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HomeMy WebLinkAbout08-04-2010 Minutes Minutes of the Joint Meeting of the CITY OF OCOEE GENERAL EMPLOYEES' PENSION BOARD (GERB) AND POLICE OFFICERS FIREFIGHTERS PENSION BOARD (PFPB) Held on August 4, 2010 At 150 N. Lakeshore Drive Ocoee, FL 34761 AGENDA ITEM I. CALL TO ORDER — Chairman Wagner Chairmen Russ Wagner and Charlie Brown called the meeting to order at 11:05 a.m. in the Commission Chambers in City Hall. Present for the General Employee Retirement Board were Chairman Russ Wagner, Trustees David Wheeler, Jean Grafton, Wendy West and Pat Gleason. Present for the Police Officers Firefighter Pension Board were Chairman Charlie Brown, Sgt. Bill Wagner, Deputy Fire Chief Butch Stanley, Ken Strickland, and Wayne Vaughn. Also present were H. Lee Dehner, Pension Board Attorney, Tim Nash of Bogdahn, Debbie Bertling of Human Resources, Peter Prior of Benefits USA, and Recording Secretary Stella McLeod. The chairmen declared that there was a quorum present for both boards. AGENDA ITEM II. NEW BUSINESS — Discussion About Plan Administrator GERB Chairman Wagner said that there had been some discussion with the city manager about jointly funding a pension plan coordinator. Based on previous discussions with the PFPB at the July joint meeting, the chairman continued, the person would be a part time employee, the City would provide equipment and workspace for the employee and benefits would not be paid. Chairman Wagner continued that the person would take care of much of the paperwork required by the pension programs, paperwork for new hires as well as folks inquiring about the retirement program and implementing training programs for eligible employees and making referrals to other financial professionals as needed. The person would come in and get all of the records up to date. Previously in the general plan, the records have gone from pillar to post with HR having a piece of the program, the administrative staff in planning doing another part, and so on. Chairman Wagner said that he didn't envision the coordinator having authority to make decisions for the program. He said that the job outline needs a few tweaks, but it outlines what General Employees Retirement Board August 4, 2010 Page 2 of 6 the employee would do. The purpose of the meeting is to see what the police /firefighters pension board thinks of the idea. PFPB Chairman Brown said that they have a plan administrator and a set cost. They would like to have a pension office here, but cost is going to be a big factor and whether or not the employee could complete the tasks. The chairman said there are also cons. They do not consult anyone in the City for professional advice which could be a problem, and finding the right person that could pull off the job description. The chairman asked his board members if they had any comments. Ken Strickland asked if the person would be performing the requirements in the description. Chairman Wagner said that the job description was the HR Director Carnicella's best effort at listing the duties they would want the employee to perform. Chairman Wagner said that they might not find someone that perfectly met all of the job requirements, but that is what training is about. The two boards might have different needs also. Mr. Strickland asked what prompted the action. Chairman Wagner said that the general employees fund needs someone dedicated to handling the duties. They want to make sure that they are independent of the City and answer to the boards. If there were an employee problem, it would go to the city manager, but the city manager would not have any day to day involvement. The chairman continued that they need someone and wondered if they police /firefighter wanted to cost share with the general employees' pension board. Trustee Wheeler further clarified that since the board needed an administrator the board determined that they had two options: they could investigate this possibility of hiring a person to perform the outlined tasks, but if it did not work out, 2) the board might end up going through an RFP process and hiring a contractor such as the one the police /firefighter' s fund is currently using. Mr. Wayne Vaughn said that he is concerned asked how many individuals within the last ninety days in light of the fact that there is an active program right now (he directed the question to Chairman Brown). He said he is also against having big government by hiring someone who would make more money than the retirees with whom the plan coordinator would be working. Mr. Vaughn said that there was no control of a salary. He does not think that the boards should be an employer of a third party. Chairman Wagner said that both boards have the right to hire employees. The chairman further clarified that employee would not be a direct employee of either board, but they would report to the two chairmen of the both boards. Mr. Vaughn