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HomeMy WebLinkAbout02-04-2015 Minutes CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND BOARD OF TRUSTEES QUARTERLY MEETING MINUTES City Hall, Commission Chambers Wednesday, February 4, 2015 at 10:OOAM TRUSTEES PRESENT: Jean Grafton Russ Wagner David Wheeler Patricia Gleason Robert Godek TRUSTEES ABSENT: None OTHERS PRESENT: H. Lee Dehner, Board Attorney Ferrell Jenne, Plan Administrator Gene Williford, City Liaison Doug Lozen, Board Actuary Tim Nash, Performance Evaluator 1. Call to Order Russ Wagner called the meeting to order at 10:OOAM. 2. Roll Call As reflected above. 3. No Public Comments 4. Approval of Minutes The minutes from the October 29, 2014 quarterly meeting were approved upon motion by Bob Godek and second by David Wheeler, motion carried 5 -0. 5. Consent Agenda The consent agenda items were approved upon motion by David Wheeler and second by Bob Godek, motion carried 5 -0. 6. New Business a. Quarterly Activity Report. i. Russ Wagner briefly reviewed the report with the Trustees and explained that two trustees sign off on all benefit payments. b. Fiduciary liability quote. i. Ferrell Jenne explained that the premium is higher for the 2015 -2016 coverage due to an increase in assets. ii. Russ Wagner asked about the waiver of recourse. Lee Dehner explained this protects the assets of the Trustees and cannot be paid by the Plan. Mr. Dehner commented that it can be paid by the City or the Trustees themselves. The Board approved the renewal of the fiduciary liability policy upon motion by David Wheeler and second by Jean Grafton, motion carried 5-0. 7. Old Business- None. 1 8. Reports (Attorney /Consultants) a. Foster & Foster, Board Actuary, Doug Lozen i. Presentation of the October 1, 2014 actuarial valuation report. 1. Russ Wagner stated he had questions on page #15 regarding normal retirement. Russ stated that age 62 should be age 60 for "contributory members hired prior to 9/18/12." Doug Lozen commented that he will review and make the appropriate changes, if needed. 2. Russ Wagner stated that he would like to ensure that members who fall under the `old plan" are grandfathered in regarding their salary. Doug Lozen commented that the responsibility falls on the City to report the correct data. Russ Wagner commented that he would like to be sent the salary information for all future calculations so he can review. 3. Doug Lozen stated that the City contribution requirement was reduced from 13.4% of payroll to 10.72% of payroll. Russ Wagner commented that this is almost $200,000 in savings to the City. 4. Doug Lozen stated the last year's City contribution was approximately 1.6M (for fiscal year 2014) and the new City contribution will be approximately $900,000 (for fiscal year 2016). 5. Doug Lozen stated that the UAAL as of October 1, 2013 was approximately 3.6M and the UAAL as of October 1, 2014 is approximately 2.7M. Mr. Lozen commented that he is hopeful that the UAAL will be gone in 2 -3 years. 6. Russ Wagner asked how the Fund is doing compared to other plans across the State. Mr. Lozen commented that the Fund is doing well; the funded ratio has increased from 88% to 93% this year. The 93% is far above the average. 7. Doug Lozen stated that the valuation report meets auditor and CAFR requirements, but still need to fulfill the requirements of SB 534. Mr. Lozen stated that they are waiting for further instructions from the State on how they want the information submitted. 8. Doug Lozen informed the Board that data came in 3 weeks later this year and it may be a problem in the future if this trend continues. Mr. Lozen commented that it may even result in not being able to present the actuarial valuation report at the May meeting. Board approved the October 1, 2014 actuarial valuation report as presented upon motion by Jean Grafton and second by Patricia Gleason, motion carried 5 -0. Board voted the declaration of returns for the Plan shall be 7.75% for the next Year, the next several years, and the long -term thereafter net of investment related expenses, upon motion made by David Wheeler and second by Jean Grafton, motion carried 5 -0. b. The Bogdahn Group, Performance Evaluator, Tim Nash i. Presentation of December 31, 2014 Quarterly Report. 1. Tim Nash explained that the report is a preliminary report for two reasons. First, the peer group rankings have 31 days after the end of the quarter so the percentages can slightly change. Second, it takes the American Realty Fund about 45 days to receive their official return percentage. The preliminary report shows a zero for the return, so the finalized quarterly report will show a slightly higher return. 