02-03-2021 Minutescrry OF OCOEE
MUNICIPAL GENERAL EMPLOYEES' RETIREMENT TRUST FUND
BOARD OF TRUSTEES
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Wednesday, February 3, 2021 at I O:OOAM
TRUSTEES PRESENT: Gequita Cowan, Chair
Robert Briggs, Vice Chair
Stefanie Wilson, Secretary
Patricia Gleason
Jean Grafton (via phone)
'TRUSTEES ABSENT: None
OTHERS PRESENT: Tim Nash, AndCo Consulting
Pedro Herrera, Sugarman & Susskind (via phone)
Doug Dozen, Foster & Foster
Kim Kilgore, Foster & Foster
1. Call to Order— Gequita Cowan called the meeting to order at 10:07ANA.
2. Roll Call —his reflected above.
3. Public Comments — None
4. AML2MLIof loofas
The minutes from the December 1
§11:g_carried 5-0.
5. Consent
a. Warrants #81 and #82 for ratification
b. Quarterly fund activity report for December 10, 2020 to January 27, 2021
The Board nd second
tK Stefanie Wilson, motion carried 5-0.
6. New Business
a. Next meeting date change
L Kim Kilgore stated the next quarterly board meeting date had a conflict with the
FPPTA trustee school and would need to be changed. The board suggested either
May 121h or May 261h for an alternate date. Pedro Herrera would check his
schedule to confirm if either one of those dates would work for hin,i and report back
to the board.
7. Old Business — None.
8. fteports Attorney/Consultants
a. Foster & Foster, Doug Lozen, Actuary
L October 1, 2020, valuation report
I . Doug Lozen stated the contribution aMOLM'tS in the valuation report
presented was applicable for the fiscal year ending September 30, 2022.
2. Doug Lozen reviewed the rniniMUrn required contribution (% of projected
annual payroll had increased from the previous valuation from 13.86% to
'16.64%. Doug fwlher commented the City's required contribution had
increased from 6.49% to 9,27%.
3, Doug Lozen stated the increase was attributable to the reduction in the
investment return assumption to 7.00%, Doug commented the required
contribution should be stable going forward since the assumed rate of
return was lowered.
4. Doug Lozen stated there was a prepaid contribution made by the City in
the amount of $25,048.45 which was available by the City to offset the
contribution reqUirements for fiscal year ending September 30,2021 .
5. Doug Lozen cornmented 'the plan experience Was Unfavorable overall with
the primary source of actuarial loss being unfavorable retirement
experience. Doug further commented the loss was offset by a gain
associated with an investment return of 7.60%® (Actuarial Asset Basis)
which exceeded the 7,40% assumption.
6. Doug Lozen reviewed the actuarial assumption/method changes were not
only the reduction of the investment return assumption frorn 7.40% to
7.00% but also a mandated change by the State to use the mortality tables
Used by Florida Retirement System (FRS) for non -special risk employees.
7, Doug Lozen reviewed a new addition to this year's report of a graph
showing the funding progress of the plan for the past ten years. The plan's
funded ratio in 2010 was around 70% and 2015 had increased to 95% and
had held stable up to 2020,
8. Doug Lozen reviewed the market value versus the actuarial value of the
fund's assets for the past ten years. Doug recommended to change the
asset smoothing methodology to a straight-line approach and to recognize
25% of investment gain and losses every valuation. Robert Briggs asked
if other plans used this method. Doug commented they were currently
moving plans to a straight-line approach.
The October 1 2020 actuarial valuation was ap2road As :Sresented' yporb L.M2L!on by Robert BrlggLs.
and seconq_jaStefanie lison rrotlon oar°rltd 5�u
The Board voted to chap the asset smooth! Atjng_EIRIhod to the
Xtar smoothinq 1n,L.onjuncflon with the 1011/21 yaluat!M.YRRU=t!rrn b Sttfar°rlt lison armed
_
MSMA.12Ratrlcla itaso_nl rrtot'sorLgLrrled_-0.
AndCo Consulting, Tim Nash, Investment Consultant
L Quarterly Report as of December 31, 2020
1. Tian Nash commented AndCo had added two additional employees to their
research team, 'rim thanked the board for being one of their valued clients.
2. Tim Nash reviewed the market environment during the past quarter, and
year. Tim stated Value outperformed Growth for the quarter and Growth
outperformed Value for the year. Tirn reviewed the ten best and worst
sector performance for the past quarter and year.
I 'Tim Nash reviewed the funds asset allocation and commented the need
to stay close to our allocation targets with the volatility in the market,
4. Tim reviewed the financlai reconciliation for the past year with a beginning
total market balance of $43,083,441 and ending market value of
$47,786,374, Tim reviewed the investments sold and investments
purchase during the past year in the fund.
5. The total fund gross returns for the quarter were 10.36%. Trailing returns
for 1, 3, and 5-year periods were 13.08%, 9.37%, and 10.04%,
respectively. Since inception (4/1104), gross returns were 7.51%.
6. Tirn Nash reviewed each of the investment manager's returns in the
portfolio.
7. Tim Nash reviewed the compliance checklist noting the areas of
noncompliance,
8. Tim Nash stated the total fund estimated annual investment manager fee
was 54. basis points.
9. Tim Nash commented at this tirne there was no need to rebalance the
fund's asset allocation.
10, Tim Nash commented Fidelity lowered their index fund cost in corripetition
with Vanguard. Tim further commented AndCo research the saving in fee
would be around $900 per year to change from Vanguard to Fidelity
mutual fund.
The Board va�ted to move from VanagaEd to l`idelif due to lower feesleases! _I!pore fhe
recommendation from Th—eire e --- nt consultant, on motion b
.L_U���Jg_qs Ord
sec
Patricia Gleason- motion carried 5-0.
ii. 9nvestment Policy Staternent (IPS)
1. Tim Nash reviewed the updates made to the iPS for approval by the board.
2. Tim Nash commented the asset class of Global Fixed income name was
changed to International/Giobal Fixed Income and the benchmark index
change to Blou-nberg Barclays Global Aggregate.
3. Tim Nash commented the aCtUarial earnings assumption was change to
7.00% from 7.40%
4. Tim Nash stated the TreaSUry Inflation Protection SeWrity (T[PS)
Performance was removed due to the Unlikelihood to have in the portfolio.
5. Pedro Herrera stated he had reviewed and approved of the changes to the
lPS presented.
The Boar
Stefanie Wilson and sneed by Patricia GjjLas:�on_moflon tarried .
L_ _
c. Sugarman & Susskind, Pedro Herrera, Board Attorney
i, Mandatory E-Verify Law
1. Pedro Herrera reviewed the new E-Verify iaw that would require all plan
vendors to use the E-Verify ystern for employment verification, Pedro
commented this reqUirement was effective 1/1/21. Pedro commented the
plan was also required to comply and register, with the E-Verify system,
ii. Legal/Legislative updates
1. Pedro Herrera cornmented there were no bilis related to the pension plan
to report at this finie,
9. Stiffaff R _E1R2!11 Discussion and Action
a, Foster & Foster, Kim Kilgore, Plan Administrator
1. Educational opportunities
a. Kim Kilgore reviewed the upcorning educational opportunities.
10. Trustees' �Re o�rtsDl�scusslon None.
and Action —
11. Adi2 in! --'The meeting adjourned at 11: 35AM.
_qrnmL
12, Next Meetim — Wednesday, May 5, 2021 at I MOM, qUarterly rneetin g
RespectfuHy submitted by:
Kim Kilgore, Plan Administrator
Date Approved by the Pension Board:
Approved by:
G�uit.� Cowan, Chair