trustees. Mr. Lozen noted that the plan uses the state money to pay for the 3.5% benefit the employees enjoy. There is still a reserve of over 600k. Trustee Vaughn asked how the dollar amounts are determined and is annexed properties included. Chairman Brown noted that the city has a data base they use, in conjunction with other fees collected by the city, with Tallahassee determining the amounts. Chairman Brown also noted that the city monitors any annexation the city undertakes and takes into consideration the subsidies paid by the state for 175/185. Finally, Mr. Lozen said that page one needs to be amended. Trustee Vaughn moved to approve and Trustee Wagner seconded the motion and the motion passed. Attorney Dehner noted the board should make a motion reflecting the expected rate of return in the short term and the long term. Chairman Brown asked Mr. Nash what his recommendation would be. Mr. Nash said based on market history and asset allocation of 60/40, the plan should meet the assumption rate of 8%. Motion by Trustee Stanley to approve the 8% assumption rate and Trustee Wagner seconded the motion and the motion passed. Mr. Prior asked Mr. Lozen if he has a matrix. Mr. Lozen stated that he did not have it, but that he would provide it before the next meeting. Motion by Vaughn and seconded by Wagner to have the actuary prepare a matrix for buy back. The motion passed. Page 3 of 4 Christine Zorman Divorce Calculation Chairman Brown asked who pays for the calculation when a member is getting divorced. Attorney Dehner said the plan can pay for the calculation or the employee can be billed for it. Richard Firstner Retirement Calculation Mr. Prior said that this is the latest calculation for Mr. Firstner. Mr. Prior said that he left a message for him on voice mail but has not heard from him. Mr. Prior provided a copy of the calculation to Trustee Stanley to provide to Mr. Firstner. OTHER BUSINESS Ratification of Paid Invoices (Warrants #1-#4) FPPTA Annual Membership Dues $ 600.00 Christiansen & Dehner, P. A. $ 729.50 The Bogdahn Group (Invoice 4766 10/1/09-12/31/09) $ 4,750.00 Reimbursement to Chairman Brown Brown – Hyatt Hotel FPPTA Conf $ 264.00 Reimbursement to Butch Stanley – Hyatt Hotel FPPTA Conf $ 264.00 Eric J. Speanburgh - Refund of Member Contributions $1,297.83 Benefits USA (Inv 001 Oct, Nov, Dec 2009) $6,300.00 FPPTA Conference (Chairman Brown Brown and Benjamin Stanley) $ 800.00 Christiansen & Dehner, P. A. $ 776.89 Trustee Stanley moved to ratify the invoices as presented. Trustee Vaughn seconded the motion and the motion passed. Bogdahn Report Mr. Nash provided the trustees with a handout titled “Chasing Returns: Fundamentally Problematic” and reviewed the process as part of the trustee education program. He presented the firms perspective on chasing returns and the mistakes that had been made in the past. This information provided Trustees with insight to the their investment management philosophy. Mr. Nash concluded his report in reference to “Chasing Returns” and provided the Trustees with a quarterly report of the Fund. The market value of the Fund September 30, 2009 was $21,107,278 and the market value of the fund December 31, 2009 was $21,765,347, an increase of $658,069 for the quarter. The total fund was up a net rate of return of 3.27% for the quarter which slightly lagged the policy by .08%. All Cap Core led the policy, the Russell 3000, 6.46% versus 5.90% and All Cap Value also led the policy by 3.21%, 7.38% versus 4.17%. International was the worst performer at -.01% which lagged the policy by -2.23%. Overall the fund did well for the quarter and for the one year. The Fund had a net return of 18.12% for the calendar year which slightly lagged the policy at 19.60%. Page 4 of 4 ATTORNEY COMMENTS H. Attorney Dehner Dehner, Esq. Attorney Dehner reported on the HELPS 2 bill noting that the bill is still pending. The 3k insurance benefit is in place. Regarding the 60t rule, any amendments to the rule are still being reviewed and there are no changes as of yet coming from the state. Attorney Dehner also noted that the IRS is still sending out the surveys. If the plan does receive a survey they are not to be ignored and must be completed. Attorney Dehner reviewed the handout regarding the Administrative Duties and Responsibilities of the Board of Trustees. COMMENTS FROM CITIZENS AND TRUSTEES MEETING DATES FOR 2010 @ 1:00 PM May 5, 2010 August 4, 2010 November 3, 2010 ADJOURNMENT The meeting is adjourned at 5:17 pm. Respectfully submitted by, ______________________________________ Mr. Pete Prior Administrator ______________________________________ Chairman Brown Contact the City Clerk’s Office to listen to an electronic copy of the complete minutes.