2. Tim Nash stated that the portfolio is in line with all asset allocations so there is no need for rebalancing. 2 3. Net earnings for the quarter were 3.41 %, outperforming the policy benchmark of 2.47 %. 4. Since inception, the Fund is at 6.59% (net), underperforming the policy benchmark of 6.82 %. 5. The Plan's gross performance of 3.46% for the quarter ranked in the 7t percentile of the public fund sample. 6. Russ Wagner asked about Brown Advisory. Tim Nash commented that they have had six quarters of not beating the benchmark. Mr. Nash stated that it is a concentrated portfolio and there have been other periods of time where they were not beating the benchmark. Tim commented that he still has confidence in Brown Advisory and has no recommendation to make a change at this time. ii. Discussion of replacement options for Brown Advisory. 1. Tim Nash explained that the report analyzes managers that they regularly use. All have strong risk characteristics and good sell disciplines. Mr. Nash briefly reviews each manager and associated management fees with the Board. 2. Tim Nash commented that he feels that Brown Advisory is a great manager and owns some of the best companies in the portfolio. 3. Board decided to not make a change at this time. iii. Discussion of change in internal employee control memo. 1. Tim Nash stated that there will not be any change in service or point of contact. The firm is moving from a family owned company to an employee owned company. Joe Bogdahn sold the majority of shares to Mike Welker. The SEC requires that the firm notifies the Board of this change and execute a consent form. 2. Lee Dehner commented that he has reviewed the documents and has no problem with the Board executing the consent form. The Board approved to execute the Bogdahn consent form upon motion by David Wheeler and second by Jean Grafton, motion carried 5 -0. c. Christiansen & Dehner, Board Attorney, Lee Dehner i. Discussion of Summary Plan Description (SPD). 1. Lee Dehner stated that two Ordinances have been adopted since the last SPD was done. 2. Lee Dehner briefly reviews the SPD with the Board and points out all changes that were made. 3. Lee Dehner commented that Foster & Foster is working on the Exhibit B. Upon receipt of this document, the SPD should be distributed to all active members of the Plan. Russ Wagner commented that he will facilitate getting this document distributed along with the member statements. The Board approved the Summary Plan Description upon motion by Jean Grafton and second by David Godek, motion carried 5 -0. ii. Discussion of legislative/legal updates. 1. Lee Dehner discussed SB 534. a. Mr. Dehner informed the Board that the State will only post calculations on their website that are required by the statute. Mr. Dehner reminded the Board that they can post the additional calculations on the City's website, which should be done within 60 days of valuation approval. Lee also informed the Board that the 3 State has not given a format on how they would like the SB 534 information submitted. b. Mr. Dehner stated that the next legislative session is March /April and the only possible bill that will affect the plan is SB 242. If passed, this bill would require all local law plans to use the same mortality table as the FRS. The FRS table is more conservative than the current table being used. 9. Staff Reports, Discussion, and Action a. FPPTA Conference Dates i. Ferrell Jenne reviewed the upcoming conference dates with the Board. Jean Grafton commented that she would like to attend the annual conference in Boca Raton. Russ Wagner commented that he is a maybe. ii. All Trustees would like to attend the Trustee school in October which will be in Naples, FL. David Wheeler and Russ Wagner commented that they would also like to attend the retirement education class that is being offered. b. Ferrell Jenne discussed the letter dated January 28, 2015 regarding maternity leave. i. Board decided to leave the May meeting date as is and another representative from Foster & Foster can attend the meeting if Ferrell is not able to make the meeting. c. Ferrell Jenne discussed the PF -11 form, which is sent out annually to all retirees to confirm the receipt of their retirement benefit. i. Ferrell Jenne informed that Board that this will be sent out in the next three to five weeks. 10. Adjournment The meeting adjourned at 12:OOPM. 11. Next Meeting May 6, 2015 at 10:OOAM. pectfully bmitted by: Ap o ed by: N F rrell Jenne Name: Russ Wagner Title: Plan Administrator Title: Chairman Date Approved By the Pension Board: l a lh'`i �p $ '31 3 4