said that the chairman was now changing what the chairman had said before in that Mr. Vaughn heard him say that there would a definitely a line drawn between the City and the administrator, now he is being told that it does not make any difference; the City will just be issuing the paycheck and the board will be handing over a certain amount of dollars to subsidize this. Another point Mr. Vaughn said he wanted to make is that he has never known the City to extend General Employees Retirement Board August 4, 2010 Page 3 of 6 that kind of courtesy. Even when he opted out of the garbage service they charged him $5, but they did not charge him $5 to get in the program. Mr. Vaughn said they charge for every copy they make so he is not convinced that they are going to get reimbursed. Chairman Wagner responded that the City is the largest contributor to the pension plan; hence, the City has a vested interest in the pension programs being administered properly. The chairman continued that there would be some overhead which the boards would have to fund and they would have to discuss the matters with the City. The city manager said that he was very willing to work with the boards. Mr. Vaughn said that employees do not retire at the end of the week. He thinks most employees can schedule a time to talk with the plan administrator. Trustee West asked the board attorney if he knew of any other cities taking these steps, and he answered that Sarasota does as well as Ft. Myers. Chairman Brown said that the City is doing it now it is just being done from different departments. Chairman Brown said there are obvious cons; he said that he doesn't have time to train someone. He agrees with Mr. Vaughn that they would be taking on another employee. The pro is that he would like to go and talk to an individual. He asked if there was any thought about how they would select a person or how to train them? Chairman Wagner said that there will be a transition. Ms. Bert ling handles a lot of the program as well as his administrative assistant Ms. Sharon Zink. Different aspects of the program are out there with different people and the goal is to bring it all under the control of one person. The chairman spoke about the different responsibilities that the City has versus the boards that are responsible for doing what is in the best interest of pension members. They can hire a private administrator or someone in- house. He likes the idea of having one person to talk to about pension matters. There are lots of people who are unemployed who might like a part time set up; the board could send them for training with the FPPTA. In general, the board wants someone in- house. Mr. Pete Prior, Benefits USA, and pension administrator for the PFPB, said that just the opposite of what Chairman Wagner suggested is actually happening. Such jobs are being outsourced to companies like his. If the City hires one person and the individual gets sick, there . is no backup. At his company several people can step in; they have a website; the City would be reinventing the wheel. If someone wants to retire, they go to the website fill out a form and send it back. It is a protected site. It is an expensive venture to put such a program together. There's a huge learning curve also. The boards should find the best person they can without having to train them or educate them. In -house administrators are usually very expensive. Trustee Grafton asked how large the programs are, if they are larger than $100,000,000. Mr. Prior answered affirmatively. Mr. Prior asked who would be the `master' of the hired employee. He said they will answer to whomever writes their paycheck. General Employees Retirement Board August 4, 2010 Page 4 of 6 Mr. Prior said if the City hired him, not that he was making a pitch, economies of scale kick in. He has already absorbed the cost of set -up. He is only three hours away. His company also provides training. The City would not have to reinvent the wheel. Sgt. Wagner said in the last meeting they talked about the price of hiring which was around $100,000. Now they are discussing $40,000 which is not what they discussed previously. He also said that the City should be looking to get state of the art equipment and not some old computer. He reiterated the point that the employee can't serve two masters. He said if the boards were unhappy with the person hired, that cannot go to a third party. Sgt. Wagner asked the board attorney if he was correct in what he had just stated. He cannot see where there would be resolution if the two boards did not agree about a certain matter. He's spoken to members about the issue and they don't like this proposal. They like the comfort of having someone outside the City helping them with their retirement. The chairman said that Sgt. Wagner made some good points. The boards did not want to be employers, if the two boards did not agree it could be a difficult position for the employee. He continued that there is nothing perfect about either option. Sgt. Wagner said that he suggests that they sit down and discuss the matter as a board (PFPB) And decide if they are unhappy with Benefits USA. If they are happy there is no reason to continue with the process. Chairman Wagner asked if Benefits USA is ever here to meet with employees. Mr. Prior responded that he has never been asked. He asked if that is something that the company would do. Mr. Prior said that it is something they would do. Chairman Wagner said what bothers him about outsourcing is that the process seems so impersonal. Mr. Prior said that for those folks close to retirement, they call his office and they help the person. This can also be done in a training session. He said that this is a relationship business. If the employee needs financial assistant (advice) they will refer the employee. He said he's three hours away by car and 1 hour by plane. They can talk with employees via Skype on the web. There is one person assigned to the City with a back -up person. He returns phone calls within 24 hours. Trustee West asked him how long he's been doing administration. He said Benefits USA has been in existence since 1997. Mr. Prior was on a pension board from 1977 to 1996. Trustee West asked what he taught with FPPTA. He said he taught meeting protocol. Trustee West said that her point is that Mr. Prior is very knowledgeable. Chairman Wagner said it has more to do with control and personal access. Mr. Prior said personal access is not at issue anymore today. Trustee West said that she thinks that police and fire have a point about the cost. Trustee West asked Mr. Prior how much he thought it would cost for the City to put together a program like his. He replied that they have not even discussed insurance for the program. He said his website cost $12,000. His GEM software is more expensive since it is a General Employees Retirement Board August 4, 2010 Page 5 of 6 secured site. It is backed up daily. Forms have to be created. He summarized that it would not be cheap. His fee is all inclusive. Chairman Wagner asked what fee is paid to his company. Chairman Brown replied that they pay $4,200 bi- monthly. Chairman Brown said that they are really skeptical about the $40000 previously proposed as a salary for the plan coordinator. Trustee Wheeler added that the number was suggested by HR Director Carnicella. Chairman Wagner asked if the board had any other thoughts. He summarized that the police /fire pension board members like what they have in their plan administrator. The GERB would have to determine what they are going to do. Chairman Brown said that it has taken a year to get things up to speed with Mr. Prior and his company. He could not imagine how long it would take to hire someone and get up to speed. He thinks doing so would be a step back for the police /fire pension. Trustee Grafton said it takes a long time to fully understand the pension. Chairman Wagner said that he will be meeting with the city manager to get his direction. He invited Chairman Brown to attend the meeting with him. After that meeting he will call a special meeting for the GERB. Trustee Wheeler made a motion that an RFP be done to provide plan administration by an outside source. Trustee West seconded the motion. Chairman Wagner asked who would write the RFP. Trustee Grafton said why not trust the RFP used by police and fire. Chairman Wagner said that they did not know what is in the RFP. Trustee Wheeler said that he does not want to wait another three months. Attorney Dehner said that he could do a draft RFP and get it back to the board to review. The attorney further clarified that the motion does not make the decision as to whether to hire an outside administrator or an employee. The motion would allow the board to continue to investigate their options to outsource the duties or to hire someone to work in- house. Trustee Wheeler made a motion, with a second by Trustee West, to send out an RFP, and the motion having passed by a vote of three to two (`no' votes being made by Chairman Wagner and Trustee Gleason), the board RESOLVED to do an RFP of pension plan administration from an outside source. The board attorney stated that he will not send out the RFP until he gets direction for the board. Trustee Wheeler having made a motion to review the RFP at special meeting or the next board meeting to determine the final wording, and the motion being seconded by Chairman Wagner, with the motion having passed unanimously, the board RESOLVED to review the RFP at the next special meeting or the next board meeting. General Employees Retirement Board August 4, 2010 Page 6 of 6 AGENDA ITEM III. ADJOURN There being no other business, the meeting was adjourned at 12:00 p.m. Respectfully submitt d by: Approved by: .1) „NJ, . . j/ Stella McLeod, Municipal R . Coo dinator Russell B. Wagner, hairman